Marketers must stop focusing only on high-end customers

Not all rich people buy products with premium prices. Fotosearch 

By  Boniface Ngahu

In Summary

• There are rich people who don’t necessarily buy high-end products.

There is a huge market at the bottom of the pyramid for both small and big businesses. I have always highlighted the opportunities at the bottom of the pyramid (BOP) to let investors know that serving low-end consumers can give you good returns.

BOP marketing ensures that you reach consumers that may not be adequately served by your competitor.

Take an example of an investment in a congested slum. It’s difficult to access such consumers and therefore this would require some extra investment to reach them.

This can be in the form of new distribution systems. For that investment, the business would charge a premium, which is normally referred to as the poverty penalty.

For example, an investment in property in slums pays back in less than a year compared to investing in upmarket locations that would take over 10 years to pay back.

Basic

Today, Market Talk seeks to demystify another side of this equation. This is based on the fact that products meant for the bottom of the pyramid are designed to address basic human needs. There is what we can call inverted Maslow’s hierarchy of needs.

This is a situation whereby when one reaches self-actualisation—the highest level of human needs, he starts craving for basic needs which is the lowest in ranking.

The trend we are talking about here is referred to as BOP loafing.

When carrying out research among affluent consumers, we frequently meet some rich non-conformists.

For example, you find a rich man who can afford a new luxury car worth millions of shillings smoking non-filter cigarettes, often associated with manual labourers.

The book ‘Millionaire Next Door’ explains how you can’t tell a millionaire by the looks and how that ordinary-looking neighbour could be the millionaire you don’t know. The saying that, “money has a common face” applies here.

Kenyan comedians are turning into interesting sources of market insights. Recently in Churchill Show, a comedian sought to explain how the rich are judged unfairly by the poor.

He said that the rich are always considered to be unkind, but this is just a notion as the poor are worse but they conceal their bad traits.

He gave an example of a resident in Mathare slums who cooks omena (which has a strong smell) alongside chapati to keep the neighbours away from popping in for a bite of chapati.