The Business Solution to Poverty: marketing and design

Business Solution to Poverty

So far, my posts have been somewhat critical of  The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers, by Paul Polak and Mal Warwick, and I can think of at least a couple more critical points. However, I really appreciate their approach to marketing and design.

Their declaration of marketing closely resembles my own:

“Marketing, properly understood, is nothing more and nothing less than a simple, straightforward process of ensuring that whatever it is you want to sell–whether a product, a service, or an idea–must be formulated so as to gain wide acceptance within its target market and achieve the effect it’s supposed to achieve. Marketing is not an alternative word for advertising: it begins at the stage conception.”

Probably one of the best things about their approach is that they pick their customers first. Polak and Warwick are focused on the 2.7 billion people who currently live on less than $2 per day. Picking your customer first helps you know whom you’re serving, learn what solutions they’re seeking, and how they will respond to your product or service.

Next, the authors recommend conducting at least 100 hours of interviews:

  • Interview a potential customer and his or her family for one full day
  • Interview another nine target families for 1-2 hours each
  • Interview managers and works at ten potential suppliers of key ingredients
  • Interview 25 vendors of competing or substitute products
  • Interview 25 households who use competing or substitute products

This amount of research is for just one village or small region. The same level of research needs to be done for new regions and new countries as you expand. And these 100 hours are in addition to many more hours researching prices, labor supply, access to capital, distribution options, and other key marketing topics.

The insights from all that market research feeds into their design process:

  • Design for a customer-derived target price-point
  • Plan for scale from the very beginning
  • Select the price/effectiveness trade-offs acceptable to customers
  • Create a proof-of-concept prototype
  • Test the prototype with at least 10 customers and use their feedback to modify it
  • Design and implement a last-mile delivery infrastructure
  • Design an aspirational branding and marketing strategy
  • Use all available local media for promotion
  • Conduct a field test
  • Scale up manufacturing and distribution systematically

Polak and Warwick contend that this upfront and rigorous attention to customers, research, design, distribution, and promotion is a hallmark of many successful first-world businesses, and it can be applied to businesses helping the global poor. I agree, and this same level of rigor can and should be conducted by public service entities to ensure the success and sustainability of their work.

(The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers and other books mentioned in this blog are available in the bookstore.)

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