Demanding savvy customers at the BoP

Probably the most successful global BoP consumer product today is the mobile phone and its attendant services. While there's fodder for a separate post to follow contained within that specific sentence, this one looks at the reasonably maturing market as a frame of reference by which to evaluate the last point made in the previous post about considering the BoP as your most demanding customers. Some snippets from the news before I summarize the lessons learned from observing those at the BoP up close and personally for a couple of years now.

From The Phnom Penh Post dated December 17th, 2009,

IT can't be easy being a mobile-phone operator in Cambodia, one of the world’s most competitive markets, with nine operators chasing just 14 million people. The Post tagged along last week on a sales push in the coastal resort town of Sihanoukville, where a vanload of chattering employees from Metfone took the trip from Phnom Penh to set up a sales kiosk in the coastal resort. The setup is a familiar one across the country, with bright advertising hoardings slung everywhere and music pouring from speakers to entice the locals in for a closer look.

Interest was strong, with price appearing to be a key consideration. The hottest sellers were low-end mobile phones retailing for US$14 and $17, as well as the firm’s $25 Methome device, which looks like a landline but runs off a mobile network. Many customers displayed intimate knowledge of tariffs and handset prices, quickly spotting any change from the last promotional visit. Though many sales seemed to hinge on these price points, most customers also seemed to have a solid grasp of comparative network quality. Many more had an eye to the future, looking for advanced products and 3G connectivity. Plenty for the customers to think about, and the operators, too. ~ JEREMY MULLINS

And coverage from the abs-cbn news from 20th December 2009 aptly titled "Getting to know the sophisticated prepaid user",

Prepaid subscribers currently account for more than 95% of mobile phone users in the country (The Philippines). (They) may usually belong to the low-income segment of the market, but they are actually very sophisticated, according to Globe Telecom Inc. CEO Ernest Cu. With the wealth of bucket-priced offerings at their reach, he said these users have learned to shop for the cheapest call and text promos, posing a challenge to profit-seeking telecommunications firms.

And why just rely on remote news articles, recall my rental car driver in New Delhi firmly dismissing the much advertised telco 'price wars' offering him prepaid plans at just one paisa a minute by saying he had a plan which cost only 50p a minute, thus saving him 10 whole paise.

What we're increasingly beginning to see is that regardless of varying levels of education or numeracy, language or culture, urban or rural or Asian or African, the BoP customer is savvy, demanding and an extremely sophisticated financial analyst in a manner that most of us – dazed by the clever pricing strategies in supermarkets – can only dream of being in our everyday lives.

Summarizing the observations made on the buying behaviour of this demographic, we can say that they tend to:

  • Maximise the return on their investment (every purchase is considered such)


  • Minimize their risk by
    • Choosing reputable and/or proven brands
    • Relying on a number of trusted recommendations and other's experiences
    • Waiting to purchase until proof of performance and commitment is demonstrated
This entry was posted in Bottom of the pyramid/Poverty, Business, Culture & research, Marketing, Mobile platform, pay as you go economy, Strategy. Bookmark the permalink.

2 Responses to Demanding savvy customers at the BoP

  1. Completely agree. We’re a design led-innovation firm in India called Quicksand and have done engagements in rural areas quite often. In all of those, it comes out fairly clearly that the decision making process for the BoP is extremely well researched.
    The one thing that is probably worth adding is that, often, while receiving relatively large amounts of money, somewhat fortuitously, there is a tendency to upgrade lifestyles through the acquisition of appliances etc. And during this “upgrade”, prestige also plays an important role in addition to pure economics.

  2. Niti Bhan says:

    Yes, prestige has definitely been noticed but I would be curious to know if you saw whether it was the brand that was prestigious or the ownership of the actual appliance (regardless of brand or of a brand with a different status than commonly held in more affluent markets)
    For eg, a washing powder available only in Faridabad district called “Paanch Bhai” is taken back to villages in Bihar by migrant labour on holiday 🙂 Its the best, to quote a factory worker, for getting rid of grease stains and factory type dirt and not available anywhere else (scarcity value??) and better value for money than even Nirma, thus its also taken back during their home leave.

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