How to reach the Base of the Pyramid and scale up your business?
Best practices of businesses focusing on the rural areas of Kenya
Master Thesis
How to reach the Base of the Pyramid and scale up your
business?
Best practices of businesses focusing on the rural areas of Kenya
Simone Tennekes
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6052258
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University of Amsterdam | Amsterdam Business School
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Master (MSc) Business Administration
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Entrepreneurship & Innovation | Thesis
supervisor: Dr. Wietze van der Aa
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Second supervisor: Erik Derksen
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Final version: 24-6-16
Statement of Originality
This document is written by student Simone Tennekes who declares to take full responsibility for the contents of this document. I declare that that the text and work in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is solely responsible for the supervision of completion of the work, not for the contents.Abstract
Prahalad mentioned it already in his book, there is a fortune at the bottom of the pyramid. But why are there so few companies that focus in this target group? Probably because of all the difficulties and obstacles companies have to overcome when focusing on people in rural areas who live on about $2 a day. These obstacles are described in the theoretical section of this research. The central question of this study asks what the best ways for companies are to reach the BoP population in rural areas of Kenya, and how they can scale up their businesses afterwards. To answer this question, this study focuses on whether the 4A’s model (Availability, Affordability, Acceptability and Awareness) and the SCALERS model are applicable for or used by companies that want to reach the BoP population and want to scale op their business in Kenya. This research has been done in a qualitative way, by interviewing different employees and / or managers of five different companies that all focus on this specific target group. In the end, not all parts of the SCALERS model are found as important to use in this research. Also, it is shown that scaling up the business and reaching the BoP can be seen as one process, therefore an explanation of a new model, a combination of the 4A’s and the SCALERS model, is presented in the discussion. Key words: Base of the Pyramid, rural areas, 4A’s, SCALERS, Kenya
Inhoudsopgave
1. Introduction ... 62. Theoretical Overview & Conceptual Framework ... 8
2.1 The market ... 8
2.2 The Base of the Pyramid ... 10
2.3 Reaching the BoP population ~ The 4 A’s ... 13
2.3.1 Availability ... 13
2.3.2 Affordability ... 14
2.3.3 Acceptability ... 15
2.3.4 Awareness ... 16
2.3.5. Conclusions on Reaching the BoP Population ~ The 4A’s ... 17
2.4 Scaling up the business ... 18
2.4.1 Conclusion on scaling up the business ... 22
2.5 Conceptual framework ... 22
2.5.1. Explanation of the concepts in the framework ... 24
3. Methodology ... 25
3.1 Problem statement ... 25
3.2 Research method ... 25
3.3 Analysis ... 27
3.4 Research Area ... 27
3.5 Cases ... 28
3.5.1 WakaWaka ... 28
3.5.2 M-KOPA ... 28
3.5.3 Kickstart ... 29
3.5.4 Envirofit ... 29
3.5.5 Dutch Water LTD ... 30
Validity and reliability ... 30
4. Results: Reaching the BoP population ~ the 4 A’s ... 31
4.1. Availability ... 31
4.2. Affordability ... 32
Conclusions on affordability ... 34
4.3. Awareness ... 35
4.3.1 Regular Advertising Methods ... 35
4.3.2 Going into the villages ... 37
4.3.3 Word of Mouth marketing ... 38
4.3.4. Conclusion Awareness ... 39
4.4. Acceptability ... 40
5. Results: Scaling up the business ... 42
5.1 Staffing ... 42
5.2 Communication ... 43
5.3 Alliance building ... 43
5.4 Replication ... 45
6. Discussion ... 47
6.1 Similarities between literature and results ... 47
6.2 Differences between literature and results ... 49
6.3 New model ... 51
7. Conclusion ... 53
7.1 Limitations and further research: ... 55
7.2 Recommendations ... 56
References ... 57
Appendix: ... 60
Products of the companies ... 60
The Virtual Grid ... 60
M-Kopa ... 61
Envirofit ... 61
Kickstart ... 62
Dutch Water Ltd. ... 63
List of respondents ... 64
1. Introduction
Everybody knows that poverty is still a major problem in this world. Nowadays about 2.2 billion people live on less then $2 day, the Base of the Pyramid (BoP) (Worldbank 1, 2014). Next to this there are over 1.2 billion people in the world who live off-grid, and so do not have access to electricity, most of them concentrated in countries in Asia or Sub-Saharan Africa (Worldbank 2, 2014). Discussions about how to fight poverty are already going on for many years. Where people used to think it would be best to fight poverty by giving away food, clothes and money to the poor, a lot of opinions are changing lately (Prahalad, 2009). Prahalad mentioned that instead of giving to the poor, it is better to work with the poor, and even do business with people who live on the base of the pyramid. Companies do not see the people as recipients of charity anymore, but as potential customers. So not only is doing business with the bottom of the pyramid seen as a way to help the bottom of the pyramid, but also as a significant opportunity for businesses to make good profit. (Seelos & Mair, 2007). Besides this, studies have shown that the poor at the BoP are willing to consume (London & Hart, 2004, in Seelos & Mair, 2007). The so-called social enterprises are the companies that are focusing on doing business with the poor people.
A social enterprise that is working with the bottom of the pyramid is WakaWaka. By selling solar charged lights and phone charges, WakaWaka is trying to give the people who live off-grid a little bit of light in their lives. WakaWaka tries to fight energy poverty and help these people by working out different business models to work together with the bottom of the pyramid and give the people a valuable product what will improve their personal lifestyles. It is not easy to find a model that works right away when working in rural areas and with people at the bottom of the pyramid, since there are a lot of challenges and hurdles. For instance, a practical challenge of selling products to people in rural areas is: how to get the products there? What happens when the road ends? The so-called last mile distribution (Vachani & Smith, 2007). Next to this, Prahalad & Hammond (2002) name a few challenges, when working with the bottom of the pyramid. Within the BoP population there are high rates of illiteracy, the people often do not have access to internet, television or other multimedia sources, and they have a very low income.
With the challenges in mind, WakaWaka is trying to find the right business model, which fits the company’s goals, is easy to scale, and is at a cost, which the company can afford. A big part of the overall business model of WakaWaka is the so-called Robin Hood pricing system. By selling the WakaWaka’s in the western countries for a relative high price,
but still in line with the existing market, it becomes possible for the organization to sell the WakaWaka’s in the off-grid areas for a much lower price. Because people who live of not more then $2 a day, WakaWaka has to come up with a model which gives the people on the BoP the opportunity to buy the WakaWaka, and not get it for free, but at a price they can afford. Right now WakaWaka is working with a new system, called the Virtual Grid, which gives the people to buy the product on a credit based payment system where they pay off the product in small parts. The company did a pilot in three districts in Rwanda where they tested the system. Even though the model looks promising, WakaWaka sees that the sales isn’t as high as it should be, and that the people they are selling to, are mostly not the people living at the BoP in the rural and remote areas, but people who earn a bit more and live in more central areas. Besides this, WakaWaka hasn’t got a clear plan for scaling up the
business.
Previous research on reaching or working with, or selling to the BoP population in rural areas is almost all about companies focusing on rural areas in India. Also, the research on scaling up business that also makes social impact, is solely about social enterprises in general, no literature is found about scaling up a business that is focusing on this particular target group, the rural BoP people. This is where the research question of this thesis rises: What are the main characteristics of successful strategies for reaching the BoP population in rural areas of Kenya, and how could they help businesses that operate in similar areas to scale up in the future? This study will show whether the models in the existing literature will also be applicable for companies in Kenya. Also, this study will try to fill in the gap in the literature about scaling up a business that is focusing on the specific target group, the BoP population. Last, this study will give recommendations to WakaWaka on their problem with reaching the right target group and scaling up the Virtual Grid.
2. Theoretical Overview & Conceptual Framework
This section of the theoretical overview will give more inside about the concepts that this paper is all about, The Market, the Base of the Pyramid population, The 4 A’s, Marketing and Distribution, and Scalability.
2.1 The market
One of the biggest problems for companies that want to do business with the BoP market is literally reaching the BoP market. Not only with physical products, but also with their marketing advertisements and information (Vachani & Smith, 2007). According to Seth (2011) the emerging markets have five characteristics. Market Heterogeneity is the first characteristic of the emerging markets. These markets have a large variance across almost all products and services. The markets are mostly local, fragmented, low scale and served by owner-managed small enterprises (Seth, 2011). Market Heterogeneity is also caused by the large skewness towards the BoP market. Since these people live of less than a few dollars a day and do not have access to electricity, banking, modern transportation and most of them are still illiterate, the heterogeneity of the market is more driven by resource constraints. These include mainly “haves” and “have-nots” with respect to both income and net worth. Next to this, the diversity with respect to access to products and services is huge between urban and rural areas. This all suggests that affordability and availability might be more important for differential advantage than a superior or expensive product with limited access (Seth, 2011). However, Prahalad & Hammond (2002) argue that the BoP population does buy luxury goods, as long as they are accessible.Emerging markets are enormously influenced by sociopolitical institutions like religion, business groups, government, NGO’s and other communities. Markets are more governed by institutions like this and less by competition of businesses. This market imperfection and the asymmetry of market-power will require organizations to rethink the
Emerging
markets
Market heterogeneity Sociopolitical governance Unbranded competition Chronic shortage of resources Inadequate infrastructure Figure 1theories of competitive advantage anchored to industry structure or resource advantage
perspective (Seth, 2011).
Unbranded Competition is a big obstacle for businesses that are entering a new emerging market. Unbranded competition is caused by the fact that in a lot of emerging markets, the branded products are not available due to the poor infrastructure and higher cost of doing business. Next to this, the households in emerging markets can be seen not only as households, but also as production units. People build their own houses, sell their own fruits and vegetables and other food products, and outsourcing is minimal, due to the availability of labor at home, mostly women and children. This suggests for businesses to succeed, that market development is more important than market orientation.
The emerging markets tend to have a chronic shortage of resources, like production (lack of skill-based labor, chronic shortage of power), this might lead to a diseconomies of scale. Innovation for new production methods and resource improvisation is key for businesses in these markets when they want to achieve an economies of scale advantage. The last characteristic of the emerging market is the inadequate infrastructure. This includes not only the roads to the rural areas, logistics and storages, but also the things that enable the market transactions, like banking functions and physical points of sales. Besides this, it also means the communication to the rural villagers, the sharing of information and things that make these things happen, like telecommunications, television and radio, and most of all, the lack of electricity. To overcome this problem, companies should make use of nontraditional channels and be creative and innovative with their own distribution and marketing channels (Seth, 2011).
2.2 The Base of the Pyramid
The concept Base of the Pyramid was first mentioned in an article from Prahalad & Hammond, in 2002. They describe it as a term that represents that part of the world’s population that lives in an informal market economy (London, 2008). According to Prahalad & Hammond (2002), the people that live on the bottom of the economic pyramid live from less than $1500 per annum. This group of people would be about 4 billion people, so the major part of the world’s population. Figure 2 Since the first mentioning of the subject by Prahalad, a lot more people researched this concept and over the years, the precise definition of the Base of the Pyramid slightly changed. The latest research on the size of the base of the pyramid was from the World Bank together with the IFC. They found that right now 4 billion people are living at the base of the pyramid, with all incomes below $3,000 in local purchasing power. This means that people in for example Brazil who live on the base of the pyramid live from less than $3,35 a day, in China less than $2,11, $1,89 in Ghana and $1,56 a day in India (Hammond et al, 2007). BoP markets represent a substantial part of the population in this world. BoP markets are mainly rural, especially in Asia and Africa. These markets are very uncompetitive, because they are poorly served, and dominated by an informal economy (Seth, 2011., Hammond et al, 2007). According to the WRI and Worldbank (2014), tiers 2 and 3 of the image above have a purchasing power between $3,000 and $20,000 and represent a population of about 1,5 billion people with an estimated consumer market of $12,5 trillion. This market is mainly urban, relatively well served and highly competitive (Hammond, Prahalad, 2004). The question that rises now is, when the BoP market is such a big market, with a size of approximately 5 trillion dollars (Hammond et al, 2007), why aren’t there a lot of businesses
focusing on that market? Not only do these people not have a lot of money to spend, there are more issues with dealing with the target group of the bottom of the pyramid. Shukla & Bairiganjan (2011) state that there is a big lack of access to financial institutions and services, which causes BoP households to still have minimal savings. Besides this, it is still a fact that there are high levels of illiteracy in the BoP areas, which makes it hard for companies to reach this group with communication materials such as brochures, advertisements and billboards. This leads to information asymmetry between rural and urban areas, and also a long gestation period for product introductions in rural areas (Shukla, Bairiganjan, 2011). Next to this, the BoP experiences restricted mobility and limited travel patterns, caused by the bad infrastructure and therefore lack of public transport. This leads to little benefit from customer experiences outside the local communities, resistance to change and a slow dissemination of knowledge (Shukla, Bairiganjan, 2011). Last, this group has a high rate of off-grid living people, which means they do not have access to electricity. Therefore, they also have most of the times no access to television, radio and other telecommunication providers, and so they do not have access to the by companies most used marketing practices, and information about products and services (Seth, 2011).
Prahalad and Hammond (2002) describe in their article 5 misperceptions about the BoP market seen by companies from the western world. First of all, companies assume that people with low incomes, like people on the base of the pyramid, have little to spend on goods and services, and what they have to spend, goes directly to their basic needs like food and shelter. Part of this is true, because as expected, most of the household spending goes to the food market, as shown in figure 2. But on the other hand, figure 2 shows that next to the very big food market, the housing, energy, and ‘other’ market are big as well. The water and ICT market in this figure are the smallest markets in the BOP total market, but since the rapid growth of the ICT market, the estimated size of this market is about twice to three times as big as in the figure above (Hammond et al, 2007). The fact that the poor do buy luxury goods is shown in the example of the mobile phone industry. (At least 55% of the poorest population in Africa owns a mobile phone, and Figure 3
at least 40% of these users, use their mobile phone to browse the Internet. In some countries, like Mauritanië, 97% and Botswana, 87% of the country already owns a mobile phone. (www.itnewsafrica.com, 2015)
Second of all, Western companies often think that all the goods that are sold in the BoP market are of bad quality and very cheap, since the people living on the BoP cannot afford anything of more quality. Therefore, companies think there is no room for products of better quality. This isn’t true. The fact is, that people in rural areas sometimes pay even more for products in for instance the food market than people living in urban areas, because there is no access to bulk discount stores. This means that there is a real opportunity for companies, especially the ones with scale advantages and more efficient supply chains (Prahalad & Hammond, 2002). The third misconception of the BoP market is that people in BoP markets are not able to use products with advanced technology, because of a lack of education and skills. As shown above by the example about mobile cellphones, this statement is proved to be wrong. Even though most people in rural areas have never used a phone before, they now almost all have a cellphone of their own, and so figured out how it
works.
The last misconception is that companies also assume that there are various other barriers when it comes to selling to the poor. Barriers like a bad infrastructure, currency fluctuations, and bureaucratic rules could make it impossible to do business in such areas according to companies. But luckily, there are already quite some examples of multinational companies that prove the opposite. Truth is though, that most of these companies still focus mainly on the lower- and middle class of the population, and not really on the bottom of the pyramid. These companies show that the barriers are often real, but much lower than that people think, and sometimes easy to overcome (Prahalad & Hammond, 2002).
2.3 Reaching the BoP population ~ The 4 A’s
“It’s like a pyramid, all four sides need to reach the axes at the same time” G. Marconi
As mentioned before, there are a lot of challenges when focusing on the base of the pyramid population in rural areas. In order to really reach the Base of the Pyramid consumer, Anderson and Billou (2007) state that businesses need to focus on the 4A’s, the framework that was developed by them in 2007. By doing a 2-year study through looking at companies that focus on the rural areas in mainly India, China and the Phillepines, doing multiple interviews and case studies with these companies and villagers in rural areas, they found out that there are four focus points that these companies need to focus on. The first focus point is Availability; how to get the products in the rural areas? The second point is Affordability; dealing with people that live of less than $2 a day. Third, creating Awareness, and the last point is Acceptability; the extent to which consumers and other stake holders of the BoP are willing to consume, distribute or sell a product (Anderson & Billou, 2007). 2.3.1 Availability One of the biggest problems for companies that want to do business with the BoP market is still the last mile distribution, meaning literally: What happens when the road ends? Since there is a big lack of good infrastructure in the rural areas, it sometimes seems impossible for companies to reach the people who live on a very remote distance from the urban areas. Managers of companies who are used to taking a good infrastructure for granted may shy away from entering the rural parts of a country.
An important factor of distributing to the rural areas is to close the infrastructure gap towards these areas. According to Vachani & Smith (2007) companies don’t need to start building roads or making telephone lines or access to electricity, but they need to choose strategies that are appropriate to the objectives of providing the chosen service. Outsourcing the last mile distribution to so called ‘BoP entrepreneurs’ is one of the most promising strategies in the rural parts of India according to Vachani & Smith (2007). By doing research to SME in the rural parts of India, they found out that by outsourcing this last mile distribution, the companies can take advantage of the motivated local entrepreneurs, that will work at a much lower cost than regular employees most of the time. This because they mostly have a low opportunity cost, (because since they are already living at the BoP, they are always looking for good jobs) given that they live in the target market, and do not need to travel very far (Vachani & Smith, 2007). Shukla & Bairiganjan (2011) add to this that because of these local entrepreneurs, it is easier to increase the penetration of certain
products into rural areas of India. The BoP entrepreneurs generate leads and can make sales by using their own social networks, for instance local schools, churches, or community groups (Shukla & Bairiganjan, 2011). An example of this is the brand Polar, Venzuela’s leading beer brand. They set up their truckers as distributors of the product, of whom many sold the product to people near the rural towns. Next to this, they placed thousands of refrigerators in the houses of the poor people in the rural areas, so that housewives could start a business by selling Polar beer, and at the same time, Polar beer could extend its market into the rural areas. Because Polar beer could be found everywhere in the rural areas, it was seen as such a high entry barrier for other beers that Brahma, Brazil’s leading beer decided to avoid the big rural and main market of Venezuela (Ireland, 2008).
Typically, the BoP entrepreneurs earn on commission on each sale they make. Not only are these entrepreneurs useful for distributing the products, but also for sharing information about the company to the rural villagers. So they are important communication touch points between the companies and the consumers in an area where there is a big lack of communication touch points (Vachani & Smith, 2007). As mentioned in the previous sub-chapter, in India the women groups play also an important part in the distribution network of companies. Either the BoP entrepreneur tries to sell the products to one or more person in such a group, or one of the women itself is a BoP entrepreneur. Because women in these groups save money together for products, the chances of making more than one sale are big (Shukla & Bairiganjan, 2011). Besides this, cooperation with other organizations can be an effective way of distributing products. For instance, cooperation with NGO’s. These organizations are highly represented in the rural BoP areas, because they mainly focus on the poorest part of the population.
2.3.2 Affordability
Due to the fact that the BoP people live of only $2 a day, the companies need to be creative with payment systems or the product itself in order to make it affordable for this target group. Innovators need to develop products or payment systems that match the cash-flow of people who receive their income mostly on a daily, instead of weekly or monthly basis. An example of such a product is made by Procter & Gamble, which also tries to serve the customers in the rural areas of the Philippines. Instead of selling products like soap and shampoo in big packages or bottles, like in the western countries, they sell it in small sachets, meant for a single use, at a very low price. The majority of these products are sold in the Sari-Sari stores, the small shops near in the villages. Surveys done by Procter and Gamble show that the people from the villages made an average of four to five visits to these
shops, to buy these kind of small size products. Nowadays not only Procter and Gamble sell these small packages, but other companies follow this strategy. (Anderson & Markides, 2006). An example of an innovative payment system is the system of the Grameen Shakti in Bangladesh, selling solar systems to people in rural areas of Bangladesh. This is an initiative initiated by the successful Grameen Bank, which provides financial services to the poorest of the poor, providing loans on a microfinance basis. Grameen Shakti sells solar systems to the BoP population on a microfinance base. Since they can not afford paying for the relatively expensive product all at once, the organization provides them the solar system on as a loan. They believe the solar light system can extend the productive hours of the people. They believe the income of the people will increase when using solar lights, since the working days can be extended with about 3 hours. With the extra money they earn, they can pay off their loan for the solar light system. Through the fact that people are given the chance to own an expensive solar system, and increase their income on a daily basis, this offer is very attractive for the villagers in Bangladesh. Started in 2002, the company now has already distributed more than a million solar light systems (Mondal, Kamp & Pachova, 2010).
2.3.3 Acceptability
Due to social, political, religious or typical cultural differences or sometimes the lack of a good educational background, products that are sold in the Western part of the world cannot easily be distributed to the BoP population of the world. With their specific and unique needs and wishes, companies have to adapt their products in order to be accepted by the population (Anderson & Markides, 2006). An example of this can be found in the rural areas of China. The Haier Group found out that most people in those areas think it is a waste of money to buy a washing machine, because it only washes your clothes and does nothing else. Therefore, a lot of consumers in the rural areas started to use it not only for washing clothes, but also for washing their fruits and vegetables. The Haier Group in China used this knowledge as an opportunity, and rebuild the washing machines in such a way that it included bigger drainpipes so they won’t get clogged, and inserted a different program for washing food. Sold at the same price as the other washing machine, this made it more attractive for a lot of consumers in the rural areas (Anderson & Billou, 2007).
As mentioned in the previous chapter, the fact that people living on the BoP does not mean that they want to spend money on products of poor quality, because they don’t have a lot of money. Because they need to save a lot of money before they are able to buy a relatively expensive product, they want the product to be of good quality. Besides this, a product of an ‘expensive’ brand can be used to show off their wealth and show other people
they do have a lot of money (Prahalad & Hammond, 2002). An example of this is in the research of Ireland (2008). By doing a survey with over 400 BoP women, she found that these women are sure of which products are better to buy and have better quality. Not only do they want to buy products of a decent quality when they are saving money for it, the products can also give them a certain social status. By showing off these products to the neighbors or other people in the village, they have a feeling that they can show off their wealth compared to the other neighbors in the village, like wealthy women do when buying jewelry or very expensive clothes. An example of this is that women buy a pack of Pampers for their baby, and instead of carrying it in a plastic bag, they prefer to carry it without a bag so everyone can see they bought a relatively expensive brand. 2.3.4 Awareness Creating awareness and using marketing tools efficiently can be a bug hurdle to overcome when working with the BoP in rural areas. Due to the high levels of illiteracy, the lack of electricity and therefore inaccessible telecommunications for most people, it is hard for companies to create awareness with the common marketing tools, like social media, advertisements on tv and radio, and brochures, billboards, or posters (Fletcher& Melewar,
2001)
However, there are more and more companies nowadays trying to overcome these problems by being innovative and creative with creating awareness for their brand or products, which means that new strategies have to be developed and mostly through a trial and error phase, companies find out how to reach this particular group in the most effective and efficient way (Chikweche & Fletcher, 2012). Found in the literature is that companies especially have a hard time dealing with the illiteracy of the customers of the BoP. This means that the companies need to be very creative in finding a strategy that works for these customers (Fletcher& Melewar, 2001; Anderson & Billou, 2007; Shukla & Bairiganjan, 2011). One thing that is mainly used by companies are roadshows, which are theater plays, dramas, or singing and dance performances by famous local people, to attract as many people as possible in a community area, like a market or a big street in a village. Next to these theater plays or stage performances, they demonstrate their products and give the villagers as much information as possible about the products (Chikweche & Fletcher, 2011). Besides the fact that it educates potential customers about the products, it is also a good chance for companies to get feedback from the consumers, and learn from the local communities. Hindustan Lever uses this as an important marketing tool for selling their
products. The scripts for the plays were changed for different dialects, education levels and religions, trying to target as many people as possible. They theater to promote soap and toothpaste products, and saw an increase in their product awareness in these areas from 22% to 30%. Another thing that is used a lot in the Indian rural areas is the selling through women groups or self help groups (Chikweche & Fletcher, 2011). These are groups of women, typically 10-15 women, mostly micro-entrepreneurs, who have similar social-economic backgrounds, and come together voluntarily to save small amounts of money individually, while also contributing to a common corpus to meet the emergency needs of the group. In India, the estimated amount of those self help groups is about 3,4 million (Shukla, Bairiganjan, 2011). Companies in India focus on these groups, trying to recruit one of the women to sell the products to the rest of the group, and tell the story of the company. And last, one of the most used tactics by companies in India to create awareness is the use of print materials such as flyers, posters and brochures, and the use of billboards next to the road, or the painting of houses in the rural areas of India (Disch & Bronkaers, 2012).
2.3.5. Conclusions on Reaching the BoP Population ~ The 4A’s
Shah and Desai (2013) researched the effectiveness of the use of the 4A’s principle in the rural Indian market and its participants like farmers, landless laborers and unemployed people. They found through a qualitative multiple case study that the use of the 4A’s in these rural markets lead to a more successful marketing practice than without the use of the 4A’s. The absence of a bad marketing policy is emphasized as a key for the success, next to the creation of vast marketing opportunities. The driving force of this success was ‘market forces,’ generating virtuous cycles in the transition marketing (Shah & Desai, 2013, p.6).
This model will be used as the core of this research. This is the only model found that is designed for reaching this particular target group, and serving the customers of the BoP in such a way that is fitted to their typical lifestyles and wishes, and it therefore fits well in this research. However, the model is only found in two other articles that are not from the same author who created the model, so more research is necessary to test the validity and reliability of this model.
2.4 Scaling up the business
“We have learned to create the small exceptions that can change the lives of hundreds. But we have not learned how to make the exceptions the rule to change the lives of millions.” Lisbeth Schorr (Dees & Anderson, 2004)
As the quote above mentions, social entrepreneurs can often be seen as successful in establishing an effective business model which focuses on the problems in local area’s they want to help, but they face big problems when scaling their operations and by this making more impact to those in need (Chowdhury & Santos, 2010). What do we mean when discussing ‘scaling up’? There are a few studies that discuss the concept of scaling up a social enterprise. Literally scaling up refers to growth. In the literature found about this topic, a lot of different meanings of the concept of scaling up are found. Where Jolly, Raven & Romijn (2012) see scaling up, or upscaling as they call it, as “increasing the impact produced by a social-purpose organization to better match the magnitude of the social need or problem it seeks to address.” (P.201) Klein (2008) sees it quite differently and refers to the concept as how effective, efficient and quickly an enterprise is able to expand and the capacity of a business of scaling up internally by employing people, developing resources and developing management resources (Jolly, Raven & Ramijn, 2012). Bloom and Chatterji make a distinction between scaling ‘wide’ and ‘deep’. By scaling wide, they mean serve more people with the same innovation, and by scaling deep they mean improve outcomes more dramatically and make more impact per person with the same innovation (Bloom &
Chatterji, 2009). Jolly, Raven and Romijn (2012) go further with distinguishing the concept of scaling up, and state that scaling up can be done in seven different dimensions. One will not exclude the other, and many businesses will use more than one of these dimensions while scaling up. Quantitative upscaling is the first dimension they mention, and by this they mean scaling up a business in terms of the number of beneficiaries. Next there is Organizational upscaling; scaling up in terms of expanding the capacity of the organization, with for instance more employees, better knowledge and resources and developing new or more efficient management systems. Geographical upscaling is as the name itself tells, scaling up in terms of regional expansion and extending into new markets. Deep upscaling is as mentioned above, achieving greater impact in the same location by for instance reaching poorer people in that area. Functional upscaling is scaling up your business by developing new products and services. Replication means scaling up by replicating your business model over and over
again, and with that grow your business. The business can support new entrepreneurs by franchising or developing new branches. And last, Institutional upscaling, in terms of transforming institutions (in a cognitive, normative and regulative way) and besides that
creating new ones.
Now we know the definitions and dimensions of scaling up, and the question that arises now is: What are the barriers of scaling up? And what solutions can be found to overcome these barriers? Two models are found in the literature, which can give guidance by developing a strategy for scaling up a business. The first is developed by Dees & Anderson (2004) and is called ‘The 5 R’s’. With this model they hope to encourage entrepreneurs and to help them go through the process of scaling up and for achieving widely and timely impact. The five R’s stand for Readiness, Receptivity, Resources, Risk and Return. The authors state that the initial exploration of scaling up a business begins and ends with the considerations of readiness (Dees & Anderson, 2004). Which means, is the business or the innovation ready to be spread? They state that the driver of the process of scaling up must understand the business and innovation well enough to define it in a way that can be successfully transferred to other communities. The driver must know what the core elements are of the innovations that are critical to achieving the intended impact. If the entrepreneur knows this and is confident about the elements that drive the success of the innovation or the business, the next question is whether the business or innovation will be accepted and well-received in the target community, which leads us to the next R, receptivity. Receptivity is shown in the willingness of the locals in the target group to invest time, money and energy to achieve the impact the innovation aims to create. An important part of this is that receptivity tends to be higher when key players in a community, like a priest, head teacher or head of the village recognize an unmet need in the community which this innovation tries to fulfill. When the need is high but the demand is low, the entrepreneurs should find ways to increase the demand of the community. This can be done through not only traditional marketing, but also for instance through favorable public policy, positive media attention or celebrity endorsements (Dees & Anderson, 2004).
The next step is that the entrepreneurs find out and know what the necessary resources are for scaling up the business. Before setting up a specific strategy, the entrepreneurs must have a plausible resource plan in mind. For instance, is the demand high enough to cover all the costs, or is extra funding necessary. Or is it possible to scale the innovation in a cost effective way? Once entrepreneurs have looked at the resources, it is
time to look at the risks the company has to take when going into the process of scaling up. How likely is it for entrepreneurs to achieve the impact they have planned to make with their innovation, or what are the chances on failing? And if so, what are the back up plans and what are the effects on the people they tried to reach with their innovations? Putting this all together, the entrepreneur has to decide whether he is willing to take the risk (Dees
& Anderson, 2004).
Last but not least the entrepreneur has to look at the potential returns. For social entrepreneurs this will be the impact driven returns. “Impact is not just about serving more people and communities, but about serving them well” (Dees & Anderson, 2004). The entrepreneur has to look for strategies that assure high-quality impact in a efficient and effective way. Once this is done, it is time to look at the first part, readiness again. If the entrepreneur now thinks he is ready, it is time to scale up his business.
While the five R’s model really is a guideline for entrepreneurs to go through the process of scaling up, the SCALERS model of Bloom and Chatterji is a model designed for stimulating successful scaling by social entrepreneurs and giving the entrepreneurs a tool which can give them guidance in creating a successful strategy for scaling up their business. This model proposes seven drivers or capabilities that can make the scaling up of a business more successful. The model also proposes that it is not always necessary to deploy every capability of the SCALERS model effectively, but it sometimes can be more effective to focus on two or three of the drivers of the model. The seven drivers of the model are: Staffing, Communications, Alliance building, Lobbying, Earnings generation, Replication and Stimulating market forces. Starting with the first driver of the model, Staffing refers to the effectiveness of an organization at filling its labor needs. When organizations develop good capabilities in this area, the organization will be better able to attract, train and inspire their employees than their competitors. The degree to which staffing will actually drive scaling will vary, depending on the extent to which an organizations strategy requires well trained and highly skilled employees to for instance give skilled services to beneficiaries (Bloom &
Chatterji, 2009).
Communicating refers to the degree with which the organization is able to reach key stakeholders and convince them that its innovation or business is worth adopting or supporting (Bloom & Chatterji, 2009). When focusing on the rural BoP, this is a difficult driver for organizations, since the people live without electricity and away from urban areas, it is difficult to reach them through regular marketing activities or online marketing (Hammond et. Al., 2007). It is clear that communicating more and better about an
organisation’s services or products will lead to more ability to scale. However, a lot of social entrepreneurs fail in communicating in a good way and are persuasive about what they are doing, either because they cannot afford the advertisement or publicity, or because they do not understand the culture of the target group and needs of the audience well enough. Therefore, research is very important in becoming more effective in communicating (Bloom & Chatterji, 2009). When the general public already supports and adopts the innovation of the organization, this driver will be less important to scaling up the business.
Alliance building refers to the extent to which the organization has made partnerships, joint ventures and other cooperations to improve the impact and make a bigger social change. Research shows that successful entrepreneurs no longer all want to do it by themselves, but are more open minded and open for collaborations, trying to make as much impact as possible together and try to get everyone contributing on the scaling effort (Bloom & Chatterji, 2009).‘Lobbying is the effectiveness with which the organization is able to advocate for government actions that may work in its favor’ (Bloom & Chatterji, 2009, P120) The high value that could be reached by this driver is that the organization has succeeded in getting the legislators, administrative agencies, courts and government leaders to help the organization with realizing it’s mission.
Earnings generation refers to ‘the effectiveness with which the organization generates a stream of revenue that exceeds its expenses’ (Bloom & Chatterji, 2009, p121). A high value means that the company will not be having trouble with paying their bills and funding all the activities necessary for scaling up a business.
‘Replicating reflects the effectiveness with which the organization can reproduce the programs and initiatives that is has originated’ (Bloom & Chatterji, 2009, P122). This means that an organization can replicate its programs or services without any decline in quality. To accomplish this, a lot of attention must be given to building the relationship and communication between the core organization and its replicators, so they can ensure quality
control.
Stimulating Market Forces is the final capability. Stimulating market forces can lead to a big social change, because it encourages people or institutions to pursue private interests while at the same time serving the public good (Bloom & Chatterji, 2009). These drivers are a good start for finding the critical success factors for scaling up a business. The question now arises is whether these also work when companies are focusing on the rural BoP.
testing the validity and reliability of the SCALERS model when it comes to scaling the social impact of a social enterprise. They found out by doing a quantitative (survey) study with 591 respondents of different social enterprises or NGO’s, that all seven dimensions of the SCALERS model are positively related to scaling social impact (Bloom & Smith, 2010).
2.4.1 Conclusion on scaling up the business
This research will focus on scaling up a business in a wide way, the goal to serve more people with the same innovation. This can also be seen as quantitative upscaling, as mentioned by Jolly, Raven & Romijn (2012).
Since the 5R’s model of Dees & Anderson (2004) is a model which focusses on the process of scaling up as a whole, and does not really focus on helping entrepreneurs create a strategy for scaling up their business, or focuses on the practical part of scaling up your business, this model will not be used in the practical part of this research. The SCALERS model however, will be used in this research, since according to the found literature it gives the entrepreneurs a good guidance in scaling up the business and with this the social impact that the social enterprises make. Also, the SCALERS model looks at the practical part of scaling up a social enterprise, and gives the entrepreneur a clear guideline on which part of the business to focus on when scaling up.
2.5 Conceptual framework
The figure below is the conceptual scheme in which the most important concepts from the subchapters about the 4 A’s and Scaling up from theoretical overview are visualized. The framework provides the focus for the research, and is used as the main themes that are brought up in the interviews. As shown in the framework, the main concepts come from the article of Anderson and Bilou (2007) and Bloom & Chatterji (2009). It shows that the 4A’s mentioned in the framework not only individually have an effect on reaching the BoP, but are also interconnected. Seth and Sisodia (2012) show in their research that a specific market action can cause the outcomes of the different A’s to co-vary. They also mention that because all 4 A’s have the same amount of influence on one customer and are seen as equally important by a customer, it is possible for the different A’s to influence the others. For example, a new pricing structure of a certain product can influence the acceptability of the people towards the product, which may influence the awareness through for instance word-of mouth marketing, and therefore also the access because more retailers want to have it in stock. (Abendroth & Pels, 2013). Another example could be that whenever the availability of a product decreases, the awareness also decreases. Whenever the products
are not seen anymore in the small shops where the rural BoP people shop, the awareness of the products will decrease. This could be caused by the fact that the BoP population often does not have good access to information and social media, and the awareness is often created through word of mouth marketing, as mentioned in the literature in the previous chapter.
Chowdhury and Santos (2010) suggest that research is necessary for finding out a good strategy for scaling up a business. They also suggest that the best way to find this strategy is through the use of best practice blueprints and looking at organizations which went through the scaling process.
As mentioned in the subchapter about the 4A’s, there hasn’t been done a lot of research on the 4A’s model, apart from the research that the creator of the model has done to create the model, and two other researches that used the model. However, no proper testing of the reliability and validity has been done. Also, the research that has been done, all took place in Asian countries. Therefore, it is interesting to see whether the model also works for social enterprises in another country, like Kenya.
Figure 5
2.5.1. Explanation of the concepts in the framework
Availability refers to the customers’ ability to acquire the product, which is captured by the
supply of the product and by the time and effort it takes for a customer to acquire the product.
Affordability refers to the customers’ willingness to pay in an economic- (do they have
enough income or budget to pay the product?) and psychological (perceived value, do they see it as a fair price?) way. In this research, the focus of this topic is on what kind of strategies the companies use to make sure the products are seen as affordable by the customers.
Acceptability refers to meeting and exceeding the need and the expectations of (potential)
customers, and the extent to which the customers is willing to consume the product. The focus is on whether the customers are willing to buy the products from the organizations used in this research, and which reasons they have for accepting or not accepting the product or brand.
Awareness refers to the ways the company tries to create awareness for its products or
brand. Interesting is to see whether the customers are willing to promote the product to other people and so if the product is also promoted through Word-of-Mouth marketing. Staffing refers to the way the company recruits and trains the employees. Alliance building refers to the way the company builds up partnerships and for what cause they use these partnerships Lobbying is left out of this study, because of the fact that help from the government could always be beneficial for companies, and this will not be different for these companies in this study. Earnings generation is seen as something that is necessary for every business, because without available capital, you hardly can set up, let alone, scale up your business. Since this will be not different for the companies used for this research, it is chosen to leave this part out of research. Replication refers to the ability of the company to replicate its services to other areas of the country or to other countries. Stimulating market forces is about giving other people and businesses an incentive to also do a social good. When doing it together, much more impact can be reached of course, but in this case, this is not really about scaling up the business itself, what this research is about. Therefore, it is chosen to leave this part out of this research.
3. Methodology
3.1 Problem statement
I am working for a social enterprise called WakaWaka. This is a company that sells solar products, focused on the Base of the Pyramid population in the world, mainly in sub Saharan Africa. Right now WakaWaka is going towards the end of the pilot phase of the Virtual Grid model in Rwanda, a Pay-As-You-Go system with scratch cards for solar energy and lightning. Although it looks very promising, the company still has some struggles with reaching the intended target group. Through market storms, road shows, and the use of celebrities, the company has gained a lot of awareness in the three districts the pilot phase is focusing on, and during these events the sales of the products is going well. However, the sales of the scratch cards isn’t as high as expected. Next to this, the main customers of the Virtual Grid right now are the middle class buyers, and not the intended Base of the Pyramid. After the pilot phase, the company is trying to scale and serve more parts of the country.
Next to the problem of this research, there also is a problem that comes up doing this research. The amount of literature on reaching the BoP, and working with the BoP is very limited. The literature that was found is all focusing on the rural areas of India. Because of this, the literature can be used as an inspiration, but it is definitely not sure that the themes mentioned in the literature will also be reliable when looking at rural areas in other countries. Research that focuses on other countries is therefore necessary to increase the reliability of the literature. Because of this, and because of the problem of the Virtual Grid of WakaWaka, the question rises: What are the main characteristics of successful strategies for reaching the BoP population in rural areas of Kenya, and how could they help businesses that operate in similar areas to scale up in the future?
3.2 Research method
The goal of this research is to find the main characteristics of successful strategies for reaching the BoP and with this, see if this could help companies to scale up their business. This has been done by a multiple case study in an exploratory way, by looking at companies that already managed to reach this particular target group and already scaled up in an efficient manner. Because these people mainly live in rural areas, there isn’t a good infrastructure most of the times, the people have no electricity so can hardly be reached through online marketing or television commercials and last, these are the people on the
base of the economic pyramid and so have very little to spend on products, so convincing them of buying products can bring a lot of difficulties (Prahalad, 2009).
A multiple case study has been done because of the unilateral and limited literature available for this topic, it seems to be very useful to look at companies that are focusing on the same, hard to reach, target group in another country.
While keeping the validity of the research in mind, the cases that were selected for the research needed to have as many similarities as possible to WakaWaka, so the companies could be more easily compared. It is necessary to focus on companies that sell to the Base of the Pyramid population, but only sell so-called lifestyle improving products. Commercial companies like Coca-Cola, or telecom companies will not be used for this research. Another similarity the companies used for this research have is that they focus on the BoP population, living in rural areas. This is because of the extra difficulties that come when
focusing on this group.
The chosen cases for this research are: M-Kopa, Envirofit Kenya, Dutch Water Ltd, and Kickstart. Each of the companies has been contacted through the network of WakaWaka
and the author.
The theoretical overview shows that companies in India focusing on the Base of the Pyramid population, all make use of sales agents to promote their products to the rural population, because of lack of access to information and therefore won’t get in touch with marketing efforts of the company. Therefore, not only the management team members have been interviewed for this research, but also some sales agents have been interviewed The research method is a qualitative research methodology. For this research twelve semi-structured interviews have been done This is chosen because of the relevant themes that came out of the theoretical overview of the research and the fact that almost all literature found is about companies in India or surrounding countries. In an exploratory study, in-depth or semi structured interviews can be helpful to seek new insights and find out what is happening. Also, semi structured interviews can be used to understand relationships between certain variables (Saunders et. All, 2009). All interviews were recorded so that during the interview, the total focus lies with the conversation, and not with taking notes. The interviews lasted between 30 and 60 minutes, which differed per interview, due to the semi-structured method. The first interview was with the Country Director of Unilever Tea in Kenya. This interview was purely to gain more knowledge about the BoP population in Kenya, and was not used in the analysis and results of this study.
3.3 Analysis
Afterwards, all the interviews were transcribed verbatim, and analyzed. In order to make a coherent whole of all the information, the data first has to be broken in to small parts, according to Boeije (2010). In this study, an inductive analysis was used to find the answers of the research question. By using a data-driven approach, the author made sure to do justice to all the themes that came up during the interviews, and not only to focus on the themes that were already found in the literature. The reason for this is the limited amount of literature available on this topic, and the fact that all research on this topic has been done in India, which might not be a good comparison with Kenya, due to geographical and cultural
differences.
At first, all the transcripts have been coded. A few words together, a sentence or a whole paragraph was coded to get a clearer view of the different themes and topics in the different interviews. After this, the codes were analyzed and grouped into themes. The recommended strategy of Attride-Stirling (2001) has been used for this. First basic themes have been identified from the codes. Basic themes are the lowest-order themes that are derived from the data. On their own they say very little about the text as a whole, and need to be read within a context of other basic themes (Attride-Stirling, 2001). From this, the organizing themes will be made. This is a middle-order theme which categorizes the basic themes in groups of similar issues. Eventually the global themes group the organizing themes, that together present a statement, an argument or a position about a given issue. A global theme is a super-ordinate theme that encompasses the principal metaphors of the interview data as a whole (Attride-Stirling, 2001).
Afterwards, the groups of global themes, organizing themes and basic themes formed a hierarchical thematic framework. The last step of the analysis is the interpretation of the frameworks, and an analysis of all the connections and relations found in the themes in this framework and with that the most important concepts of this study. These global themes will be the basis of the analysis chapters in the result section of this thesis.
3.4 Research Area
The research area for this research is Kenya. Because of the already existing network in this country from both the author and WakaWaka and the different characteristics of the country, like percentage of rural households and income rate of the population, this country was found to be most suited for this research.
people in this country live off-grid, meaning they have no access to household electricity (Sunnymoney, 2014). 42% Of the country lives below poverty line, which means that they are part of the Base of the Pyramid (www.unicef.org). Besides this, the illiteracy rate of the country is approximately 30% of the people (of 15 years and older). These characteristics make the country a very useful place to do this research, because the target group of this research is easy to be found.
3.5 Cases
In this section, a short explanation of the five different cases will be given. 3.5.1 WakaWaka Camille van Gestel and Maurits Groen officially founded the company in 2012. The goal of the company is to fight energy poverty and give light to the 1.2 billion people who live off-grid, since a lot of health- and personal problems can occur when living off-grid. One of the ways through which the company wants to reach the BoP population, is through the Virtual Grid system. This is a way to distribute affordable electricity services without the need for an infrastructure with power lines. WakaWaka uses a pay-as-you-go (PAYG) technology using a modified WakaWaka Power (solar light & charger) and the existing mobile phone network to create a ‘Virtual Grid’ to provide sustainable and affordable light and power to off-grid households.3.5.2 M-KOPA
Just like with WakaWaka, the goal of M-Kopa is to fight energy poverty. The mission of the company is to make high quality energy affordable for everyone. Since the commercial launch of the M-Kopa product in 2012, the company has been growing extensively. The company started in Nairobi, and is now rolling out to other countries like Tanzania and Uganda. On January first of 2016, the company installed over 300.000 products in homes in
these three countries.
The M-Kopa product is a solar home system, containing 3 lights, of which 1 portable, and two bulbs to hang on the ceiling. Next to the lights, the system offers a radio, and a battery for charging your phone or the radio, and to power the lights. The battery is charged through a solar panel that also comes with the package, that must be placed on top of the roof of a house, or in case of a poor constructed house, it could be placed elsewhere.
3.5.3 Kickstart
Kickstart is a social enterprise founded in 1991 by Martin Fisher and Nick Moon. The goal of the organization is to get millions of people out of poverty quickly, cost-effectively and sustainably. And in doing so, change the way the world fights poverty. The organization believes that not in order to fight poverty, you have to work together with the poor, create businesses with them, or give them opportunities, and trade, instead of giving products to them.
They want to establish this by helping small farmers, and giving them a chance to boost their businesses, by selling water pumps to irrigate their crops. By working together with NGO’s, and microfinance institutions, Kickstart gives the poorest people of the rural areas of Kenya (and other African countries) a chance to buy a water pump. Because people now don’t have to wait for the rains to come, the farmers can grow their crops during the entire year, which leads to an increase in their income (Fisher & Moon, 2005). By now, over 170.000 new businesses have been started with the use of the Kickstart tools, and over 850.000 people have ben helped out of poverty making use of the moneymaker pump (www.kickstart.org).
3.5.4 Envirofit
Evirofit is a social enterprise that was established in 2003. The main goal of the company is to develop technological solutions to improve the human condition on a global scale, mainly focused on the developing world (www..envirofit.com). The real breakthrough of the company was in 2007, when the company turned its attention to clean cook stoves. Enirofit states that there are more than 4 million deaths per year that are caused by household air pollution, which is more than HIV, TB and Malaria combined. This is a huge problem which envirofit tries to solve through the use of clean cook stoves. Low income families in developing countries often cook indoors, using kerosene, fuel, wood or charcoal to cook, most of the times on home made cook stoves, made from iron or clay. Cooking on these kinds of products, generates a lot of smoke. The cook stoves of Envirofit save up to 80% of harmful emissions, reduce fuel costs by up to 50% and reduce up to 60% in wood, biomass or charcoal. Therefore, a stove like this is very attractive for the poor customer. Not only is it good for their health, but it also gives them a chance to save money. In ten years time, Envirofit managed to sell over 1.000.000 cook stoves, in over 45 countries.
3.5.5 Dutch Water LTD Dutch water is founded with the goal to produce healthy and clean water at the lowest price as possible in Kenya. Because most of the people in Kenya, especially in the rural areas of Kenya, do not have access to clean drinking water, the company tried to find a way to make this water affordable for the rural villagers. Dutch Water sells its water for a price which is 10 to 20 times lower than the prices of competitors. By setting up their own distribution network, the company manages to sells 10L jerry cans of water to all the small local shops in the villages, but also door to door, to schools and churches, and to people on the streets. Nowadays, about 40.000 people make use of these jerry cans every day.
Validity and reliability
To ensure the construct validity of this research, one interview has been done with to gain more information about this specific target group. Besides this, multiple sources of evidence have been used, like the interviews that were been done with the respondents, and the websites and documents on websites of the five companies used in this study. This will also ensure the reliability of this study. The transferability of this study will be ensured by the fact that this study consists of a multiple case study, done on existing companies that all focus on the rural BoP population, and all have a mission of improving the lifestyle of the BoP population. The credibility will be ensured by the themes found in the analysis and the matches with the themes found in the already existing literature.4. Results: Reaching the BoP population ~ the 4 A’s
4.1. Availability
When looking at the outcomes of the interviews on the part of availability of the products for the BoP population in rural areas, the strategies of the companies differ. Where M-Kopa, and Envirofit literally bring the products to the consumers’ homes, WakaWaka, Dutch Water Ltd. and Kickstart use other strategies. Reasons for this could be that they are all selling different kinds of products, with different kind of needs. Dutch Water Ltd is selling a product of which all the people know what it is, it is water. They all need it, and it can be seen as a ‘Pull’ product. People always buy their water in the small shops in or near the villages, and sometimes at marketplaces. Dutch Water is selling their water at all the small shops where the BoP people already come, and used to buy other water before Dutch Water Ltd was there. The same thing holds for Kickstart. By finding out where all the BoP people go to buy the stuff they need for their small farms, they found out what the best places are to sell their products. “So when you have a high quality product, it is important to figure out where the poor people buy the products for their farm, where they buy their seeds, their fertilizers. Mostly in the small agro shops. And apparently, those people have a lot of trust in the people who run those small shops. They will come and ask them a lot about which kind of seeds they need to use, if there are new pesticides and so on. They ask for a lot of information from those people. So that particular person is the adviser of the farmer of the village level. Therefore, we have an arrangement with these particular retailers.” John, Kickstart
WakaWaka tries to do the same, but it seems to follow the same strategy as M-Kopa did in the past. They assume people of the BoP will go to the stores to buy the products there, but M-Kopa states that this doesn’t work, since they experienced it themselves. They mention that because the people do not have enough trust in a new product or brand to just buy it, and often don’t know the brand (good enough). They need to be convinced, which most of the times doesn’t happen in shops where also a lot of other things are being sold and where the shop owners don’t try to convince the buyers enough. Even though WakaWaka tried to get the shop owners to promote their product more by giving them a higher marge on the products, the sales didn’t go up. From the companies used in this research, M-Kopa, and Envirofit (and Dutch Water in the early days) are the companies that really go into the rural villages to create awareness
