PAGE 22 POLICY
RETAIL Policy The RSP partnership is
Issues
THE FUTURE
OF RETAILING?
THE
APARAJITAS
OF
BANGLADESH
BY CATHERINE DOLAN,
UNIVERSITY LECTURER IN
MARKETING, CULTURE AND
SOCIETY, SAID BUSINESS
SCHOOL AND LINDA SCOTT,
PROFESSOR OF MARKETING,
SAID BUSINESS SCHOOL
In a small village in rural Bangladesh,
Jahanara, a woman of 40, opens a black
bag with the letters RSP (Rural Sales
Programme) imprinted on it. One by
one she unveils its contents - a pair of
Bata slippers, Unilever washing powder
and Square sanitary towels - before an
eager group of men and women. After
selling her wares, Jahanara slings the
bag over her shoulders and sets off to
a neighbouring courtyard, where other
customers await her delivery of soaps
and shampoos. Jahanara is one of
Bangladesh’s thousands of Aparajitas –
female entrepreneurs who sell consumer
goods ‘door to door’ through an innovative
partnership between CARE Bangladesh
and consumer goods companies such as
BATA, Unilever and Square.
products companies wish
one of a growing number of
initiatives that aim to reach
consumers at the ‘base of
the pyramid’ (BoP) - the
four billion men and women
who, like Jahanara, live on
less than USD 2 per day
(Karnani, 2007). Pioneered
by C.K. Prahalad and Stuart
Hart, the BoP approach
maintains that companies
can simultaneously help to
reduce poverty and increase
profits by targeting the
world’s poor - an untapped
yet potentially thriving new
market for firms facing
saturation in established
markets (Prahalad & Hart,
2002; Prahalad, 2005). By
aligning the business goals
of growth and economic
profit with the development
objectives of poverty
reduction and human
welfare, BoP schemes have
become arguably the most
influential model of socially
responsible business this
century1.
Yet while BoP initiatives are
touted as creating “profits up
and down the value chain”
(Karunakaran et al. 2009:3),
they require companies
to think differently about
marketing and retailing. In
contrast to the conventional
ways that business provides
products and services in
developed markets, selling
to BoP consumers requires
companies to experiment
with new business models
and ways of addressing what
Anderson & Billou (2007)
term the 4As - awareness,
availability, affordability and
acceptability:
AWARENESS
Low-income consumers
are often unaware of the
1. http://www.globalens.com/bop/bop1.aspx
to sell and are typically
beyond the reach of
standard advertising and
marketing strategies. Few
consumers have consistent
access to technology such
as radios, television and
computers, and most
travel infrequently to urban
centres. These limitations
mean that information about
new products is generally
acquired through informal,
non-market channels and
that social networks are
often the most powerful
influences on a purchasing
decision. Building awareness
and demand for products
therefore requires getting
closer to the consumer
through unorthodox
advertising techniques (e.g.
street performances) and
local distribution chains.
AVAILABILITY
Over the last decade, a
number of global companies
have invested in new
ways of delivering goods
and services to the poor
in developing countries
(e.g. Unilever, Hewlett-
Packard, Citibank, Royal
Dutch/Shell, BP, Johnson
& Johnson). However,
many companies lack the
capacity and/or resources to
establish viable marketing
and distribution systems
in under-served regions.
Infrastructure is often poor
and systems for collecting
and delivering goods under-
developed, creating high
transaction costs (Karnani,
2007; AT Kearney, 2007).
Companies that target
BoP consumers have been
forced to restructure how
they market and distribute
products in regions that
are geographically remote.
THE RETAIL DIGEST PAGE 23
PAGE 24 POLICY
In Vietnam, for example,
Unilever developed a network
of over 100,000 independent
sales representatives to
reach remote parts of the
country (Xanhon, 2005)
while in Brazil, Avon ladies
travel along the Amazon in
small boats and canoes.
AFFORDABILITY
The majority of BoP
consumers have little cash,
subsisting largely on daily
wages and/or small incomes
from trade. While the key
to selling in BoP markets
is not necessarily the price
but rather the usefulness
of the products (Sawhney,
2009), the goods and
services that companies
market must be at a price
point and unit size that the
poor can afford. Several
mobile phone companies
now offer prepaid cards in
small denominations, while
in Asia, Unilever, Procter &
Gamble, and most of their
competitors sell single-use
sachets of products. Despite
the environmental and
cost implications of single-
serve packages, their size
and affordability increases
consumption among the poor
(Karnani, 2007; Sawhney,
2009). They are particularly
amenable to direct-to-home
distribution as women can
carry a range of samples with
them, giving their customers
an opportunity to try new
products at little cost.
ACCEPTABILITY
One of the biggest
challenges to targeting BOP
markets is to ensure that
products and services meet
the needs of consumers
who typically have different
cultural norms, aspirations
and buying behaviour from
2. http://fmcgmarketers.blogspot.com/ 3. Cited by Insead, http://knowledge.insead.edu/Bottompyramid.cfm
consumers in developed
markets (Anderson &
Billou, 2007). In China,
the white goods company
Haier pioneered ways to
use their washing machines
not only to launder clothes,
but to clean vegetables
and make cheese, while in
India Hindustan, Unilever
modified the ingredients of
its hair care products to fit
with the cultural preference
for using a single soap for
hair and body (Anderson
& Markides, 2007). In the
same vein, the FMCG firm,
CavinKare, capitalised on
the prevailing belief that a
light-skinned complexion can
be obtained by drinking a
mixture of saffron and milk
by launching ‘Fairever’ - a
saffron-and-milk face cream
in low cost sachets2.
These innovative approaches
to marketing and distribution
are often difficult for
companies to realise
independently. As a result,
more firms have sought
partnerships with NGOs with
local knowledge that can
help to facilitate access and
develop distribution capacity
in less developed markets.
CARE Bangladesh’s Rural
Sales Programme, a
corporate/NGO partnership,
is one such initiative.
Started as a pilot initiative
in 2004 to generate income
and employment for the
rural poor, the partnership
has provided participating
companies with thousands
of new customers and given
poor women a way to earn
a living through small-scale
entrepreneurship. Like
other partnerships between
multinational corporations
and women’s informal
networks (e.g. Unilever’s
Project Shakti and Danone
Grameen Ladies), CARE uses
the sales force of Aparajitas
to distribute affordable
products in rural areas. The
scheme reaches consumers
where they are, distributing
products to Aparajitas by
bicycle, who in turn sell their
wares door-to-door through
existing social networks.
However, the CARE model
differs significantly from
corporate-led BoP ventures
in that it is managed by an
NGO and brings together
the products of multiple
companies, both global and
local (Unilever, Bata Shoes,
and Square Toiletries Ltd).
CARE now partners with five
companies, incorporating
1,200 Aparajitas in 40
Upazilas (sub-districts) of
Bangladesh.
CARE Bangladesh suggests
that such schemes, if
done right, can be a path
to poverty reduction and
sustainable development.
In contrast to a ‘narrow’
BoP marketing strategy,
CARE ensures that the
RSP delivers more than
a distribution network to
partner companies. As Peter
White, Director of Global
Sustainability at Procter
& Gamble noted, serving
markets at the base of the
pyramid is “not just about
making consumer products
cheaper” but developing
“products that actually
meet the specific needs”
of low income consumers3.
CARE’s intimate knowledge
of local communities
provides firms with hard-to-
access market intelligence
while ensuring that the
products distributed by
Aprajitas address the needs,
preferences and lifestyles
of rural consumers. For
instance, the organisation
has recently included
several domestic products
in the Aparajita’s offerings
such as seeds, spices and
stationery, and is developing
backward linkages with local
producers.
Most importantly, CARE has
developed a business model
that addresses the poor not
only as consumers but as
entrepreneurs, aiming to
empower rural women by
providing sustainable income
generating opportunities.
As Asif Ahmed, Programme
Director of Economic
Empowerment for CARE
Bangladesh explains, “CARE
wanted to move beyond a
traditional BoP approach
for market penetration. We
wanted to make optimum
use of the expertise of
MNC’s to create an efficient
rural marketing system and
develop enterprise. Given
the lack of available time for
poor producers to engage
in marketing, and the high
incidence of poverty in rural
areas, it was imperative that
a sustainable distribution
and marketing system be
provided to support rural
farmers, producers and
entrepreneurs. This is what
the RSP is now achieving,
and in effect, helping rural
producers access profitable
markets, augment incomes,
and fight poverty”.
Unlike corporate-managed
BoP schemes, CARE plays
a key facilitating role in
the initiative, identifying
potential Aparajitas,
providing them with training,
business skills and a credit
guarantee, and integrating
them into a value chain. The
 THE RETAIL DIGEST PAGE 25

organisation has developed
a decentralised distribution
structure in which a Hub
Manager (who links the
product companies with the
sales team) and a service
person (who works for the
hub manager) ensure that
Aparajitas have a steady
supply of products, and
CARE maintains a detailed
knowledge of the Aparajitas
and the Upazilas in which
they operate. In turn the
companies subsidise
operating costs and provide
the necessary trade credit,
training support and
delivery of products to the
hub, service person and
Aparajitas.
Although several international
NGOs remain leery of
marketing to the poor,
asserting that global
consumer goods companies
will displace local industry
and encourage needless
spending by those who can ill
afford it (Xanhon, 2005), the
RSP demonstrates that BoP
initiatives can provide women
with low risk opportunities
to develop their business
skills and to benefit from the
income and flexibility that
entrepreneurship affords.
Although the profits women
earn from individual sales are
small, the cumulative gain
can be significant. Women
earn an average commission
based on the sale of products
(approximately 18 percent),
which provides an average
income of BDT 970 per
month. This is a substantial
amount in a region where
average household incomes
are typically below BDT
1,000 per month. In
addition, the RSP addresses
the lack of disposable income
in rural areas by allowing
Aparajitas to exchange
consumer goods for rice and
other food grains, which they
in turn trade for other goods
or convert into cash.
The beneficiaries of the RSP,
however, are not limited
to the 1,200 Aparajitas.
Companies acquire access to
markets that were previously
inaccessible and that have
considerable potential
for growth. In 2008, for
example, the RSP generated
BDT 26 million of sales, of
which BATA, Unilever and
Square comprised 56, 26
and 14 percent respectively.
At the same time, rural
Bangladeshis can access
consumer goods at much
lower prices without the
incurring the time and travel
costs to purchase them in
urban areas 4.
BoP ventures like the RSP
offer a potentially promising
way to marry financial and
social objectives, providing
companies with markets of
untapped growth potential
and the prospect of more
sustainable livelihoods
for the poor with a more
comprehensive view to local
economic development. Yet
for companies to realise
profits while creating a
‘wealth-generating web of
micro-entrepreneurs’, such
schemes must be more than
a local distribution strategy
or a way to grab a share of
rural wallets (Karunakaran
et al. 2009:3). They must
advance business models
that tackle the unique
characteristics of BoP
markets, from scaling down
products to affordable
and convenient sizes to
developing a cost effective
distribution model that
provides products that
are locally-relevant and
accessible to the rural poor.
The fortune at the bottom
of the pyramid requires
a new way of marketing,
distributing and retailing, but
most importantly a new way
of thinking about the role of
business in society.

REFERENCES

Anderson, J. & Billou, N. (2007)
Serving the World’s Poor: Innovation
at the Base of the Economic Pyramid
Journal of Business Strategy 28(2)
Anderson, J. & Markides, M. (2007)
Strategic innovation at the Base of the
Pyramid Sloan Management Review
49(1) pp. 83-88
A.T. Kearney (2007) Serving the Low-
Income Consumer: How to Tackle
This Mostly Ignored Market Executive
Agenda 10 (2) pp. 48-56 [available at
http://www.atkearney.com/index.php/
Publications/serving-the-low-income-
consumer.html]
Karnani, A. (2007) The Mirage of
Marketing to the Bottom of the Pyramid
California Management Review 49 (4)
Karunakaran, N. with Prasad, A. &
Bhuva, R. (2009) India’s New Retailers
Business Outlook India July 11,
2009 [available at http://business.
outlookindia.com/newolb/printarticle.
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Prahalad, C.K. & Hart, S. (2002) The
Fortune at the Bottom of the Pyramid
Strategy and Business 26 pp. 2-3
Prahalad, C.K. (2005) The Fortune at
the Bottom of the Pyramid: Eradicating
Poverty Through Profits Upper Saddle
River, NJ: Wharton School Publishing
Sawhney, M. (2009) Marketing to
Customers at the Bottom of the
Pyramid: Case Studies and Best
Practices from Emerging Markets
[available at http://www.kellogg.
northwestern.edu/student/club/ptmba/
marketing/documents/Marketing%20to
%20MOP%20and%20BOP%20Custom
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Xanhon, K.J. (2005) Selling to the
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http://www.time.com/time/magazine/
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4. http://www.bei-bd.org/docs/BSEP%20Workshop%20Report.pdf