While cities cover only two per cent of the global land area, they contribute around 70 per cent of the global greenhouse emissions, one of the main drivers of climate change.
The UN forecasts that urbanisation and population growth could add another 2.5 billion people to urban populations by 2050, with almost 90 per cent living in Asia and Africa. Consequently, the urban contribution to greenhouse gas emissions and climate change will only increase with time.
The urban poor, who constitute almost 30 per cent of India's urban population, do not have the knowledge or the capacity to pay for such products. It has always been a challenge to symbiotically combine all four components (informed customer targeting, low-cost marketing, innovative distribution and sales, and nurturing consumer goodwill) to design a marketing strategy for the urban poor. As a response, some organisations have started leveraging community-level leaders (CLLS) as marketing channels for such products.
The rationale for the CLLs comes from the effectiveness of the model in building long-term products resilient to climate change while simultaneously creating livelihoods. Some best practices that can be used to strengthen the efficacy of the CLL mode are:
Design a product identification framework tool: Each product should be analysed on the basis of four parameters: a) demand for the product (number of households), b) affordability (price), c) profitability (percentage of price), and d) scalability (potential demand across different urban agglomerations). On the basis of analysis, only those products which score high on all parameters should be offered to the market.
Conduct on-ground demand assessment: Understanding the customer becomes more important in such cases, particularly since the customers knowledge of the product is limited. Hence awareness levels, willingness to pay and customer demand becomes more critical. Such an on-ground assessment can help further shortlist products for a particular set of homogeneous households.
Provide easy financing options: It is beneficial to help CLLs establish close networks with MFIs and other financial institutions to provide financing facilities to potential consumers, hence enhancing their ability to pay and increasing uptake.
Segment CLLs based on skillsets and motivation: Classification of CLLs as per their sales skills and motivation is essential for success. Selling different products require different skillsets and a quick analysis can help in this matchmaking. Some parameters which can be used to assess skills include age, educational qualification, business experience, and technical skillsets.
Capacity building: CLLs need a certain degree of training and it is observed that CLLs find it easier to sell better when trained rather than through close association with their communities.
Build ownership in CLLs: Instead of making the product available free-of-cost, CLLs should be asked to invest in the product. If required, finance should be made available by partnering with co-operative banks and MFIs; that way one can build ownership in CLLs.
Design standardised operational procedures (SOPs): Since the business model includes partnerships both with CLLs and product manufacturers, it is necessary to design SOPs to simplify the entire delivery process.
Develop a clear return policy: To avoid compulsive transactions and selling below market price, it is necessary to have a clear and well-defined return policy to avoid any bottlenecks in the CLL model.
As more and more organisations adopt the CLL model, a conscious integration of the above mentioned practices can stimulate sales, while also creating sustainable livelihoods at the last-mile.
- Vineeth Menon and Shreejith Borthakur
(Vineeth Menon and Shreejith Borthakur are with Intellecap advisory services. The views expressed are personal)