Food for creative thinking

Non-consumers

by Yasushi Kusume

'Market-creating innovations transform complex and expensive products and services into simple and more affordable products, making them accessible to a whole new segment of people in a society, whom we call ‘nonconsumers’. 

The Prosperity Paradox, Clayton M. Christensen, Efosa Ojomo and Karen Dillon 


Non-consumers are individuals at the Bottom of the Pyramid who aspire to progress in their lives but lack affordable and accessible solutions to help them achieve their goals. This then forces them to go without, or to create workarounds, which in turn means their efforts will go unnoticed by conventional business metrics. Businesses ignore them. Christensen and his co-authors think this is a mistake. They, and writer/entrepreneur C.K. Prahalad, see the 'non-consumption' economy as a highly promising area for growth.

 

The 3 As

C. K. Prahalad was a business writer and entrepreneur now best remembered for popularizing the term ‘Bottom of the Pyramid’. In his book, The Fortune at the Bottom of the Pyramid, he argued that we should stop thinking of the poor as victims. Instead, we should start seeing them not only as resilient, creative entrepreneurs, but also as value-demanding consumers. He then suggested 3 ‘As’ that would help them generate consuming power. They are:

  1. Affordability: Offer affordable prices without compromising quality or performance.
  2. Access: Respect existing distribution methods and ensure accessibility.
  3. Availability: Ensure that the product can be used immediately and easily.

I think it goes without saying that you need to fully understand the local context before you can create viable solutions for it. As an illustration of how such solutions can be put into practise, let me describe a project I worked on in the past. It was called ‘Chula’. 

 

A smokeless stove

The Chula project’s intent was to improve indoor cooking stoves on the Indian subcontinent. The World Health Organisation had estimated that 25% of deaths from indoor air pollution occur in India, with 1.6 million annual fatalities resulting from toxic smoke created by the burning of biomass fuels. People were harming themselves by breathing in the smoke from cooking fires. To help reduce this problem, we worked on producing a ‘smokeless’ stove. And to do so we made use of the 3 As by targeting three areas: competitive pricing, accessibility, and ease-of-use.

 

Affordability: we partnered with local NGOs so we could use existing infrastructures to produce low-cost wood stoves that didn’t compromise cooking quality. 

 

Access: we utilized existing distribution channels to reach rural consumers. 

 

Availability: we designed the stoves for immediate use. No complicated learning curve; users could benefit from them immediately.

 

The project was a success, with our designs not only receiving several intellectual property rights, but also offering a significant breakthrough in low-tech solutions. We incorporated a chimney design that captured harmful particles, reduced smoke and made for easy, indoor cleaning. It also enhanced heat efficiency, which in turn lowered the cost of fuel required. 

 

Three further innovations

C K Prahalad is not the only person to suggest ways of working for the ‘bottom of the pyramid’. Christensen, Ojomo and Dillon have proposed three innovations they believe can also be applied to markets. Each type is relevant not only to operational growth, but also to addressing issues around poverty and reaching the nonconsumers outside the existing marketplace. Let me briefly touch on each.

 

  • Sustaining Innovation

This extends established products and services by increasing diversity or enhancing specifications. While it generally doesn't reach new customer types, it does improve market competitiveness.

 

  • Efficiency Innovation

This helps companies grow by leveraging existing assets – such as business frameworks, infrastructure, and resources – to increase efficiency and remain competitive in saturated markets.

 

  • Market-creating Innovation

Seen as crucial for economic prosperity, this innovation creates new markets. It brings products and services to people who previously had none, or to locations where existing products were unaffordable or irrelevant. Market-creating innovations ‘democratize’ previously exclusive products and services.

 

Growing from niche to mass 

When products and services are available only to a specific niche targets, then unaffordable prices, low infrastructure accessibility, and other issues turn many consumers into nonconsumers. The chances of changing behaviour, routines or habits decreases. New technology and services remain out of reach. For example, even if someone wants to replace a combustion engine car with an EV, they will remain a nonconsumer if charging stations are hard to find, or charging times are long. They only become a consumer when products are established and affordable.

 

Generate consumer power

My recommendation after all this? I believe the 3 As and the three innovations are relevant not only for Bottom of the Pyramid consumers, but for those  in any mass market.Therefore, if your brand operates mainly in the mass market and focuses on a specific market category, then implement the Sustaining, Efficiency, and Market-creating innovations to develop an investment program. And apply the 3 As to generate consumer power. 

 

Remember that you’re not investing in flying taxis or immortality science, but in practical solutions for all. Reaching those consumers is your objective, and adopting the strategies I’ve outlined will have a significant impact on expanding your business, not to mention a clear return on your investment.