Rob Katz

Roundup: Medicine Shoppe; A “Poor” Market

A couple of quick reads, especially if you’re recovering from Independence Day celebrations in the United States.

First, over at Acumen Fund blog, Fellow Nadaa Taiyab writes about her experiences working with Medicine Shoppe India and its new spinoff, Sehat Clinic.? The post is a fascinating take on what BOP business models mean from the ground up.? For instance, Taiyab reflects on the tremendous change a business model undergoes from concept to launch:

When I arrived in December, we opened the first Sehat Clinic. Last weekend we opened the seventh, with an eight shortly underway. The model has undergone a tremendous evolution in the past six months. We shifted our site selection strategy from relatively affluent areas with a slum nearby to locating the clinics right inside slums. We redesigned the process through which we recruit doctors and created an employment package that allows us to hire experienced doctors at a salary we can afford. We also implemented an entirely new concept for Medicine Shoppe called community marketing outreach. Through this program, we hire local women in each area to make daily home visits, refer sick patients to the clinic, spread health education and awareness, and promote our free health camps and health clinics. In the past four months we have held over 35 health-plus-vision-testing camps, serving over 4,000 people. We have also made some changes to the look and feel of the clinics and shops and put all our marketing materials in local language, to make our services more appealing to low-income markets.

Second is an article in the Business-Standard by BOP critic Aneel Karnani.? He writes that the BOP market is overestimated by C.K. Prahalad and by WRI (full disclosure – WRI runs, and many of the authors of this blog authored the report that Karnani calls into question.)? His argument is worth reading – I’m working on a formal response, and can’t say more at this time.? Regardless, read it.? An excerpt:

The alleged large and lucrative market at the bottom of the pyramid is a fantasy. Opportunities for profit by selling to the poor are not nearly as pervasive as the BOP proposition argues. If a private company is motivated not by economic profits, but by social responsibility, then of course there are many opportunities for marketing to the poor.
Fueled by rapid economic growth, the shape of the economic pyramid is changing in many developing countries leading to a rapid emergence of the middle class. Companies seeking new profitable opportunities are much better off targeting this vast new pool of consumers–the fast growing middle class–in the emerging economies, especially China and India.