I read this book about 2 years ago. It indicated what we all should know. The poor are an important market for goods and services. By poor I mean family incomes below $2,000 PPP annually. Selling goods and services to the poor is not exploitation. Let me repeat that folks selling goods and services to the poor is not exploitation.
Assuming the customer has free choice, information and bargaining power including the right to say no, they should be respected and treated as equals in the marketplace. Having money is a form of freedom of choice, no matter how small the amount.
This book covers some fascinating cases of services and goods that have been repackaged or offered in such a way that the poor have access to them. Some of the examples include soap and eye operations in India. By cleverly repackaging the goods and services and by streamlining the structure of the offering, some of the most dis-enfranchised people can reduce sources of illness and gain sight again. That is a good thing.
Here is a video file showing how to sell soap to the poor. go and buy the book Fortune at the Bottom of the Pyramid (source of the video files in this post), or think about how you might use your existing product or service in a new market, namely the poor market. An eye doctor lifted the franchise and operational focus concepts from McDonald's and provided sight for thousands. see video here.
It is expensive being poor
this might sounds silly, but proportionally to their incomes the poor pay much more for services than the rich. Water, electricity, loans, fuel etc. are often only available through grey or black markets to the poor. Without proof of home, running water or credit history, services are provided, but in inefficient and dangerous manner to the poor. Illegal electricty, loan sharks, counterfeit medicine all come expensively or with different risks that are unique to the poor. If legitimate corporations pursue or in many cases are allowed to pursue this market millions stand to benefit.
Phone examples
Most of the major cell phone manufacturers are targeting the poor right now. They are creating $20 phones that bring people together, some of the fastest growing cellphone markets are in Africa. Today 30m Africans have a cell phone and some countries are experiencing triple digit growth rates. Imagine living in a place so remote that a village truck or transport visits once a week. No medicine, no electricity, no way of communicating with the outside world, especially if the literacy rate is low. Now imagine phones with solar charges in these places. Wow, that is revolutionary (economically, socially and politically).
Like most revolutions that benefit the poor, this started with the rich and trickled down. Yesterday's Yuppie plaything (business tool) now enables some of the worlds poorest to be a part of what is going on. The same happened with the net, automobile and most drugs. Today's whims, tools or rich world goods and services eventually reach the poor via free markets. My advice, take a good or service and go explore that market first.
Information via the web, and phone, products and services targeting the poor, tap the bottom of the pyramid. A market of +1 billion customers is out there, with needs and wants. Information, medical and technical services can positively impact them in ways that most of us can't imagine.
Financial services for the poor
Imagine the difference for victims of natural disaster in 3rd world countries if they had access to life insurance, even in small amounts. That is something worth contemplating the $1,000 life insurance policy. Nothing to the people reading this blog, but potentiall staves off famine if a breadwinner dies in the 3rd world.
Banking is another important area. Many poor have no way of safegaurding wealth and so own illiquid or perishable assets instead. Try buying a goat and making change with 3 chickens. Cash in the bank is a luxury, but the poor have money even if only a little and safety and savings is of even more interest to them than the rich as they are often vulnerable to illness or fate more so than the rich, as a breadwinners illness can be a matter of life and death for a family.
So how much money are you leaving on the table by not serving the poor. Please note that every company "serves" its customers or they go away and that I am not talking charity here. A lot companies do well by doing good.
