Enhancing New Product Adoption at the Base of the Pyramid: A Contextualized Model

Abstract

Companies are recognizing and pursuing the opportunity to serve the market known as the base of the pyramid (BOP), i.e., consumers who live in poverty in developing countries. The BOP constitutes the largest remaining global market frontier for businesses. Until recently, it has been ignored because of its seeming unattractiveness and insurmountable challenges compared with middle-and high-income markets. However, BOP consumers desire and are able to pay for quality products tailored to their needs. In response, firms are developing new products specific to the demands and conditions of this low-income population. To innovate effectively, ensuring new products are well received, firms need to know how to enhance new product adoption among these consumers despite the barriers of poverty. We address this need by developing a model of adoption contextualized to the BOP. Based on theories of innovation and poverty, and drawing on the emergent subsistence market literature, we propose that certain new product characteristics, social context dynamics, and marketing environment approaches moderate or counter some of the limits of poverty, making adoption possible. We then discuss the managerial and theoretical implications of our model for innovation practitioners and researchers.

University-driven inclusive innovations in the Western Cape of South Africa: Towards a research framework of innovation regimes

“…The extent to which innovations are useful in contexts, or have 'contextual quality', requires deep knowledge of such contexts (Nakata and Weidner 2012;Prahalad 2012;Mitchell and McGahan 2014). The data from our pilot study, while preliminary, indicate that this is the case in all these UTII projects, irrespective of the degree of innovation either in terms of technical novelty or their social dimensions.…”

Frugal Innovation and Development Research

“…This polycentric innovation is also thought particularly important for designing and producing frugal products and services. As Nakata and Weidner (2012) observe, the living conditions of poor people must be taken into account, including issues such as income poverty, social stigmatization, inadequate housing, infrastructural services, and remote locations. In addition, 'the poor' also highly segmented in terms of income, and comprises multiple cultures, ethnicities, literacy, capabilities, and needs (Prahalad, 2012).…”

“…In addition, 'the poor' also highly segmented in terms of income, and comprises multiple cultures, ethnicities, literacy, capabilities, and needs (Prahalad, 2012). The challenge is, therefore, not just simply providing stripped-down versions of products to middle-and high-income consumers, but instead providing newly designed, and value and context sensitive innovations that are truly compatible with the circumstances of people living in poverty (Nakata and Weidner, 2012).…”

“…Brazil, Mexico, Turkey, and Russia follow closely. Market research has shown that people belonging to these income classes are receptive and willing to spend money on quality products, provided these are suitable, have well enough quality and are reasonably priced (Nakata andWeidner, 2012, Prahalad, 2005). Frugal innovations may well respond to the aspirations of this group of consumers.…”

Does quality matter for innovations in low income markets? The case of the Kenyan mobile phone sector

“…At present, focus has been on 'first steps' -those processes related to policy and firm strategy that links to acceptance as innovations are diffused to low income users and innovations scaled by firms in markets (Foster & Heeks 2013, Nakata & Weidner 2012, where quality concerns can bring greater understanding about longer term impacts of these innovations.…”