Marketing Stoves to BOP Communities in India – A Trek of a Lifetime
by Veronica Lescay Megret, MBA '13 (2/20/12)
Although I’ve traveled extensively and have been to major Asian cities before, I was not prepared for Mumbai’s intensity. That's where I spent my winter break working with Aavishkaar, a micro-venture capital fund, and its portfolio company, Servals Automation.
Even though I’ve traveled extensively around the world and have been to major Asian cities before, I was not prepared for Mumbai’s intensity. India’s largest city, with a population of over 20 million, is poverty-ridden and polluted with unbearable traffic; yet it’s colorful, diverse, intriguing, and in-your-face. This is where I spent my winter break working with Aavishkaar, a micro-venture capital fund, and its portfolio company, Servals Automation. My assignment was to figure out how to introduce green-technology gasifier stoves to base of the pyramid (BOP) consumers.
I am a classical MBA career-switcher; my professional experience is in the advertising industry but post-MBA I’d like to pursue a career in international economic development. One step toward this goal was to enroll in a Johnson study trek during winter break, and we had plenty of options. While the Brazil and the Turkey/Bulgaria treks were great possibilities, I wanted not only to visit companies in emerging markets, but also to have a real-world client experience in the field. Thus, the India trek was the ideal choice to accomplish both of these goals.
The TLUD Gasifier Stove uses biomass as fuel and produces biochar as the byproduct. Admittedly, I did not know much about these stoves, but I was eager to learn about this new technology and how to introduce it to a BOP market. I was confident that I would be able to apply the skills from the Johnson core curriculum and my professional background as well as my newly acquired knowledge of social enterprises to this project – and that I certainly did. Furthermore, I partnered with an MBA student from the Somaiya Institute of Management and Research in Mumbai, which proved to be invaluable when conducting surveys in Hindi.
So how does one go about marketing a stove to a population that survives on less than $2 a day? Sure, the stove fights climate change, reduces deforestation, and decreases indoor air pollution, but I knew that our target consumer did not necessarily care about these points. Instead, I reasoned that direct monetary and time savings, the ability to generate income, and the ability to convert waste to cooking fuel would resonate well with BOP populations. Having worked in market research and advertising, I knew that to truly understand the client’s needs and concerns I had to conduct a survey amongst our target customers.
It was only after surveying Mumbai’s slums that I recognized the high barriers to entry that existed for the TLUD Gasifier Stove. The stove’s relatively high price tag, the difficulty of attaining biomass in urban areas, and the lack of clear market opportunities for the resale of charcoal were issues that seemed to stand in the way of expansion for Servals. However, similar stoves were making headway in other regions of the world, so I recommended that Servals test a “pay from savings” strategy that was successful in Uganda. Essentially this means having demonstrations that target opinion leaders and early adopters, and establishing a network of easily accessible charcoal buyers. Little did I know that I would learn so much about cook stoves in a matter of weeks!
Upon returning to Johnson I have had time to reflect on my experience. I was pleased to have spent my winter break in such a productive way – working in the field and having daily interactions with locals; I can think of no better way to improve my cross-cultural skills. I quickly developed an understanding of local customs and cultural contexts and swiftly adapted to a new environment. The India trek solidified my desire to pursue a career in international development to work with BOP populations on sustainable business models.