GRASSROOTS APPROACH TO

EMERGING MARKET CONSUMERS

• The prolong and sound development of Rural
India and, India as a whole demands not only
providing people with Facilities but making
them able so that they readily accept it.

• When core sectors of the economy thrive,they

transform consumers into producers thereby
promoting overall economic development.
 BENEFITS TO POOR CONSUMERS
• Employment
• Quality of life
• Health prosperity
• Market certainty
• Safety
• Generates self esteem
• Promotes culture of self Entrepreneurship
FACTORS RAISING COST OF SERVING POOR
CONSUMERS
• Industries which contribute maximum to the
economic development have the lowest profitabilty.
• CUSTOMER ACQUISITION AND PARCELLING
› Low disposable income limits the amount consumers can buy at any
one time, thereby demanding delivery of products and services at
affordable price and size.
• COLLECTION
› Consumers have high need for liquidity leading to low savings.
› Locating and contacting delinquent consumers is difficult and raises
cost.
› The harder it is to collect the higher the eligibility criteria set for
customers.
• INFRASTRUCTURE
› The poorer the infrastructure facilities the harder and costlier to
support production and distribution
• DESPERATION
› Desperation leads to pilferages.
› Pilferages jeopardizes the long run provision of services.
• SECURITY
› High unemployment and low government support makes
infrastructure laid down by companies highly prone to thefts and
damage .
• EDUCATION AND CULTURE
› Lack of education , knowledge and good information make the
consumers highly vulnerable to risky and unprofitable businessess.
› Companies have to put extra effort to change or accommodate the
existing behaviours and mind sets of consumers.
PRINCIPAL –AGENT PROBLEM
A company is in a weaker position than the community when it comes
to gaining
PRINCIPAL –AGENT PROBLEM
A company (the principal) is in a weaker position
than the community (the agent)when it comes to
• Gaining local information
• Shaping people’s views
• Dealing with bad behaviour
 SOLUTION
COMMUNITY BASED APPROACH

“beneficiary participation, collectively organized

at the community level, in designing and
implementing development interventions”
 A cooperative solution corresponds to collective action
ie. the combination of strategies that yield the largest
group pay-off
• COMPANY’S INTERESTS
› Security
› Collection
› System monitoring
• CONSUMER’S INTERESTS
› Employment
› Commerce
› High standard of living
When a company can show that its own interests are
aligned with the interests of the rural consumers, it can
then enlist community support.
BUSINESS MODEL ARCHETYPES
 MANILA WATER USES CBA
• Company offers options for individual or
collective installation,metering and billing.
• Cost reduction by 60% for collective
connections.
• Group responsibility for paying the bills
• Group encouragement to meet the obligations
and impose sanctions on those who don’t.
• 100% recovery of bills after this initiative.
• Several community based initiative taken up
by the company
› Providing jobs to more than 10000 people
› Meeting the sanitation needs of the people by
bringing clean affordable water.
› Making available small loans in partnership
with bank of Phillipine islands.
› Increasing awareness among communities
about the long run risk using illegal
connections