The New Rules of BoP Marketing

Tuesday, January 31, 2012

Santosh Nagar is almost a city within a city. Inside this sprawling slum in Mumbai’s north-western suburbs are rows of houses that sit cheek by jowl with each other. Over 20,000 residents run businesses from tailoring to soap making in its narrow, labyrinthine bylanes. There are almost half a dozen schools and hawkers selling everything from brooms to insurance policies. Not to forget the ubiquitous kirana store, one every 15 metres, serving a growing demand for everyday household items, from mosquito coils to popular detergent, from lanterns to shampoo sachets.

Ravi Maurya, whose tuck shop lies amid this hustle-bustle, has been doing brisk business in this urban slum for a quarter of a century. Maurya wouldn’t think of moving out of Santosh Nagar. This is where he’s always lived — and earned his livelihood, serving countless customers, many of whom transact no more than Rs. 5 at a time. Maurya’s merchandise is also tailored accordingly — small pack sizes, lower priced products and lesser known brands. The national brands that get advertised on television don’t always make it to Maurya’s shop shelf, unless he decides to go to the local wholesaler and buy his supplies. The large company distributors shun stores like his situated inside the slum, preferring to restrict themselves to the larger outlets, about a kilometre or two away. “They just didn’t care about us,” says Maurya.

So about a year ago, Maurya was pleasantly surprised when a PepsiCo distributor salesman turned up at his door, offering to book orders, supply ready stock and even offer him a week’s credit. As a result, today PepsiCo’s Lehar range of namkeens and wafers hang from shop fronts in his store — and across most of Santosh Nagar — aggressively competing with locally made brands like Diamond and Balaji.

Source: Forbes India (link opens in a new window)

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Base of the Pyramid, multinational corporation, pricing