Whilst attending the 2010 World Congress on IT in Amsterdam, I was fortunate enough to hear MART Founder and CEO Pradeep Kashyap deliver a speech on product innovation in developing economies. Although his session focussed on India’s rural poor, his two core messages – that genuine insight comes from close customer collaboration, and that truly customer-centric products sell themselves – are of great relevance to marketers everywhere.
A recent example of such a strategy is Nokia’s ‘Life Tools’ – a mobile service for Indian farmers and farming communities providing real-time crop price data and weather forecasts. With farmers often relying on agents to collect and sell their crops, lack of access to price data can seriously weaken their negotiating position. However, once armed with ‘Life Tools’, farmers know how much their crops will sell for, enabling them to demand a fair price.
Although ‘Life Tools’ costs only $1.25 a month, its success comes not because it is ‘cheap’ but because it delivers true value at low cost. Given the severity of poverty within developing economies (many live below the World Bank’s International Poverty Line of $1.25 per day), individual consumers are only able to afford products which directly improve their standard of living. The products that succeed in these markets are often designed from scratch in collaboration with end consumers. Usually product development is conducted by researchers who facilitate workshops where consumers can design products to solve the problems they face. These solutions are then realised by companies (such as Nokia) who have the resources to develop them.
Although it is essential to set prices as low as possible, the growth potential and size of developing markets cannot be underestimated. India’s populate exceeds 1 billion with 60% relying on agriculture to make a living – when these numbers are taken into consideration, the economics of Nokia’s ‘Life Tools’ (even at $1.25 per month) are difficult to contest.
So, to return to the main point of this blog, what lessons can first-world brands learn from product innovation in the developing world? Although consumers in the west benefit from incomes far in excess of $1.25 a day and we have little need to improve our standard of living, it is not unrealistic to question the efforts of companies to provide real value in their products. With 8 out of 10 new products failing within three months of launch, and reliance on backward-looking surveys and focus groups firmly entrenched across marketing departments, surely it is time we look for a better way to understand and engage our customers?
Perhaps a ‘back-to-basics’ approach is required; bring an end to the recent trend of adding more features, re-branding or slashing prices and focus on the core offer instead? Perhaps we should ask the customer to design their own product rather than give feedback on an existing offer? Perhaps we should listen-to and engage with customers, transferring some ownership to them even if we find out we’ve been doing it wrong all along? One thing is for certain: get it right and the product will sell itself. Could there be a stronger justification to try?