Sunday, May 6, 2012

Sachet Marketing

Last week during class Professor Zak talked about multi-national or global companies altering their strategies for different countries and emerging markets. The readings for this week also touched on this idea, particularly as it applies to the developing world. In both instances I was reminded of an example from the social innovation class (because I have, indeed, taken three classes from Professor Z) where Unilever began to sell products in India and other developing countries. However, they did so in small packages termed "sachets," rather than sell the soaps and shampoos in the same manner as they do in the U.S. While this strategy doesn't necessarily alter the product line, it does tailor it to the local population who are unable to afford buying large quantities of Unilever's products at one time. The company even explicitly calls out the efforts on their webpage as "making our products more affordable," and have seemingly devoted a lot of the company's attention to these developing and emerging markets.

While putting your product into a smaller package in order to sell it at a lower price to consumers who can't afford the "traditional" packages is not necessarily an earth-shattering concept, it has seemed to spawn a larger movement. The website Trendwatching.com has dubbed the phenomena "Sachet Marketing." Their page cites examples of Unilever, Banco Azteca in Mexico, GrameenPhone in Bangladesh, and even Whirlpool using a sachet-esque technique in order to make their products available to consumers in these developing countries.

The focus of Sachet Marketing and Unilever's own press seems to be on the ability for this manner of marketing to act as an inclusionary tool for the developing world. However, I'm still left with questions over whether it is more exploitative than inclusive. That is to say, is the focus really about making affordable products to better these people's lives or is it to get your foot in the door for when these consumers are able to afford the larger packaging? If we accept these strategies as forms of social innovation and entrepreneurship, then the answer is clear and perhaps the ideas are not even competing. But if the choices are made purely as a business decision in the traditional sense (i.e. not the Porter-Kramer shared value model), is it still okay?

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