Ever since the birth of the idea of the ‘Bottom of the Pyramid’ concept through the path breaking book-Fortune at the Bottom of the Pyramid written by Professor C. K. Prahalad, companies have looked at the BoP as possible business avenues. Prahalad has urged different stakeholders such as the government and businessmen to stop looking at populations from low-income households as helpless but as entrepreneurs and more importantly as valuable customers. This sector has emerged as a new market for many companies and businesses and this was said to be a critical means of development. According to Prahlad, this model just required a lot more innovation to come out with low cost solutions. However, many companies have often struggled to design and develop products that are actually relevant for BoP and transforming existing products is not a viable solution.[i]
One possible solution
Swayam Shiksha Prayog (SSP) is an organization that looks to work in rural marketing and community development through increasing the capacity and encouraging women entrepreneurs and thereby create women empowerment. They believe that women are central to community development and well-being of a family is not a new one. SSP has extensively worked in different areas in Maharashtra and created a very unique entrepreneurship and marketing model that focuses on the BoP population, particularly women and create both vibrant businesses and social impact. SSP has a number of avenues and means of making this happen and each solution is deeply integrated with the other.
- Microcredit- In order to help women support their ventures, SSP has partnered with many financial institutions by serving as an intermediary between mainstream financial corporations and local women SHGs. Through this partnership, they have used products to ensure that these women have access to credit and also train them to ensure sensible use of finances
- Retail Enterprise and Rural Marketing-SSP trains women to set up and create retail markets for environmentally friendly energy products through Sakhi Unique Rural Enterprise (SURE). This is SSP’s foray into rural marketing where women are involved with the process of conceptualizing and designing the products and at the same time market and sell the products through their distribution networks. The women who are identified for this program are called ‘Sakhi’ and this has expanded significantly enough for SSP to create a new company called Sakhi Retail. This not only just empowers women but also helps to create environmental sustainability in the long run. All products distributed through this enterprise are green and environmental friendly and the alternatives are often harmful for women- particularly use of firewood and kerosene for lighting and cooking. This adds to the strength of the enterprise since women are able to market these products since they completely understand the benefits as well. The ‘Sakhi’ model was conceptualized jointly by SSP and C.K. Prahlad, the father of the BoP space in India. Some of the products sold by the enterprise include ‘Oorja’- a smokeless stove, solar lanterns, pellets, ChotuKool, a nano refrigerator and fertilizers among others.
SSP’s model is the perfect means for any company which is interested in the rural marketing and BoP space. Their rural enterprise endeavour in fact started with their partnership with Bharat Petroleum (BP), one of India’s largest oil and gas companies. SSP’s journey with BP Energy started way back in 2004 when SSP was selected by the Late Dr. C.K. Prahald to partner with British Petroleum for assessing energy need in rural India. As cooking energy came up as a major need, it then partnered with Indian Institute of Sciences, Bangalore to develop Oorja Cook stoves – Smokeless Cook stoves as an alternate to the regular stove and market the same to the Base of the Pyramid through a retail and distribution network of women entrepreneurs. ‘Oorja’ is an innovative solution because it uses ‘pellets’- a product made of coffee beans, corn and sugar cane instead of fuel.
The women Sakhis were also involved when the product was being developed and hence this partnership is a means for both product development and rural marketing. Once the products are developed, the women have to then create a market for these affordable products, create awareness among the communities and then sell these products. SSP provides the training for these ‘Sakhis’ and develop the products in partnership with different companies.
SSP’s partnership with First Energy, an alternative energy company that specializes in creating applications for home and commercial cooking began in 2009 when they took over the distribution network set by BP. Through this partnership they were able to further co- develop a Micro pelletiser which enabled production of bio pellets at the community level thereby reducing overall distribution costs leading to an increase in the usage of Oorja cook stoves.
They have so far developed 5 such micro-pelletiser in Osmanabad, Latur, Washim, and Solapur in Maharashtra and Muzzafarpur in Bihar. This retail enterprise initiative also incubates successful Sakhis to undertake the production of pellets as a regular business initiative whereby excess remaining after sale to the community at large is bought back by First energy for their commercial market operations.
Apart from Oorja and the micro-pelletisers, SURE has also partnered with other corporates such as Godrej for ChotuKool, a nono refrigerator, Hindustan Unilever Limited for Pureit, a water purifier and D Light for solar lanterns. Today, SURE has sold more than 70,000 cook stoves in more than 5 districts in Maharashtra through a network of 850 + SAKHIS. As a result of this intervention, over one crore rupees were saved month on month on fuel and resulted in reduced indoor air pollution, better health and productivity for women, girls and families. The Sakhis are able to earn significantly more than their remuneration from their earlier jobs[ii]. As a result of other products that they have sold through SURE, they have a customer base of 6, 00,000 people.
Benefits to the Corporate
Appropriate product customization
One of the biggest challenges for corporates in cracking the BoP market and entering into a new market is actually understanding the needs of the segment. Given that SSP works extensively with the women entrepreneurs, the corporates were able to design the appropriate and relevant products for this segment by involving the ‘Sakhis’ in every stage right from building the product to pricing it. This enabled them to create and enter a new space entirely and identify with it quickly
Increased sales through the Bottom of the Pyramid
The biggest benefit to the corporate partners has been the increased sale of their products. This therefore is a direct positive for their business interests and they are able to crack the BoP market, and this has not been the case for many other corporate who are venturing into this space.
Ability to create social impact
Even though this is quite different from a typical CSR initiative, the venture is also able to create large sustainable social impact at the number of levels. First, the corporates are able to provide women from rural areas with a sustainable livelihood and contribute towards their empowerment process, helping SSP reach their goal. Second, they are able to directly contribute towards the environment and being companies in the oil and gas and energy space, this is extremely critical for them. Third, using products such as wood fuel and kerosene is extremely harmful for the user’s health resulting in issues such as respiratory diseases. SURE’s products provide viable affordable alternatives for the same.
Benefits to the Social Enterprise
Reduction in costs and increased scale
SSP’s partnership with BP and First Energy has enabled to reduce their costs. They have been able to leverage the core strengths of their companies and their ability to innovate in order to create these low-cost products which may have been difficult otherwise. Creation of these low cost stoves and micro pelletisers has also helped scale up in size quickly and reach out to over 600000 customers.
SSP’s partnership with the corporate organizations has also helped build their visibility and brand. This has also enabled them to reach out to the organizations’ networks to further expand on their distribution network. The success of this initiative is the biggest evidence of the impact of their programs on women empowerment and community development.
Co-create the product with community
One of the beneficiaries in this program are the ‘Sakhis’ themselves. The biggest take away from these partnerships is that involving the women in all aspects right from product design and pricing to the sale of products was key to the success of the initiative. This helped the corporate design relevant products for the BoP with inputs from people who understood that clearly.
Identify the right channel
One of the reasons that the distribution network established by SSP has been successful is also because they worked with women entrepreneurs. This meant that the companies were able to leverage SSP’s core strength of already working with these women and the trust factor that SSP has built with them. The products developed through this initiative were also inherently beneficial for women and hence the ‘Sakhis’ were able to sell them well.
Provide training opportunities
Given that these products are clean energy products, it was important that the ‘Sakhis’ actually understood the benefits of the products since they had to convince other women to buy them. This is also a sector with little awareness in many areas and the fact that these women had undergone training not just on this but actual aspects on retail and rural marketing is another crucial reason for the success of this initiative.
The partnerships between SSP and BP and First Energy are extremely unique and largely unexplored in the realm of Corporate-Social Enterprise collaborations. These exemplify extremely mature initiatives since they were actually able to utilize the strength that laid within the ‘Bottom of the Pyramid’ and were able to partner with the women both in the capacity of ‘entrepreneurs’ and ‘end customers’ as well. The companies here have been able to work with the social enterprises for product development as well as rural marketing and interestingly this achieves two goals- strategic initiatives that create social impact and creation of new markets to enhance their business value as well.
[i] [email protected] (2009). New Approaches to New Markets: How C.K. Prahalad’s Bottom of the Pyramid Strategies Are Paying Off – [email protected] [online] Available at: http://knowledge.wharton.upenn.edu/article/new-approaches-to-new-markets-how-c-k-prahalads-bottom-of-the-pyramid-strategies-are-paying-off/
[ii] Bharath, S. (2014). Social Enterprise Showcase: Sakhi Retail – A sakhi to help you reach every rural doorstep | The Alternative. [online] Available at:< http://thealternative.in/social-business/social-enterprise-showcase-sakhi-retail-a-sakhi-to-help-you-reach-every-rural-doorstep/>