?Affordable Prices? is The Way to Get to The Bottom of the Pyramid: Tech4Society

Thursday, February 11, 2010

If you want to provide a product or service to the poor, you have to start with what they can afford and work from there.

“Whether it is America, India or Nepal, we work backwards and first think, ’What can the customer afford?’”, social entrepreneur David Green said at a panel of innovators on the first day of the Tech4Society conference being held in Hyderabad this week.

Others agreed that providing much-needed products and services to the poor at an affordable price requires a rigorous rethinking of everything from design and supply to distribution and maintenance.

Smart companies reaching towards those largely ignored until now, have consistently found that there are better, cheaper ways to deliver goods and services when the end customer is at the bottom of the pyramid.

“It doesn’t really cost that much to make things,” if you take out all the profit margins added he said. “It’s about demystifying the margin structure and distribution.”

Mr. Green points to Aurolab in Tamil Nadu which has been able to slash the price of intraocular lenses, used to give people with cataracts eyesight, to only $2 from as much as $3000 by not relying on the established medical producers and suppliers. “Be in control of production and you will be in control of pricing,” he said.

Source: Wall Street Journal (link opens in a new window)