Posts Tagged ‘marketing’

Deconstructing the solar lighting market hype

Nairobi solar lantern shop, July 12th 2012

The Economist’s Q3 2012 Technology Quarterly has a paean on the promise of solar lanterns replacing nasty, stinky kerosene once and for all. Of note is the careful mention of MKopa, a Nairobi based startup founded by Nick Hughes of MPesa fame, until now conducting pilot tests in stealth mode. But the rest of the article is still the usual rehash of the immense promise of solar lighting to finally get rid of that incumbent fossil fuel, something social enterprises like d.light have been attempting to fulfill for some 4 or 5 years now.

Why isn’t anyone asking what’s taking so long for this mythical promise to bear fruit? I’d like to start by deconstructing the article and identifying the implicit underlying assumptions that tend to trip the promise keepers.

As previously happened with mobile phones, solar lighting is falling in price, improving in quality and benefiting from new business models that make it more accessible and affordable to those at the bottom of the pyramid. And its spread is sustainable because it is being driven by market forces, not charity.

Show me the case study of a successful example of this product becoming a sustainable business proposition. Every company mentioned in the article is either in pilot testing new business models or talking about their performance and brightness, even while distributing via NGOs. If this is a consumer product business for patient capital then why aren’t the Chinese brands waiting (or mentioned, for that matter)?

Phones spread quickly because they provided a substitute for travel and poor infrastructure, helped traders find better prices and boosted entrepreneurship. For a fisherman or a farmer, buying a mobile phone made sense because it paid for itself within a few months. The economic case for solar lighting is even clearer: buying a lamp that charges in the sun during the day, and then produces light at night, can eliminate spending on the kerosene that fuels conventional lamps.

 The economic case might be clearer but the reality is far more complex than that. Lets compare the market entry strategies of mobile manufacturers in their pioneering heydays and the solar lantern makers. Where is the user research and consumer insight on existing household energy usage and purchasing patterns that might shed a light on this ongoing multi-year promise?

The mobile phone is a personal asset. Most people put aside bits and bobs of cash towards their purchase of their phone. It belongs to them and there is prideful ownership and status involved with models and brands.

The solar lantern is not a personal asset. It belongs to and will be used by the entire household. There may be more than one adult earning member of such households. The decision making involved is one of group dynamics, never as simple or easy as that of an individual purchase.

Eliminating spending on kerosene is not the same as generating income by the way of the phone.

Additionally, the phone has become a ‘must have’ and is aspirational, in addition to connecting you instantly to your social network. Small and portable solar lanterns are not yet status symbols nor aspirational in anyway, given that much of the marketing communication places emphasis on saving money on kerosene. Whooptydoo, says the subsistence farmer whose dreams might include TV sets and radios, to be added over time, in modular fashion, to the solar home system.

In an informal test of solar lights carried out by The Economist in Africa, users grumbled about the soapy quality of light and lantern-style design. But the company has won plaudits for its other models: its largest lamp, the S250, was included by the British Museum in its “History of the World in 100 Objects” exhibition as the 100th object. .

I mean, really, The Economist? That is weaselling out of accurate consumer feedback isn’t it, if you state that users (the people who are going to sustain the businesses remember by purchasing the devices) don’t like the lanterns but hey, look, the British Museum likes it. Remember the design awards granted to the LifeStraw? Look at what happens to them:

 Carefully hidden away in case someone comes to check up on the beneficiaries of generous charity. When asked why it wasn’t in daily use, the response was that it was far too difficult and took too much time when it was easier to pour a 20 cent bottle of purifier into a bucket.

The article ends with a product that’s a concept developed in a studio. Who is hoping and how that this designer device will magically obtain a viable business plan with effective distribution and sales? The Economist might have been better off focusing on MKopa and Eight19’s efforts to experiment with new pay as you go business models, though I can already see their solution’s limitations particularly in the Kenyan market’s context. They could have talked about Econet Solar or Angaza or MeraGao in India, in the same vein of experimental business models instead of defaulting to the hopeful batteries and museum pieces that will grace the dusty shelves of retail outlets.

Btw, that SunKing you bought in an African supermarket? How many rural low income BoP customers shop there, do you know? 

Hub and spoke model for new product introductions



Nairobi’s Central Business District – Luthuli Avenue is the heart of the electronics and consumer appliance trade for Kenya. Chinese businessmen can be seen mingling with Somali traders and wholesalers come from all over the country to see “what’s new”. I saw recently introduced solar powered refrigerators (just 60W) on display, direct from China but was not permitted to photograph.

Marketing principles for the informal economies of the emerging world

This will be the working title of the book I plan to sit down and start writing the latest by January 2013. And I can’t start earlier than November this year because I need to see the results in the market start to come in first before I can pontificate on the topic, but naturally as they say.

I was mentioning to someone on a call just yesterday that we cannot define the informal economy, or rather it has been our attempts to do so that have led to more barriers between the formal and the informal. Why not try to describe it, give it some characteristics and possibly propose a principle or two that underlays the design?

I think that the seeming chaos of the informal economies across the rural and peri urban parts of less developed regions seems to imply automatically to those more accustomed to neat and clean systems that work in their home locations that there are no rules to this economy nor any commonly agreed standards or measures i.e. economic anarchy

This is so not true.

This old post of mine illustrates different types of “socially agreed upon” weights and measures in the informal market, not only is the variety astounding but the quantities and measures are similar across the country. Every single cyber cafe, big or small, across the country charges a shilling a minute as standard rate unless they have high competition in the neighbourhood that might make them lower it but I’ve only seen it twice in all the cybers we covered in last year’s Village Telco project.

Flexibility is the key to understanding how this economy works, and its carefully crafted hyper local “guidelines” rather than rules, as in they are socially enforced rather than through formal channels available to consumers elsewhere more privileged.

In your tiny social network/community/income source pool, you cannot afford to gain a bad reputation in transactions, work will be hard to come by. This is the basis of the naturally evolved checks and balances prevalent in the ‘systeme D’.

And so on and so forth, as you can see, it apparently seems I do have a lot to say but I’m waiting for all the anecdata that qualitative research relies upon to come in.

Lessons from working with Social Enterprises

Aisle Manager at Nakumatt

By the end of my most recent project, I was convinced that the label “Bottom of the Pyramid” (or Base of the Pyramid) also known as “the BoP” was one of the biggest barriers for organizations seeking to serve these emerging consumer markets in the informal economies of the developing world.

The alternative long and descriptive sentence is not as snappy as the BoP and I struggle with this everyday as I try to capture the characteristics and qualities of this market. But the problem with the label is that it has come to be closely associated with poverty alleviation rather than an emerging market opportunity, and thus gets loaded with the detritus of the aid and development industry. If you are to be a sustainable business, you need to generate revenue if not make a little profit and for that you need to consider your target audience as your customer, not your beneficiary.

The peculiarities of social enterprises seeking to serve the poor include the existential struggle between doing good and good business. But the emphasis on the BoP as the poor, the underserved and overlooked (by myself included) diverts us from taking them seriously as financially shrewd even if economically challenged customers in their own right. We barely know where they shop and why, how they make their decisions to purchase and how they plan to pay for them, in fact there’s little or no serious consumer research on these segments of the population. No wonder if they are not considered serious consumers to be wooed and won over like any other.

“Should we be profiting from the poor?” ask a plethora of well intentioned articles when those who do business with each other in the informal, cash based economies have no such compunction when doubling the price of kerosene as a premium for the convenience of transporting it 10km closer to their customers.

If we took away this well meaning yet now increasingly problematic label (with all the associations of poverty and helplessness), we’d perceive a diverse group of people with varying needs, aspirations, cash flows and consumption habits. We’d be segmenting them with the same rigour of a Unilever or attempting to reach them wherever they shop like Coca Cola. We would not be sitting around measuring impact of the soda or wondering how to scale. I’m going to wrestle with this wicked problem further but in the meantime, here are some collected thoughts from my observations in field recently:

Questioning the value of the term Base or Bottom of the Pyramid aka the BoP
But why aren’t they buying my fantastic life saving product?
Assessing social impact vs financial sustainability for Base of Pyramid business models
Why so much “BoP” marketing fails in the developing world

 

Social enterprises and the target audience for their value propositions
What does it mean when Chinese manufacturers enter the social enterprise space?
Systems thinking and the mobile for economic impact and wealth creation
Raising some concerns about urban user research insights being applied to design for rural markets

 
Navigating the African market opportunity
Caution: The emerging African market PDF stampede
Cracking the informal markets in Sub Saharan Africa: the need for strategic improvisation
Insights from the South African low income market (BoP) opportunity
The ingenuity economy: grassroots social enterprises abound

 

Why so much “BoP” marketing fails in the developing world

Consumer electronics stall in informal market, Nairobi Kenya 23 January 2012

Increasingly I have been getting the sense that there are some fundamental issues with the way BoP focused organizations are developing, creating and implementing their market entry strategies.  Here are four of the most obvious errors that I’m seeing:

Assuming there’s no competition

Most of these firms, particularly those coming in from the outside and seeking to serve the ‘poor’ in the developing world seem to be operating in a vacuum. Observing their market entry actions point to an underlying assumption that they are entering a virgin market where  no competing solutions for their product or service exist.  If this fundamental premise is mistaken then every element of their marketing, communication, distribution and pricing strategy will naturally suffer.

A caveat here is that it might indeed be a virgin market for branded international solutions in the formal market but this is where overlooking the informal markets and existing practices in user behaviour can be far more dangerous since this is where the competition will come from in the form of substitutes or alternate solutions.

Because of the above assumption, little effort is made to uncover information about the customer, the market or competition or the operating environment. Whether this is due to a vacuum of information on BoP markets or the developing world, or this subject simply not being taken into consideration, the fact remains that this oversight then gives rise to a series of errors (like the domino effect) – those in marketing strategy viz., marketing communications, value propositions and positioning not to mention pricing.

Conflating company mission with marketing strategy

While this is most commonly found among well meaning social enterprises entering these markets for the first time with their life saving products for the poor, large multinationals with previous experience in the developing world are not immune the minute they choose to focus particularly on the BoP (or poor) market.

Tata Nano is the most obvious example of this although here one wonders how much of this had to do with their actual marketing communications and advertising for the Nano and how much to do with all the media hype around the car being specially for the ‘common man’? All the positioning and branding in the world through formal advertising and communication channels could not overcome the public perception of the ‘poor man’s car’ created by every other article – from engineering news to international styling – on the Nano.

Similarly, if all the marketing communications, press reports and online information is geared towards the ‘poverty alleviating” mission of the company then this lack of clear focus or understanding of who the target audience is will come through in the positioning and branding of the product in the marketplace.  And no one will aspire to buy the ‘poor man’s product’ if it means a clear signal of having failed to succeed or admitting defeat among their friends and neighbours.

Confusing value proposition with need

This lack of clarity and understanding about the target audience for a product or service and thus, its marketing communications and messaging then snowballs into incorrect positioning of the product or incorrectly identifying the value proposition for the end user.

The end result might be the same – the customer choosing to buy your product – but the pain points may differ tremendously across geographies and regions, not to mention socioeconomic strata. An example is water saving flush toilet mechanisms being sold in Nairobi as a sustainable, greener alternative – that is, the same positioning and value proposition as that used in the eco-conscious parts of the Northern European continent. Sales are sluggish. But when you take into consideration that there is a water shortage or that many communities need to purchase water in tankers to fill their household storage tanks, a simple shift in positioning to “Spend less money flushing down the toilet” or some such clever quip could in fact make a more sensible approach in this situation for the very same product.

This gets more obvious the lower down the income stream you go – Mama Mboga with her vegetable stand may not have the same priorities nor relate to the same value propositions that social impact investors do.

Overestimating the ability of a faceless brand to communicate value

There is probably a snappier sentence to capture this aspect but at this stage of understanding the BoP markets and their challenges its perhaps better to be clear than pithy.  Some have called this issue one of Trust and in the past, I’ve referred to it as Commitment but the fact remains that this aspect is the most challenging and difficult to overcome as a barrier to acceptance.

Even megabrands accustomed to instant global recognition such as Google may find that not only is their brand unknown and unheard of in these new and emerging markets but others may have gotten there before them.  Which, in a way, brings us back to the first point in the assumptions made at the very beginning of considering market entry strategies in the rising global middle class.

The multifunctionality of livestock in rural Kenya

This is an interesting research paper from Purdue’s Agricultural Economics department published in 2008. Titled Traits Affecting Household Livestock Marketing Decisions in Rural Kenya (pdf), it’s abstract informs us that:

While many contemporary development programs with regard to Sub-Saharan Africa’s pastoralists promote improved livestock marketing as a way out of poverty, they also fail to take into account the multi-functionality of livestock within these communities, and thus are doomed to failure. While livestock are a main source of income for the pastoralist household, they also serve a purpose as a store of wealth, food source, and status symbol. Furthermore, cattle and smallstock (sheep and goats) fulfill each function to a different degree. Since livestock are so multi-functional, marketing projects could better achieve their objectives if they had a more accurate picture of what motivates household livestock sale decisions.

The findings from the first phase of my fieldwork in rural Philippines and India identified the tendency for livestock purchases to be perceived as investments, maturing at different times over the course of the natural year. A piglet, for example, could be used as an investment – to be sold when adult for 2 or 3 times its original cost or as a cushion against shock – to be eaten as food or sold in times of need. Whereas it was rice or wheat that tended to be used as a store of wealth by the Filipino and Indian farmers, this paper demonstrates that rural Kenya pastoralists display the same behaviour, only changing the form of the stored wealth from grain to livestock.

We cannot look at any rural marketing strategies without first understanding household financial behaviour (or consumer behaviour as traditional marketers are wont to call it, though that can be misleading) and many of the traits so displayed offer a challenge to conventional business practices and market entry strategy.

Here’s a lovely paragraph from their research paper which echoes my findings, giving me confidence that my findings from the upcoming rural Kenyan fieldwork will only underscore the basic patterns of rural financial household management already seen elsewhere.

Given the emphasis placed on the multi-functionality of livestock in the literature, the implication is that households will treat livestock similarly to a savings account or stock portfolio and typically (and perhaps reluctantly) only sell livestock to cover cash shortfalls when certain necessary expenditures arise. Depending upon the household liquidity of livestock, animal sales may take place frequently to cover living expenditures or infrequently to cover lumpy expenses such as school fees, tuitions, and uniforms. Additionally, pastoralist households likely hold livestock as a buffer against future uncertainties and obligations that cannot be completely foreseen.

Lack of liquidity among rural households has often led those evaluating the so called “base of the pyramid” households to inaccurately assess purchasing power based on availability or spending patterns of cash money whereas in actuality cash money is rarely held onto and rapidly converted into tangible goods as a form of investment in a diversified portfolio.

If interested in comparisons, my second link above ‘findings’ is the final paper I’d submitted to the iBoP Asia project in 2009 on the ‘Prepaid Economy’ research.

Senegalese research on innovation processes in their informal ICT sector

I came across some excellent research by Dr Almamy Konte and Mariama Ndong of Senegal. While I’m sure the original working paper in French must be far better than this drafted English translation, their key points are nonetheless something to make us sit up and listen, particularly with regards to innovation in the informal economy.

Research has shown that the informal sector of ICT is a sector that has recently developed (since 2000). This sector has evolved to meet the specific needs of the ICT society. Coping mechanisms in this sector spend by taking into account the social and economic populations.

Taking into account these social realities is the basis innovations noted in the sector. These innovations (social innovation, organizational innovation, and marketing innovation) are a reflection of the Senegalese society and its organization. These innovations are based on values and thus Senegalese distributive logic versus the logic of profit prevails in the capitalist system. ~ from their abstract

They have found that the innovations observed among the informal ICT sector (covering all aspects of information and communication technology such as the repair and repurposing of old equipment, sales of new and refurbished including scratch cards and accessories etc) are those that have emerged in response to cultural and social needs inherent in Senegalese society and many of the core values of the businessmen reflect this localization.

A snippet from page 10:

In Senegal, the informal sector provides enormous potential and capacity for innovation that justifies his place in the Senegalese economy. The emphasis is on using knowledge rather than the production of knowledge. Innovation has always been viewed as a transgressive action individually or in groups to improve unsatisfactory situations, or at least solve problems.

However, innovation is not a simple problem solving but it contains within itself the seeds of creativity and originality, it acts on the margins of freedom of the actors when dealing with operations increasingly demanding control (CROS, 2007, 9). Any characteristic of the informal sector in Senegal who works in the “lack of structure”, but who is under enormous pressure and intense competition in the modern sector.

Innovation is meeting a need (real or potential), a market and workable solutions. It is important to link the needs to the requirements because the informal sector in Senegal follows the demand and adapts itself. It has a great capacity for innovation and responsiveness that the modern sector itself has not.

I have highlighted the sentences that stood out for me – while I had not been able to comprehensively address this topic as well as the authors have managed to do – it was back in the Autumn of 2010 that we’d conducted a field study among the jua kali workers in Kenya to take a closer look at innovation under conditions of scarcity among the informal manufacturers and fabricators based on the same logic.

That here, the informal sector’s responsiveness to customer needs was of a level entirely different to that of the formal industry – that their inventiveness and ingenuity was partly a demonstration of their ability to make and offer for sale exactly what their market wanted. There was little or no scope for errors in an environment of resource scarcity and irregular incomes. Products sold were incomes earned, a direct correlation that Konte and Ndong observed as well:

we try to show that the innovational act in this area is beyond the theories of innovation. Indeed, here the imaginative character of the actor is based on a sense of survival. With a highly developed competition, the human being must be creative and resourceful to get a place in the economic market.

While the PDF as a whole is a treasure trove on the informal ICT sector in Senegal and related literature, this last part from their sampling exercise did also stand out for me. It is the identification of the core values that helped increase their revenues, by the participants of the study, that is the informal ICT business owners:

Social values that contribute most to the increase in turnover of UPI are honesty (Jub ak ngor), courage (Diom), solidarity (ndimbaleunté) and hospitality (téranga). Indeed, the arguments advanced by respondents in the UPI to justify the choice of social values are numerous.

Honesty for these IPU (Informal Production Unit) respondents is the value that leads to success. It helps to establish trust, to secure and retain customers. An insured customer always comes back and you can even get other customers.

Courage is an essential value for a person who seeks a horizon. For them person must be selfless in order to survive in this business. It is not easy to get up early and be present every day for a long duration (12 years for some). Thus, only the courage and perseverance can help them to move forward.

Solidarity for them is a national value, Senegalese, because Senegalese feel affection for helping each other. It serves to reinforce the links in the sense that these UPI are family so everything happens in families. This solidarity is reflected in contributions, loans among themselves and participation in happy events as unfortunate. Furthermore, this solidarity allows IPU meets their limits by complementarily. Solidarity also fixes and maintains customers (make loans). This social value is often instilled in them their religious associations(Dahira).

Hospitality is value of any good Senegalese in their opinion; some of them had to receive it in their career. A welcome to the customer saves his confidence by putting them at ease and that sometimes happens with a smile, buying fruit drinks to customers. Therefore, a client welcomed, always returns.

Social enterprises and the target audience for their value propositions

It struck me while browsing through some ‘design for social impact’ product websites recently that while their focus might be on the poor, their communication and messaging was geared towards the Western or top of the pyramid audience.  I’d rather not link to nor name names, select your favourite cookstove/solar lantern/water purifier social enterprise and look at it from the point of view of their intended customers – the erstwhile poor in the developing world.

Their marketing communications tend to look and feel no different from that of the big name charitable organizations – big eyed brown child seeking your help to drink water/study/eat food etc.

Whats the problem, you say, these are well meant start ups and they need all the help we can give them to get these wonderful life changing products out to make that better world for the 99% er 90%, whatever?

The problem comes down to the value propositions that these organizations identify as being critical for their target audience.

“Cooking with cow dung gives Mrs Rajarani terrible hacking coughs everyday, SupercleanCookStove helps ensure her lungs are healthy enough to do all the housework”*

“Kerosene emits enough noxious fumes to equal smoking 2 packs of filthy cigarettes a day, our CleanFreshBriteLite takes over the burden of keeping encroaching darkness away”*

et cetera

Where’s the problem, you continue asking me, these products are well designed modern technology that will help alleviate these side effects?

Agreed, but is the value proposition being made one that resonates with you, dear reader on the broadband internet, browsing their photoshopped website, ready to donate a few extra lamps/stoves/watercoolers or one that will resonate with their intended customer?

Who is the customer? What do they want? What value proposition resonates with them?

And how many entrepreneurs have been frustratedly asking “Why aren’t they putting down good money for this fantastic product of mine?

Because the demand being addressed by these messages is not that of the target audience, who are ultimately the ones for whom these products are made.

Everyday, research shows that the barriers to adoption include:

Improved cookstoves rank poorly on all three dimensions: their benefits are rarely valued highly by customers at the outset, they are expensive, and they require a significant change in lifestyle to be put into use.

Lets start with benefits alone – which is where the topic of identifying the correct value propositions for the target audience comes in. If your messaging and marketing is all about the best selling drill addressing an audience of home improvement contractors but what your actual customers need is a hole in the wall, how will you manage to bridge this gap in communication when you face your customers directly?

By focusing on the value propositions – be they environmental, healthcare related or otherwise – meant for every other stakeholder but the end users aka the customers of the product themselves – organizations may never quite identify nor refine the benefits as they relate to the poor customer, in the context of their lives, and their decision to purchase and use the said products.

To quote an old post about the Tata Group’s approach to low income customers,

Their primary criteria – as a business – for the design and development of this product was to take the concept of the Bottom of the Pyramid as a viable demographic to serve, setting the design criteria and constraints for both the product itself as well as their revenue model and pricing structure accordingly. The fact that it will “do good” or “improve life” is as important but this aspect has not been permitted to overshadow the need for the product to be competitively priced and attractive to the consumer, offering value for their hard earned rupee, even as it prevents their children from suffering from diarrhea.

By taking their BoP customers as seriously as they would any other demographic, they focus on delivering a clearly identified and on target customer value proposition, thus a clearly defined benefit, to the end user. This aspect will show up in their marketing and communications as well.

What strikes me the most is that these are the basics of marketing and strategy, imparted in any MBA program around the world.

*exaggerated to amuse myself

But why aren’t they buying my fantastic life saving product?

DSC02432

An all too common a question blurted out in frustration by well intentioned social enterprises attempting to crack the code of the informal economy at the base of the pyramid, usually ending with the rejoinder “when they can spend double the amount on a phone!”

So why aren’t people sensibly rushing out with their hard earned shillings or kwacha or rupee to bring home that life saving potable water gadget or heart warming bit of solar sunshine to add to their clean and efficient cookstove in their kitchens?

There are two separate questions being conflated in that exasperation.  One of the fundamental errors in evaluating this dilemma lies in assuming the mobile phone as an object of ownership equals any one of these artifacts i.e. you’re comparing apples to oranges. You may as well ask why someone could spend money on medication for a sick child instead of on your [insert BoP product here].

What seems like a very long time ago, back  in 2006 when I first started pondering the BoP and their consumer habits more closely, an online colleague who blogs as niblettes put forth an answer. I’m yet to find a better explanation than his  – from a December 2006 post titled “Wealth flow key to BoP product success“:

For instance, cell phones are an incredibly popular product in developing countries, despite the fact that their cost relative to income makes them very expensive. Certainly part of the reason is a lacking wireline communication infrastructure. But this is only helps explain demand, not their capacity to pay for a cell phone nor the high priority placed on cell phone ownership.

What allows people in developing countries to afford the high relative cost of a cell phone is the fact that these devices provide an actual return on investment–they make money. Cell phones do this by accelerating the flow of existing wealth within an economy.

If you have $1 it takes a year from the day you spend it for it to come back to you (you buy a loaf of bread from a baker who buys some wheat form from a farmer who buys the charcoal from you), you will not be in a hurry to spend that $1. However if it takes only a day for the $1 to come back, you won’t think twice about spending it.

Now, what makes cell phone ownership a high priority for people of limited capacity? Cell phones accelerate the flow of wealth which grows purchasing power without having to first increase the total money supply in the economy. This gets into all sorts of arcane macro economics, so lets keep this practical. Imagine you live in a part of the world where it can take weeks just to negotiate a replacement part for your broken tractor. It costs you the same price for the part, but getting it this part tomorrow means harveting your crops on time, while getting it in three weeks means getting a lower price for over ripe produce.

Accelerating the flow of wealth like this is almost like getting something for nothing: increased purchasing power with no foreign direct investment, no charity and no bloating work hours.

Toothpaste, dvd players, and even dishwashers will not have this same kind of direct and immediate effect on an economy. So while folks in bottom of the pyramid market may want such things, they can neither pay for nor will they prioritize such purchases because these kinds of products don’t repay their investment price the way a cell phone does.

Distinguishing products this way (those that accelerate the flow of wealth vs. those that don’t) seems to provide a lot of insight into what kinds of new products will and won’t succeed in bottom of the pyramid markets. However, like i warned, this theory is still pretty fresh (it may even have to go back in the oven for a while).

Well, I think its time to bring this idea out of the oven now – I can attest to this finding after having looked at how those at the BoP managed their household incomes on uncertain income streams – their cellphones did indeed help them accelerate their decision making and the responses i.e. accelerate the cash flow, primarily because they increased their span of control over time – periodicity and frequency or money – in cash or kind.

There are of course numerous other nuances at play in choice of purchases including social status, but sadly, in the case of social enterprises, the majority of their offerings tend not fall under the category of “bling”. But at the very least, we would be doing ourselves a disservice if we consider a mobile phone just another consumer product, at least on this side of the planet.

The other issue, or question, is then “Why aren’t they buying X or Y, when X will save more money for them in the long run and emit less smoke/more light/clean the windows/prevent diarrhea?”

Embedded in this question are frames of reference and as yet undiscovered value judgments – from our perspective, it seems like it should be common sense to make this sensible purchase – I hesitate to call them subtle patronization even though in some cases that may also be a factor.

One of the elements that had emerged from the Prepaid Economy work was the concept of “willingness to pay” vs. “ability to pay” – that is, we should not assume that the ability to pay for a product implies a willingness to pay for it. Conventional frameworks such as disposable income and whatnot operate on this implicit assumption, but once we tease out the underlying influence of mainstream consumer culture, so carefully cultivated over three or more generations, we can take a clearer look across the ‘values gap’ into the BoP consumer’s mindset and values, as a discerning and demanding customer in his or her own right who is making ends meet and a better life for their children in very challenging environments.

I believe framing it this way would then allow for an indepth look at  the area of “Demand” – not demand creation, which implies an artificial stimulus of ‘want’ rather than ‘need’ but instead the existing patterns of behaviour, tradeoffs made, the Why behind the decisions to continue to use something instead of replacing it with the socially beneficial solution. One can then see why there is no demand, or if the demand exists, what are the barriers to purchase.  In plain English, what’s really going on if we are not to simply assume entire populations lack the common sense of the product’s creators.

The increasing importance of user experience for cyber cafes

Cake Plaza, near Prestige, Ngong Road, Nairobi June 2011

This idyllic garden paradise is our favourite hangout and interestingly enough, our cyber cafe, in the literal sense of the words, since it provides free wifi along with your coffee and butter cream cake. Given our recent single minded obsession with internet access and cyber cafes, it was only natural to fall into a conversation with Cake Plaza’s personable young manager, Ken about his wifi set up and his observations. Ironically (or naturally) this short exchange gave us much food for thought.

In summary, the free wifi is part of Cake Plaza’s marketing budget and it was installed exactly one year ago. In this time, Ken has noticed more people using their phones to browse – they have to request the password for wifi access but he’s also noticed an increase in people coming in with laptops – his thinking is that people enjoy the sense of space and privacy offered by sitting at one of the tables over the conventional cramped cyber experience. In fact, there are groups from out of town who’ve taken up the private room by the week as a temporary work space, paying 1000 Ksh (approx US$ 10) a day for the privilege of reserving it for their use.

Individuals tend to come in the evenings after work, may or maynot have their own mobile broadband modem but it seemed as though after the work day was over, this was where they relaxed with personal browsing for an hour or two before heading home for their dinners. He does have a policy of switching off the internet access for those customers whom the waitrons notice don’t order anything from the menu.

It was this last part that clicked with Muchiri, who, by the way, has the past experience of setting up a successful cyber and selling it as a going concern.  The fact that wifi usage is dependant on purchase implied a business model. While Cake Plaza is an excellent bakery (the owner is an experienced Korean chef) in its own right and not in the cyber business per se, it did have a policy (and password) for its excellent free wifi.

This meant that for many of the evening browsers  making the trade off  between spending a 100 Ksh on a cup of coffee for 60 minutes of browsing may often be a preferable choice to spending just 60Ksh in the local cyber. That is, it was the experience that was drawing the wifi seeking traffic – we can attest to that because we did it often enough ourselves, usually spending far more than we would have at a cyber for the equivalent amount of time.

This reflects back to what I wrote about Robert’s concept of a spacious business center in downtown Mombasa offering comfort and convenience to transient CNF agents and highly mobile urban professionals. As the industry has matured, Muchiri said, it was not about “The Internet” anymore but the customer experience.  Indeed, there may not be cybers in the traditional sense eventually but instead there’ll be business centers, work spaces, hot spots and coffee shops etc – just the way they are found in Singapore or San Francisco.  And if so, then this evolution has already begun here in Nairobi, Kenya.