NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Sawing a bed in half to create bunks that will fit in a small room may seem strange at first glance, but look deeper. Furniture for sale in most Brazilian stores does not meet the needs of low-income customers. As a result, these consumers either modify what’s available, or spend more money to have something custom made. Therefore, data that suggests that Brazilian low-income consumers invest very little in furniture for their houses is misleading. They do invest, but not in the places that can be easily detected through traditional research.

Participatory market research can provide reliable data for developing inclusive business models. By involving the target group as partners rather than passive objects, researchers can not only see the world through their eyes, but also discover new solutions together with consumers.

At Endeva, an independent institute based in Berlin, we specialize in building, sharing and applying knowledge of inclusive business and private sector-led development solutions. We have defined research as “participatory” when it gives the target group the ability to directly influence the researchers’ perspective. Our recent experience with such market research in places like Brazil, Sierra Leone and Madagascar has given us some great insights on the best ways to gather the information that businesses need and empower low-income communities to work on a partnership level to create products and services.

Benefits of participatory market research

Bringing in the target group’s critical insights at the early stages can circumvent many common challenges that business models operating in low-income markets face. Although relatively more resource- and time-intensive than pure desk research, well-designed participatory market research can yield great benefits.

First, it empowers and creates trust. Researchers are often foreigners and recognized as such by the communities they’re observing. Trust is important, and can be gained through deep interaction and dialogue. Secondly, it enhances understanding. A product may not sell for any number of reasons – local perceptions, informal rules or constraints. A person may not want to replace a stone cookstove with a “superior” solar cookstove because the solar version doesn’t allow for warm meals after dark, or because stones used for cooking are traditionally a valued inheritance for their daughters. Lastly, the methodolgy can identify innovative solutions straight from the users.

Market research methods at the base of the pyramid

Participatory market research is not a one-size-fits-all solution. There are many different methods that can be applied, depending on the situation and the product or service. In Endeva’s process, we have identified the main research methods, organized by the various outcomes an organization can aim to achieve.

Outcome 1: Use Context

Self-documentation encourages participants to portray the context of the product or service with their own eyes. For example, in Brazil, we gave people disposable cameras and papers with happy or sad faces. They were encouraged to put a smiling face on furniture solutions they liked, in their homes or those of acquaintances, and the frowning face on what they did not like. They took photos of their observations to provide us with documentation.

Outcome 2: Perceptions

Semi-structured interviews and focus groups allow researchers to gain deep insight on how the target group participants view their needs and experiences with certain products. For example, in Sierra Leone, we developed a seasonal calendar with the members of a cassava cooperative, which allowed us to identify when they sold products and had strong cash flow, as well as when cash flow was significantly weaker.

Outcome 3: Solutions

The target group already has their own ideas about solutions, and these reveal more information about preferences and constraints. In Brazil, people were asked to draw ideas for furniture they would find useful. Using space efficiently, e.g. through multifunctional furniture, emerged as a key theme.

What we learned

Our experiences in Brazil, Sierra Leone and Madagascar resulted in lessons on how to best prepare, implement and use the methods described above. These lessons include:

• Get informed about the local context as well as possible before beginning the research; work with local researchers if possible.

• Focus your research on key questions to maximize time and resources.

• Select participants purposefully, e.g. by speaking to opinion leaders, like town municipal leaders or teachers, or by leveraging existing social groups, such as farmer associations.

• Brief participants by clearly stating the reasons for your research and what they can reasonably expect to come out of it. Don’t create false expectations!

• Use visual materials to avoid problems with language or literacy.

• Triangulate results by combining different research methods.

• Be aware of your research methods’ blind spots to make the results as objective and useful as possible.

What is your own experience with market research at the BoP? Please share your insights and discuss them with us, here in the comments and/or at our upcoming peer-learning workshop, set for Sept. 10 in Berlin.

Christina Tewes-Gradl is a founder and managing director of Endeva.

Aline Kraemer is a director at Endeva and leads Endeva’s work in the health sector.

Note: This blog post is a summary of a longer article that will soon be published in the first book of the BoP Learning Lab Network. For the projects mentioned in this post, the authors worked with Research Centre for Design and Sustainability (Núcleo de Design e Sustentabilidade) of the Federal University of Paraná in Brazil, the ILO’s Youth Employment Network in Sierra Leone, and with HERi Madagascar.