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Access@

Bottom of Pyramid

Expanding beyond the metros: How to accessbottom of the pyramid consumers in India ? ?

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2

AGENDA

SECTION I Background

SECTION II Case Studies

SECTION III Recommendations

Questions and Answers

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Four Billion poor can be the engine for next round of global trade and prosperity.

Serving the Bottom of the Pyramid consumers will demand innovations in Technology,

products and services, and business Models. More importantly it will require large firms

to work collaboratively with civil society organizations and local governments.

C.K. Prahlad

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BACKGROUND

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GM drives into ruralmarkets to sparksales ..MINT

Mobile Phone vendors dialinto rural segment

.ECONOMIC TIMESHero Honda to focus onrural MarketsDomainB LG to focus on rural markets

to fight slowdown

.ECONOMIC TIMES

Cement firms shift focus to villages BUSINESS STANDARD

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Infrastructure

> In last 50 years, 40% villages have been connectedby road, in next 10 years another 30% would beconnected

> More than 90% villages are electrified

> Rural Telephone density has gone up by 300% inthe last 10 years

> Number of pucca houses doubled from 22% to41%

Media Penetration

> 41 million Kisaan Credit Cards issued.

> 42 mn rural household are availing bankingservices in comparison to 27 mn urban HH

> Of the total 20 mn rediffmail signup , 60% arefrom small towns.

Disposable Income

> 72% of the Population contributes nearly half ofGDP

> 6 Lakh + Villages, 36 Lakh Shops

> Percentage of BPL families declined from 46% to27%

Aspirations

> 60% of the Goods Consumed by Rural in India

> By 2030, Rural will be 4 times the size of Todaysurban Market

> Rural Literacy improved from 36% to 59% in pasttwo decades

What isChanging ?

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Availability Affordability

Acceptability Awareness

CHALLENGES IN RURAL MARKETING APPROACH

Lack Regular Cash Flow

Little access to Credit Low per capita Income

Traditional Methods of

Advertising difficult

Low Literacy

Physical communication

facilities difficult

Conventional

Distribution channel

not effective. High Cost of Creation

Vast & uneven spread

BarriersCultural ,

Social

Multiple Languages ,

Dialects

Seasonal demand

patterns

Product positioning

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PRODUCTION - SALE CYCLE FOR BOP

Product Design&

ManufacturingDistribution

Marketing &Promotion

Purchase byEnd Consumer

Product RelevanceSocial

Determinant

Low Price PacksEntry barrier

low

Induce Trial

Educate

Usage of Acceptable tools ofpromotion

Use Platforms, commonly visited

Social , Emotional Connect

Repeat purchase

Word of Mouth Involvement of the Community

Community Empowerment

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AGENDA

SECTION I Background

SECTION II Case Studies

SECTION III Recommendations

Questions and Answers

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CASE STUDIES

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HUL PROJECT SHAKTI

Collaborated with Self-Help Groups (SHG) to extend rural reach by offering

them opportunities for business.

BUSINESS OBJECTIVE

Direct reach into untapped markets through local influencers

Sales and distribution initiative that delivers growth

Communication initiative that builds brands

Micro-enterprise initiative that creates livelihoods

SOCIAL OBJECTIVE

Provide sustainable livelihood opportunities for underprivileged rural women.

Social initiative that improves the standard of life in rural India by providing

quality products.

Scalable and sustainable

Started with 17 women in two states. Today, it provides livelihood enhancing

opportunities to about 45,000 women in 15 Indian states and provides access to

quality products across 100,000+ villages and over 3 million households every

month.

Video Link:http://www.youtube.com/watch?v=keTOZ4rfF6I&feature=player_embedded

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LIFEBUOY - HUL

Reformulation : Added Floral Scent, Milled Soap for longer life and more lather

Change in Price : Low Cost

Awareness : Soap only associated with removal of visible dirt, Mass Media Radio & TVnot available.

Community Involvement : Hired two-person facilitator teams to go into village schools

and initially teach youngsters between the ages of 5 and 13 about the problems that can be

caused by invisible germs and how they can be largely eliminated by washing hands with

soap. Parents and village elders are then approached with similar messages.

Most cases of diarrhea can be prevented simply

by washing hands with soap. In India, whichcontributes 30% of all diarrhea deaths in the

world, surveys indicate that even though 95% of

Indian households own soap, only 30% use soap

daily.

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E-Choupal - ITC

Offers the farmers all the information, products and services they

need to enhance farm productivity, improve farm-gate price

realization and cut transaction costs.

Madhya Pradesh,Uttar Pradesh, Andhra Pradesh, and Karnataka

Recognized as Indias largest Internet-based initiative, covering

1,300 choupals, linking 7,500 villages, and serving almost 1

million farmers.

Altogether, more than Rs 1 billion (US$21 million) intransactions have occurred so far.

KEY REASONS FOR SUCCESS

Partnerships built with academia and NGOs to create and

document relevant knowledge about agricultural practices that

are useful for farming communities.

Participatory method in which ITC tried to understand the

information needs of rural communities.

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HORLICKS ASHA - GSKCH

People in rural areas were not regular users of Horlicks because they were short of cash. They could

afford to buy it rarely and would make it last for months. The company needed a product that could

be used on a regular basis.

Reformulation : Horlicks Asha, along with a Small Low Price pack

Change in Price : 40% cheaper than the mainstream brand

Test-marketed in pockets of Andhra Pradesh & Karnataka.

Promotion

Distribution

Added 4,000 sub-distributors to its existing 500 distributors in smaller towns.

Awareness

Series of street plays for introducing the product.

Screening movies and taking the product message across.

Participated in 60 Village Fairs

Tie up with a microfinance group ( SKS Finance ) to distribute 75,000 Samples

PROJECT FAILEDPRODUCT WITHDRAWN

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Micronutrient

Deficiencies

Prevalence(World wide)

Success ofInterventions

Solutions

Low Medium High

Good Moderate Low

Iodized Salt

with Ki & KiO3

Natural & Synthetic

Vitamin A

Food Fortification &

Supplementation

Iodine Vitamin A Iron

Price : Low Price , Small Unit Packs Taste & Form : Acceptable, Iron Fortified Beverage

Distribution : NGO Partnership with Community

Engagement

Marketing & Promotion : Women Empowerment with

creation of Women Entrepreneurs

VITINGO : COCA COLA INDIA

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Initiated Partnership with BISWA in 2009

Effectively utilize BISWA infrastructure (Office and Manpower) to reach out to >

9,00,000 women beneficiaries.

Potential of 1 million U/Cs annually

ACTION

Initiated Partnership with Madura Micro Finance in 2010

Create Women Entrepreneurs to reach out to > 5,00,000 women beneficiaries

across the State.

Potential of > 0.5 million U/Cs annually

Initiated Partnership with Gajam India in 2011

To Create Village Level Entrepreneurs (Women) to reach out to > 10,000 schools in

Bihar.

Potential of 1 million U/Cs

Currently in talks with MYRADA to:Co-create a small scale production unit at the village level that will be independently managed by

a MYRADA Community ManagerTo integrate the production capacity with Government of Karnataka to on-board Vitingo on to the

National Rural Health Mission (NRHM) project on iron deficiency alleviation.

ORISSA

TAMIL NADU

BIHAR

KARNATAKA

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GE HEALTHCARE

PRODUCT - ECG for rural Market

Low Price , reducing the cost of a single ECG exam to as little as the price of a bottle of water

for rural patients

Incorporating a smaller printer

High Battery Life. Moreover, battery performance has been enhanced, enabling as many as 500

ECG readings on a single battery charge.

MARKETING - Its through direct sales efforts that GE is making strides into the rural and semi-

rural markets in India, and slowly making an impact on the quality of rural health.

OTHER PRODUCTS

Low Cost Infant Warmers

Portable Ultrasound Machines

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NOVARTIS AAROGYA PARIVAR SCHEME

KEY OBJECTIVE

Creating Awareness

Enhancing Local Availability

Developing Affordable Health Solutions

Innovative Direct Approach to make villagers aware or prevalent diseases and encourage them to

seek treatment

DECENTRALISED MODEL

The Field force is in Autonomous Cells. Each Cell has Health Educators and supervisors whocollaborate with Local Health professionals, pharmacy chains and NGOs to address the whole

patient flow including education, diagnosis , treatment, delivery and availability and

accessibility of medicines.

Offering patients integrated solutions to Health Probems rather than mainly selling products to

Health Professionals.

Low Cost, Small Size products

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MORE CASE STUDIES OTHER INDUSTRIES

Telecom : Cellular Phone Network

Banking : Financial Inclusion Mobile Instruments : Nokia

Healthcare Delivery : Narayan Hrudalaya , Sankar Netralaya, Arvind Eye Center

Insurance : MicroInsurance , Microfinance corporations

Automobile : Hero Honda, Mahindra

Development Organizations : GAIN ( Fortified Wheat Flour , Milk , Edible Oil ) , Micronutrient

Initiative

FMCG : Lehar Iron Chusti,HUL Pureit,Britannia Nutrition Foundation

Pharmaceutical : Abbott,Elder Pharmaceutical ( Elvista ), Novo Nordisk ( The Changing Diabetes

Barometer Project ), Eli Lily

Medical Device : GE , Roche

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AGENDA

SECTION I Background

SECTION II Case Studies

SECTION III Recommendations

Questions and Answers

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AGENDA

SECTION I Background

SECTION II Case Studies

SECTION III Recommendations

Questions and Answers

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THANK YOU !!