Innovations primarily directed at tapping the potential at the bottom of the pyramid (BoP)

A 15000 rupees venture tansformed into 11000 crore rupees turnover company within such a

short span of time that it started giving the MNCs in FMCG sector sleepless nights! That was

the power of right packaging, pricing and promotion of the Chik Shampoo targeted at the lower

income segment otherwise known as the “Bottom of the Pyramid (BoP)”.

The phrase, first used by U.S. President Franklin D. Roosevelt in a radio speech in 1932, gained

prominence when Professors C.K.Prahlad and Stuat Hart explained in their books how this

segment can earn you profits if the low margins and high volumes model is tapped properly.

According to the World Bank, nearly half the world's population—some 2.8 billion people—

subsists on $2 a day or less. The two professors argued that the MNCs have continuously

neglected that particular segment of population and it was high time that the huge chunk of

population lying at the lowest rung of economic ladder be stopped being looked upon as victims.

Instead they urged the business giants to collaborate with the government and civil society

organizations to create business models wherein the poor people can contribute as creative-

entrepreneurs as well as value-demanding consumers.

In 2000, Hindustan Unilever’s (HUL) Project Shakti- a sales and distribution initiative- selected

a woman as a Shakti entrepreneur (Shakti Amma) from a self-help group (SHG) set up by an

NGO or government body. The company’s rural distributor supplied the stocks to this woman

who in turn sold the products to consumers as well as to retail outlets in the village.

This not only helped them empower the underprivileged but also increase their product

penetration in rural markets.

It is not low pricing alone that helps a company break ice with the BoP? How you promote the

product among your target customers also matters a lot.

Chik introduced the concept of getting a shampoo sachet free on returning 4 empty sachet

packets of Chik. This incentive made the customers specifically buy the product The Company

also used the popularity of cinema among masses to sell their products, This included sponsoring

a movie show in local theatre and showing Chik advertisement during the interval time or using

famous movie dialogues to promote their product on radio ads. They for the first time introduced

the concept of floral fragrances in shampoos capitalizing upon the Indian women’s weakness for

putting flowers in their hair or fragrance. To encourage usage of shampoo in villages they held

live demonstrations wherein local barbers performed champi with Chik shampoo on school boys.

The villagers thus learnt not only how to lather and wash but also how the shampoo makes their

head cleaner and more fragrant.

LIRNEasia an information and communication technology policy and regulation think-tank

active across the Asia Pacific region, has tapped the use of mobile phone to buy a ticket for the

public transport system in Sri Lanka, by sending an SMS. With 10 million passengers daily using

10,000 private and 5,500 Government buses, and 13 million of the 20 million Sri Lankan

population having access to mobile phones, this was a natural step.

The ticket value can be added to the bill or deducted from pre-paid (on the lines of movie

tickets). This is aided by the NFC (Near Field Communication) technology- a standards-based,

short-distance, wireless connectivity technology which enables two-way conversation between

electronic gadgets.

Recently, the Godrej Group came up with a 43-liter cool box that weighing 7.8 kilograms called

the ‘Chotukool’. It runs on a cooling chip and a fan similar to those used to cool computers. To

deal with shortage of power in rural areas, the fridge uses high-end insulation to stay cool for

hours without power and also consumes less than half the power consumed by regular

refrigerators. To make the product affordable to the poor it has joined hands with non-

governmental organizations, self-help groups, and micro-finance institutions in the villages.

Mirakle Couriers, a Mumbai-based social enterprise, employ and train deaf adults for all aspects

of a courier service. They have tapped upon the 6% of India’s population that suffers from some

kind of hearing loss. Poor education coupled with discrimination leave a staggering 66% of the

deaf unemployed.

Pick-ups and deliveries are performed by deaf men, while office work, like mail sorting and data

processing, is managed by deaf women, who are trained in office essentials such as Microsoft

Excel, email literacy, and archive management.

I have always wondered upon why the destitute (5% of India’s population) can’t be

engaged into keeping the city clean. This would not only employ

them but also maintain the sanitation of our Nation. There are

many such ideas that people have for the BoP. One must realize

that coming up with a new strategy or product for the segment is

not enough. It should sustain on its own. Profits are an

indispensable part of any socially responsible business and they

have to come from the target consumers only. For that one needs

to devise products that not specifically caters to their needs but

also is easily accessible and affordable to them.

“All the manufacturers vie each

other for meeting the demands of

high-end users, but what many

forget is that it is the segment of

non-users that’s the biggest market

in India. With Chotukool, we target

the bottom of the pyramid

customers who don’t even use

refrigerators.”- G.Sunderraman,

VP, Godrej & Boyce.