Today while at a NextLevel pharma event in Singapore, we heard a superb presentation by Sameer Desai of GSK’s healthcare business. Sameer comes at emerging markets with a unique point of view that builds on a concept of what he describes as “delight, don’t dilute.” For those familiar with what I’ve written about earlier, much of what he describes has to do with design for the bottom of the pyramid, or what has been described as “frugal engineering.” His perspective offered some very specific insights into what this concept means, the best example of which is Nokia’s efforts in India.
Nokia’s India cell-phone business may be one of the best examples of frugal engineering and bottom of the pyramid commercialization strategies ever developed and successfully developed anywhere. Led by Jan Chipchase, Nokia’s former Chief Usability Researcher (his TED video here shows how his background as an anthropologist has been relevant to his work at Nokia). What Jan discovered when they went out into the field were the following boundary conditions that needed to inform what Nokia developed. They were as followed: an illiterate customer base, the phone would be the first of the family and in many cases the community as a whole, most villages would have irregular power supplies, the radio was their key source of entertainment, and the phones would have to survive in a dusty and noisy environment.
That is quite the combination of needs and obstacles. What came of Nokia’s research was a phone that offered the following: a dust resistant keyboard with a rubberized shell-shock proof shell (farmers were going to be rough on the product), 5 different address books (mom and dad might share one, and another family member or someone else from the community could have their own), a 22 hour standby battery life, a built in FM radio with an integrated loudspeaker (this allows the farmers to take one less appliance into the field and further encourages user adoption as they can take one device and accomplish two common objectives during their work day), a built in flashlight (ditto!), a speaking clock in local languages, and loud MP3 ringtones. All of this was done with a product that was profitably sold for less than $30.
The result? Nokia has now sold over 250m of these phones around the world, primarily in emerging economies. User adoption has allowed Nokia to access complimentary revenue streams (Nokia’s Lifetools, Nokia Money, and OVI email). Nokia discovered that once bottom of the pyramid customers bought a Nokia phone, they became very brand loyal. Keep in mind that while one could make a very conceptual argument that what Nokia has leveraged in part is “aspirational marketing”, I would argue this is not what has driven Nokia’s success in India.
Rather, what Nokia has discovered is that by doing good on-the-ground research of how potential customers live, the challenges they face, the needs they have in common, their engineers and product development people can design a custom solution for this segment of the market, an insight which is key to what Sameer called “delight, don’t dilute.” It’s a simple but profound insight that success in bottom of the pyramid markets isn’t simply about dumbing down or somehow economizing an existing product; many times it is about embracing your customers where they are and creating delight for them just as you would in more evolved markets.