Photo: South Sudan communicty radio station. Photo above: Rural internet cafe.
Digital Communicationand the BOP
Prahalad’s BoP concept has become well known by now among scholars and practitioners. Co-creation with poor people as active consumers, producers, and innovators are central to the concept. It envisions social development through market growth.
In order to discuss why digital communication is increasingly important for marketing at the BoP, two perspectives are key:
Firstly, the poor: What role does digital communication play in the daily life of the poor? Is this role becoming more important for them? It implies whether digital communication is important for the majority of the people at the BoP in the long-run.
Secondly, business: How do companies benefit from digital marketing communication with the BoP currently and in the near future?
Literature shows that the usage of information and communication technique (ICT) at the BoP increases continuously. It stems from people’s need for networking. Authors emphasize the function of people’s social networks as driver for the adoption of mobile phones. Further, various scholars identified that digital communication services have become a necessity for the poor. ICT plays a crucial role as direct channel for services needed in the daily life at the BoP. Digital communication offers essential social and economic services, such as financial transactions (e.g. M-PESA) and employment services (e.g. Babajob.com) –
digital communication supports personal as well as collective improvements at the BoP.
It is the culture of necessity at the BoP that functions as driver of innovation. The constraints in the day-to-day life at the BoP lead to creativity and invention. It follows that ICT as latest necessity has taken on a function as catalysts, knowledge provider, and as platform of innovation. It lowers costs, because it cuts out middlemen, and connects the BoP and the global market directly. Further, it renders sustainable solutions, including trickle-up innovation, which brings benefits for both, emerging and developed markets.
Communication at the BoP is necessary, it drives innovation. A wonderful example of this are “llamadas pedaleadas”.
In this context, Heeks (2010) claims: “The tools for a digital economy are now—and will increasingly be—in the hands of the world’s poor. Our view of them can start to migrate: from seeing them as victims to seeing them first as consumers, then producers, then innovators of a digital age.” (Heeks, 2010, p. 24)
Similarly, Crosnier (2011) writes: “The digital revolution begins at the Bottom of the Pyramid. This new form of digital marketing is more meaningful, has a clear purpose, and understanding of its unique contribution to current social and economical transformations in this world.” (Crosnier, 2011, p. 29).
However, crucial questions remain:
Is it indeed a digital revolution – already? Why is it a new and more meaningful form of marketing?
The major challenges for adapting marketing to local requirements of the BoP market remain. Prahalad’s benchmarks of affordability, access, availability, and awareness are difficult to achieve. Marketing and technologies must remain as simple as possible.
For example, Futurist and Management consultant Patrick Dixon states on Globalchange.com that mobile phones sales in future will be to people on low incomes. However, prices of technological devices must be lower, affordable to the people at the BoP. “We are going to see extraordinary new models of communication. ÷100 dollar computers about to be launched across the whole of Africa… with a hand wired thing for electricity. If we can do that for an entire PC, then we can totally reform and re-invent the telecom mobile business.” (watch clip)
ICT is found to make marketing efforts at the BoP more efficient and profitable. However, limited income, literacy, and education among the consumers impose serious barriers to marketing communication at the BoP in general. Political interests, controlled competition, and limited infrastructure create big obstacles for the private sector to increase business with the BoP. Revolution implies sustainability and empowerment.
However, the above mentioned innovation example of M-PESA was enabled only through collaboration with the provider Vodaphone/Safaricom. Further, consumer’s expenditures on mobile telephony exceed 50% in some fast-growing African markets while operators profit from high margins.
ICTs roles as enablers of openness and innovation are striking, but the battle for network openness remains. Is the revolution really taking place – already?
The author, Daniela Jung, would like to engage with Business Fights Poverty community members on ‘Why digital communication is increasingly important for marketing at the BoP’, her postgraduate research topic. Daniela is looking for respondents who will add to her primary data collection; via this blog, and via interviews.
To put yourself forward as an interviewee please contact Daniela Jung.