Reading Helen Walter's review of Emily Pilloton's book Design Revolution in Businessweek titled "This is a design revolution?" made me wonder what would happen if we approached doing business with the BoP without the filter of "social impact" or "doing good" or other fuzzy wuzziness etc? What if the design of a product or service was simply considered the same way one would for any other demographic? And metrics of profitability, viability and sustainability of the revenue model applied to the decision to enter a new market, regardless of whether they were "the poor" or simply humans? How does this influence the success of the product or service in the market and, critically, how does it influence design?
It seems to me that this is what Tata is doing when they consider the overlooked and the underserved that comprise the majority of their domestic market. This week, Ratan Tata launched the Tata Swach, a water purifier designed and developed to serve the base of the pyramid market in India. A snippet from the news,
products which were earlier not within reach of the vast number of
people through innovation and technology, not just stripping down the
value of the product,” Tata Sons chairman Ratan Tata said.
The Swach, a pet project of Ratan Tata, is the group's bet that the
private sector can offer a better, consumer-based solution to one of
the world's most persistent health problems than most governments in
the developing world can.
This is interesting because the product is one which is not really in line with any of the TATA Group's current line up, and the water purifier market in India is currently a battleground. Hindustan Unilever, yet another firm with no history of consumer products of this sort has its Pureit – the first mover in the BoP segment, is facing challenges from the incumbent water purifier maker Eureka Forbes, who only recently woke up to the potential of the lower income demographic. One would think that in this situation the timing of the Tata Swach's launch would be a disadvantage but apparently not if this input is anything to go by,
749 rupees ($16.11) and 999 rupees ($21.48), depending on the material.
The filter itself costs 299 rupees ($6.43). It will purify 800
gallons (3,000 liters) of water – enough for a family of five for a
year – before it automatically shuts down.
Hindustan Unilever's Pureit filter, which also does not require
access to running water or electricity, costs 2,000 rupees ($43.01),
with a replaceable battery kit that costs 365 rupees ($7.85) and can
purify 1,500 litreof water.
The Tata Swach – Hindi for “clean” – meets U.S. Environmental
Protection Agency standards, and doesn't require running water,
electricity, or boiling, executives said.
It's cheaper than boiling water, cheaper than bottled water, and 2.5
times less expensive than Hindustan Unilever's low-cost Pureit filter,
according to data provided by the companies.
This implies that Tata has applied the lessons learnt from developing the Nano, as well as approached the whole market entry strategy as carefully and as rigorously as it would in any segment. 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.
This interview with the product's designer, award winning NID alum, Satish Gokhale, quotes him accordingly,
Most details about the materials and methodology that went into manufacture of Swach is under wraps, but Gokhale said there was the dual need of using right priced material without compromising on the strength of the unit and its usability with the ultimate aim of making it affordable to everyone who drinks water in the country.
This sounds more like design for a demanding client, no aspect of "social impact" or "doing good" being allowed to overshadow business needs. After the three year long project has finally seen the light of day, Gokhale's wife is quoted as saying,
tiring journey of dozens of sketches, and renderings and e-mails going back and
forth," Falguni Gokhale told TOI, adding that Tatas wanted a perfect product and
nothing half-baked would do.
making money through the replacement of battery kits that cost Rs 365.
Compare the difference in approach and in framing of the problem (market entry strategy for low income demographic) between Tata and Hindustan Unilever (HUL). No subsidies for Tata, no compromises and from all that one can read and find, greater value for the rupee offered to the discriminating investor that is the BoP consumer. To quote our own marketing ;p "Price is simply a design constraint, not the sole criteria".
Yet one can already see that when the market awareness and education of the poor user has created the demand, this latecomer to the product category will walk away with the lion's share of the sales. Tata is a global brand, poised apparently to become the Nokia of drinking water, since their next goal is entering the African market with the Swach.
Now bringing this whole blather back to the questions posed in the beginning of the post, what if "BoP Design" was approached from the same perspective as design for business and not design for social impact or doing good or any number of heart warming phrases that seek to imply improving the lives and livelihoods of the poor.
Is there any doubt that better quality water would do all of the above? And is there any doubt that this shows all the signs of being a successful commercial product for Tata?
This is just good design doing its job – making stuff that people want to buy. (For the BoP are people too)