Though the title seems quirky ! The invisible market is nothing but the market or the consumers who are at Bottom Of Pyramid. BOP lies mostly on the tier 5 or tier 4 of World Economic Pyramid.
In common language which we say lower class or Middle class (be it upper or lower). Our consumer market consists of 80% of BOP and 20 % of TOP. Whereas, most of the products concerned and limited to only Tier 1 and Tier 2 cities. Hence, the 80% of the market skipped out.
The consumers of BOP mostly have a common characteristics they are Price Sensitive and Value Conscious. For, any given product they try to use the greatest of it. ( Eg Dalda used over ghee as dalda is cheaper, serves the same purpose, tastes good where as it is not good for health and the reverse happens in TOP ) . Though they are value conscious they are brand conscious too at times ( LUX as endorsed by Bollywood celebrities and on the other hand Lifebuoy which is although good for killing germs and are endorsed by none, also pocket friendly have seen less or deceased sales over Lux. As, consumers preferred Lux as a soap with beautiful smell in comparison to lifebuoy.
It is important to understand the needs of the customer and fulfill them, as they have money to spend and they tend to spend more on things than TOP. When villagers takes loan they repay with high percentage of interests than the bank in cities. An ideal example in this case will be Grameen Bank.
BOP consumers has an urge to live a life with good connectivity (an affordable phone and connection), minimum entertainment, educational facilities in short to have a better standard of living. Striving for that they tend to move from villages to cities for work which causes slumps, increasing unemployment and all possible man-made disasters.
Companies who can have higher productions than the need and is under-utilizing it probably consider the segment and start their production the small pouches or sachet. An ideal example will be cosmetic brands have introduced the pouches for shampoos, cream and hair gel. Which is affordable for BOP available in local small shops and the want satisfied.
An example of Vim Bar which is ideally used for washing utensils have increased their sale by 15% just by re-launching it by a plastic coated in it which uses its utility more.
The major challenge that faced by Companies is understanding the what they want, transportation and financial services is the major drawback towards it.
Also, many companies don't want it be used by BOP as there positioning may degrade in minds of the customers from tier 1 or 2 or 3 cities.
Maruti relaunched itself as Nexa to capture the market who are moving from upper middle class to top class because of the perception that Maruti is a car for middle-class family. Maintaining staus-quo is important for young-youth.
Or an example of Tata Nano which launched itself " Car which is Cheap" the word "cheap " made it loose the major share and drastically, failed to have a proper placement in consumer mind.
Affordability, Availability and Accessibility is what required for any company to set up business in this market.
Many entrepreneurs are coming up with various solution to problem but very few are providing any solution to this.
Few ideal business models are Coca-cola which launched pet bottles for Rs 5 or ITC's e-choupal had set up and shown the roads for many upcoming business.
The urge of the products may make you loose your job in future.
