Distribution and promotion strategy for 'Tata swach': With a focus on BOP Marketing

Abstract

Coined by US President Franklin D Roosevelt, the term bottom of the pyramid (BOP) indicating the lowermost strata of the socio-economic pyramid has started gaining strong grounds with more and more firms trying to capitalize on this ‘combined purchasing power’ of 4 billion people across the globe. Today, organizations led by visionary leaders are focusing on the huge market potential and other added advantages of doing business in these markets by trying to identify and fulfill the most basic needs of these markets profitably. Tata Group with its new revolutionary product Tata Swach, a nanotechnology water purifier, has tried to do the same by catering to one of the most basic human needsclean water. With rising instances of water-borne diseases and an urban penetration rate of 6% in the country, the water purifier industry is expected to witness a high growth in India where close to 400 million people form the base of this pyramid. The BOP markets, as they differ significantly from each other in terms of market size, scope for segmentation, price sensitivity, shopping patterns, availability of financial services and types of distribution channels and promotional techniques required, can further be divided into urban BOP and rural BOP markets. With its innovative but affordable features targeted specifically at BOP customers, Tata Swach is expected to start a new era in the industry itself. However, the underlying challenges in distribution and promotion to these markets can pose threats to Tata Swach’s ambitious plans. Therefore, this study aims at understanding the market dynamics of these BOP markets to come up with a sustainable and implementable distribution and promotion strategy for Tata Swach. Geographic and demographic differences in different BOP markets coupled with very low margins on each unit of Tata Swach restrict the scope of successfully employing the conventional intermediary distribution channels. Therefore, use of direct selling force in addition to local kirana and small appliances stores has been recommended. Local youth can be employed as direct sales force to target a cluster of villages through direct demonstration and activity centers such as Haats. For reaching out to consumers in the BOP markets, Tata Swach needs to employ both push and pull strategies. A major objective of the promotional campaigns should be to create awareness about the importance of drinking clean water besides communicating about the product. Recruitment of a direct sales force for door to door selling, endorsements by doctors, support of opinion leaders and group meetings of household decision makers can be implemented to influence purchase decisions. On the other hand, some of the promotional tools that can be employed for disseminating information about the product are mass media vehicles, local trade activities like fares and Haats, outdoor advertising, audio visual vans and events which interest the local audiences.