Global Consumer-Products Companies Target Low-Income Consumers

Overview: In Frugal engineering. Indovation. Reverse innovation. These are some of the terms that marketers at GE, Procter & Gamble, Siemens, and Unilever are using to describe efforts to penetrate more deeply into emerging markets. As growth in mature markets slows, executives and managers at many global companies are realizing that the ability to serve the needs of the worlds poorest consumer will be a critical source of competitive advantage in the decades to come.

Two-thirds of the worlds population, more than 4 billion people, live on less than $2 per day. This segment is sometimes referred to as the bottom of the pyramid and includes an estimated 1.5 million people who live off the grid.

Not every company has been successful targeting the low-income segment.

Based on diffusion theory (factors affecting the rate of adoption / characteristics of innovations), how might an understanding of the characteristics of innovations help marketers succeed in emerging markets?