EMERGING NUMBERS
The consultants have good reason to zero in on this layer of the pyramid,which is squeezed between the much-touted middle class and the BoP.For one,their annual household incomes are nothing to sneeze at between 1.5 lakh and 3 lakh,as against under 1.5 lakh for BoP households.For another,they are the largest chunk of the population at 470 million;and by 2021,they are projected to still be the largest,at 570 million,or 42% of the population.By then the EM base is expected to account for $1 trillion of consumption,up from $450 billion currently.Perhaps that is why Philips no longer has BoP in its lexicon.Instead,the Dutch electronics multinational prefers to call its strategy to reach consumers at the mass end Philanthropy by Design (PbD).In 2007,Philips consumer lifestyle division test-marketed a new wood stove via NGOs.A little after a year,the company ended its test and recalled the product to the drawing board as the NGOs failed to find enough takers for what should have been a revolutionary product.While Philips officials insist the project hasnt been shelved,there are few signs it will be re-launched in a hurry.A spokesperson from its Netherlands headquarters confirmed that Philips Consumer Lifestyle has completed a commercial pilot project,which ran between 2006 and 2007 in Maharashtra,Tamil Nadu and Uttar Pradesh.However,in India,Philips encountered an unforeseen coincidence of market conditions and distribution problems, says the spokesperson.Whereas in Africa we managed to set up a solid partnership that we believe will be the foundation for success. Exit BoP,enter PbD,which allows local stakeholders to use intellectual property and design for free as part of the companys contribution to sustainable development.The returns are not measured in terms of profit,but in building brand equity and trust.
MOVING UP
Marketing low-cost products with high-cost business models makes little sense for most companies.They are discovering that reaching far-flung and diverse consumers is a persistent headache since it involves huge costs in distribution and sourcing as well as in monitoring and training suppliers.Worse,marketers are quickly realising that there is no standard affordable pricing at the BoP.What is seen as affordable at 500 for one set of consumers is too expensive for another bunch in Indias diverse BoP segment.The tension in cracking the code is heightened by a clash of priorities between corporates and NGOs as they battle social good versus business and profit objectives.Finally,consumers with uncertain cash flows and limited means that make upfront payments difficult contribute in making BoP a tough nut to crack.That may explain why companies such as Nokia,Idea Cellular and Bajaj Auto have tweaked their solutions to target the EM segment.Mobile phones and services,which had 860 million subscribers at last count,is an area of massive potential.Idea Cellular,for instance,transformed its sales structure,moving from a hub-and-spoke model to one more focused on end salespersons,and built finance,training and HR practices around them.Nokia,which is battling to stay relevant in the handset market,turned its attention to mobile services,piloting a mobile payment initiative with Yes Bank for nearly a year before rolling it out in 2011.This service will allow users to pay insurance premium,top up their prepaid connections and pay bills by using text-based services from their phones.Many of these services are not for the very poor, explains Sashank Tripathi,executive director and leader,strategy and research,PwC India.Like Nokia Money is meant for those in the EM,who are not destitute,but will need different approaches to court and make sustained profits. Even companies that are focused on BoP are realising they have their task cut out getting to the bottom.Consider industrial giant GE,which went back to the drawing board with its baby warmer for the masses by removing top-end features,reducing power consumption and extended its sales reach.The companys focus was to create healthcare access to BoP people.However,as we started our activities,we realised that we are reaching people in the middle class in geographically tier-II and tier-III towns,where there are many a million who cannot be called bottom of pyramid, says a GE spokesperson.GE is now looking at ways to make its solutions more cost-effective for BoP consumers.There are some 14 innovations and few market /disease-based approaches to ensure healthcare access to more people, adds the spokesperson.
LOCAL CONNECT
Not everyone has given up on BoP.Hindustan Unilever Ltd (HUL),Indias largest marketer of home & personal care goods,claims success at the bottom.The recipe: self-help groups (led by Shaktiammas),low-priced pack (selling shampoos and detergents in sachets for 1),altering product prices and its most recent initiative called Khushiyon ki Doli,a campaign for media-dark villages.The Doli is essentially a van that features products from HULs portfolio such as Wheel,Lifebuoy,Clinic Plus,Pepsodent,and Fair & Lovely.It has helped HUL reach locations with a population below 4,000.Says Hemant Bakshi,executive director,sales and customer development at HUL: Serving BoP consumers has been a rewarding experience for HUL,both in terms of business opportunity and consumer insight.The consumer insights in this market have helped us build new products and scale up businesses. He points to Project Shakti,Pureit water purifier and Wheel detergent as examples of how HUL used these insights to build viable products and services.BoP market is an important part of HULs business as it covers a large part of Indias population. Yet,theres little clarity on how much such initiatives contribute to HULs bottom line.Experts point out that companies do themselves few favours when rushing headlong with BoP strategies unaware of market realities.For instance,P&Gs razor launch in India failed because the company tested the razor with Indian men at MIT,instead of in rural India,where limited access to running water made it a painful and ineffective product.P&G then launched Gillette Guard,its first razor developed entirely in and for Indiafor 5and other emerging markets.The launch was based on the learning that most Indian men sought a safe razor that could be easily rinsed in a bowl of still water.Prema Gopalan,founder of Swayam Shikshan Prayog,a learning and development organisation,says she is frequently courted by multinationals looking to build a BoP strategy -- and they usually havent a clue about how to go about it.They approach BoP consumers with standard operating procedures that they use for urban markets, contends Gopal.Unlike many,Amit Jain believes that consumption alonewithout an opportunity to generate income -- is a viable BoP strategy.The CEO of HealthPoint Services,a for-profit social enterprise,says corporates need to understand the dynamics of the market and try to generically expand it instead of cannibalising it.Consumption is consumption, he says.Companies should be driving consumption and meeting BoP consumer needs,not ensuring their income growth.The battle has to be won in the minds of the consumer in this segment. A clear victory in that battle is still some time away unless marketers think moving to a new battlefield called the emerging middle is a more practical option.
Tuesday, March 6, 2012
The Fortune Just Above the Bottom
(Source:The Economic Times epaper dated 6th march http://lite.epaper.timesofindia.com/getpage.aspx?pageid=13&pagesize=&edid=ETD&edlabel=ETD&mydateHid=06-03-2012&pubname=Economic+Times+-+Delhi&edname=Delhi&publabel=ET)
Addressing the needs of the poor calls for the patience of a saint and the pockets of a prince.A clutch of companies that has neither is targeting a more pragmatic opportunity: the chunk of consumers between the middle and the bottom of the pyramid,discover Kala Vijayraghavan & Rahul Sachitanand
Two years ago when Godrej & Boyce launched the affordable refrigerator ChotuKool,it was one of the finest examples of disruptive innovation at work.The idea of allowing a new set of consumers to access a product that has for long been perceived to be the prerogative of the more affluent was shaped at a workshop the company had with Clayton M Christensen,a Harvard professor who coined the phrase.Disruptive innovation is a process by which a product or service is targeted at the bottom of the market,after which it moves up the market and is eventually in a position to compete with established rivals.Godrej junked the traditional marketing model of a distributordealer chain and tied up with India Post,self-help groups and NGOs to sell the refrigerator.The idea discussed in the workshop with the Harvard professor was to involve rural folk in the process,right from designing to selling the product.With Godrej starting at the bottom of the pyramid (BoP),it seemed to be following the late CK Prahalads prescription to a T: of selling low-margin products in high volumes to consumers at the bottomPrahalad put the number of such consumers,who earn less than $4 a day,at 4 billion globally and,in the process,building a viable business.The results were,however,not quite what Godrej expected as it realised that affordability levels at the bottom were much lower than they projected.The next billion (commonly used to refer to BoP consumers globally ) is just marketing terminology, says G Sunderraman,vicepresident,corporate development,Godrej & Boyce,who reckons there is no fortune at the bottom of this proverbial pyramid.Sunderraman feels ChotuKool needs to be repositioned.How can you expect poor consumers with a minimum sustenance to be your pot of gold, he asks.The Godrej VP thinks it is unlikely that BoP consumers will use the refrigerator to store frozen peas or butter.Instead,the focus should be to create a product that can also help consumers generate income,he says.Thats why Godrej & Boyce is developing a version that can be used by chemists and primary healthcare centres to store vaccines.Already,small entrepreneurs in non-urban areas are using ChotuKool to sell items like chilled water.BoP is a great strategy,but its only for those who are willing to ride the long haul and wait patiently for the much-elusive profits to show.For those who dont have the confidenceand the deep pockets to keep pegging away at the bottom,the options are two-fold.One,forget about profits and move the business into the not-forprofit categoryjust as Procter & Gamble did worldwide by transferring a venture for a water-purification powder to its philanthropic arm.The other option,as many marketers in India will vouch for,is more pragmatic: move away from the bottom to the relatively more lucrative band of the pyramid just above it.Management consultancy PricewaterhouseCoopers has christened this the emerging middle (EM).
Addressing the needs of the poor calls for the patience of a saint and the pockets of a prince.A clutch of companies that has neither is targeting a more pragmatic opportunity: the chunk of consumers between the middle and the bottom of the pyramid,discover Kala Vijayraghavan & Rahul Sachitanand
Two years ago when Godrej & Boyce launched the affordable refrigerator ChotuKool,it was one of the finest examples of disruptive innovation at work.The idea of allowing a new set of consumers to access a product that has for long been perceived to be the prerogative of the more affluent was shaped at a workshop the company had with Clayton M Christensen,a Harvard professor who coined the phrase.Disruptive innovation is a process by which a product or service is targeted at the bottom of the market,after which it moves up the market and is eventually in a position to compete with established rivals.Godrej junked the traditional marketing model of a distributordealer chain and tied up with India Post,self-help groups and NGOs to sell the refrigerator.The idea discussed in the workshop with the Harvard professor was to involve rural folk in the process,right from designing to selling the product.With Godrej starting at the bottom of the pyramid (BoP),it seemed to be following the late CK Prahalads prescription to a T: of selling low-margin products in high volumes to consumers at the bottomPrahalad put the number of such consumers,who earn less than $4 a day,at 4 billion globally and,in the process,building a viable business.The results were,however,not quite what Godrej expected as it realised that affordability levels at the bottom were much lower than they projected.The next billion (commonly used to refer to BoP consumers globally ) is just marketing terminology, says G Sunderraman,vicepresident,corporate development,Godrej & Boyce,who reckons there is no fortune at the bottom of this proverbial pyramid.Sunderraman feels ChotuKool needs to be repositioned.How can you expect poor consumers with a minimum sustenance to be your pot of gold, he asks.The Godrej VP thinks it is unlikely that BoP consumers will use the refrigerator to store frozen peas or butter.Instead,the focus should be to create a product that can also help consumers generate income,he says.Thats why Godrej & Boyce is developing a version that can be used by chemists and primary healthcare centres to store vaccines.Already,small entrepreneurs in non-urban areas are using ChotuKool to sell items like chilled water.BoP is a great strategy,but its only for those who are willing to ride the long haul and wait patiently for the much-elusive profits to show.For those who dont have the confidenceand the deep pockets to keep pegging away at the bottom,the options are two-fold.One,forget about profits and move the business into the not-forprofit categoryjust as Procter & Gamble did worldwide by transferring a venture for a water-purification powder to its philanthropic arm.The other option,as many marketers in India will vouch for,is more pragmatic: move away from the bottom to the relatively more lucrative band of the pyramid just above it.Management consultancy PricewaterhouseCoopers has christened this the emerging middle (EM).
Sunday, January 8, 2012
Rural Youth Placement- Optometrician Course- Titan
The above picture is of Rural Youth from Maharajganj District of Uttar Pradesh State who have been selected for Optometry Training and Placement with Titan Eye Care. The youth is 12th pass, having Science background and positive attitute. They underwent rounds of written test, Interviews and screening processess conducted at Gorakhpur and Delhi. Currently this batch is undergoing a fully residential training program at Bangalore. This training is Free for them and is funded by the Titan Group.
eJeevika has sourced these brought youth from the villages of Maharajganj district with the help of our Field Team.
The youth is undergoing a life changing experience by getting exposure to the best training in state of the art Institute, good hostel facilities and industry interface (Tata Group). They will be ready to join work in 18 months as Professional 'Optometritians' with Titan Eye Care Brand.
Thursday, December 15, 2011
Maslows theory applicable in attracting Talent
eJeevika has been trying to make rural youth employed by training, certifying and employing them.
It seemed very obvious that those who do not have a Job will like to get certified, skilled and employed.
But to our surprise we found out a couple of interesting insights which are obvious but we had underestimated their strengths.
eJeevika has approached more than 100 candidates to take up a course in the construction industry for 3 months, get certified and eventually start working. We thought that at least 50% of the youth will enroll for this course (pls note that it is a free residential training course where all the expenses are covered followed by assured employment). 15 candidates showed willingness but none of them pursued this course. The 15 candidates started for the training destination by train but got down at some other station (a fellow passenger told them about a job opportunity of becoming cleaners in a temple) and joined the work where they got immediate money. We came to know that 3 months training period was a long wait for them.
Now this is not a one of example. We have witnessed similar incidences many times in the last few years.
Today, I was discussing Maslow’s theory with a team mate and it struck me that the reason the rural youth is behaving in this particular way is because of their unmet basic level needs.
Maslow posited that people want and are forever striving to meet various goals. Because the lower level needs are more immediate and urgent, then they come into play as the source and direction of a person's goal if they are not satisfied.
A need higher in the hierarchy will become a motive of behavior as long as the needs below it have been satisfied. Unsatisfied lower needs will dominate unsatisfied higher needs and must be satisfied before the person can climb up the hierarchy.
Knowing where a person is located on the pyramid will determine his behavior. For example, motivating a middle-class person (who is in range 4 of the hierarchy) with a certificate and free skill training course will have a far greater impact than using the same motivator to affect a minimum wage person from the ghetto who is desperately struggling to meet the first couple of needs.
Another client of ours who wants to train healthcare specialists has worked out a beautiful approach of attracting and retaining the trainees. Initially they were facing a tough task of attracting 12th pass candidates for a diploma course followed by full time employment. They were training the youth free of cost and were also offering them a stipend of Rs. 3000/- per month. After the initial hurdles they revised the stipend amount to Rs. 5000/- per month.
The candidates were thrilled and very enthusiastic after this revision. This slight change in the amount has taken care of the candidates basic level needs and they are now open to pursue the higher level needs like skill training and certification.
It seemed very obvious that those who do not have a Job will like to get certified, skilled and employed.
But to our surprise we found out a couple of interesting insights which are obvious but we had underestimated their strengths.
eJeevika has approached more than 100 candidates to take up a course in the construction industry for 3 months, get certified and eventually start working. We thought that at least 50% of the youth will enroll for this course (pls note that it is a free residential training course where all the expenses are covered followed by assured employment). 15 candidates showed willingness but none of them pursued this course. The 15 candidates started for the training destination by train but got down at some other station (a fellow passenger told them about a job opportunity of becoming cleaners in a temple) and joined the work where they got immediate money. We came to know that 3 months training period was a long wait for them.
Now this is not a one of example. We have witnessed similar incidences many times in the last few years.
Today, I was discussing Maslow’s theory with a team mate and it struck me that the reason the rural youth is behaving in this particular way is because of their unmet basic level needs.
Maslow posited that people want and are forever striving to meet various goals. Because the lower level needs are more immediate and urgent, then they come into play as the source and direction of a person's goal if they are not satisfied.
A need higher in the hierarchy will become a motive of behavior as long as the needs below it have been satisfied. Unsatisfied lower needs will dominate unsatisfied higher needs and must be satisfied before the person can climb up the hierarchy.
Knowing where a person is located on the pyramid will determine his behavior. For example, motivating a middle-class person (who is in range 4 of the hierarchy) with a certificate and free skill training course will have a far greater impact than using the same motivator to affect a minimum wage person from the ghetto who is desperately struggling to meet the first couple of needs.
Another client of ours who wants to train healthcare specialists has worked out a beautiful approach of attracting and retaining the trainees. Initially they were facing a tough task of attracting 12th pass candidates for a diploma course followed by full time employment. They were training the youth free of cost and were also offering them a stipend of Rs. 3000/- per month. After the initial hurdles they revised the stipend amount to Rs. 5000/- per month.
The candidates were thrilled and very enthusiastic after this revision. This slight change in the amount has taken care of the candidates basic level needs and they are now open to pursue the higher level needs like skill training and certification.
Friday, November 11, 2011
Interships at eJeevika
http://blog.internshala.com/summerinternship/management-internships/
Archive for the ‘Management Internships’ Category
Internship with eJeevika- Market Research – Multiple Locations- India
November 11th, 2011
“The soul of India resides in its villages” is perhaps most quoted and least acted upon statement. The socio economic divide between India and Bharat, between haves and have nots is widening and we, for our own good, can’t afford to remain silent spectators. The growth has to be inclusive for overall progress of the country and employment of rural youth is a powerful driver to achieve that.
Have you ever been disturbed by the question of limited career choices (if any) available to rural youth – youngsters just like you and me but who did not have access to A class higher education as we did? If yes, the internship at eJeevika could be a great first step that you may take in the direction of bridging the gap. Check out what some of the leading publications like India Today & Economic Times have to say about eJeevika.Last date to apply is 15th December 2011
About Internship: - The Market research profile for winter ’11 involves meeting pre- specified institutes and creating a database of candidates (fresh and experienced) with the help of technology tools of eJeevika at the district level. Conducting events and counseling sessions to engage with students. Meeting local industry bodies and understanding their human resource requirements.
The project would be challenging, interesting and when completed, extremely fulfilling. What more, eJeevika might consider you for a pre-placement offer with a competitive package based on your performance.
Who can apply: - Both Male and Female candidates interested in Market research and business development profiles can apply.
Location: - Punjab, Himachal, Haryana, UP, MP, Gujarat, Rajasthan, J&K and Delhi (Two interns per state- 18 interns in total). Candidates will work in districts around their place of study or stay. There is no need for the candidates to relocate themselves.
Duration: - 5 weeks
Start date: - 1st Dec-2011
Stipend: - A basic stipend of Rs.2000/-
How to apply: – Please ensure that your Internship CV adheres to these basic guidelines before hitting submit button. If all set, go ahead and apply here. The last date for applications is 15th December 2011 – Hurry!
“You can also share any meaningful internship that you know of here and join the movement to build a Wikipedia of internships and win exciting prizes. Check out the FAQs Section for more details.”
Archive for the ‘Management Internships’ Category
Internship with eJeevika- Market Research – Multiple Locations- India
November 11th, 2011
“The soul of India resides in its villages” is perhaps most quoted and least acted upon statement. The socio economic divide between India and Bharat, between haves and have nots is widening and we, for our own good, can’t afford to remain silent spectators. The growth has to be inclusive for overall progress of the country and employment of rural youth is a powerful driver to achieve that.
Have you ever been disturbed by the question of limited career choices (if any) available to rural youth – youngsters just like you and me but who did not have access to A class higher education as we did? If yes, the internship at eJeevika could be a great first step that you may take in the direction of bridging the gap. Check out what some of the leading publications like India Today & Economic Times have to say about eJeevika.Last date to apply is 15th December 2011
About Internship: - The Market research profile for winter ’11 involves meeting pre- specified institutes and creating a database of candidates (fresh and experienced) with the help of technology tools of eJeevika at the district level. Conducting events and counseling sessions to engage with students. Meeting local industry bodies and understanding their human resource requirements.
The project would be challenging, interesting and when completed, extremely fulfilling. What more, eJeevika might consider you for a pre-placement offer with a competitive package based on your performance.
Who can apply: - Both Male and Female candidates interested in Market research and business development profiles can apply.
Location: - Punjab, Himachal, Haryana, UP, MP, Gujarat, Rajasthan, J&K and Delhi (Two interns per state- 18 interns in total). Candidates will work in districts around their place of study or stay. There is no need for the candidates to relocate themselves.
Duration: - 5 weeks
Start date: - 1st Dec-2011
Stipend: - A basic stipend of Rs.2000/-
How to apply: – Please ensure that your Internship CV adheres to these basic guidelines before hitting submit button. If all set, go ahead and apply here. The last date for applications is 15th December 2011 – Hurry!
“You can also share any meaningful internship that you know of here and join the movement to build a Wikipedia of internships and win exciting prizes. Check out the FAQs Section for more details.”
Friday, September 16, 2011
4th Global Skills Summit- Ministry of Labour and Employment Government of India and FICCI
eJeevika participated in the Global Skill Summit held in New Delhi at FICCI.
eJeevika and Labtech International jointly participated in the Exhibition.(In the picture are Mr. Deepak Mehrotra (Director eJeevika) and Mr. Shafiek Sultan (Labtech International).
In this exhibition eJeevika focused on the 500 million youth skill agenda, that every one in the skills domain is trying to address.
"Where are the 500 million youth? Who are they? What do they want?"
eJeevika proposed its MOBILIZATION Solution to address this Pressing Issue.
If you want to know more about eJeevika's Mobilization solution then contact us, we will be happy to share.
The Key note speaker Mr. Ramadorai, Advisor, PM National Skill Development Council said in his address that employ-ability solutions should be able to 'Scale, Replicate and should have Robust Monitoring Mechanisms'.
Mr. Sharda Prasad, Director General, DGE&T, Ministry of Labour and Employment, GOI mentioned that there is a pressing need to digitize the Employment Exchange of India.
Every one in the Skills eco-system are facing the lacuna of mobilizing the unemployed youth, a problem to which eJeevika has appropriate solutions.
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