This document summarizes a presentation by Jade Oyateru on marketing to low-income consumers. The presentation discusses how companies like Unilever and Cemex have successfully targeted low-income markets. Cemex issued a "Declaration of Ignorance" to acknowledge they did not know how to reach these consumers. Cemex then launched Patrimonio Hoy, a membership program that provided building materials and loans to low-income home buyers. The program became profitable and has assisted over 350,000 families. The presentation argues that marketing should aspire consumers to higher levels and offer social value, rather than meeting them at their current station. It also profiles social enterprises like Gbemiga and Lat Photo Energy that are
2. MARKETING TO LOW INCOME CONSUMERS
Jade Oyateru
Meet the Speaker
Shopper & Customer Marketing Manager,
Unilever
Unilever Global Foundation Ambassador
Worked in Sales & Marketing:
• Nestle UK & Nestle Nigeria
• Unilever Nigeria & Unilever East Africa
Education:
• Harvard University - International Business
• Imperial College Business School - MBA
3.
4. MARKETING TO LOW INCOME CONSUMERS
What do we know??
Most people in
sub-Saharan Africa
live on less than a
dollar a day
Poverty in Sub-
Saharan Africa
stands at 42.6%
The share of
Africans living in
urban areas is
projected to
grow from 36%
in 2010 to 50%
by 2030
Projections also
indicate that
between 2010
and 2025, some
African cities will
account for up to
85% of the
population
5. MARKETING TO LOW INCOME CONSUMERS
We Don’t Know
Shhhhh!!!
Let’s throw it out!! All the information,
all the statistics, all the assumptions!!
6. MARKETING TO LOW INCOME CONSUMERS
Declaration of Ignorance!!!
• Cemex is one of the largest cement and building supply corporations in the world,
with over $15 billion in net sales in 2014.
• Cemex identified low-income families in Mexico as a market with a steady need for
the company’s products and a large potential for growth.
• The only issue was that Cemex had no idea how to adopt its traditional assets and
strategies to target a low-income market
• Then the company did something unprecedented, Cemex issued “Declaration of
Ignorance”.
• The company publically stated that it had no idea how to reach low-income markets
7.
8. MARKETING TO LOW INCOME CONSUMERS
Perceptions of The BOP
• Why do we assume that we are different from the BOP??
• Why do we assume that the marketing strategy that works for middle-income,
higher-income always has to be different than the ones from the BOP.
• Have you ever seen a Rolls Royce advertisement on television?? But you see
Mercedes all the time.
• Marketing shouldn’t meet customers at their station in life, it should aspire to a
higher level and offer a social value; quite often that is the failure of the strategies
at the BOP
• The human quality of aspiration is what ties all groups in the pyramid together
9. MARKETING TO LOW INCOME CONSUMERS
Current Perception
• The Current perception of the consumer at the BOP
Psychological
Safety
Love/belonging
Esteem
Self-
actualization
10. MARKETING TO LOW INCOME CONSUMERS
Where is the BOP Market??
Source: Working with the Bottom of the Pyramid; Success in Low-Income Markets
[2007] Dansk Industri
There are about 4 Billion people at the Bottom of the
Pyramid (BOP).
The African BOP constitutes 71% of the purchasing
power for the continent.
The BOP constitutes a $5 Trillion global consumer
market.
11. MARKETING TO LOW INCOME CONSUMERS
The BOP’s future is urban and young
Africa has an urban future, between over the coming fifteen
years, cities in Africa will, every day, become home to at least
another 40,000 people.
Between 2005 and 2010, Lagos grew by 1.8 Million people,
Kinshasa by 1.6 Million and Luanda by 1.2 Million.
Ernst & Young predicts that by the year 2030, 90% of the
world’s young urban population will live in large cities in some
of Africa’s fastest-growing economies.
Source: Ernst & Young Emerging Economies
will live in
large cities
90%
12. MARKETING TO LOW INCOME CONSUMERS
Resurrecting Dead Capital
• A Peruvian economist, Hernando de Soto, introduced the concept of ‘Dead Capital’
in which he estimates that about $1Trillion is locked in the informal sector in Africa.
• This amount is three times sub-Saharan Africa's annual GDP, and more than 70
times the amount of aid the continent receives each year.
13. MARKETING TO LOW INCOME CONSUMERS
The Marketing Mix at the BOP
Product Price Promotion Place Purpose??
14.
15. MARKETING TO LOW INCOME CONSUMERS
The Social Entrepreneur
“There are many positive ways for business to make a
difference in the lives of the poor - not through
philanthropy, though that is also very important, but
through initiatives, that over a period of time, will help build
new markets”
- Kofi Annan, ex-UN Secretary General
Gbemiga is a unique micro-enterprise initiative that is both a catalyst for rural wealth creation
and a successful business operation
16. MARKETING TO LOW INCOME CONSUMERS
The Dollar Shave Club
• In 2011, the Dollar Shave Club was formed as a response to the frustration faced by
men in buying affordable grooming products from giants like Gillette.
• They created a community of consumers and packages that suited them “The
Humble Twin” (two blades per razor, five razors per month, $3 per month).
• Dollar Shave Club’s sales have steadily increased since its launch, from $4m in
2012 to a projection of between $140m and $150m in 2015, with 2.4 million users.
• The big boys have noticed, Gillette filed suit last year for infringement.
17. MARKETING TO LOW INCOME CONSUMERS
Cemex Patrimonio Hoy
• After their declaration of ignorance and researching new approaches for the
market, Cemex launched Patrimonio Hoy.
• In 2000, the company launched Patrimonio Hoy, a membership program for low-
income home improvement customers.
18. MARKETING TO LOW INCOME CONSUMERS
How It Worked
Members apply in
groups of three.
Group is
responsible for 70
week payments of
$10-15 which is
held as payment
towards material.
Payments buy a
package of
building material
with architectural
and engineering
services.
Price of materials
held fixed over
course of work to
avoid fluctuations.
19. MARKETING TO LOW INCOME CONSUMERS
Delivery Value for the BOP
• Patrimonio Hoy became profitable in 2004. In 2005, a study found that than 99.2%
of the $42 Million in materials and loans provided by Cemex had been paid for on
time.
• Company estimates that, since inception, Patrimonio Hoy has extended over $135
Million in microcredit to customers.
• Assisted over 350,000 to build their own homes.
20. MARKETING TO LOW INCOME CONSUMERS
Turning Rubbish to wealth
• Two Ugandan high-school drop outs formed Lat Photo Energy.
• Using pyrolysis from their shacks, they convert refuse and waste and turn it into
fuel.
• Kampala produces about 1500 tonnes of waste a day, three quarters of which is left
uncollected and rots.
• Processing over three tonnes of wastes and turn it into fuel for “boda boda drivers”
and sell it to them at under $1 a litre, half the price at the stations.
• They even have three types “Super”, “Premium” and “Pure”.
