Schumacher’s Small is Beautiful (1973) dispelled the myth that the tractor was always the best technology to use. Western high tech fixes can often be counter productive. There is no good or bad technology to carry out a task – only an appropriate or inappropriate one. High tech is not always the right solution and innovation is more to do with improving on current process than flights of blue sky thinking. The informal market offers major insights into this area – especially in packaging and distribution.
Innovation is often about dealing with things as they are not just blue sky new to the world thinking.
A defining characteristic of the informal market is its relative poverty to the formal world. As such, it drives a much harder bargain on value and affordability. We explore ways in which the value for money imperative has driven innovation on product and packaging design; accessibility, availability and all within a target price point.
Take Chennai based Cavin Kare and their use of scaled down versions of their personal care brands and shampoos. First, Cavin Kare targeted where the brand leaders Hindustan Lever and P&G didn’t have a presence.
Cavin Kare invented the scaled down versions to move the product to a price point that was affordable to rural India and the informal market. Also, their marketing focussed on the need to deal with the perception that shampoos contained harsh chemicals that damaged hair and that shampoos are a glamour rather than a hygiene product. So, whilst Hindustan Lever may have had 69% of the market share in the 1990’s, this equated to no more than 10 per cent of the hair wash occasions in the country. This is the issue that Cavin Kare’s sachet innovation was designed to target. [i]
[i] Business Line, India. Aarati Krishnan, Shampoos: Putting money where the lather is. (January 2001)