Getting Ready for Success at the BoP
Having supported companies to enter BoP markets over the last decade, the European BoP Learning Labs and World Business Council for Sustainable Development (WBCSD) have learned about best practices in inclusive business innovation, marketing, last mile distribution, financing, partnering, and measuring results. To share their insights, the Learning Labs and WBCSD teamed up in 2013 to offer an online course on Succeeding at the BoP. The target audience was senior management in companies that were planning or had started an inclusive business model.
For the companies that participated, the three most interesting topics presented were last mile distribution and financing, followed closely by market understanding and marketing.
The market understanding and marketing module urged participants to leave their desks and shop with their customers. Many BoP customers, companies find, are just like us – irrational spenders. The Market Creation Toolbox cites an example: in marketing and packaging feminine hygiene products, women are sometimes more interested that the product is discrete and feminine than in its actual functionality. Including the consumer in all stages of product design is the solution – getting on the ground, seeing the challenges, and interacting with consumers to see how they think those challenges can be best overcome.
Last mile distribution can pose a lot of problems for companies working at the BoP. Lack of infrastructure, expensive over ground transport, and other challenges can threaten the success of a business model. This module asked and gave insights to a long-standing question – why a coke can be bought anywhere in the world but not basic necessities. Keeping in mind four important topics for distribution – availability, affordability, awareness, and acceptance – this module also reviewed with companies main tactics, along with best practice examples of distribution strategies. These include use of existing channel and infrastructure, establishing channels through partnerships, building new channels, and going for a hybrid distribution model. The module also gave advice from best practice companies on their key success factors within each distribution strategy.
The financing module brought to light the “pioneer gap” – a phase of high upfront investments without revenues. This means a lack of financing for critical parts of venture development such as creating a working prototype, engineering the product, distribution contracts, and introducing a product to market. The module showed participants who to turn to depending on the finance they need and the range of funds they are seeking. A farming cooperative, for example, may look for capital to fund pre-harvest finance and inputs, and need a medium amount of money, such as 25,000-2 million USD. Learning to identify a company’s financing needs is key. Further information on finance, such as a crash course in different financial instruments – convertible grants, soft loans, and co-matching grants – was also useful to participants.
The WBCSD and BoP Learning Labs took the opportunity to learn from participants as well, and have brought in additional features for the second round of the course to make the learning experience more efficient and better than before:
“Succeeding at the BoP” Executive Online Course will be offered for a second time from April 28 – June 16. This time around, we've built in improvements based on participant feedback. We invite you to register by April 8th!
More information on these topics, the course, and how to register are available here.