Here's some conventional marketing wisdom: People who live on less than $2 per day simply aren't a worthwhile target demographic.
But recently, some Indian companies are challenging such ossified thinking with innovative products designed to fit the needs of India's poor, reports The Wall Street Journal:
Such inventions represent a fundamental shift in the global order of innovation. Until recently, the West served rich consumers and then let its products and technology filter down to poorer countries. Now, with the developed world mired in a slump and the developing world still growing quickly, companies are focusing on how to innovate, and profit, by going straight to the bottom rung of the economic ladder.
As the Wall Street Journal explains, Indian companies started to change the way they looked at impoverished consumers after they snapped up low-priced cell phones. Then companies began to design products that they hoped would find a similarly huge demand. Soon, Tata Motors released the Nano car, a small $2000 vehicle that made car ownership a possibility for a whole new slice of Indians since it sold for less than half the price of the next-cheapest car on the Indian market. Tata plans to export a more luxurious version of the Nano to Europe — providing an example of how the goods designed for local markets could increase global competition between Indian and Western companies.
There are several other examples of products redesigned with the poor in mind. Cheap battery-powered refrigerators are a huge help to families without electricity in their homes. The solar-powered cell phone base station won third place in The Wall Street Journal's Technology Innovation Awards earlier this year. And the introduction of mobile banking is revolutionizing banking and money transfers in rural areas via cell phones in many poor countries.
It's a newer way of thinking about poverty, and one driven by bottom-line concerns: How can firms sell the poor what they need now, rather than waiting until they have the money to buy what others already have?