AYESHA SHAIKH:C.K. Prahalad defined the Bottom of the Pyramid (BoP) as “people earning less than $1,500 a year.” How would you define BoP within the context of Pakistan?
FAHAD ASHRAF: Reckitt Benckiser (RB) defines BoP as those underprivileged consumers who have reduced purchasing power in terms of value, but in terms of absolute numbers, constitute the largest proportion of Pakistan’s population. According to the Government of Pakistan’s poverty measurement statistics, approximately 60 million people live below the poverty line and essentially this is the BoP population segment for Pakistan.
AS: Prahalad’s book The Fortune at the Bottom of the Pyramid was published in 2004 and the idea of tapping into this massive market potential immediately gained traction with brands across the world. Why has it taken more than a decade for BoP Marketing to reach Pakistan?
FA: BoP has been a talking point in brand circles for quite some time, but on-ground initiatives have taken off only recently and this has been triggered by the changing technological landscape, which has made BoP consumers accessible to brands, particularly those living in remote areas. Technology, particularly cellular technology, has created an enabling environment. The speed with which cell phone penetration has increased among BoP consumers has opened up avenues for businesses to reach out to them. Previously, communication media was limited to a few terrestrial channels, like PTV, print and radio and there was no way to directly interact and engage with the largest population segment of the country. Now, there are almost 40 to 50 million cell phone subscribers and SMS marketing has become an important outreach tool. As more people switch to smartphones (Google has projected that by 2018, the cost of an average smartphone in Pakistan will come down to Rs 500) and have access to 3G, the possibilities of BoP will increase. Small shops in remote villages today stock bread, eggs, milk – and cell phones.
AS: How has RB brought BoP to Pakistan?
FA: RB launched the first pilot under ‘Project Hope’ last year in Dhori village near Sargodha. The initiative was aimed at creating awareness and developing products and services specifically tailored to the low-income BoP consumer. To improve the project’s effectiveness, we collaborated with Save the Children and Plan International (an international NGO specialising in healthcare solutions) as well as government organisations. Our goal is realising the ideal of Sehatmand Gharanay, Khushal Pakistan.
AS: Is the scope limited to image-building campaigns or have there been changes in product formulations as well?
FA: BoP Marketing starts with educating consumers and creating an aspiration for an improved quality of life. However, product adoption will not take off unless poor households have access to affordable solutions. This is why RB started with awareness drives about the benefits of handwashing. However, most of these consumers do not have the spending power to purchase a 100 gram bar of Dettol soap for Rs 50. This is why we have created a new, affordable, multipurpose ‘Hope’ soap specifically for this market. It is priced at Rs 25, has a strong citrus fragrance and can be used for bathing, handwashing, and even to do the dishes. This one-fit-for-all approach has proved extremely effective; the brand has achieved an 80% market penetration and is being used by almost 600 households. However, this is not where RB’s role ends. As our brand portfolio does not include some essential FMCG product categories that the BoP market needs, we have collaborated with other organisations to create a basket comprising sanitary products, personal hygiene solutions and nutritional consumption items for children and adults. Our R&D teams are working towards developing a powder that decomposes waste, destroys bacteria and germs, and completely masks odour. Since sanitary facilities are severely lacking across Pakistan, bringing this product to market will go a long way in reducing the incidence and mortality rates associated with diarrhoea.
“BoP Marketing starts with educating consumers and creating an aspiration for an improved quality of life. However, product adoption will not take off unless underprivileged households have access to affordable solutions”
AS: How has the community responded to Project Hope?
FA: When Project Hope started off, there was a lot of resistance from the local community because decades-old beliefs and behaviours were being challenged, particularly when we began involving women from Dhori to help spread the message. Plan International provided education about the features and benefits of the products we were bringing to the village, and provided sales training to the women as well. In a conservative social setup, recruiting local women turned out to be a winning stroke and helped us reach a wider audience. The way the system works is that RB is responsible for delivering the products to the village, after which the women sales team takes over and goes door-to-door telling others about the benefits of these products. Not only has Project Hope brought brands such as National Foods, Peak Freans, Shan and Shield to Dhori, it has also created employment for local women who earn stipends and sales commissions, which in turn has increased their purchasing power.
AS: From a business standpoint, is profit generation a core objective of BoP marketing campaigns?
FA: Yes, but we need to be patient. There is a reason why they are underprivileged. With rising inflation and changing prioritisation, their aspirations are changing. The gain per consumer is extremely small. The market is saturated and competitive, so there is no other way for companies to progress unless they visit these areas and do something to help them. Prices must be kept low and profits will become possible only when massive sales volumes are achieved.
AS: What is the most challenging aspect of executing a BoP campaign?
FA: To change consumer habits; although managing the logistics of distribution to ensure that the BoP consumer has access to brands is a costly undertaking as well. However, once the product is available, the greatest challenge is inducing trial. Several international behavioural studies estimate that it may take up to 250 to 260 days for new habits to form. The answer to executing a successful BoP campaign lies in creating a sustained, long-term intervention. I do not think that bombarding people with marketing communications produces the desired behavioural change unless it is supplemented by in-person product demonstrations.
AS: What has the post-campaign evaluation revealed about the effectiveness of Project Hope?
FA: It has been an unprecedented success. The figures compiled for the last six months show a 23% reduction in diarrhoeal incidences and a five percent increase in five times a day handwashing. These results have encouraged us to scale up the project, and our target is reaching five million households in the next five years. However, there are financial as well as logistical limitations that will have to be overcome if Project Hope is to be implemented nationwide. The uncertain security situation, lack of adequate infrastructure, inconsistent government policies, and deeply ingrained cultural taboos are the major obstacles restricting the widespread implementation of BoP marketing in Pakistan.
For feedback, email firstname.lastname@example.org