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For the Developing World, Cheaper Isn't Better

As far as the developing world is concerned, we often assume that the essentials are cut-and-dry: clean water, sanitation, electricity, and the like. But designing products that actually help people to meet those needs is another matter altogether.

Whereas the demand might be simply, the design process for these goods can be so complex that many products that are distributed throughout the developing world at no charge often go unused. And despite this reality, more and more companies and startups are targeting developing nations such as China and India because of the potential to tap into a massive market.

According to a recent MIT study, the culprit is a combination of poor quality, unreliability and the failure to meet certain cultural needs. But the greatest factor in determining whether a product would appeal to consumers in developing nations was simple: will the product help make its owner money?

The study went one step further to explain that rather than catering to basic needs, companies should target the abundant mom-and-pop shops and businesses made up of five people or less, as they’re already looking for products to help their “microenterprise” generate more income.

“If you can convince them you can make them money, you’re most of the way there to selling them your product,” explains Jesse Austin-Breneman, a graduate student in MIT’s Department of Mechanical Engineering. “It seems obvious, but if you look at a lot of products out there, they’re not really doing that.”

Austin-Breneman and Maria Yang came to this conclusion after reviewing four case studies in this area and identifying the product designs that were having success in developing countries: solar-lighting technology, cookstoves, drip irrigation and a line of Nokia cellphones.

And from their research came a set of guidelines on how product designers can best cater to these markets. On top of the suggestion to focus on products that will be profitable for the consumer, the researchers’ list advises companies to focus on reliability and service, as well as creating a product that can be serve several functions.

“We’re trying to refocus people’s design thinking,” says Austin-Breneman. “For example, rather than figuring out a clever way to fix sanitation, let’s come up with a clever way to make people money that’s perhaps in the sanitation sector.”

For those familiar with Nokia’s reputation for creating near-indestructible cellphones, it may not come as a surprise that these were among the most successful products sold in developing countries.

Once you take a look at their key features, the connection to profitability becomes clear. The phones are capable of keeping separate contact lists that could enable their owners to rent them out. To charge per call, the phone’s owner simply monitor time displays that mark the length of each call.

As far as service is concerned, Nokia also provided rural Indian villages with dedicated service vans that would come to fix a broken phone, in the seemingly improbable event that a Nokia were to break.

The preference for service and reliability carried over for drip irrigation systems, which are designed to deposit small amounts of water to the base of each plant in a given field. Farmers tended toward companies that offered service, as well as extras such as classes on seed types that have proven to be the most valuable. Similarly, when the irrigation systems were modular, meaning farmers could expand their operations over time, consumers were more likely to invest in them.

For solar lighting, multifunctionality was the selling point for these “microentrepeneurs.” The models that allowed store owners to power their shop’s lights at night, then rent out the unit during the day to charge cellphones for extra cash were the most popular.

But don’t take the frugality of these small business owners to mean that your target customer in developing nations are cheap. In each of these cases, business owners weren’t leaning toward the product with the lowest price in the short term. Instead, they opted for the options that promised the greatest long-term value.

In the future, the MIT researchers hope to explore additional case studies, perhaps giving them insight into specific market sectors, and hope that their upcoming work will help both large and small companies best tailor their designs to the needs of developing nations.

The team will present their findings at the American Society of Mechanical Engineers’ (ASME) International Design Engineering Technical Conference this month.

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