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Opportunities

Thinking small, yet never losing brand focus, could open up entirely new markets for many of the world’s B2C and B2B manufacturers. And besides the instant extra revenues, building a brand-relationship with future big(ger) spenders should result in even greater revenues long term. Useful links Hindustan Lever

Selling branded goods in smaller doses and packages to low-income consumers

Here’s an interesting business question: if roughly two-thirds of the world’s population makes 1500 USD or less per year, why try to sell them expensive, big goods and services that were designed for consumers in the US, Europe or South East Asia who make twenty or more times as much ? Multinationals like Philips, Unilever, Coca-Cola and Motorola, who all eye a piece of a market overflowing with 4 billion aspiring consumers, have realized that a focus on low prices, small sizes, and simple-to-use products will pay off big time (source: Business Week). But smaller and cheaper doesn’t mean less branded or less cool. Sophisticated consumers from India to Brazil, especially in rural areas, demand top brands, albeit often in smaller and thus more affordable doses. Fast moving consumer goods giant Unilever acknowledged this market in an early stage, by coming up with branded, ‘size/usage adjusted’ products: In Brazil ‘Ala’, a brand detergent created specifically to meet the needs of low-income consumers who wanted an affordable yet effective product for laundry that is often washed by hand in river water. In India ‘Sunsil’ and ‘Lux’ shampoo sachets sold in units of 2-4 dollar cents, ‘Clinic All Clear’ anti-dandruff shampoo sachets at 2.5 rupees each, and 16 cent ‘Rexona’ deodorant sticks. In Tanzania ‘Key’ soap, sold in small units for a few dollar cents.

Opportunities

Thinking small, yet never losing brand focus, could open up entirely new markets for many of the world’s B2C and B2B manufacturers. And besides the instant extra revenues, building a brand-relationship with future big(ger) spenders should result in even greater revenues long term. Useful links Hindustan Lever