Recent conversations with friends in the fields of market research and product development have returned me to a long-standing question: how do we really derive meaningful insights and understanding of the BoP consumer? Indeed, many organisations from consumer goods manufacturers to mobile phone operators are looking to the BoP for growth opportunities. The most common approach to marketing and selling products at the BoP is to lower the price point. As the Emerging Futures Lab aptly summarises, “Price is simply a design constraint, not the sole criteria.” But a deeper understanding of consumers’ value systems in context is required.
Most of our existing segmentation models quantify individuals based on their income and education, which is irrelevant when seeking to understand a group of people who manage irregular income. The Living Standards Measure seeks to solve this problem by quantifying people based on the physical assets they own to reflect what people are able to do with their income once they have it. Most producers and marketers recommend using a hybrid of these existing models to form a consumer profile. The critical piece missing from this entire equation is the consumer value system. It is their values that drive their buying behaviour, be it a sachet of shampoo, a mobile phone, or a set of gold bangles.
I question whether a cheaper basic phone, for example, is really the most appropriate solution we can offer the BoP. It may solve the price constraint, but it brings with it a host of other drawbacks which I will outline later. Our continuous quest for answers, conflicting opinions and fuzzy approach suggests that we may not be asking the right questions in the first place.