CSR Social Research Digest - March 2013
This report covers the main challenges and aims to discover new ways to research the BoP market. It is based on insights gathered through the programme ‘Three Pilots for Pro-Poor Innovations’ and it is the second publication of a series of five. The series covers key challenges and solutions for any organization that wishes to have impact through inclusive innovation strategies in BoP markets.
- An increasing number of companies and NGOs have launched innovative products and services in the Base of the Pyramid (BoP).
- BoP represents the four billion people with an income of less than 4 USD a day of local purchasing power.
- Understanding the local BoP system and individuals is fundamental to ensuring the successful development of ‘inclusive innovations.’
- The purpose of gaining BoP Insights is to identify, understand, assess and engage BoP actors in co-creating inclusive innovations that create impact in a socio-economic and ecologically sustainable manner.
- The population of the BoP predominantly lives in developing and emerging economies of Asia, Africa and Latin America.
- There are four phases of inclusive marketing research:
Search: The BoP market is not homogenous and segmentation such as rural v. urban, men versus women, stable v. unstable income etc., is useful to understanding potential future consumers.
Understand: Deep dialogue is vital when entering BoP market and helps collect large amount of information in short-term period.
Co-create: market consumer research is top-down and target audience should be involved in the market research right from the start.
Commercial Pilot: Putting the product or service up for sale in a shop, stall and community. A commercial trail gives you direct response to your production proposition and tells you whether a market exists in the first place.
- Although, BoP markets vary in terms of cultural and geographical setting, available capabilities and needs, there are several challenges facing products and service development which most BoP markets have in common (known as the 4 A’s of BoP Marketing):
Affordability: the extent to which BoP individuals are capable of investing their limited financial resources in a product, service or business proposition
Acceptability: the extent to which BoP are willing to adopt a proposition and/or to participate in the value chain as a producer, entrepreneur, investor
Availability: the degree to which BoP individuals have easy and regular access to a proposition
Awareness: level of understanding and knowledge BoP individuals have of the product, service or business proposition
BoP Innovation Center