Michael Goldman, Lecturer in Marketing, Innovation and Strategy with the Gordon Institute of Business Science, wrote a brief piece about C K Prahalad’s concept of reaching the world’s poor in MarketingWeb. Read it here.
The key is a radical rethink and some serious innovation, especially around the “price-performance” ratio. “This kind of innovation requires an ability to discard traditional approaches to price-performance improvements. It means a relentless focus on tailoring the specific value offering to the needs and context of this market, while rethinking the delivery of the offering to the consumer in order to provide value at a significantly reduced cost.”
Prahalad’s book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (buy it at Amazon.com or Kalahari.net), suggests 12 innovation principles that every business should consider. See the summary below.
12 Principles of Innovation for Bottom of the Pyramid Markets
C K Prahalad, in his book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (buy it at Amazon.com or Kalahari.net) provides the following building blocks for creating products and services for Bottom of the Pyramid markets:
1. Focus on (quantum jumps in) price performance.
2. Hybrid solutions, blending old and new technology.
3. Scaleable and transportable operations across countries, cultures and languages.
4. Reduced resource intensity: eco-friendly products.
5. Radical product redesign from the beginning: marginal changes to existing Western products will not work.
6. Build logistical and manufacturing infrastructure.
7. Deskill (services) work.
8. Educate (semiliterate) customers in product usage.
9. Products must work in hostile environments: noise, dust, unsanitary conditions, abuse, electric blackouts, water pollution.
10. Adaptable user interface to heterogeneous consumer bases.
11. Distribution methods should be designed to reach both highly dispersed rural markets and highly dense urban markets.
12. Focus on broad architecture, enabling quick and easy incorporation of new features.
A summary is available here.
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