Trade offs, risks and brand loyalty on a budget

Starting the conversation off on brands and their perception at the bottom of the pyramid means asking a lot of questions and working towards finding answers that seem to make sense. On an extremely limited budget, every purchase decision made is a trade off – this was a concept not only mentioned often by the people we met in Africa during our work but also pointed out by Rama Bijarpurkar on the Indian BoP consumer – that the choice isn’t should I buy this pair of shoes or that pair, but for which child should I buy the shoes?

In this context, I’d initially assumed that the cheapest product wins – regardless of brand. However, when debating this with Emlyn, he pointed out – suitably inspired by Tiger beer, of course – that in fact, when you have only X amount of money to spend on a can of beans you’re far more likely to spend a few pennies more on the brand you’ve are already familiar with, have tried and tested, and know you like the taste, than take the risk on a cheaper product that you may not enjoy. After all, we can afford to throw away a can of beans if we don’t like it and purchase again our preferred brand, but the low income consumer has no such luxury of choice or experimentation.

On the other hand, branded products – particularly in India – are more expensive than unbranded commodities, usually sold loose. Both Bijapurkar and Bushir point out that for personal care items like soaps and shampoos, women will often buy the better brand for special occasion use, perhaps not daily but certainly regularly. The same goes for other items like detergents – the more expensive one might be used only for better clothes and regular stuff for daily use.

However the pattern of purchase works out, the criteria for purchase seems to remain the same – I cannot take a risk with the purchase I make this money I have. I must make a trade off or budget decision on every purchase I make. Every penny has to count. [or cent or paisa or kwacha]

When there is such a high level of aversion to taking risks, how then do you introduce the unknown and the untried? Novelty becomes meaningless – a direct contrast to the “new and improved” mindset of the consuming classes everywhere else.

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