Brands for the bottom of the pyramid
When you’re building brands you’re building communities. In today’s world this often means creating brand ecosystems far from conventional brand territories, across national borders, and across market boundaries.
More often than not, this also means brands for the “bottom of the pyramid.” These are the four billion individuals that live in undeveloped economies. They had the misfortune to be born into non-industrialized societies, yet they have no shortage of intelligence, courage, ingenuity, and drive.
They’re ready to grow. The question is: how will your brand help them grow, even when they have little money? In other words, how do you create customers for your brands when people can scarcely afford them?
Sachet sizes are not the answer. Low price sub-brands are not the answer. Maybe sales are not the answer. Maybe your brand should think of itself as an NGO, and consider investing in infrastructures that can return your investment as platform strength. Instead of pursuing the conventional price premium, maybe your brand’s future is best served by the human premium.
C.K. Prahalad has analyzed new profit opportunities in developing economies. Here is his list of the top areas where innovation is needed at the bottom of the pyramid:
- Focus on (quantum jumps in) price performance.
- Hybrid solutions, blending old and new technology.
- Scaleable and transportable operations across countries, cultures and languages.
- Reduced resource intensity: eco-friendly products.
- Radical product redesign from the beginning: marginal changes to existing Western products will not work.
- Build logistical and manufacturing infrastructure.
- Deskill (services) work.
- Educate (semiliterate) customers in product usage.
- Products must work in hostile environments: noise, dust, unsanitary conditions, abuse, electric blackouts, water pollution.
- Adaptable user interface to heterogeneous consumer bases.
- Distribution methods should be designed to reach both highly dispersed rural markets and highly dense urban markets.
- Focus on broad architecture, enabling quick and easy incorporation of new features.
Prahalad frames the issue:
What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win–win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable.
Let’s look at some of these terms: “partnering with customers,” “actively engaged,” “innovation,” and “win-win scenarios.” Those sound like brand elements to me. Is there any reason why brands, with their protean social powers, should not lead this effort?
The bottom line
It’s a new context out there at the bottom of the pyramid. Old brands won’t work. New brand concepts are needed.
(Thanks to Vinnie Mirchandani)