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X O B L O O T Your guide to entering developing markets


Authors Marie Louise Møllebæk Larsen Andreas Flensborg

Copyright © DI International Business Development 2011

Acknowledgements Sara Ballan, Prosper Nyavor, Patricia Richter, Louise Koch, Peter Helk, Christian Friis Bach, Birgitte Holst-Jensen, H.G. Muriuki, Lilian Odhek.

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Pick the correct answer. s markets? w o r r o m o t f o u want a share

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Are you ready to challenge business as usual?

Does your compa

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renurial drive?

Yes! Yes!


No. No.


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If you answered this Toolbox will help you get started! 7 Business

15 Toolbox

Model Dimensions


10 Participatory Market Research Cases

Understanding the market

Getting on the ground

Making the link

The Business Model Dimension section will help you understand how markets in developing countries challenge your traditional business model and inspire you to generate new and better business models.

Developing appropriate products and business models requires local market information, primarily from future end-users. The Toolbox Activities will guide you through hands-on activities that can help you obtain this information.

To help you understand how the activities can be applied in the real world, the Cases section shows you how different types of companies used the activities to develop their business models.

PREFACE Jacob Kjeldsen Director DI International Business Development The words of Kishore Mahbubani, the Singaporean professor, can make alarm bells go off “Europe just doesn’t get it. It does not get how irrelevant it is becoming to the rest of the world. And it does not get how relevant the rest of the world is becoming to its future. The world is changing rapidly. Europe continues to drift.” Not only is Europe faced with this brutal reality, but in particular companies are failing to look into the markets of tomorrow – more specifically, the markets found in Asia, Africa and Latin-America. Companies must position themselves at an early stage in these markets to secure competitive advantage. However, developing markets are unchartered territory for many companies. It is our experience that compa-

nies are often unsure about the specific potential for their business – and as importantly – how to get started. . The ambition of the Market Creation Toolbox is to help your company get started! In many cases getting started is not a complicated process. It often comes down to applying sensible business approaches and ensuring a strategic fit between the objectives of your company and the market. DIBD and our many partners in the markets of tomorrow have extensive experience in developing business projects for developing markets, and we hope that the Market Creation Toolbox will inspire and guide your company to take part in the rapid change.


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58 TOOLBOX ACTIVITIES 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86


THE MARKETS OF TOMORROW Growth! This is the keyword for the emerging regions of the world, as the low- and middle-income classes rapidly evolve.


Think of Rwanda, Cambodia or Peru, and for many, images of helpless poor people waiting for handouts come to mind. For years, low-income regions have had the image as a worthy destination for corporate donations and as non-viable commercial or unethical markets where companies strip the needy of their last cents. The strong images of despair are real, but show only a small part of life in developing countries. A growing number of companies no longer consider those in developing countries as helpless poor people, but as active consumers with needs, desires and significant collective purchasing power. Three key drivers are motivating these corporate first movers: the market potential, the innovation potential and the CSR potential.

The CSR potential

Making a difference Many companies engaging in BOP-markets find that prioritizing sustainability creates more durable business models. They are able to leverage this value in the short term as part of their CSR profile. Development impact is difficult to quantify and seldom black and white. However, many agree that companies can play a necessary and positive role supporting economic and social development. Poor people often face a “poverty penalty,� which means they pay high prices due to market inefficiencies. By leveraging technology and knowledge, companies can develop products and services that make a difference and challenge monopolies.

The market potential

Growing by the day While markets at the top of the economy pyramid are largely saturated, markets in developing countries are often underserved. At the same time, developing countries are enjoying the most spectacular growth in history. Annual economic growth 1980 - 2016

While growth rates are undeniably high, so are entry costs. Products, services and business models need to be adapted to the realities and needs of developing markets. This process is not only a sunk cost, but can constitute a vital innovation driver that benefits new and traditional markets. For example, GE Healthcare has successfully developed a low-cost electrocardiogram machine for the Indian market, which has subsequently been marketed in the U.S. with great success – and done this without losing substantial revenue on their existing products in this category. In other words, they have taken advantage of reverse innovation. This challenges conventional wisdom that innovations originate in rich countries and are then sent downhill to developing countries.




















World Advanced economies Emerging markets Source: People living at the base of the world’s economic pyramid (BOP) make up 72% of the 5.6 billion people recorded in national household surveys. Collectively, these people are estimated to represent 51% of global gross domestic product (GDP) in 2014. At the same time, the middle-income class is growing fast in many developing countries. Shaping the preferences of today’s low-income consumer is an investment in the middle-income class of tomorrow. The speed at which these developments are happening is a force to be reckoned with, as it represents a development of markets that unquestionably holds an opportunity for companies willing to take a look and rethink business as usual.


A space for innovation, research and disruption


The innovation potential

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The notion of BOP (Base Of the Pyramid) markets was first coined by C.K. Prahalad in the book The Fortune at the Bottom of the Pyramid. He argued that companies should sell to the poor since the world’s economic base consists of 4 billion potential customers that live in underserved and inefficient markets. As a response to this book, a number of authors have debated the theory, questioning both the size of the market and the ability for multinationals to alleviate poverty. Since Prahalad’s initial work, the debate has evolved continuously, resulting in an identification of best practice and pitfalls newcomers can learn from.



While entering new markets always requires tough learning and adaption, it is our experience that many of the obstacles and misunderstandings that make the difference between success and failure are avoidable. Often the problems occur far away from the target markets in corporate headquarters where wellmeaning business professionals develop products and business models that look great on paper, but seldom work on the ground. A key reason is that rarely are developing markets merely entered; instead, they need to be created. This Toolbox will help you understand how this is done.

Who can use the toolbox? 10

The Toolbox is designed primarily for business professionals who are entering developing markets for the first time. The activities are relevant for business professionals across industries and company sizes, B2B as well as B2C. However, companies that directly or through local businesses reach low-income end-users will benefit more than companies who, for example, invest in large-scale infrastructure projects through governments or international organizations. BOP projects are typically initiated in one of the three areas indicated on the figure on the opposite page. However, objectives, as well as company stakeholders, often change along the project process.


Based on best practice from successful business ventures, the Toolbox stresses the importance of on-the-ground business model development involving local stakeholders. In short: participatory market research. Depending on the company, type of product and time frame, this can be either a long or short process, but it will probably require you to leave your comfort zone and seek information and ideas directly from and with your target market. This Toolbox is designed to help you with this task.


Is this toolbox for me? Where do I start and how do I use it? This chapter introduces the toolbox basics.

What can I use the Toolbox for?

Until recently, few Kenyans would have known how to answer a market survey about mobile banking. However, a huge number of Kenyans have leapfrogged from not even having a bank account to using technology that is more advanced than in many developed countries. Through brave innovation, mobile operators and banks have created a new market from scratch. This ability is key to many BOPbusiness ventures. Large companies, such as Procter & Gamble (P&G), Johnson & Johnson and Philips have failed because they focused on perceived “needs,� such as clean water, but failed to understand how a market for clean water can be created. In other words, how the value proposition for clean water translates into something people are willing to pay for. One of the main ambitions of this Toolbox is helping your company understand these dynamics.

Sales and business development Projects often focus on generating a short-term return. The projects typically involve minor adaptations and are based on introducing products or solutions to existing markets. The Toolbox can be used to understand current market dynamics and develop appropriate business models.

Idea Generation

Concept Development

Project Definition

Pilot Project

Market Launch

Innovation and R&D Projects focused on generating a medium to long-term return. The projects typically involve considerable innovation and R&D efforts, such as new products or services. The Toolbox can be used to understand the needs and demands of local markets, which feeds into the innovation process.

Sustainability department

So cia lR esp on sib ilit y


Business Development Project

Research and Development

To reap the benefits of the Toolbox, it is suggested that it is used in the initial stages of the project development process and when additional information needs to be obtained and ideas generated. The Toolbox is primary developed for you to use at the stage where you already have an idea or product as a reference point, which could have a potential in the emerging market of a developing country. Once you have your reference point, it is time to decide how you are going to explore the potentials for your idea or product and consequently develop an appropriate business model. This is where the Market Creation Toolbox comes into play.


When do I use the toolbox?

les Sa

Co rpo rat e


Projects focused on short-term and long-term return. The Toolbox helps companies understand how CSR objectives can be linked with business objectives.

This Toolbox can help you on the ground, but it does not elaborate about creating a supportive internal framework. However, this should be a high priority! While understanding and operating in a foreign and complex market is challenging, it is our experience that BOP-projects are often challenged as much from within. In many instances, BOP-business development does not fit into the company’s usual structure and processes. Often BOP-projects require more patience, explanation and resources than normal projects. To justify these extra requirements at the management level, it is often necessary to highlight the shortterm value (e.g. related to innovation, CSR, employee retention) and to ensure that the project group has enough internal leeway to adapt and adjust the business model along the way.


The Toolbox Activities have been designed based on research and analysis conducted in connection with several


Besides the research and analysis, a number of design and business consultants have tested the Toolbox Activities, and their relation to the Business Model Dimensions, in actual field research. Through their professional work they have conceptualized, tested and assessed the Toolbox Activities to ensure their relevance and applicability for market creation projects. Therefore the Toolbox Activities have been created by combining best practices and methods from participatory development work and design with market research activities already known and used by many businesses. This ‘methodology’ of the Toolbox has been labeled as ‘participatory market research’, which defines the approach companies should apply to develop successful commercial projects in developing markets.



design and innovation projects. Research, stakeholder workshops and pilot tests were undertaken in Denmark, Asia and West Africa to assess methods and guidelines within participatory development work, BOP projects and market research. Conclusions from the analysis highlighted a need for a set of well-described activities that could support companies with practical guidelines on how to undertake market research in developing countries with a strong inclusion of target groups.


The information and knowledge of the Market Creation Toolbox rests upon research and practical experience. The description of the Business Model Dimensions is the results of numerous of observation from working with companies in the field, as well as a review of the body of knowledge on BOP business models. The description is not exhaustive, but provides companies with inspiration and highlights of how well-known dimensions of a business model differ in developing markets.


Background of the Market Creation Toolbox

The BOP Learning Lab was initialized in 2007 and focuses on engaging Danish companies in development markets, with a specific focus on low- and middle-income markets. The BOP Learning Lab has assisted a number of companies in developing BOP strategies from conceptualization to implementation in different developing countries of the world. DI International Business Development (part of the Confederation of Danish Industry or DI) runs the BOP Learning Lab. Since 2007, the Learning Lab has build up unique competences and delivered high-quality results for a number of large Danish companies exploring the potential of low- and middle-income markets. The BOP Learning Lab draws on the expertise of DI International Business Development, a business consultancy unit with +15 years of expertise in developing and emerging markets and offices in India, China, Brazil and Russia.

DESIGNWITHPEOPLE offers consultancy services to NGOs and businesses in planning and undertaking participatory field research and design activities in low-income countries. The organization offers professional consultancy services to NGOs and businesses based on several years of experiences in managing and undertaking participatory design and innovation activities in both Asia and Africa. Experiences include both local and global activities to develop and assess new innovations for NGOs and private companies. Through the voluntary organization new networks and innovative methodologies are continuously created through student involvement and local co-creation to facilitate innovative aid solutions.

Structure of Toolbox The Toolbox should not necessarily be read chronologically from the first to the final page. When reading the Business Model Dimensions or cases, you can access the Activity Toolbox to enhance your understanding of how to apply the Toolbox Activities to your own projects. It is important to note that the Toolbox is not an A-Z guide, but aims to help your company get started. This also means that the Activities are meant as inspiration and need to be adapted to the specific conditions of your company.



e Get Inspir

You can use the section on Business Model Dimensions to get inspired on what to include in your participatory market research


Lin Make The

You can use the case section to understand how the Toolbox Activities have been used in actual participatory market research


s Do It Your

You can use the Activity Toolbox get advice on facilitation and access a large variety of tools that can produce valuable information and knowledge



CASES 16 18 20 22 24 26 28

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This section will inspire you on topics that can guide your participatory market research Photo to the right, shows the Toolbox Activity Price mapping taking place in participation with a group of farmers.



As illustrated in the introduction, the use of the Toolbox focuses on the initial part of the project development process. The rest of the chapters in this section on business model dimensions are actual dimensions of a business model, whereas this chapter will show you how to take the very first step, making it possible to initiate the development of a BOP project. The rapid market assessment will give an overall estimate of how to proceed with the project, as it will provide you with the knowledge and information you need in the decision-making process.

Where to start? When your company has decided to go into a new market or country, the process typically begins with a market assessment, feasibility study or market entry analysis. Applying such tactics can produce efficient results in developed markets, but in BOP markets, investigating and gathering information and data can be a very complicated task.

Visits to small shops, although some are hard to find, can provide useful information This means that traditional approaches and relying on desk research will not get you very far, as access to market information and knowledge is typically very poor. However, as with any other market study, the process will begin with a consultation of secondary information sources, but you must be aware of the constraining factors that limit the reach of the secondary information. A predominant reason for the poor access in developing countries is the informal economies. The size and structure of the informal economy is a factor of considerable proportions, which contributes to an inherently different business environment. Typically, the informal economy is not taxed, monitored by government or included in the GDP, unlike the formal economy. In some cases, 70% of the workforce earns their living in informal markets.


To successfully design your Business Model Dimensions, you need to understand the existing market and get access to the right information and knowledge.



World Resources Institute: Large online collection of articles, blogposts and debates on BOP. UNdata: Access to useful databases such as OECD Data, FAO Data, WHO Data, International Financial Statistics and UN Procurement Statistics. Doing Business Index (World Bank): Provides objective measures of business regulations for local firms in 183 economies and selected cities at the subnational level. Growing Inclusive Markets (UNDP): Case study bank of 120 inclusive business models from over 40 countries and collection of 1,000 inclusive business models from all regions and sectors. Index of Economic Freedom: Covers 183 countries across 10 specific categories of freedom, such as trade freedom, business freedom, investment freedom, and property rights. Corruption Perceptions Index (Transparency Index): Measures the perceived level of public sector corruption in 178 countries. Global Peace Index: Measure of global peacefulness by domestic and international conflict, safety and security in society, and militarization in 153 countries by taking into account 23 separate indicators. Asian Development Outlook and African Economic Outlook: Comprehensive analysis of macroeconomic and development issues of the two continents. Various sources of information: BOP Learning Lab Denmark,Center for Sustainable Global Enterprise at Cornell University’s Johnson School of Management, William Davidson Institute, Gapminder, Endeva, World Governance Indicator, Journalists Without Borders, Eurostat.

The benefits and drawbacks of an informal economy are many, and your company must understand the markets in this informal economy to achieve success. As you will see in the description of the next business model dimension, the population living in the informal part of the economy can be included as part of your business model with great advantages. The informal economy is often one reason why information and knowledge can be very difficult to access. Even though many developing countries have national bureaus of statistics and other information agencies, the availability of sector-specific data concerning production value of certain goods can be very low. Due to these factors, the rapid market assessment focuses on supporting the limited available data with on-the-ground participatory market research.

Visits to specific stores, for example local pharmacies, during field research can produce valuable knowledge

However, local presence is not only important in relation to meeting your designated target group. At times, you need to go to the to the source to acquire secondary information and data, as the availability varies to a very high degree and often cannot be acquired on the Internet. At times, countries collect


Therefore, it is highly recommended to meet with government offices (e.g. statistical bureaus, information offices of ministries, research centers, etc.) and NGOs as these types of organizations typically run large programs with monitoring and evaluation requirements, making it necessary to collect the needed data and information.

Meet the end-users on their home ground Perhaps the most important reason as to why you and maybe an entire team should go to the market is to meet the potential customer of your products or services. As mentioned, information is difficult to access. So for knowledge about consumer preferences, etc., which stresses the need for companies to go to the market at a very early stage, it otherwise becomes very difficult to conduct enlightened decision-making.


To develop your successful BOP business model, it is very important to understand the existing market at an in-depth level. A comprehensive understanding of the existing market will help you to understand how existing problems and needs are addressed, thereby allowing you to position your solution. The most effective approach in establishing this understanding is to be present in the market, making it possible to see the conditions on the ground and meet the different stakeholders, especially those in your designated target group.


On-the-ground understanding of existing market

and store data and information, but due to constraints on resources, the information is never disseminated.

ViewWorld is a smartphone- based app that easily and effectively collects and reports text, data, photos, video, sound, barcodes and GPS coordinates. The approach is to use the ViewWorld web interface to create, import and export data forms to and from smartphones. The ViewWorld App can be used for market research allowing better and easier collection of data and knowledge. ViewWorld is developed in cooperation with DanChurchAid, Danish Red Cross, CARE Denmark, International Media Support and Rockwool Foundation. ViewWorld is a system thatcan help organizations, associations and businesses collect, aggregate and present data.


The target group segmentation is useful in documenting your visits and talks with various target groups that could become potential consumers. Upon returning from the rapid market assessment, the segmentation will help you decipher between different groups.

Deep dialogue is vital when arriving to an emerging market, as it supports the first contact with your target group. This activity assists in “getting the ball rolling” as the interviews and contacts you make are bound to spread and grow.

Selling the product literally means that you sell your product or put it up for sale to get an immediate response from potential buyers. The activity generates important knowledge, not just in relation to consumer feedback, but also from shop owners, as they will let you know whether there is a market for your product or service.

Resource flow can be used to generate an estimate of the input and output at a general level of an organization, such as a rural health clinic, allowing you to acquire some numbers about available medical supplies and staff (inputs) and treated patients (outputs). This could be valuable information in assessing the potential market.

Follow and observe is very useful when you want to get a better understanding of the informal market. As it is very difficult to obtain specific data and information on the informal market, this Toolbox Activity is used in situations such as visiting different types of sales outlets, asking about pricing and distribution, etc.

Ranking values can be used to understand how people perceive the characteristics of products when they must prioritize them. This approach is very useful for creating a platform for dialogue. The exercise could state something that is obvious, whereas people’s real opinion is revealed in the subsequent dialogue.

Customer segmentation

Deep dialogue

Product in market

Resource flow

Follow and observe

Ranking values

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CASE: RAPID MARKET ASSESSMENT This case focuses on how AAK (AarhusKarlshamn) made a rapid market assessment of an edible oil market. This case will highlight: The ability to conduct a rapid market assessment to estimate the potential for a company in a market. How you do a rapid market assessment using the Toolbox Activities: Customer segmentation, Follow and observe and Ranking values.

Market overview


Based on desktop research, the overall market potential for edible oils was established. UNdata, such as FAOstat, proved to be a reliable source and general internet research generated a list of relevant stakeholders, such as private companies and government research institutions. A number of telephone interviews provided further insight, especially concerning the informal market, which is essentially what attained the largest potential.

Digging into the informal market As the largest potential was estimated to be in the informal market, it became apparent that participatory market research, using the Toolbox Activities, was required. The Toolbox Activities assisted in collecting the necessary information and knowledge. To effectively do this would require an involvement of the future end-users of the product, which meant that valuable insight on how to generate the business model could be collected at the same time. Prior to the study, the team selected a number of suitable Toolbox Activities and made the necessary preparation, such as developing different focus materials, e.g. picture cards for ranking the characteristics of a product.



FOLLOW AND OBSERVE Based on research prior to the field research, it was very evident that the informal market had to be examined closely, as the majority of the consumers were represented in this market, especially wholesale vendors. An important part of the rapid market assessment focused on identifying the markups every time an edible oil product changed from one market participants to another. By following and observing the different actors in the market, it was possible to establish how many times the product shifted hands 1 , and by using the Toolbox Activity Deep dialogue in different shops, the mark-up and different products were identified 2 . This means that a rough estimate was generated in terms of the product’s value when entering the country (established from desktop research and visiting the National Bureau of Statistics) until it was in the hands of the end-user. As the product in focus was edible oil, the follow and observe method also permitted the research to ask operators of street kitchens and restaurants about how they used different products.






An expected output of a rapid market assessment is an identification of multiple customer segments. As noted earlier, the primary customer segment, wholesale vendors and street kitchens, were examined and detailed information was collected and compiled into “personas.� The different personas then represent a typical customer from the examined segment. The most attractive customers identified, were female middleclass consumers 9 and street vendors 8 . Important as it is to visit the street vendors at the shops, it is equally important to invite them to a location where they are able to share their thoughts and ideas with similar shop owners 3 . The persona description also contains the preferences of the different consumers based on the ranked values, e.g., what is the prioritization of the different product characteristics. An important part of the customer segmentation is that it is an ongoing, cross-cutting activity, which involves a combination of notes and photos over time 7 .


RANKING VALUES Another important part of the participatory market research was the prioritization of product characteristics, especially in relation to the nutritional value of different products in the market. The three largest customer segments, street kitchens and low- and middle-income households, were presented with 20 different picture cards 3 , all indicating different characteristics of edible oil, such as taste and durability. Furthermore, a number of local products were used at the focus group 5 , including the locally manufactured red oil 6 . The groups prioritized very differently, with the street kitchen initially focusing on nutrition, but ultimately deciding on price 8 . Middle-income consumers heavily emphasized the need for nutritional value 4 . However, the researchers remained skeptical, as later research on brand preferences showed a bias toward a very unhealthy national brand. An interesting fact was that the low-income households perceived edible oils with added vitamins or no cholesterol as something exclusively for the rich people.




CUSTOMERS AND ENDUSERS Select your customers and/ or end-users and understand when people are willing to pay to solve a need.


Identifying, building and maintaining a customer base among lower- and middle-income classes is a daunting task, but it can yield substantial returns for a company. When you are faced with the task of selecting and building a customer base, and the subsequent development of the business model dimensions, you can use this chapter for inspiration on how to navigate safely through the development. A key factor to keep in mind is that the basic needs of your target should not be misinterpreted as market demand.

Identifying and selecting your customer base When highlighting the potential of BOP markets, the huge number of people is typically emphasized and this leads to the conclusion that tremendous opportunities exist. It is true that opportunities exist, but you must remember that companies operating on these markets use different sales channels and very seldom sell directly to the consumer. Although many companies do not sell directly, it can be very important to establish a direct relation to your company’s end-users. This relations is equally important from the initial contact is established to the go-to-market strategy is launched.

decide to bid on government tenders, you can typically gain an advantage by getting acquainted with the World Bank’s tender processes, as the majority of all governments have implemented the procurement processes of the World Bank.

The need for end-user education The rapid market assessment will assist you in understanding the different customer bases your company can target. Regardless of which customer base your company decides to focus on it will entail a certain degree of education of the enduser. In the case of Grundfos LIFELINK, the company needed a plan for how to educate their target group on how to use their product.

The rapidly evolving middle income class: Lives in brick houses, dresses nicely and has a daily job Concerning the selection of markets and potential consumers, past experiences have shown that companies selecting the most impoverished target groups in rural areas encounter a more difficult start-up process. Contrary to this, you have a higher chance for success (also towards the people living at the very base of the pyramid) if you choose peri-urban and urban areas and integrated resourceful local organization, such as co-operative groups. However, this depends on your sales strategy, as the choice of sales channel will determine the type of end-users that your company will address.

The need for education is tied to the importance for companies to ensure that the end-users perceive the value proposition the right way. An imperative step in the development of the value proposition is to understand the difference between needs and markets.

Different types of customer bases As in any other market, your company can sell the products on a business-to-business (B2B) or business-to-consumer (B2C) basis; however, other relevant approaches exist. For instance B2N, also referred to as business-to-NGO, exemplifies the opportunity of selling to NGOs, such as The International Committee of the Red Cross, e.g. the company Grundfos LIFELINK, establishes an agreement with Red Cross concerning the delivery of the water service provision system. Besides the large number of NGOs, the United Nations supplies to developing countries throughout the world, which makes the UN a very attractive customer. Another example is B2G, or business-to-government, which is typically based on tender issues by local governments. If you

Visiting local communities can change your perception and enhance your understanding of future end-users

Unmet need is not a market At times, companies misunderstand and confuse the needs of the consumers and interpret this as market demand. The problem arises when you translate basic needs, such as lack of medical services, water, food, etc. As noted in the introduction, many companies have failed even though they used sensible strategies. However, it is typically not a question of which

strategy to apply but spending the necessary resources in developing the appropriate value proposition. To do this, you need to get an in-depth understanding of the people living at the base of the economic pyramid. Below are a number of aspects that companies must bear in mind for a better understanding of their target group: Trap for the altruistic: Companies tend to confuse need with demand (who can use the product, rather than who can buy it). Cash flow blindness: Products that appear inexpensive by Western standards cost two weeks’ salary in a developing country. “It’s-being-sold-on-credit-so-they’ll-buy-it”: Company sales and profits are realized on the basis of increased debt and loans for the consumer.


Quality standards: Consumers and workers conduct their lives with dignity and demand both respect and quality from service providers and employers. Financial constraints: Low and fluctuating incomes and limited access to credit or insurance drive the consumers to be smart shoppers and risk-adverse investors.

in their everyday life. This approach has been well examined by Erik Simanis (2010) in his work with the Solae Company, which was part of the BoP Protocal project. For this to be successful, you must submerge yourself in the local community and include your target group. The next chapter will provide you with inspiration on how this can be done.

Process of developing an open-ended value proposition To get an in-depth understanding of your target group, you should apply an open-ended process. The process is open in the way that you, in close collaboration with your target group, allow them to define the value proposition, thereby encouraging them to establish a perception of how the product makes sense


Follow and observe can be used to get out among our future customers. Go to a local community and talk or observe people in their everyday lives. If you are developing a business model for a new food product, it can be useful to observe how people prepare their food or how they shop.

Deep dialogue is very useful in collecting the insights of people regarding their perception of a product and whether they would actually pay for it. The activity is important in determining if the company can offer anything of commercial value to potential end-users.

Activity map is used to map a typical day of your end-users. You develop a set of pictures illustrating the typical activities of a day. (You will have gained additional insight after following and observing, as well as deep dialogues.)Then your target group maps out their day and you will have a platform for dialogue, which can provide valuable insight in how value is created.

Learning by doing follows the idea of submerging yourself in the community to better understand the way people perceive and understand things around them. This is an explorative task and does not necessarily focus on any research questions or products, but is an activity designed to make you understand the living in the local community.

Designing the value proposition to include the potential customer in the design of your product or service. Prepare different materials, such as pictures or prototypes, to facilitate feedback from the target group. Recognize the importance of an openended value proposition where people develop their own perception of the product’s value.

Concept assessment is used when you have an idea or product that you want to present to your designated target group. The assessment activity will provide you with information and knowledge, which can be used in the iteration of your idea or product.

Follow and observe

Deep dialogue

Activity map

Learning by doing

Designing value proposition

Concept assessment

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CASE: CUSTOMERS AND END-USERS This case focuses on how VestergaardFrandsen’s strategic partnerships ensure inclusion of the end-users.





This case will highlight: The need to establish close relations with your end-users although they are not the customer base. How strategic partnerships can ensure inclusion of the end-users through the activities “Learning by doing” and “Designing of value proposition.”


VestergaardFrandsen (VF) has turned corporate social responsibility into their core business of creating life-saving products for the most vulnerable. Innovative products and concepts are developed under their unique Humanitarian Entrepreneurship business model, such as a thin sheet of woven shade cloth impregnated with insecticide that is installed on the walls of a house to offer protection against diseases like malaria and dengue. While the end-users are people living at the BOP target, customers are primary public agencies (government agencies, NGOs, etc.) or larger private industries interested in running community-based malaria control programs. Strategic partnerships are formed with potential customers during the early research and development to prove the safety of the product and create evidence of impact on malaria. While the marketability of the products depends largely on the ability to prove the life-saving advantages, VestergaardFrandsen also undertakes local field research to address the product’s usability and acceptability among the endusers – key factors for the actual ratio-of-use.


LEARNING BY DOING In the focus country, a rural community was selected as a research site. A local company that ran a malaria control program provided the access to the site. The product development consultant from VF was welcomed to the community by the village chief. The consultant expressed interest in staying overnight two days in the community during the first week, showing full respect for the local conditions, and the chief honored the request by handing over a local abandoned house 2 3 that was then renovated. The house and a few overnight stays did not only create direct access to the community but was further useful for the research to undertake most of the initial tests of fixing methods 12 13 and acted as a local storage facility. In addition the possibility to stay overnight provided an opportunity to test other VF concepts and products with target-users and potential customers, as well as discover new opportunities by spending time in the community in the evening, observing the local behaviors at the time when the malaria-infected mosquitoes often bite.

CONCEPT ASSESSMENT In addition to the textile technology, a second design challenge was to ensure that the durable lining product would be fixed on the walls throughout the expected efficacy period of three years. A large variety of fixing and adhesive products were purchased in the U.S. and locally, and tested systematically on a variety of rural walls 12 13 .



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DESIGNING OF VALUE PROPOSITION Bed nets are frequently used inappropriately by the end-users who instead catch fish with the net, decorate with the packaging or get cash from selling the bed net on the market rather than using it as intended to cover their beds. This behavior challenges the value proposition of the product, especially the way end-users experience the product must be attractive so misuse is avoided. Misuse is particularly problematic if health awareness is low. To design the durable lining product VF needed to create attractive experiences for the locals. A number of local research and design activities were undertaken: samples of the durable lining product were “forgotten” in the village and later people were observed using the durable lining product to screen their windows for insects 9 ; many houses were visited to identify that if the wall lining was blue, it would have great aesthetic value for those who could not afford painting 7 ; developed acceptability and durability surveys after the first pilot tests revealed that the durable lining killed and physically screened for other rodents; 11 and that the transparency of the textile enabled personal paintings on the wall to still be seen 10 . These local experiences are now part of the product’s design and used in marketing to appeal to the locals.


To assess the textile, end-users were presented with small material samples 6 and pictures of the installation during interviews. They shared initial skepticism because the textile was similar to that used in grain bags. Later, full room-installations were undertaken locally to assess the training needed for locals to manage the installation 5 8 . The full-room installations were also used so that the community could assess the product in use and for VF to observe the local adaption 14 . An “Acceptability, Durability and Impact on Malaria” survey was developed to guide later product assessment trials through secondary partners. The survey was tested before being finalized. The test included surveys with households that were intentionally given non-impregnated durable lining. The test answers proved inefficient in producing the correct answers. To avoid misleading answers the survey now includes observations and activities that can reveal insight beyond people’s answers, including the use of locals in the community as assistant researchers to tap into local knowledge and attitudes 15 .


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Create mutual value by including end-users in your business model – employ your customers and let them access new markets for you.

The time spent on the community inclusion is not a given from the beginning and cannot necessarily be scheduled, as it requires you and the company team to submerge yourselves in the community and literally become part of the everyday lives of the potential consumer – what can also be described as participatory market research. For example, the Solae Compay, a Dupont subsidiary, took a project team to the slums to live and work together with the target group. The project was a Base of the Pyramid Protocol project as developed by the Center for Sustainable Global Enterprise at Cornell University. The result was several potential business models and concepts, ultimately ending up as a successful adoption of a soy protein product.

In continuation of the previous chapter on customer base, you must be aware of the added value of cocreating with and including local communities in the business model. Co-creation – an expression for development process with mutual benefits – is used from the very early stages of the project development, beginning when you establish contact with the target groups to the implementation of your business model, where the target group is included, such as distributors. Regardless of how you cooperate with the target group, a certain degree of education is usually required.

The idea of inclusion A business model dimension that differs greatly in low-income markets is generating “inclusive business models.” The idea is to include the potential consumer into the business model, thereby enhancing the overall likelihood of a successful and profitable business venture. The inclusion can happen in various ways in the value chain, such as inclusion of consumers, producers, business owners or employees.

This, the end result of community inclusion, is a comprehensive understanding of the lifestyle of the target group of your company, which means valuable information and knowledge that will allow you to generate a successful business model.

Co-created fridges Companies that have gone through seeding, or participatory market research, have gained new insights that allow them to generate non-traditional business models, such as the Indian company Godrej and Boyce. The company manufactures a wide range of appliances, but had only succeeded in penetrating 18% of the Indian market with its refrigerators. The company decided to start a project that would address this challenge and conducted detailed observations and openended interviews with rural and semi-urban people who typically earned $125 to $200 a month. The results showed that the target groups shared or rented fridges on a communal basis, which did not meet their needs. However, the reason they did this was not obvious. The observers found that most fridges contained only a few items, as the users tended to buy small daily quantities of vegetables and milk. Moreover, as electricity was unreliable, the little food that was stored was put at risk. The overall indications were that the fridge, as we knew it, did not propose




The notion of community inclusion lies at the very heart of the market creation strategies, whereby you identify a community, which becomes the base of your initial business concept. The process of establishing contact with a community and subsequently reiterating your ideas with the community can also be referred to as the co-creation process. Through this process, you develop and qualify the value proposition that your business model will ultimately deliver to the consumers.


Community inclusion

The inclusion of the target group in the business model is often seen as a positive – and at times necessary – aspect of the business model. However, before you decide on including your target group, it is useful to be aware of the economic lives of lower- and middle-income classes. The reality that these income brackets are faced with can challenge the idea of inclusion. For example, your business model may assume that it is positive to offer people an occupation, such as through employment or entrepreneurship. If this approach is favored, you should be aware that microenterprises are unable to take advantage of economies of scale, but economists do not necessarily understand why. Many point to the lack of credit or systematic informality as the barriers keeping entrepreneurs from scaling up a 1- or 2-person operation, and they leave it at that. However, other reasons are also possible, as it appears that some entrepreneurs consciously choose to engage in multiple occupations as a way of hedging against a downturn in any one field – similar to how a sophisticated investor diversifies his or her portfolio: Risk spreading is clearly one reason why the low- and middle-income classes, who might find risk especially hard to bear, tend not to be too specialized in any one occupation. They work part-time outside agriculture to reduce their exposure to farming risk, and keep a foot in agriculture to avoid being too dependent on their non-agricultural jobs. You should also note that for many entrepreneurs, this is a survivalist strategy and not necessarily the most profitable solution.

Invitations to people’s homes can be an eye-opener in relation to the country’s cultures and norms

the typical value proposition to these Indian people – so why rent or share a fridge? The team concluded that what this group needed above all else was to stretch one meal into two by preserving leftovers and to keep drinks cooler than room temperature. Clearly, there was no reason to spend a month’s salary on a conventional refrigerator and pay steep electricity prices to get the job done. Nor was the solution a cheaper conventional fridge. The unmet job required an entirely new product, supported by a new business model. After initial participatory market research indicated that low-end refrigerators were not the right approach, the team prototyped a unit from the ground up and tested it in the field with the consumers. The test included 600 women, gathered to participate in a co-creation event. Working with the original prototypes and several others that had followed, the women collaborated with a


Social mapping is a very important activity to conduct in the early stage of your business model generation. The activity allows you to map the local community and get acquainted with relationships between key stakeholders, such as consumers and shopkeepers.

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team on every aspect of the product’s design. The result was a red, portable, 8 kilogram, low-energy fridge at $69, which is half the cost of a basic refrigerator.

Owner-scheme and supply chain integration

This example addresses the sourcing of raw materials; however, you can also consider including the target group as part of the sales or distribution. Regardless of how your inclusive business model will look, it is imperative that people are educated, whether they assist in producing/supplying or are consumers your product.

Yet another way to include the BOP segment in the business model is to encourage ownership, as the South African company Mondi Recycling, which successfully reconfigured its entire supply chain of used paper, did by outsourcing an essential link of the recovery process to former employees through an owner-driver scheme. The scheme was developed as the company could reduce its costs and increase productivity by paying its transport service providers on a volume basis rather than a fixed salary basis. The service providers were then in charge of dealing with the more than 12,000 hawkers, which the used paper industry relies on.


Customer segmentation will help you understand who is actually a consumer. The activity supports other activities, such as deep dialogue. In this case, it useful to generate an overview of the different target groups that you are observing.

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Creating scenarios can be very useful in this context as you can use it to exemplify how your target group should be included, such as making a picture showing your business model that depicts how your target group will be involved. This can generate valuable feedback.

Ranking values can be used for various things. For example, in the early stages, it can be used for general feedback on different concepts for your business model and, at a later stage, you can use it to rank the importance of the different dimensions of the business model in relation to when your target group should be included.

Prototyping is an important activity, as a deep understanding of local needs and markets does not ensure that you will translate these into the right solutions. Include your target groups or local manufacturers to get inspiration by sharing their ideas and feedback on your solutions.

Deep dialogue can be used to get comprehensive insight into the dynamics of a community from the individual’s perspective. This can be a determining factor in understanding how and why a potential target group should be included in the business model.

Create scenarios

Ranking values


Deep dialogue

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CASE: INCLUDING END-USERS This case illustrates how NGOs planned and collected insight from field research through local partnerships. This case will highlight: The potential to undertake participatory market research through local partnerships and collect feedback through digital media. How you can ensure end-user inclusion through the Toolbox Activity: Deep dialogue.

Using smartphone to plan research


Through a partnership with IBIS, the company Worldbarrow collected information on their target groups by using the ViewWorld product (read about ViewWorld on page 17). Information was collected through a customized survey, which generated a valuable overview of local farmers and their characteristics. The information helped Worldbarrow identify participants to work with and prepare activities to address market opportunities for an innovative wheelbarrow.

Identify opportunities through local partners The organization access2innovation collects insight on local conditions, needs and opportunities through NGO partnerships. The NGOs ActionAid and CARE undertook local research, addressing renewable energy, water, sanitation and food, at their own centers and in target communities within one month. Research was undertaken after initial training on the “Deep dialogue” activity. The feedback and insight were communicated digitally to access2innovation who will use the material to support and identify opportunities for new commercial solutions that can reduce poverty.



DEEP DIALOGUE Pre-survey in cooperation with NGO Worldbarrow developed a digital survey from the ViewWorld website that included questions to characterize the farmers, optional questions on local types of crops and transport, and open-ended questions to ask what farmers would use a wheelbarrow for.

Effective market research Through IBIS, “Deep dialogue” was undertaken with 20 farmers during one day by using a smartphone with the survey form 2 . Answers, notes, pictures and GPS coordinates were recorded directly on the smartphone to develop a profile of each farmer 3 . The report of the survey was printed 7 and helped the researcher to later identify and involve the same farmers in participatory market research activities 5 . The pre-survey also made it possible to adapt market research activities based the on initial knowledge of the farmers’ business and initial feedback on the prototype.

DEEP DIALOGUE access2innovation facilitated a workshop for both CARE and ActionAid to inspire and guide how to undertake research and needs identification through deep dialogues. Both NGOs were given the “Deep dialogue” activity description and asked to collect insight through questions, observations, pictures and video 4 . ActionAid used deep dialogues to specifically identify opportunities for renewable energy at one of their local training centers 6 while CARE was asked to identify local challenges in general by exploring one of CARE’s communities 8 .





After one month, both NGOs delivered information from research through reports with pictures and quotes 10 from the target group, videos communicating local conditions 6 , interviews with target group representatives and pictures showing local conditions 9 . The material illustrated what topics and challenges the local partners considered important and relevant. Based on this material, access2innovation will address the need for further research and map potential needs that can hold the interest of industries.




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How you can create a strong inclusion of the end-user through the Toolbox Activities: Value ranking and Prototyping. InnoAid started an innovation project to work together with NGOs and workers’ unions to co-create with the street food vendors a set of educational, financial, social and technical solutions to sustain and improve their businesses.

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Through the use of Toolbox Activities with the vendors themselves, it was discovered that their needs and priorities differed from those discovered through the initial desk research. While publications focused on challenges related to unhygienic conditions and urban development, the vendors prioritized day-to-day challenges, such as how to avoid harassment from local authorities and maintained their pride about being individual and diverse businessmen.

Creating access to the end-users Local influential leaders played an important role in the beginning to create access to the end-users. It was discovered through initial research that to create access to work directly with the vendors, local “hawkers’ unions” had to be approached to introduce the research to local leaders of the vendors.

Prior to the field study, a list of fourteen different values relevant for the purchase of street food was defined in collaboration with a local partner. The values were all defined as negative values of the street food business that could prevent customers from purchasing the food at a particular stand, including “dirty water,” “angry vendor,” “old food” or “costly.” Aspects were represented with a short title in English and the local language and large pictures that wereas glued on heavy-duty cardboard to be re-used in several sessions and in rough environments 3 . On an A3 paper 2 a scale was made with an arrow from “High: The value that would stop the customer from purchasing food at a street vendor” and “Low: the value less important for the customer when purchasing street food.”

Inclusion of vendors and consumers

This case will highlight: The need to undertake local field research to understand end-users of the solutions and include them into the design process to assure that solutions are acceptable and affordable.


This case focuses on how InnoAid included the endusers to develop solutions for street food businesses.



RANKING VALUES Developing material


The first ranking of values was done by approaching customers during lunchtime at the street food vendors. Individual consumers were introduced to the activity, and by using the ground or a small table, consumers were asked to rank the values on the A3 paper. The activity created much attention from other consumers who interrupted the activity with their suggestions for the ranking, generating valuable discussions that revealed differences and arguments for consumers’ prioritization when purchasing street food. For the customers, the vendor’s behavior, tastiness of the food and hygienic conditions were much more important than price. Individual street food vendors were asked to rank the values according to their idea on what they thought consumers prioritized or disliked the most when looking to purchase street food. The vendors were approached during midday or late afternoon when their businesses were quiet.

Dual use Customers’ and vendors’ rankings provided quantitative insight when comparing ranking of the same aspects among the vendors and consumers as well as qualitative insight by addressing notes from the discussions and dialogue during and after the activity. Looking at the consumer as well as vendors’ perceptions of the customer gave deep and very relevant insight for the project to address solutions prioritized by the consumers and addressing the attitude of the vendors. There were several differences on what the consumer valued and what the vendor thought his or her consumers valued. These differences became relevant when designing messages in the educational material on how the vendors could improve their businesses by looking at new value propositions. The activity was very simple, but with the vendors, who mostly had very limited formal education and were unfamiliar with participatory activities, it provided the right level of abstraction for them to understand and be able to reflect on their ranking of values.

PROTOTYPING Conceptualizing Fifteen pictures were selected of current local kiosk designs taken during the first field visit and printed in A4 and laminated. Eight key aspects were defined that were important to address in the design of the kiosk, such as mobility, storage and durability. For each key aspect a paper card was made listing different types of solutions to consider, such as for “mobility” addressing the need for wheels, a mechanism to push or pull, solutions on how to remove the kiosk to clean the area, etc.


Two workshops, each with five vendors, were arranged through the vendors’ union. During a workshop, one of the activities was to address the design of the kiosk. The laminated pictures were presented to the group. The pictures included were intentionally, local street kitchens, but not from their own street to avoid critiques becoming too personal and sensitive. The paper cards were used to structure the activity and solicit ideas from the vendors on the technical design by only addressing one aspect at a time. Ideas were shared and developed by using the pictures as a reference of current good and bad existing solutions. The researcher and vendors used the laminated pictures and other paper to draw new, detailed solutions 4 5 . The drawings, especially on the current design, were very useful for the design team to further develop solutions.


Detailing Design ideas from the vendors used by a group of design and innovation engineers who developed an improved modular kiosk that could be adapted and manufactured in accordance to the vendor’s financial capabilities to invest in a new solution and the specific type of foods sold. For further feedback, a concept catalogue was developed to show the use, variety and specifications of the design through 3D drawings and taken to India for further feedback from the vendors, unions and consumers 7 . In addition, the kiosk design was printed in black and white to invite selected vendors to detail the design by coloring and detailing the illustration of the kiosk 6 . Allowing the vendors to design and detail the print-outs provided insight, such as the looks of the menu and the meaning of the colors.

Prototyping The revised concept catalogue, based on the vendor’s feedback, was used to present to three local blacksmiths for additional comments in relation to the manufacturing aspects 7 . Two of the blacksmiths were contracted to manufacture a 1:1 prototype to both gain insight on local manufacturing skills, how detail solutions were made, how to communicate technical designs for local manufacturing and to be able to estimate the cost. The prototypes were afterward lent to two street food vendors who are currently using these to provide additional feedback in relation to usability and durability 8 .








Often distribution is the determining factor for a successful BOP business model. Costs can easily increase, however, this also creates strong incentives for innovation and, as a result, sustains competitiveness.


Many companies have experienced that the distribution and organization of the supply chain, is the determining factor enabling and sustaining the business strategy. The reasons that this business model aspect draws a high degree of attention are e.g. the lack of efficient infrastructure, unorganized market structure or high costs or operating in rural areas. The size and organization of the informal markets typically suggest that companies must develop innovative practices to enable a profitable supply of their products to the consumers.

Make use of alternative distribution channels Successful BOP-business models are often ascribed to innovative distribution forms and creative use of supply chains. The evidence of the need for innovation in this context is demonstrated by the different types of distribution observed in BOP-markets.

Distribution in rural areas is very different to urban areas Approaches such as micro-franchising, piggy-backing, product bundling and back-loading are examples of alternative distribution channels applied to cost-effectively reach consumers of lower- and middle-income classes.



Sales points exist in myriad types in developing countries, especially due to the size of the informal sector. Below is a list of the many types of sales observed: Shelf shops: Small shops along the road are found in urban and rural locations. The shops are very often combined with street kitchens and evidently have irregular opening hours. Supermarkets: Fully equipped supermarkets, as we know from developed countries, are in many developing countries. However, the prices typically exclude the lower-income classes. Motorcycles: Often used for distribution, the motorcycle is also used as a sales platform, sometimes as a rebuild model with a load, thereby allowing more space. Bicycles: Bicycles are more than often rebuilt, such as with boxes in front or back. The bicycles are very popular for distribution or sales due to the low costs and large area coverage. Pushcarts: The carts offer high volumes and are often used for heavy-duty items, such as cement or liquids. However, the radius is rather limited due to the slow speed. Head baskets: A popular way of transporting goods is by carrying a container or basket on the head. People will usually sell directly from these basket, thereby making it a small shop.

Aligning market strategy and distribution strategy An important factor in determining how the consumers should be reached is whether a company is entering or creating a market. In relation to market creation strategies, distribution is a critical success factor, due to what can be defined as the “margin game.” In short, this can be explained using Procter & Gamble as an example. The company, which marketed a sachet product, soap, relied on very large volumes and small margins. It can be discussed if the product qualifies as a “BOP product” when looking at whether it has any social impact for the BOP, however it is undeniable that through the packaging and distribution approach, commercial success has been achieved. However, this approach is based on the contingency that an existing market can be entered, which results in the possibility of realizing profits on small margins.

Lack of access to transportation can produce creative results, such as this gigantic running wheel

Contrary to this strategy, a company can decide to create the markets, which means investing in the framework needed for a successful commercialization, e.g. the cost of changing the lifestyle of the consumer, so they can adopt the company’s product. Essentially this requires higher margins, because the distribution and marketing of the product is higher. Companies must be aware of this factor when determining the ideal distribution and supply chains.

Micro-franchising Determining the ideal distribution strategy evidently relies on the type of product or service the company is trying to market. For some companies, micro-franchising has been a successful approach in reaching consumers. Examples include FanMilk, which pioneered bicycle and push cart distribution of ice cream at mass scale, making it possible for the company to realize substantial sales. However, the use of alternative transportation was only part of the success. Another important factor was the integration


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Integration of service provision Building on the same critical factor as FanMilk, in terms of access to markets, the company Essilor has developed an innovative approach in creating access to new markets. The company is a manufacturer of eyeglasses and through the exploration of the BOP market they found that even if the people could afford

the eyeglasses, it does not necessarily entail that they would buy them for the simple reason that they cannot access the product. This meant that the company had to find a way for the distribution of a product that goes hand in hand with a service that requires on-site equipment and expertise. Namely they needed to test people to conclude what types of eyeglasses were needed. The solution was to create a mobile clinic that would reach the consumers at their location, thereby creating access to the market.

Back-loading Back-loading occurs when empty freighters move across the country, thereby providing an opportunity for transporting goods. DHL in Kenya has had great success with delivering goods to remote farmers, using the empty trucks that pick up the produce. The empty trucks have opened up as a business opportunity for not only DHL, but also several other companies that supply farm inputs to the farmers.


The social map can be used as an exercise that draws out the hierarchy in a local community and reveals who the decision makers are. This is relevant in relation to distribution as it allows the company to determine how the local community can be included in the business model.

Social map

of micro-franchising, which means that entrepreneurial individuals can rent, for example, a bike and choose, on their own, the markets where they want to sell. These micro-franchisees can realize higher profits than if the company invests in identifying and going to the same markets. Other business companies have tried to adopt the micro-franchising in the business model; however it is contingent upon important factors such the dilemma between social objectives and profitability, meaning how poor can the people included are allowed to be. If they are too poor, they will not be able to pay the franchisee fee, which translates to poor sales for the company.

Follow and observe can be used to track products and people, such as by physically following the process, thereby understanding the intricacies and risks of distribution in the informal market.

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Creating scenarios involves, e.g. a company presenting a fictive distribution scenario for a group of people, thereby gaining valuable feedback on how companies can shape the distribution.

Ranking values is a very useful exercise, which can assist companies in prioritizing the value of different manners, for example, if people would pay for service provision as part of the distribution.

Price mapping is very useful in determining the different costs that a target group encounters, such as throughout a given supply chain. The activity can then assist in assessing the different mark-ups in the supply chain.

Concept assessment involves testing your idea or distribution on your target group. For example, if you can conceptualize a distribution setup, you use the activity to receive feedback and gain valuable information as to whether your concept is feasible.

Create scenarios

Ranking values

Price mapping

Concept assessment

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CASE distribution system

CASE: DISTRIBUTION SYSTEM This case focuses on how Danisco closely examined an existing distribution system. This case will highlight: The need to investigate how the distribution system works to estimate how to develop a distribution scenario that would cost-effectively reach the farmers. How you can explore a distribution system through the Toolbox Activities: Follow and observe, Price mapping and Ranking value.

Informal market channels


A very large quantity of the milk is supplied through informal market channels, such as small outlets or markets, and informal processes also influence the organization of the milk collection at the farmer level. Large, industrialized milk processors exist, with a demanding value chain, such as depending on the season the infrastructure makes it easy or difficult to collect the milk from the farmers. Combined, these factors create a market that is complex to operate in, especially for the farmer himself.

The people in focus The farmer procures his products in numerous ways, through co-operatives, manufacturers and small shops. This indicates that the farmer is not waiting to be taken by the hand but is a thrifty and entrepreneurial individual. The majority of the farmers are looking to grow the farm, but the complexity of the market, most often the low access to information regarding sales prices and prices on farm inputs, obstructs him or her from developing the business.



RANKING VALUES Prior to the field study, 20 small pictures were printed that showed the different aspects of a farming business. At workshops, the farmers and the informal traders were asked to organize and prioritize the different features of their businesses (e.g., the value of durability) 1 , which indicated to the researchers how they valued and prioritized the different features/aspects of their businesses 5 . The activity was very fruitful in revealing how these potential consumers made business decisions, such as at community meetings 2 ; again, this provided value information for the value proposition of the product. This information could in turn be related to how the product should be distributed. For example, when looking at existing consumption habits and patterns, it became possible to estimate whether traditional distribution through an importer would be relevant, or if it was more efficient to develop an alternative distribution scenario based on where other goods, such as daily food products, were bought.

PRICE MAPPING The participatory consumer research also contained an activity that encouraged the farmers and the informal traders to disclose buying and selling prices, as well as different types of incurred costs, (e.g., materials and fees) using simple cardboard paper 11 .





The activity was carried out on-location at the cooperative 10 . Altogether, this information established an overview and, more importantly, a reference point for discussion 13 . This made it possible to discuss the economic value to be derived from the introduction of the product. Hence, this activity turned out to be useful for numerical information that could be used to estimate how consumers can benefit economically. To extract information the farmers were asked to fill out a questionnaire 9 . In relation to the distribution of the product, this information was very valuable to determine how best to achieve a cost-effective distribution while attaining the economic value that the farmers had expressed.

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FOLLOW AND OBSERVE The researcher literally followed the farmers and informal traders for a day 12 , to and from the points of milking, pick-up, transportation, and delivery at the dairy. The arrangement to follow the milking from A 8 to Z was easily organized through a local dairy, as was focus group meetings with the farmers. However, it should be noted that the farmers showed significant signs of bias, as the dairy quality control representative followed the researcher to the locations. However, following the supply chain of the milk supply proved many valuable learning’s, such as how the milk is bought and sold on the informal market or how the milk is being handled 4 . Altogether, the insight generated was used to determine where the weak points of the current distribution system, e.g. such as the current storage containers, which were not approved by the authorities 6 .




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CASE distribution system

CASE: DISTRIBUTION SYSTEM This case focuses on how students mapped current infrastructures for delivery of products and services. This case will highlight: The need to understand local infrastructures and how these can act as opportunities and barriers for new types of healthcare services. How you can explore a distribution system through the Toolbox Activities: Follow and observe, Deep dialogue, and Activity map. Four master’s students from Copenhagen Business School undertook a six-week project for a pharmaceutical company to research about how to create access to new healthcare services through micro franchising. Toolbox Activities were used to map current infrastructures for the supply of medical drugs and services, and to understand the pivotal role of local entrepreneurs in delivering service to the patients. 34

Informal provision of health care The great number of unqualified healthcare practitioners with little or no formal training is a challenge for Indians seeking quality health care. These practitioners are often the first point of contact for a patient, as they are considered a trusted neighbor who offers very low prices for attractive treatments. While NGOs are starting to recognize the unqualified practitioner’s skills to reach out into the community, and are providing them with training and/or incentives to do referrals, companies are often facing great challenges in their local programs since they sidestep this important social actor.

Student projects based on empirical data The students completed 10 days of field research with a consultant to meet with different local healthcare programs and local organizations that could share insight on current challenges and opportunities from different standpoints and give access to local communities, local practitioners and patients.



FOLLOW AND OBSERVE By walking through different residential areas where lowerincome residents lived, worked and commuted, the team got up-close impressions of the urban conditions and local health services. With no predetermined plan, the group easily identified local diagnostic and health clinics, pharmacies and micro-entrepreneurs. The lack of a firm plan provided the group the possibility to observe the target groups in their daily lives, without the bias of an organized event where a local contact could serve his or her interests. Most people and institutions welcomed the students and the informal dialogues provided valuable knowledge. Through the contacts established with local NGOs and government initiatives it was possible to visit the slum dwellings and nearby rural villages where it was more difficult to access without someone from the community itself. The team followed a local health worker and observed the conditions in the communities 2 . The activity provided the unique opportunity to gain insight into local infrastructures and the role of the informal health practitioners 7 .

ACTIVITY MAP 30 small pictures were printed before departure, symbolizing different types of symptoms, treatments, types of transport and daily activities and healthcare practitioners.

To prepare for the local dialogues, a research diary was developed for each primary target group: patients, health professionals and entrepreneurs. Valuable dialogues were created spontaneously in different locations, such as on the streets 3 , in shops, private households 4 9 , clinics, offices and during health campaigns 5 . The use of audio recorders was helpful in hectic environments. Meeting patients at their homes revealed insight into their socio-economic conditions. Different profiles of the patients were developed through the research diary and later used to develop solutions on how to bring healthcare services closer to the patient. Patients revealed an interest not only in affordable drugs, but also the delivery of additional valued services. Dialogue with pharmacies gave an understanding of current supply and sales of drugs, and services provided, such as local home delivery. Dialogues with local entrepreneurs provided insight into the characteristics needed for local distribution models and services offered to the customers.




The activity proved to be, apart from a great icebreaker, also a way for the patient to open up and communicate his or her emotions, and through them articulate on the challenges posed in his or her everyday life by the disease 8 . It gave insight into the patients’ daily and weekly treatment activities that communicated a great need for better access to health care.




During deep dialogue session with patients the images were displayed to the patient, who, with the help of a timeline on a piece of paper, told his or her typical daily activities 6 . The activity map changed according to the level of involvement of the patient and the space available for drawing. Variations of the diagram included the use of two different cards to refer to activities that happened daily or occasionally.




The high impact and success of sachet products is highly related to the nature of people’s cash flow. Because the informal economy, most often, does not operate with monthly pay slips and credit lines the cash flow is more volatile and can change quickly from day to day. This means that people tend to prefer purchases in small quantities so cash flow is freed up.

PRICING AND FINANCING Setting the correct price for products and ensuring that people can access finance are key priorities in these markets.


Although the situation has looked gloomy, the circumstances in developing countries are slowly changing. Still, many people are living in extreme poverty, but as conditions improve, so do two of the key factors determining the success of multinationals in BOP markets: pricing and financing. Determining and charging the right price and relying on available finance for the consumer has become a reality. Companies should beware of the common traps when developing BOP projects and the innovative methods applied to ensure success.

Poverty trap: People pay more for less A commonly known fact about consumers in lower- and middleincome classes is that they are sometimes trapped in poverty and basic goods, such as food products, energy, education and health services, are overpriced. The trap occurs as these basic products and services cost more – at times more than in developing countries – than they should, thereby obstructing people’s consumption habits. For example, water in Bangladesh is estimated to be more expensive for the BOP segment than in Copenhagen.

Informal shops’ administration of cash is very different to formal markets

However, this has a severe impact on products or services that have higher costs, but is better economically in the long term. For example, during field research, a Danish medtech company found that the most commonly used products were very cheap (USD 0.50) and of inferior quality to the company’s own products. Contrary to this, the company observed that its products were also on the market, although access was very low and the average cost (USD 5.4-10.8) was much higher than the commonly used product. However, participatory market research revealed that even though the product prices were very different, the total cost for the user differed, resulting in the cheaper product having higher costs.

Furthermore, it is often the BOP segment, and perhaps most often, that pays higher prices for basic goods and services than wealthier consumers – either in cash or in the effort they must expend to obtain them – and they often receive lower quality as well. For example, the most common energy source used for cooking in Sub-Saharan Africa, charcoal, typically has a higher cost per meal than would electricity or liquefied petroleum gas if these energy sources could be accessed. However unfair these situations might be, it sends an unambiguous signal that these segments have a disposable income that can, at times, sustain the costs brought upon them. In other words, it can be deducted from the observed examples that their purchasing power is low and that they are paying more for less. This evidently opens up the doors for companies, provided that needs are not misinterpreted with demand.

Small quantities: Good or bad? BOP markets are often linked to sachet products. A good example of a successful sachet product is Arla’s milk power products, widely sold in Africa. In one instance, when marketing the product in Congo, the company observed that sales were poor on the cheapest of their products. Through research it was found that a different and former brand had been cheap and of very low quality, therefore, the consumer connected low price with low quality. The result was that the high-end product in Arla’s product range became very popular.

Popularity of mobile phones have meant that pricing information must be very visible The reason was that due to very poor quality, the product’s consumption rate was significantly higher (approximately five products a day) than the company’s own product (one to two products a week). This example shows why low pricing does not

necessarily free up capital or works in the favour of the consumer. Furthermore, it emphasizes why innovative financing models are needed to assist the consumers in accessing better products and services.

Financing schemes: Enabling consumers to buy Companies and communities have invented multiple ways to ensure that people do not lack access to their products due to financial capabilities. Some of the approaches observed include: Financing schemes for ongoing services: Financing schemes for ongoing services is widely applied – the best known example being prepaid credits for mobile phones. The rapid expansion and adaptation of mobile phones in developing countries is intertwined with the company’s ability to put a vendor on street corners where people can access the fi-


Cross-financing: Cross-financing builds on the concept of subsidizing costs of a product by the earnings from another product, thereby catering for very different segments based on price and overall experience of the product. An example is AravindEyecare, which subsidizes 70% of all the poor patients they treat for cataracts. Regular patients are charged USD 350, which means that the hospital can offer the operation at USD 30. Evidently, the cross-financing only works because of very well-developed cost structures, such as the procedures and routines of the surgeons.

Group financing: Group financing is a very popular financing method in rural areas, where people come together and pool their capital for investments. Typically, this type of financing emerges when there is no access to formal institutions, such as a microfinance institution. Microloans: Microloans have become very popular as a method to increase access to financing for people. It can be questioned whether microloans have succeeded in reducing poverty, but it remains a complementary solution for companies in extending their products, which can benefit individuals or communities.


Concept assessment can provide considerable insight into the e.g. financial aspect of your solution. For instance, the concept might involve a financing scheme as part of the purchasing. The activity can provide valuable insight into whether the target group finds it attractive.

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nancial means (airtime credit) to use the products (mobile phones/sim card). Grundfos LIFELINK, as mentioned earlier, has managed to introduce a token where people can transfer mobile payments, and thereby use the token to pay for services. The technology is very applicable, as it is more flexible as a device than transferring from the mobile phone to pay for the service.

Follow and observe can be used to visit a number of stores, together with your target group. This will allow you to understand how they look for products or services, as well as collect price information. You can also visit the bank together with a local.

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Resource flow can provide details on the input and output of a household. For example, does the household have a loan and what is the loan financing? Similar to this, you can map the income and expenses of a shop, which can then be cross-referenced to price lists of the shop.

Ranking values is useful in getting people to prioritize the different characteristics of a product or service, such as whether they value price over taste. It could also be how much they would sacrifice to buy the product, such as giving up other purchases to buy the company’s product.

Self-observation can assist you in getting an insight into details that would usually not emerge when you are physically present. For example, you can instruct people to note the prices of a number of relevant purchases, e.g. every time they buy groceries.

Price mapping is a particularly relevant activity in relation to this business model aspect, as it can extract price and cost information of a group of people. Through the activity, you gain a better understanding of the economic value proposition of your company.

Resource flow

Ranking values


Price mapping

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CASE: PRICING AND FINANCING This case focuses on how Worldbarrow sourced relevant price information. This case will highlight: The benefits of introducing a prototype to a local community, as part of relevant price information, which can be used for the business model generation. How you can explore pricing and financing through the Toolbox Activities: Resource flow, Price mapping, Assessing product, Product in market and Self-documentation.

Price determination


There are different methods in determining a product’s price; however, in BOP markets, pricing products can be particularly difficult. A specific factor for the wheelbarrow product, which is designed specifically for farmers, was that cocoa farmers are trapped in a low cash flow trap – after they sell the harvest, time surpasses before the payment is received. By this time, they will have spent the most cash on fertilizers and pesticides.

Small returns also count Even though such factors play a considerable role, the farmers are very conscious about the financial opportunities of a wheelbarrow. The wheelbarrow would increase their carry load and speed, thereby liberating resources, which could be allocated elsewhere, such as nurturing a large farm or attending to secondary income opportunities. The small returns on a wheelbarrow would be sufficient to finance the actual purchase, as the farmer’s overall income would be increased.



RESOURCE FLOW The activity addressed both expenses and income of a farmer’s household and business to understand the distribution of spending. An elderly farmer was asked to be the first participant due to his good English skills. The farmer was very thorough and wrote down his types of resources, from church offerings to pesticides 7 . Participants later had less confidence and used the categories from first exercise. The activity proved very time-consuming since it invited farmers to proudly share insight on their crops 3 , use of pesticide and showing their farming tools. The farmers ranked the resource categories in accordance to their relative yearly cost 4 , and afterwards they tried to define the annual spending on each of them, in local currency, with the help of others observing the activity 2 . The resource flow communicated clear examples of the fact that local spending is not always rational from our point of view. Through the activity, valuable insight on local spending and revenue was found, as well as a local vocabulary of local resources that proved useful later.





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PRICE MAPPING The participatory consumer research also contained an activity that encouraged the farmers and the informal traders to disclose buying and selling prices, as well as different types of incurred costs, (e.g., materials and fees) using simple cardboard paper 11 . The activity was carried out on-location at the co-operative 10 . Altogether, this information established an overview and, more importantly, a reference point for discussion 13 . This made it possible to discuss the economic value to be derived from the introduction of the product. Hence, this activity turned out to be useful for numerical information that could be used to estimate how consumers could benefit economically. To extract information, the farmers were asked to fill out a questionnaire 9 . In relation to the distribution of the product, this information was very valuable to determine how best to achieve a cost-effective distribution while attaining the economic value that the farmers had expressed.

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PRODUCT IN MARKET The activity commenced by preparing various pictures indicating people’s positive or negative opinion of the product 13 . These were later attached to the product itself. However, before that, the researchers visited a number of shops. The selection of the shops was spontaneous, as the shops are typically very small and pre-arranged appointments are difficult to make. However, it would be possible to coordinate with a local partner to visit a number of selected shops for a more structured approach. Additional value can be achieved if the researchers pick a non-traditional shop, to allow for feedback from not-soobvious customer segments. In this case, a shop that dealt in hardware supplies 17 was chosen and the researchers agreed with the manager of the shop that a product be presented at the front of the shop with the printed picture attached to it 14 . In addition to this, he was given a number of questionnaires 18 for his clients to fill out. Instead of merely handing him the questionnaires, the researchers carefully instructed him on what each question addressed, etc. 15 . When clients filled out a questionnaire, they received a free pen 19 . The product remained in the shop for three days and upon return, the researchers had a short informal meeting with the manager 16 . The activity provided insightful knowledge concerning his clients’ responses to the product, such as the price, what it could be used for and the general appeal.


The manager of the shop was very interested in including the product in his stock and found the price to be attractive. It was agreed that the manager receive the product, which can also be useful if the researcher should return again, as this will generate new insights.





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Prior to departure, 20 disposable cameras were prepared with a list of nine different pictures to be taken by the farmers themselves 22 . Each of the selected 20 farmers got a disposable camera with an exercise to take a minimum of nine types of pictures within two days. Most farmers had never used a camera before, so it got a lot of attention, making them proud to be participants. They were clearly informed about the purpose of the cameras 21 . The farmers were in control of the activity and the outcome was very explorative 20 . The activity was launched by letting the farmers take 10 pictures, thereby trying out the camera – this also allowed them to chose motives of other things that had a personal value. Pictures were developed after the field research and grouped according to themes identified among the pictures 23 . More than half of the pictures were directly relevant to the project, while the remaining photos were of children, local activities, the researcher, etc., and gave insight into what the farmer valued. Pictures revealed alternatives uses of the wheelbarrow not revealed during own observations, and insight on local farming tools, road conditions for the wheelbarrow, how farmers used the prototype and their general living conditions 24 .

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and find out how they think it should be solved. This emphasizes the importance of including the local community in the development and execution of packaging and marketing strategies. Creating alliances and co-creating with the local community will significantly increase the likelihood of success. Therefore, the company should focus on studying and learning the behaviors of the local community and integrate this behavior into the business model.


Alternative product value For companies, the value of a product might be apparent and easy to understand. Even for products that are easy-to-use and serve a specific purpose, people can and will adapt the use of the product. For example, a manufacturer of mosquito nets, observed that the communities in which their nets were used to protect the people from getting malaria, the nets were instead being used as fishing nets.

In developing markets, alternative methods must be used because the consumers are hard to predict.


The perception of marketing and packaging has had, in many cases, to be altered when operating on markets in developing countries. Applying the same approaches as in developed markets usually has drawbacks, as people’s valuation of the products and services are very different. Typically, this is a result of a very different behavior due to the circumstances in which the people live. Consumers use the products in new ways, which means that the marketing and packaging sometimes do not correspond with the expectations of the consumers.

Communicating the value proposition The value proposition of a product is difficult for foreign companies to communicate in developing countries, as people’s behaviors are based on a different set of principles than in developed countries. The result of this behavior can be observed in different ways, such as the notion of irrational spending. Irrational spending occurs not only in developing countries, but it is much more difficult to determine the cause of the irrationality due to low access to information. An example of irrational spending is the high pro-

Alternative product value is often observed, for example by using windscreen wipers to transport fish portion of income used on alcohol and gambling, even though basic needs have not been met. As previously mentioned, the disposable income can be difficult to estimate and a reason for this is that consumption is at times irrational.

Similarly, a Danish company observed, during field research, that battery acid plastic containers were being used for transporting dairy products. Altogether, these examples point towards first of all the necessity for companies in conducting field research as it brings about very important information and knowledge on product use. Second, it shows the creativity and lack of knowl-

This is evident in the marketing and packaging of intimate health products, such as continence care, where women at times are more occupied with the design of the product – that it looks feminine and discrete – than the actual functionality of the product. The organization Ecotact, a provider of sanitarian services in areas with poor access to sanitation, has had success in completely leaving out the core of the product: access to toilets at a central location (similar to that of a small shopping center). Instead, the organization focused on the services surrounding the toilets, which were access to clean water, showers, washing clothing, but also less traditional services such as internet access, shoe shining and convenience stores. Eventually, religious and political leaders, actually making the toilets chic, have endorsed the Ecotact toilets.

Inclusion of the end-user is the answer These examples demonstrate a fundamental issue: Companies need to find out exactly what the challenge is for the individuals

Typical packaging in developing countries comes in small quantities and bright colors

edge – in this case related to packaging – of the local population, thereby giving away important information on how the product value is interpreted and in which way it should be marketed.

Social change campaigns To meet the challenges of making people understand the value of the product or service, you can apply a number of non-traditional marketing strategies and techniques. A common marketing strategy is social marketing, which highlights the benefit of the product from a social perspective, as well as a financial perspective. For example, the sales people are instructed to emphasize the health benefits of a food product, thereby providing an incentive to buy besides the price. In large scale, companies can organize for social change campaigns, typically together with government and/or NGOs.


In addition, the company is accumulating learning in terms of how the product creates value for the people involved in conducting the grassroots marketing, and how the local community receives the output from the marketing activities, such as the community cooking expo.

Grassroots marketing techniques The idea of grassroots marketing builds on the idea that a company should tap into the collective efforts of brand enthusiasts. For example, the Solae Company made community theaters and community cooking expos in the efforts to introduce the company’s soy products. The key aspect in these techniques is that they include the people of the local community and allow them to experience the value of the product.


Deep dialogue is effective in acquiring a deep understanding of people’s perception of how companies communicate to them, such as in terms of the channels used for marketing or the packaging of the products. The activity is also applied as a general activity that can generate necessary insight and contacts for conducting other activities.

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The message of the campaign can then support the usage of the company’s product. P&G did this in a campaign that had a positive approach related to their products. The company has developed a successful clean-hands campaign with Safeguard soap that combined a message about bacteria with upbeat commercials of healthy, happy children washing their hands and playing.

Target group segmentation can be used in the process of developing your marketing and communication for the business model. When conducting your participatory market research you should simultaneously segment your target group. At a later stage, this will allow you to determine how totailor the marketing and communication, which can be developed using other Toolbox Activities.

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Designing value proposition is very important when you need to understand how your marketing and communication is perceived. The activity focuses on including the end-users’ perceptions of marketing, such as assessing whether a local community theater is effectively communicating the value proposition. It could also be simpler things, such as an assessment of the words used to describe the value proposition.

Selling the product can give you answers as to whether a given marketing technique is working. By placing a product in a shop and providing the necessary training to the personnel, you will receive very specific feedback, which can assist you in deciding how to market to the target group.

Prototyping assists you in including the target group in the actual design of marketing techniques, packaging of your product or communication channels. This can be a very effective method in drawing on unique knowledge in the community. For example, if people think that the best way to communicate your product is by using very special local words, this can contribute significant value to the marketing.

Designing value proposition

Product in market


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CASE: MARKETING AND COMMUNICATION This case focuses on how Arla obtains end-user feedback on milk powder packaging. This case will highlight: The need to go into dialogue with end-users to obtain insight on their perception of products and get their ideas. How you can get this insight on product packaging using the Toolbox Activities: Deep dialogue, Customer segmentation and Designing the packaging




Getting the packaging right


As in other markets, the packaging is very important in developing markets, especially in rural areas, as it can be the only channel of communication to the end-user. In this case, it was important to obtain the initial feedback from the end-users as the company was working with an assumption that the endusers considered the product as something for children. With a set of research questions on these topics, the market research was launched.

The focus of the field research was defined prior to departure as well as three target groups: children, women and men living in small communities.

Identifying the customer segments As part of the packaging assessment, it was important to estimate what type of customer segments the current products were targeting. Generating an overview of this made it easier to test the packaging of the milk powder product, thereby comparing the different target groups to understand what differs between Arla’s product and existing products.

Upon arrival, the researcher visited local shops, roadside entrepreneurs and others to identify where similar products were sold and to approach the customers. The researcher started very informal dialogues with the customers at the place of purchase to address a few key questions on when, why and what milk they were purchasing. While some people had no time to talk, most people showed interest and took time to share their preferences and habits of drinking milk. No questionnaires were used, but the focus framed the dialogue and notes were taken afterwards. Similar informal deep dialogues were done with people in their private households, facilitated by a local partner. Being at the point of sale it was possible for both the customer and researcher to use the products displayed as reference in the discussion – addressing the different product brands, type of packaging, price and quantity.

DESIGNING VALUE PROPOSITION A local shop owner was approached on the street with his five friends and they were invited to a focus group activity on the street. The scope was to understand participants’ perceived value of milk and how this could be communicated through the packaging material.




An A3 illustration with pictures of each locally available milk product along with a picture of Arla´s own product was shown. The group was asked to review the illustrations and write on the images their interpretation of what the images tried to communicate. After the group had written keywords, such as “health, strength, peace, for kids,” the group was asked to select the keywords that were attractive to them and to explain why. From selected keywords, the group was again asked about how the packaging should look in order to attract them. The group used the included illustrations to highlight details, such as attractive names, images, messages etc.






An activity was prepared to structure and further elaborate on selected deep dialogues with people in shops or at their private households. An A4 template was developed to address key aspects during the dialogue and to later structure notes, looking at “what, why, how, where and when you buy milk.” Included in the template was also the customer’s priority of various products. Ten locally purchased products along with Arla’s own samples were presented and the participant was asked to rank a top five based on his or her own personal preferences. The activity still provided valuable insight for marketing, such as differences in purchase patterns, point of purchase, product preference and the influence of local radio on which product customers would buy. Through the activity, it was found that to address the value of milk for children, there would be a great difference between targeting teenagers compared to when the mother would purchase milk for their kids.


The practice of microfinance institutions is an example of how the loans are combined with enterprise development services, if the borrower is a small business. The ability to provide different services is a popular way of competing against other microfinance institutions.

SERVICE AND MAINTENANCE Creating a service and maintenance setup around a product can enhance the overall value.


Many good intentions and projects have stalled or failed because they lacked the necessary service and maintenance dimensions. Products that are delivered as part of a service system still remain uncommon in developing markets, but with the fast rise of information and communication technology, products are increasingly supported by a service system that eases access and payment. Maintenance remains a vital part in BOP projects, as conditions are harsh and access to educated workforces is low.

The dualistic nature of maintenance Maintenance is a very complex aspect of the business model. There are many factors in developing countries that challenge the companies operating there, such as the level of education, the access to necessary components in case of breakdowns or the financial means required to maintain the product. Evidently, these factors make it difficult to market products that require frequent or advanced maintenance. However, some companies also perceive this challenge as an opportunity to innovate and, for example, to develop high-end products with

Selling the product by the service While companies can increase ease of use and access through product innovation, such as in the GE example, another approach is to ensure that the value of the product is realized through a service system surrounding the product. Wells in villages might look like any ordinary well, but in some cases they are businesses with cashflow and employees low or no maintenance requirements. At times, this can go against the business model of some companies, as the revenue streams come from the maintenance and after-sales services and not the product itself. An example of product innovation, which typically cannot function without a maintenance component, is hospital equipment, such as a cardiovascular electrocardiogram. The company GE, as mentioned in the introduction, has made an effort to develop a low-cost and mobile electrocardiogram for rural locations in India. The result was that doctors in urban locations, which have the skills to use the product and can access the necessary maintenance and service, could visit patients and make on-site diagnoses. The product has since been sold in China and the United States, which makes it a case of reverse innovation, where the framework and circumstances of the developing country creates a fertile breeding ground.

Grundfos LIFELINK, mentioned in earlier chapters, focuses on selling a water service platform in which Grundfos LIFELINK performs the role of technology provider. In market terms, the problem is not that there is a need for water, but rather there are no existing solutions – particularly solutions delivered by NGOs – have succeeded in delivering a continuous supply of water on a commercial basis. In particular, the systems break down due to lack of maintenance and non-existent access to services.

Interlinking the service and the product A successful model in selling the product of your company is to link it to a service, where the two co-exist. A successful approach is that of E Health Point, which a for-profit social enterprise. E Health Points are units owned and operated by Healthpoint Services India that provide families in villages and smaller towns with clean drinking water, generic medicines, comprehensive diagnostic services and advanced tele-medical services that “bring” a doctor and modern, evidence-based healthcare to their community. By offering drinking water and other daily needed services, the E Health Point links people to the healthcare services, by providing them an incentive for daily visit.

Nice clothing is not an obstacle if it means business, as this woman who owns and sells second-hand spare parts

The Grundfos LIFELINK’s project builds on an innovative model where the community invests in a water service platform. Besides the installation and technology, the company also has a contract that offers 15 years of after service. The after service is paid through the consumption of the water, which has a metering device installed, ensuring that Grundfos LIFELINK receives its yearly fee. The example shows how the service rather than the product itself can sell a homogenous product, safe drinking water.

skilled labor, both at the vocational and managerial levels. Some companies confronting this problem realized the value of educating the local workforce as part of the business model.

involve the local workforce. They are typically knowledgeable on local conditions and can assist in assessing if the local community possesses the required maintenance skills.

For example, Kuyasa CDM project retrofits solar water heating, insulates ceilings and installs energy-efficient lightings in 2,300 homes. To realize this project, it was necessary to educate a small local workforce of local craftsmen. Besides installing the technology, they were also able to ensure maintenance in the future.

For example, the organization InnoAid focused on developing a bicycle ambulance adapted for local conditions. However, the adaptation not only focused on the needs of the end-users, it also focused on the maintenance, as this is vital if the ambulance is to be used in emergency situations. To accommodate this critical issue, local craftsmen were involved in the process of constructing the ambulance, thereby ensuring that the construction was not too advanced for other workers in the community to maintain, if necessary.

Educating the local workforce

Localizing service systems

In projects, the level of success has often been determined by the ability to deliver service and maintenance. A typical drawback of projects in developing countries is the lack of

When developing services, your company can gain additional value by including your target group in the development. In terms of maintenance, it can also be advantageous to



Price mapping can be useful in different ways, such as in a method for people to communicate the economic value of a service, such as veterinary services for farmers. The activity then becomes a platform for dialogue, and different topics can be explored based on the prices that have been mapped. E.g. if level of service is reflected in the price of the product.

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Follow and observe can shed light on the perception of service and maintenance in a local community, such as if you follow people around and observe the different things they regard as a service and when a certain component requires maintenance. The activity gives you a quick insight into a community and their ways of doing things, such as accessing service and maintenance. This knowledge can be very useful when you design the business model. Follow and observe Page 68

Prototyping lets you include the target group in the design of the service and/ or maintenance procedures. Including your target groups especially in maintenance – if your products require such – can be particularly useful as they will contribute with valuable information. This could include how often maintenance is required for similar products and how they would like to access maintenance – can they handle it themselves, or would your company have to carry out the maintenance?

Create scenarios for people to better understand the different concepts and ideas that you would like them to provide feedback on. For example, if you are planning to launch a service that will make it easier for people to access the internet in rural areas, provide people with examples of how the internet can be used. The activity lets you present people with fictive situations, such as pictures of a countryside and people accessing the internet, thereby letting them imagine what you are trying to offer.

The activity assists in collecting this feedback, so the concept can be improved or discarded.


Creating scenarios

Concept assessment

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Concept assessment is useful if you have developed a concept or product and need feedback from your target group. For example, you have developed a conceptual model of how to easily clean and restore a component of a product by using local resources and to validate this concept you need feedback from the local community.



CASE: SERVICE AND MAINTENANCE The case focuses on how Grundfos LIFELINK delivers safe drinking water through an innovative service delivery platform. This case will highlight: How product and service can be intertwined to deliver a greater value to the consumer. How you can explore the need for setting up a value-adding service system, using the Toolbox Activities: Price mapping, Prototyping and Follow and observe.

Accessing water through a service platform


Grundfos LIFELINK, a subsidiary to Grundfos, offers a water service system, which includes an energy-efficient pump, solar panels, money transaction service system and a 15-year-long service and maintenance contract. After mapping the initial outcome of the pilot project, it remained clear that many access-to-water projects fail because of the lack of maintenance. Therefore, the company wanted to integrate a maintenance component into the business model.

Commercial sustainability Next, the solution had to be commercially driven so as to allow for continuous maintenance, which challenged the company to think up an innovative method for paying for the safe drinking water. The solution proved to be mobile payments, as this type of transaction could also set aside money, which would be used for the service and maintenance. This way, the company is not only selling a pump, but a complete service platform, which can be installed in areas without access to electricity and still ensure that the company receives its fee for delivering maintenance upon request.



PRICE MAPPING Determining the price for water would seem to be a straightforward task. However, as the team ventured into this topic, it turned out to be more complex than anticipated. As part of the research, the different price points of water access were investigated through group interviews 6 . This revealed that people paid an average of 10-15 cent per liter for water that was picked up from the nearby river 2 . However, upon more research, it turned out that people had a very different perception of the price of tap water. They based the price on the price of tap water 3 in urban areas and were expecting to pay no more than 2-3 cents. This insight meant that the service dimension of the business model had to be very innovative if water was to be affordable. This called for the introduction of the mobile payment system combined with low maintenance to keep the cost very low.

PROTOTYPING The prototyping established its roots back in 2005, as the company sold 25 solar-driven pumps to UNICEF. In 2009, the company mapped the outcome of the project and found that only nine pumps were still active.

The toolbox activity was used to gain insight into how the target group accessed water. The team would literally follow the target group to determine when and how water was being picked up, such as with bicycles 7 . Different groups, such as women 8 and farmers 4 , were selected and in addition to following the process, the team also observed the target group’s behavior. Observing potential end-users can yield great results, as a lot of the knowledge needed for the business model can be tacit. An important part of the following and observing of the target group is the trust and confidence gained when spending time with people. In this case, the activity provided insight into how the service system could address some of the challenges that people were faced with as a result of poor access to water. Also, by observing people, it became apparent that mobile payment is an integrated part of the everyday life. By using already accepted technology, a community can accept the introduction of new products, such as the provision of safe drinking water.




These activities lead to the integration of a mobile payment transaction system, which was tested extensively, ensuring that this dimension of the business model was designed correctly.




This led the company to develop a new, innovative system 9 that involved the end-user in the design of the prototype. Workshops and actual testing have provided valuable insights when developing the prototype 6 5 . An important part of the prototype development was to understand the challenges people faced, such as how water was fetched. The Toolbox Activity Observe and follow provided insight into how people fetch water by digging deep holes and letting groundwater fill the hole 1 , which together with Toolbox Activity Price mapping assisted the development of the prototype.





CASE: SERVICE AND MAINTENANCE This case focuses on how InnoAid addressed service and maintenance aspects of a rural ambulance. This case will highlight: The need to design service and maintenance aspects together with local stakeholders to address the sustainability of a rural ambulance concept. How you can develop solutions for service and maintenance through the activities “Creating scenarios,” “Prototyping,” and “Concept assessment.”

Making maintenance feasible


The organization InnoAid identifies and develops innovative projects in low-income markets. Through local partnerships, a project was formed to develop an innovative rural emergency health transport system. Four students were involved from the Technical University of Denmark to complete local field research to prototype the initial concept for the product and service solutions. The prototype was manufactured based on the widely popular bicycle van rickshaws that minimize manufacturing costs, allow for easy access to spare parts for maintenance, and create a sense of familiarity for the driver and for the patients.

Reformulating the project challenge from product to service system Local doctors and NGOs communicated a great need for a bicycle ambulance to access remote villages and provide safe transport for people to the nearest health clinic for a minimal fee. Local research, in contrast, revealed that the targeted customers did not perceive a need since it was commonly accepted that an emergency trip to nearest health clinic could worsen the patient’s health conditions, or even have deadly consequences. It was found that there was a great need to address the services surrounding the emergency bicycle, as it would have to be marketed as a full-service product and not just a product reflecting a single trip transport to a nearby health clinic.



CREATING SCENARIOS “If road conditions were improved, then what would be the challenge of offering an attractive transport of patients from their home to the local health clinic?” Similar hypothetical scenarios were created and presented in small focus groups with local women health workers to address additional problems and challenges relevant to the project 2 . By excluding the primary challenges of the poor road conditions in the scenario, participants were forced to think of possible secondary challenges. Through the use of scenarios, the students were able to focus on a discussion that addressed relevant challenges not initially revealed during dialogues. The students facilitated the first focus group while one of the local participants from the first workshop facilitated the next workshop, allowing the students to stay in the background to observe and document learning 3 . By making questions less abstract and addressing specific situations, important challenges were identified that the locals initially perceived as secondary and unimportant.

CONCEPT ASSESSMENT Critical feedback about durability and need for maintenance was obtained through dialogue with the local blacksmiths as well as by looking at similar products in use, such as the local van rickshaws.


PROTOTYPING A local blacksmith was hired by the partner NGO to manufacture an ambulance prototype with the students using supplies from a local bicycle shop. Students developed 3D sketches and technical drawings that were adapted through dialogue with the blacksmith 4 . With the help of the blacksmith, they adapted the ideas to the local van rickshaw and included a suspension system with locally available spare parts. The design was further optimized during an iterative problem-solving process between the students and local manufacturer during the manufacturing 11 . The prototyping gave valuable insights into local skills, daily activities of a local blacksmith and visitors’ first impressions of the design. Through the prototype, initial manufacturing and maintenance costs were both estimated. Local school kids were invited to draw and color an ambulance, which gave insight into important details, such as logos and colors 5 6 7 . The prototype was used as a requisite in three role-plays to prototype the service-delivery system. Local participants played the role of driver, helper and patient and tried out an emergency situation before they were included as a focus group to discuss the needs for a service delivery system 12 .






By showing local residents only the frame of the 1:1 prototype, they gave a lot of feedback related to appearance, such as the need for colors and aesthetically to look “less rural.� The finalized prototype was assessed for its usability and acceptability through actual use by both locals and the students to get hands-on experience 1 9 . Different routes were mapped in the area to use the ambulance on the variety of roads. Vibrations on the stretchers were assessed by using an app for iPhone that collected data for later analysis and to ensure the design complied with health and safety standards 10 . Discussions about the service delivery addressed an overall challenge to communicate and build services to improve the current situation while not creating expectations of convenience similar to an urban minivan-ambulance that would not be sustainable or functional in the rural context.


9 10 11 12


54 58 60 62 64 66 68 70

72 74 76 78 80 82 84 86


Matrix to the right shows the Activity Toolbox Overview White circles indicate the activities that can be applied to the business model dimensions. Small green circles indicate the participatory market research cases that contextualize how activities has been used to collect insight within a specific business dimension.

Deep Dialogue


Activity Map

Social Map

Resource Flow

Follow & Observe

Learning by Doing

Costumer Segmentation

Creating Scenarios

Ranking Values

Price Mapping

Designing Value Propersition


Concept Assessment

Product in Market

RAPID MARKET ASSESSMENT (page16) CASE (page 18) CUSTOMERS AND END-USERS (page 20) CASE (page 22) INCLUDING END-USERS (page 24) CASE (page 26) CASE (page 28) DISTRIBUTION SYSTEM (page 30) CASE (page 32) CASE (page 34) PRICING AND FINANCING (page 36) CASE (page 38) MARKETING AND COMMUNICATION (page 42) CASE (page 18) SERVICE AND MAINTENANCE (page 46) CASE (page 48) CASE (page 50)



FACILITATION ADVICES The toolbox activities support participatory market research that will challenge you to leave the hotel to discover the context of your target group first hand. Identifying and creating markets in low-income countries require participation and strong inclusion of your target group during the research. You should not only observe or interview your target group, but through your facilitation have them participate actively in communicating valuable and deep insight. To successfully use the toolbox activities, it is important that you pay attention to a number of aspects that are of high importance when undertaking field research in low-income-markets. These include: Flexibility and the right approach to plan the field research Making sure you are ready and packed for the activities 54

Adaptation and detailing of activities which are relevant and useful for the specific context Selecting appropriate participants for your field research – who to choose, for what, and when Building skills and the right attitudes as facilitator Having tools to motivate participation of people who are not familiar with market research activities Knowing how to undertake activities in a focus group Having tools on how to provoke opinions from your participants Knowing the challenges and opportunities of using interpreters

Develop a clear goal of what the expected outcome should be of the field research to gain specific knowledge relevant for the dimensions of your business plan. Define the challenge(s) that your field research will address and ensure you: Write the challenge narrow enough to make the focus of your field research manageable. Write the challenge broad enough to allow you to discover the areas of unexpected value. Be open to challenges. During the field research, what you learn may cause you to elaborate, or even fully rephrase, the defined challenges and opportunities. Define your target groups, e.g., from their role within the value chain that you are examining or types of people within a specific income segment.

ESTABLISH PARTNERSHIPS Look for local partners prior to the field research who can help you to make arrangements for the local research and give you advice on the appropriateness of your planned activities by using their network and cultural insight. Consider which types of local partners you wish to engage, such as consulting companies, research institutions, small- or medium-sized businesses or NGOs. Consider that: Students can be helpful to engage as local researchers NGOs can be valuable partners due to their local network and insight on local challenges, but they often have little time to undertake new activities if the scope of the field research is not aligned with their development activities Align expectations with partners. Be careful to build expectations from the local partners so that they will not only assist field research, but also become the future business partners.

PREPARE A SCHEDULE Develop a schedule for your field research, listing the specific appointments and activities you will undertake.

Include time and flexibility for new appointments and for you to visit local sites first identified upon arrival. It is advised to keep the end of the schedule free of other appointments, as some local appointments are first made once you are in the country. Include flexibility in the program. Make room for activities to take longer than planned, for the agenda to be changed due to sudden unpredictable happenings, and be open to whatever else awaits. When working in communities, there will often be a codeof-conduct on how to be welcomed that should be respected and may take time to adapt to. It often involves meeting with the chief and elders of the village or community to present your mission and request for collaboration. This is followed by the elders introducing the village and their interest to participate in your field research. Ask your local partner if you should bring a local present for the chief or elders when greeting the community – this can include local snaps to nuts and fruits, but the gift is often very dependent on the specific context. Consider that local researchers or the target groups may be able to undertake some activities by themselves, giving you time to do other activities such as partnership meetings while the research is being done.

DEVELOP MATERIAL Select, adapt, and prepare toolbox activities and visual or physical material such as pictures, prototypes, post-it notes and pens to support the undertaking of the activities.





Keep it simple – Do not make activities very sophisticated or difficult to understand and use. Developing a simple activity will efficiently give you valuable information and the participant will build confidence to participate and share additional insight. For example, one simple activity would be asking your participant to sort 15 images showing different types of products according to his or her perceived values. Complex activities will take time and may lead to misconceptions that will affect the outcome negatively.

Look for people within your target group who are used to expressing their opinions and who seem to be most open and capable to purchase, use and adapt new solutions. These types of people are not only suitable participants in research but can also be considered as local researchers and/or facilitators who can later become early adopters or lead users of your solution. To identify suitable participants, look for local administrators, opinion leaders, farmers, local entrepreneurs, teachers, or women representatives of local ‘Self Help Groups’.

Prepare material that takes into consideration your target group’s ability to read and write and language preferences. Your local contacts can advise you on whether material should be written or needs to be primarily visual.

To avoid the pitfall of creating a market for the “few” current primary customers, try to identify people who could be future consumers or lead users to inspire others to use and value your solution.

Develop visual material Avoid symbolic images or exaggerated drawings to show a concept, since they can often divert the activity to irrelevant discussions. The more you can present your idea or scenario in realistic way, the better – consider the use of pictures, 3D drawings, small models, or prototypes. Find pictures from the same or similar context. For the development of a water supply system in rural India, look for images that picture a rural Indian setting and include images of Indian people and technologies that are currently used in India. Try to limit the details of the surroundings shown on an image. These details may become the center of the discussion but are irrelevant. For example, participants who discuss the shape of the houses or kitchen utensils, which they are not familiar with, on a picture that is supposed to obtain feedback on a cooking stove only. Use the same type of illustrations. Use illustrations from the same type of country, and show products that are in the same condition such as all drawings or picture of products that are all new or all used to avoid people expressing preferences for the ones that look new instead of addressing the design itself. Glue or tape image on heavy paper to avoid the images flying around when outside or inside where there is a fan. Another alternative is to use “Sticky Gum” as a solution.


Video camera and camera (consider a smartphone instead) Notebook, post-its and pens Small gifts for participants (could be common goods purchased locally)

Respect the differences of people when organizing and inviting them for group activities. Consult local partners on how to organize the groups and create an environment where participants feel free to speak and express themselves. Consider how different social status, gender, occupation, and age can affect the dynamics of the group, e.g., including opinion leaders, such as the chief or local administrators, may deter others from speaking freely. Consider using your time and resources to undertake your toolbox activities with different types of target groups, because the groups you have defined are not the only relevant groups – the current non-user of similar solutions may become your next customer. Consider involving young people in supporting their parents’ participation in activities or involve them as local researchers. Young people often have an interest to express themselves. They can be included as “young journalists” or “detectives” by giving them the materials needed to collect data from their community or household.


FACILITATION Completing the toolbox activities and getting the most out of them greatly depends on your personal behavior and attitude. Coming in as an outsider, foreigner and professional, you will be challenged in your personal ability to facilitate activities where you will act as the interested student who wants to learn from your participants, and not become the expert who “knows best.” Emphasize that there are no wrong answers. In any introduction, it is a good idea for you to make clear that you are there to learn and to not give out gifts, since peoples’ interactions may be influenced by a perception that you will be a source of charity or funds. Because you are unfamiliar with the context and are foreign to the locals, it is good to spend some time in the community or with the same local people for them to open up and share their true and honest opinions. Within a few hours in a community, you will experience people starting to open up and show interest in your work and your presence will be less intimidating. Three good pieces of advice from Participatory Rural Appraisal (PRA) and Participatory Learning and Action (PLA): 1. Show interest in learning. Your participants should feel that they are being looked upon as the experts, and they should feel that their feedback is valuable to you, even if it is negative. Do not correct participants but rather try to understand their perceptions and why they perceive things differently than you. 56

2. Do not rush or interrupt but instead give the participants time to sit down, listen, think and discuss instead of interrupting when people are trying to concentrate on a task such as making a map or diagram. 3. Have critical self-awareness and be open to embrace and share errors or mistakes. Keep developing and adapting the research activities based on your experiences Consider using local facilitators while you take on the role as observer by supporting the local facilitators when needed.

MOTIVATE PARTICIPATION Involve people at a time and place that is convenient for them. Show appreciation for people’s participation by giving some type of allowance. Activities take time from their family, work and other activities, so some compensation should be provided for their time. However, allowance should not be a source of bribery or a primary motivator. Provide drinks and snacks during the session and consider giving them a sample of your product or a similar product on the market. Listen, share and learn during the activities. Be open by sharing your own experiences and giving time to listen and learn from your participants. By doing this, you recognize their knowledge and make them feel relevant as participants. Consider including a local competition. Adapt research activities so that they end with a local competition where participants present their material developed from an activity, such as a prototype, and are evaluated and given a prize by you and a local jury. Make toolbox activities fun and interactive to create a more informal environment where participants enjoy themselves and where it is not “wrong” or “inappropriate” to express needs, critiques, sensitivity or “crazy” ideas and to share personal insight on sensitive topics. Role-play is a good and fun method to boost the self-confidence of people and fun for others to see and comment upon. Consider sharing what you learned from a community in a local newspaper or radio program to make your participants’ needs and desires heard, for the participants to be proud of their contributions, or to mobilize others to participate. Use local indicators and terminology in your activities to build understanding: Include local measures, from “inches” to “head baskets.” Ask your participants to define the local criteria they will use to assess a solution. Ask your participants to share their perception of the meaning of, e.g., happiness, status, and development to discover that they may be very different from your assumptions.

FOCUS GROUPS PARTICIPANTS: Depending on the activity, 4-10 participants plus you and a translator/facilitator. TIME: One to two hours depending on the activity, at a convenient time for the participants so they do not feel rushed. WHAT: Define a clear purpose of the focus group session and the types of people who should participate. Local partners can help you to find and select your participants. WHERE: Find a place near your participants that is large enough for everyone to sit down, see and hear each other.

INTRODUCTION Start with a warm-up activity to create an open and informal setting during group activities, e.g., break down barriers with a practical task, such as asking people to reorganize the place for the group activity. The task will also reveal who is an initiator and who is more passive. Explain the goal of the meeting and the “rules of the game” such as that no opinions will be judged, that every comment is welcome, and that all participants are asked to contribute actively to the session. Make sure that people understand the goal for the outcome of the session and how they can benefit from this. Ask people to introduce themselves only by name to avoid preconceived perceptions or hierarchy within the group.

FACILITATION Consider addressing questions by including a bowl or box with questions written on small notes that you wish to address during a focus group. Ask a participant to randomly pick one of the questions to read out loud so the participants feel they are part of structuring the session and not to be shy to speak to the group. Try to involve passive participants by asking them a direct question or help them when undertaking the given activity. Include questions that each participant shall write his or her answer on a card and give to you anonymously to make sure that all participate and address sensitive topics in a sensitive matter.

PROVOKE OPINIONS To get the attention of your participants and motivate them to share opinions during an activity you can consider including either provocative or mismatching prototypes or scenarios. Provocative content will make your participants feel uncomfortable and they will therefore start to transform the presented material into something that they find more appropriate and through this develop new solutions that they accept. Keep in mind that provocation can be sensitive and make sure it is only used to bring inspiration to the session.

USING AN INTERPRETER Where an interpreter is needed, you should spend a minimum of 10 minutes before any activity to share the content and the “rules of the game” of the activity. Make sure that the interpreter is informed that you would like participants to participate openly and actively during the activity and that the interpreter should not answer in place of the participants. Facilitating activities through a translator will take time, and it can be good to use the same translator when repeating the activity elsewhere so that no additional training is needed.



Follow these steps: PREPARATION

DEEP DIALOGUE Semi-structured interviews obtain deep insight into individuals’ knowledge, needs and experiences.

1. Questions to obtain general information about the person 2. Research topics under which you will organize questions 3. Notes on how you wish the dialogue to happen, e.g., whether the person will show you around, demonstrate a product, engage in an activity, or see visual material you have prepared. 2

Test the content and length of the “Research diary” on one or two people and adapt it before using it for the local dialogues to make sure you will have time to get answers to all your relevant questions. Have a general flow and structure to your “Research Diary.” Indicate the most important questions in your “Research Diary” for you to incorporate at the time of the interview.

STEP 3: Arrange individual meetings with selected people from your target groups at a time and place convenient to them. Meet people in local settings where they are at ease and are relevant to your research. 5 6

Do not try to control the dialogue too much, but remember to listen and follow topics that seem interesting to the person interviewed.

stand current challenges.

Outcome Deep insight into your target group’s:

TYPE OF ACTIVITY Interview Observation Focus group

STEP 4: Set the stage by introducing the program for the activity and how the research will be used. Make sure that people give their consent. While you and a translator will focus on creating a dynamic dialogue, it is recommended to have another person who will focus on taking notes and/or recording the session.

WATCH OUT Verify information – Ask different types of questions and confirm by drawing, showing pictures or using the environment as reference.

STEP 6: Motivate interaction by asking the interviewed person to enact a scenario or process or to use a product available in the environment, such as showing how a basket is used to carry goods. Make use of activities included in your “Research diary” to obtain answers through more than just a question, such as by demonstrating a product or using visual material 1 .

STEP 8: Try to document the key points you learned right after the interview and add any additional questions or comments in the “Research diary” for the next interview. STEP 9: Assess insight from the deep dialogues to develop a profile of your target groups’ characteristics.

Consider hiding your list of questions to help build a dynamic dialogue. Learn the key questions by heart or keep a short list of overall questions in your notebook during the activity. 4 6 The “Research Diary” can be a good framework for the complete field research, so include other activities in this toolbox that can bring answers to a number of the included key questions.

STEP 5: Show interest by first asking questions related to the person’s background before you address the research topics. Use your diary of questions to facilitate the dialogue. Avoid leading questions but rather use open-ended questions encouraging the interviewed person to provide in-depth answers. Feel free to pose new questions and not necessarily follow the order of the questions in the research diary.

STEP 7: End the dialogue session when you have no more questions or when you feel that you may delay the person in undertaking important personal activities.

GOOD PRACTICE To build your local network, you can ask the interviewee to suggest people who should be included in the research.

target group you plan to have an informal interview with and include:

Keep the interviews short – If the interview is long, participants become tired and lose interest, which will negatively affect the outcome.


Personal knowledge, attitudes, perceptions, and experiences Experienced (and perceived) needs and challenges Daily life, context and networks

STEP 2: Prepare your “Research diary” 3 for each selected


The activity guides you on how to undertake and motivate semi-structured interviews with individuals from your target group. Preparation activities, such as making a diary of questions and various visual materials to support the communication, will ensure that the activity will spark a structured and motivated dialogue. Supplement your quantitative market surveys with this activity to get a deeper and more varied insight into your target groups, which is critical to identify real opportunities and under-


Consider training local people to undertake the deep dialogue and report findings to you. Local researchers could be skilled people from the community, students, people from an NGO or a research consultancy (See case on page 26).

STEP 1: Generate a list of key topics that you would like to address in your research, what knowledge you will like to gather, and the type of target groups that can provide you with this insight. Draw on your organization’s in-house knowledge, desk research and expert interviews.


Self-documentation (page 60) Follow and observe (page 68) Customer segmentation (page 72) Creating scenarios (page 74)

GET STARTED WITH THE RAPID VERSION List your relevant key questions in a notebook, like a checklist, before going to the field for your interviews. Print out illustrations in colors that will help you to explain your ideas and consider if there would be local products that you could include in the dialogue as specific references to your ideas or questions. Arrange to meet people at work, at the market or at home. Be open to where the dialogue may take you. Keep in mind your key questions you want answered and consider how to explain abstract questions through a story (see Creating scenarios page 74).

CASE DESCRIPTIONS Including end-users (featuring NGOs, page 26) Distribution system (featuring CBS, page 34) Marketing and communication (featuring Arla, page 44)

PARTICIPANTS Works well with individuals, a single household or a small focus group of two to four people.

TIME Two hours to develop “Research Diary” and template for debriefing. One hour maximum for each deep dialogue.


1 2






“Research Diary” or similar question guide Notebook and a template to note what you learned Printed images relevant for the key-topic you will research 1 Camera, dictaphone , video camera, smartphone




Follow these steps:

DOCUMENTATION Give your target group the tools to document their needs and aspirations on their own.




Target group’s own interview, observations, and design

Make the self-documentation tools look attractive and reward participation so that it is desirable to be a local reporter/ researcher.

STEP 7: Develop relevant material that can communicate diversity and trends from the reportage. Consider developing posters of all the material collected with images and drawings made by people and your comments and additional notes from the following focus group discussion.

Communicate clearly to the participants when they need to deliver their “documentations” and make a local person who is known among the participants responsible for the collection. Ensure that people know whether they will get a copy of their drawings or pictures or it will only be for your research. Collect names and records of all participants in order to find them for later collection. Make sure that if you involve local researchers that they are fair, unbiased and have no stake in the research results.



Deep insight into daily practices and experiences Focus on research and visual material reflecting your target groups’ own priorities and perceptions Discover concerns not expressed honestly in your presence Insight that does not require your presence Quantitative and qualitative insight over a longer period of time, such as by using mobile phone for selfdocumentation


Be inspired by local technologies and ways of communicating when selecting or adapting the self-documenting activities, e.g., does everyone have mobile phones and a camera?

STEP 5: Supervise and follow-up on people’s self-documentation if needed, possibly through a local researcher. Consider designing activities so that participants continuously report insight back in a convenient way instead of only at the end of the research period. STEP 6: Review your target group’s reportage and identify differences and trends within the material 3 . Validate findings by completing a deep dialogue with a few selected people who are part of the reportage. If there is time, then present findings anonymously through personas and scenarios for your target group to validate and elaborate on during a focus group discussion.


SMS questions sent to participants mobile 5 Drawings for people to add detail, write on, and color 4 Ask people to collect specific products available in household or market to address local purchase habits 6

Select people of different gender, age, status and profession to undertake the self-documentation in order to capture very diverse viewpoints and perspectives.

STEP 3: Design the self-documentation activities and easyto-follow instructions and adapt them to the context of use. Instructions can be a simple day-to-day diary listing the activities and/or reminder of daily activities sent out to people’s mobile phones. Keep it simple: the participants are more likely to complete a limited number of specific and easy selfdocumentation activities. Use illustrations rather than text at places where illiteracy is high. STEP 4: Identify, recruit and instruct people from your target group on how to undertake the self-documentation. During a focus group session, show them how to do the selfdocumentation. Bear in mind that self-documentation takes time and skills, therefore you should consider how to compensate people for their effort. Select participants who may not only be consumers but skilled people from the community that you recruit and train to be local researchers, or who will support the locals in their self-documentation.

Camera and a list of 10-15 pictures that participants should take



The activity provides an alternative insight into local conditions, undisturbed by an outsider’s presence. Invite your target group to become active researchers of their own daily practices and experiences by using templates and tools you have developed. The material and insights collected are a valuable basis on which to start a focus group discussion and to dig deeper into conditions, needs, and opportunities. Complete this activity when you want to know your target group on a deeper level but do not have the time to spend with them.

STEP 2: Review the list of questions and select or create the appropriate number and type of self-documentation activities, such as reflection; type of information that you would like people to document; type of data (visual 1 /written/reflective, qualitative 4 /quantitative 5 ); the skills and types of people you would like as participants, e.g., skilled people from community or young people who like to share their story; time frame for the activities.



STEP 1: Define a short list of research components where insight may be communicated best by people themselves.

Inform participants of the intended use of the insight that will be generated and what they should document to limit the possibility of people misusing the templates, e.g., to take family portraits rather document than local activities. Understand relevant dynamics and power relations in the research area before selecting local researchers or people involved in reportage, because local perceptions that you are showing favoritism can be damaging to your reputation.


Deep dialogue (page 58) Follow and observe (page 68) Customer segmentation (page 72) Creating scenarios (page 74)

GET STARTED WITH THE RAPID VERSION Following an interview, ask the interviewee to undertake a few activities in his or her own time until you will meet later the same week. Activities might include: getting the number of the house owner to send him a daily mobile message asking about his daily spending; ask the housewife to collect and bring the types of cooking oil she uses; or ask the young girl to write her ideas on how to improve the local water pump after she has talked with her community during the week. Upon meeting again, your participants will bring you deep insight on which to base a deep dialogue.

CASE DESCRIPTIONS Pricing and financing (featuring Worldbarrow, page 38)

PARTICIPANTS You may encounter that not all participants report back their selfdiscovery activities or understand the activity in order to deliver valuable insight. Therefore, it can be good to invite 10-20 participants to undertake the activities for variety.

TIME Preparation depends on the template you use. 1-30 days for participants to undertake the activity depending on the scope and content of the activity. 1-2 hours for focus group discussion following the review of people’s reports.

1 2







Follow these steps:

The activity invites your target group to share their process of daily activities during an interactive session with you. Participants will make a simple map that represents their activities within a given timeframe, such as “yesterday’s schedule.” The activity is a good introduction into the current local practices and lets you understand the journey of a day or a specific activity to identify opportunities on which improvements could be made.


Outcome Identify and obtain target groups’ assessment of: Daily activities Products and services used Stakeholders involved Resource flow Local value chains and sales channels Current challenges and desired solutions Identify hot-spots

TYPE OF ACTIVITY Interview Focus group

STEP 4: Start broad by giving participants the possibility to talk about what they typically do during a day, then direct the dialogue to specific activities of interest. Ask people to make use of the printed images and place them along the timeline, symbolizing the activities they do during a day. 1

Invite several participants to make one activity map together since a group will generate valuable discussions for you to listen in on, e.g. when they disagree on which and when activities are done. It is much harder to get an individual participant to “think out loud” during the mapping. Limit the time of the session by having a focus on mapping activities for “one day.” Then ask how activities differ throughout a week to avoid participants mapping repetitions.

STEP 6: Facilitate a dialogue by continuously asking questions to help participants elaborate on their typical activities. Share your understanding of the activity map that was made to make sure you have the right understanding. Ask what happens in the time between the included activities on the map.

WATCH OUT The value of the session is in the dialogue during the activity mapping, the questions raised and people’s interactions. The value is not necessarily in the final physical activity map developed. Therefore, it is important to make time for questions during the mapping session and for a follow-up dialogue.

STEP 7: Ask participants how they would like to make improvements by using the map as a reference 4 , e.g., how time could be minimized if some services were available at the same place instead of having to travel to several places.

STEP 9: Write a short story that represents each of the types of activities identified so what you learned can be used as scenarios in research toolbox activities.

Address the past: Map activities and major events in the past. For example, invite opinion leaders to map the major events or challenges in the past for the community and learn how they overcame the events to bring inspiration for your new solution.

Select pictures appropriate for the local culture and which people can relate to in the local setting. 5

STEP 5: Focus on specific activities when a typical day has been outlined by asking deeper questions like “who else was involved” or “how do you feel about…” and invite people to detail their map by using the images 6 . Motivate people to draw or write new variations of activities if your selection is not sufficient or representative 3 .

STEP 8: Document the activity map with video and pictures. Write down if new stakeholders were identified and your five key points you learned from the session, including facilitation advice for next session.

Choose to further develop the same activity map with other stakeholders involved in the process to map a complete value chain, e.g., the process of activities that follow when the farmers have sold the cocoa.



STEP 3: Invite one to three people with similar profiles to a session and start by drawing a timeline on paper or on the ground. Give the introduction “This is Yesterday” and indicate time of day on the timeline.


Assist groups or individuals in mapping what they do during a day or week to better understand the local practices and lives of the local people.

STEP 2: Prepare by printing images that can symbolize variations, e.g., different water collection technologies, “smiley” emoticons, resources such as “liters of water” and “money.” Use the web to find generic and inspirational images. 2 5 6



STEP 1: Define the type of local activities you wish to understand. The activity could be “local water collection” and wanting to understand aspects such as “water technologies, stakeholders, resources and related emotions.”

Map a process: Develop an activity map of a process rather than a daily schedule, e.g., the process of cocoa farming. Create an activity map with a small group of cocoa farmers to address relevant aspects of the activities such as locations, stakeholders and resources.


Deep dialogue (page 58) Follow and observe (page 68) Customer segmentation (page 72) Creating scenarios (page 74)

GET STARTED WITH THE RAPID VERSION Before an interview, list in your notebook the types of daily activities you would like to understand better through your target group. As an icebreaker for a dialogue ask the interviewee to explain what he or she does during a day. Draw a line in your notebook, indicate morning and evening, and ask questions to outline the day with specific activities by asking what, when, how, and who? Write the activities along the “timeline.� You may ask about specific activities, try to recount the day to confirm the contents, and ask how the activity map illustrating a day differs from a week/month/year.

CASE DESCRIPTIONS Distribution system (featuring CBS, page 34)

PARTICIPANTS Works well with individuals, a single household or small focus group of a maximum of four people.

TIME Thirty minutes to two hours per session, depending on the group size and number of aspects you will address.


1 2




Facilitation guide listing type of activities and questions Printed images relevant for the focus Pens and small pieces of white paper to draw and write on Camera, video camera or smartphone Notebook and pens




Follow these steps:

Use the activity early in your research to identify relevant stakeholders and locations for your business case through deep dialogues. Ask participants to map out the people to they are related to through their business, community or daily activities. Use the map as an analytical tool to address local socio-economic relations. The social maps represent participants’ perceptions of, for example, the organization of a community.



TYPE OF ACTIVITY Interview Focus group

Use a circular diagram illustrated on a poster or in the soil to map and analyze relations between stakeholders.

STEP 4: Identify individuals and organizations relevant to your target group by asking the participants to draw the community on the ground using colors and local materials. For example, if the activity is done with a local entrepreneur you can ask him or her to map the stakeholders that are involved in his or her business while you create a simple map using pieces of paper to represent each stakeholder. A method to elaborate on the social map is to ask questions such as: “Is this all the people in our community – what about the school and health clinic?” or “Who removes your waste?” or “Where did you get the kiosk from?”

STEP 7: Establish new contacts by asking if participants can introduce you to, or give you contact information for the different types of stakeholders so that you may involve them in a similar session to confirm the relations or identify a different set of meanings.

Develop your own social map and grow your network through your initial local contacts that can refer you to their local contacts. Try always to ask questions that can reveal people’s opinions about each other.

Verify the map and your understanding. This can be done by summing up your interpretation of the map and let participants correct you or confirm. Invite people to highlight other differentiations or relations than the ones you ask for and suggest – you may not understand all types of local dynamics.

STEP 5: Create the social map by using the ground or a large piece of paper, place pieces of paper to represent each stakeholder, and write their characteristics. For a social map of the community, the mapping will be done according to the physical layout of the community, although with a vendor it may relate to the time of day when he has contact to his customers. Use existing maps as reference if they exist. For example, an NGO might have previously created a map. 1 2 3 STEP 6: Ask participants to indicate specific relationships according to their perception of who has no access to safe water, who is often sick or who has an outstanding loan. Consider asking participants to map stakeholders in accordance with subjects like wealth, power, trust, friendship, communication, etc., by rearranging pieces of papers that each represent a stakeholder. 4


Undertake the mapping in the relevant context, for example at the business, place of activity or given community.

If using existing maps, try to understand what indicator people already use to diversify the community.


Your target group’s definition of a community and what services should be provided Identify target groups and individuals Networks and relations Power structures, such as mapping the decision-makers in a community People’s perceptions of each other Insight for target group analysis and segmentation

STEP 3: Identify and invite selected people whose networks you would like to understand, such as inviting village elders and community representatives to create a social map of their community or a vendor who sells dairy products in the community.

Use a local map of the area to map larger areas of social classes, farming practices, distribution chain, etc. 5 Use existing community maps to identify key-stakeholders within a community, differentiation between individuals or commercial or social hot spots. 1 2 3

STEP 2: Develop material that can help you and your target group develop the social maps, such as: a list of possible stakeholders; a list of the type of relations you would like to address and analyze; small pieces of paper in different colors and shapes (square and circular); printouts of iconic illustrations of men and women; pictures illustrating different types of relations (e.g., money, resources, trust). EXECUTION

Focus group activity that allows your target group to map the relationships between relevant individuals and organizations.



STEP 1: Define the type of networks you would like to understand, whether they relate to a specific community, business or activity. To understand a local market it could be relevant to e.g. understand social structures of a selected community as well as the network for a local micro entrepreneur.

Use the activity on a household level to identify social relations within and near the family, such as who is responsible for the household resources and making decisions, and who might be the potential end-user of a product or service. 6

Be sensitive about how to identify relations in a community map by not asking directly “who is poor or rich?” but think of what could be used as indicators instead. The maps do not necessarily represent reality but may say more about the perceptions of your participants.


Deep dialogue (page 58) Activity map (page 62) Follow and observe (page 68) Customer segmentation (page 72)

GET STARTED WITH THE RAPID VERSION Ask your focus group to indicate different types of stakeholders on a geographic map that you printed by using a program like Google maps or that the community had. Indicate actors or stakeholders – people, objects, organizations – by adding small post-its and asking questions to make sure stakeholders of your interest are included. When stakeholders have been mapped, then reorganize the stakeholders and draw lines in between them on a sheet of paper in accordance to a relevant analysis such as power/influence, a process (flow chart), relations or relative influence. Retell the situation mapped to the focus group to ensure you have understood and to address if any stakeholders are missing.

PARTICIPANTS Works well with a focus group of local opinion leaders or e.g. representative from local women groups.

TIME Execution takes ½ – 2 hours depending on the scale of mapping (community vs. activity) and the number of participants.


List of possible types of stakeholders List of different types of relations Pack of small papers to write on Printed illustrations of men, women, and types of relations Pens, notebook, camera, video

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VARIATION Follow these steps:

Activity that will give you insight into the ingoing and outgoing resources of a local system such as a household or business.



TYPE OF ACTIVITY Interview Focus group

Arrange a second session with the “passive participants” to crosscheck and compare stories, e.g., between women and men if the first session is dominated by certain people.

STEP 3: Invite selected people from your target group to a focus group 1 5 or individual session. You may do the activity with five farmers working on the same farm, followed by individual sessions with each of the five famers and their families to understand their household economy. STEP 4: Introduce what will happen in the session and the systems that will be addressed. STEP 5: Focus on income by asking participants to list everything that generates money for the household/business. Write each of the aspects on separate pieces of paper and place them on the right side of the worksheet. Use your list of resources to devise examples of resources that can generate income. You may also have printed some illustrations to visualize resources. 2 3

STEP 9: Address purchases and investments by asking how often mapped products and services are bought as well as the reasons for the frequency of purchases, such as due to limited durability or large consumption.

The pieces of paper where people have written additional resources can be used in later Resource flow activities. For example the pieces can provide a reference point for the participants, such as a farmer that have written different types of farming tools in a local language. These papers can be used in future sessions with other farmers.

WATCH OUT The activity can be time-consuming so be clear about how much detail you want about each type of resource. For example, whether you will only classify spending on “food” or “groceries” and not address each type of grocery as this is not relevant for your solution.

STEP 7: Rank resources by asking participants to rank the pieces of paper cards according to what provides the largest income and what costs the most. If participants are able and willing, ask them to estimate resources in quantity and price – this can be time consuming but may change the order of the ranking by addressing each aspect specifically. 6 STEP 8: Identify the person(s) responsible for the resource(s) by asking the participant(s) to tell who controls which resources listed within the business or household – you can list the names directly on the papers. 2

Conduct the session close to the chosen system, such as at the household to make it possible for participants to demonstrate how both the resources and the system works. You will also be able to observe and ask about resources that might not have been included for example by addressing the household’s spending on electronics.

People could rank the resources in accordance to their relative size, then work together with the participants to quantify resources in local currency – this might be what they are spending and earning on a weekly, monthly or yearly basis.

STEP 6: Set focus on expenditures by asking participants to list everything that costs money for household/business on separate pieces of paper, and place them on the left side of the worksheet. Use your list of resources to come up with examples of resources that are expenses. 6


Source and type of household income and spending Decision maker and manager of resources Resources used to purchase, use and maintain a system as well as the perceived value and outcome of the system Ways of financing the resources and how they are prioritized



With this activity you will engage selected people from your target group to map out their ingoing and outgoing resources in relation to a system, such as the household or business income and expenditure. During a small focus group session or individual dialogue, you will ask people to communicate their flow of resources by addressing one type of resource at a time and then listing the resources on a template developed by you. The participants will prioritize the resources. The participants will be asked to indicate who typically manages the types of resources.

STEP 2: Develop an A3-size worksheet for each system with illustrations, e.g., one picturing the household and one picturing a local business. Prepare small pieces of paper and develop your own list of possible types of resources related to the systems in categories like “medicine, education, clothes, etc.,” for the household and “crops, farming tools, transport, etc.,” for the faming business. Consider printing images to represent some of these resources. 3



STEP 1: Select up to three types of systems of local resource flow that you would like to understand. In a project with a focus on farmers, it could be relevant to address the resource flow of the farmers’ household as well as the famers’ crop-business.

If the system is a product-service system such as provision of water from a public water pump, the activity could be done near the pump with five people who all use the same water pump. Set focus on output and outcome by asking participants to list everything that the water pump delivers, such as income, liters of water, health, experiences (such as exhaustion), time consumption, etc. Then focus on inputs by asking participants to list everything that the water pump requires for upkeep, use and maintenance, such as: expenses, time, education, transport, etc.

It can be a sensitive subject for people to “reveal” their spending to others in their community so evaluate with local partners who to include in an activity.

USE IN COMBINATION WITH Deep dialogue (page 58) Activity map (page 62) Follow and observe (page 68)

GET STARTED WITH THE RAPID VERSION Bring 20 green and 20 red A6-size pieces of heavy duty paper and a picture to illustrate the system that you wish to map the resource flow, e.g. a house or a given type of work. Ask someone who can read English from the community to write in the local language on the cards the type of categories that are relevant for local input and output, guided by your interest. Map the resource flow in sessions with either a household or one from a given profession. Let the participant first review the cards made and motivate the person to write more if needed, then ask the participant to prioritize the cards in accordance to the amount of resources and then ask him or her to quantify the resources.

CASE DESCRIPTIONS Pricing and financing (featuring Worldbarrow page 38)

PARTICIPANTS Works well with individuals, a single household, or small focus group of maximum of four people.

TIME ½ – 1.5 hours per session depending on the group size, number of systems to address, and the detailed level of the resources to map.


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List of possible types of resources related to each system Small pieces of paper to write or draw on (25 min. per session) A3 paper to arrange the paper listing resources Pens, notebook Camera, video or smartphone




Follow these steps:

The activity helps you to get into the local context to identify relevant stakeholders and obtain deep insight on your target group’s local conditions. Follow and observe selected people from your target group in their activities, environment, or during the specific use of a product. The activity invites you to ask questions along the way to obtain deeper insight. However, the activity stresses to collect and analyze insight based on observations to get beyond what people say, to understand what they do and feel.



Establish contact with relevant stakeholders Insight into local conditions, such as the infrastructure Identify sales and distribution challenges Insight into actual use of products or services Innovative opportunities to address the gap between what people say and do

Interview Observation

STEP 3: Complete the activity by following your contact through an area 1 4 . Observe, meet people, ask, listen, discuss and identify problems and solutions 3 5 . The areas that turn out to be most interesting may first be discovered during the walk, so be open to change course or extend your walk.

Trust and build trust with the people you meet. Be explorative and not afraid to follow the lead of a local or to approach people in a local shop, because they will usually welcome your interest.

STEP 4: Take time to stop and talk with people you meet on the way – you may use your notes from the “Deep dialogue” activity as inspiration for your questions. Pay attention to identify possible gaps between what people say and what you observe them doing when you ask them about their activities 2 . Be aware that people are not expecting you, so ask if they have time to answer questions, ask if it is okay for you to observe them, and explain how you will use the information 5 .

STEP 7: Collect contact information for the people you meet if they are interested in being included in later activities relevant to your field research. STEP 8: Sum up your observations and interview by writing down your initial impressions to ensure they are considered in later analysis.

Ask for a local community map for you to use as an icebreaker for an introductory dialogue and to plan the visit through the community. Communicate what types of people you would like to meet or specific sites of interest you would like to visit.

Consider structuring your observations by dividing them into:

STEP 5: Continuously document your observations and tasks by writing notes, taking pictures or recording video 2 6 . Both contextual and detailed pictures as well as video are important communication material for others in your project team to visualize the challenges and opportunities. Your smartphone can easily and discretely take pictures and record video as an alternative to larger equipment. STEP 6: Consider following and observing other stakeholders than your target groups, e.g. understand what people purchase when they are wealthier than your target group or why some people in a community do not share the same challenges or needs.

Include the activity on one of your first days to collect your own initial learning’s before doing other activities.

To avoid affecting people’s behavior by your mere presence, consider installing a camera to record observations at a given place. The recording can be used as a basis for a deep dialogue. 1. Environments where you make the observations 2. People involved in activity 3. Objects people interact with 4. Messages that are being transferred during the activity 5. Services that enable the activity

WATCH OUT Make sure that your local contacts show you places that represent local conditions and not only the areas where NGOs are giving special attention in a program that may not show the full scale of local development challenges. People may stop all activities due to their curiosity of your presence. Tell them to continue their work, as you would like to learn from them. DATA COLLECTION



STEP 2: Plan visits with local partners who can make arrangements with local contacts. Make sure to have a plan that you can Follow and observe activities on a day when they would naturally happen, e.g., going to the market or selling a given crop. EXECUTION

Unplanned visits and walks in selected places to identify and discover current local conditions and interactions.



STEP 1: Define who, where and what could be relevant for you to observe and discover. A good idea is to have a plan for a combination of visits: e.g., the village where farmers live, the farm where the farmers’ undertake their daily work, the farmers’ travel to market using your wheel barrow prototype, the nearby town where farmers’ tools can be bought. Develop a list of key research topics that you would like to observe and discover, e.g., in relation to products, people and environments.

Assess your own or similar products by following people and periodically asking them questions such as ”Why do you do that?” or ”How did it feel to…?” or “Could this be easier?” Consider presenting a number of exercises that you can ask your participants to try out while using your product and then observe them in action. 2 . Understand local distribution systems by following one aspect of the distribution for a day or be open to follow different stakeholders to gain insight on the various stages of the distribution.

Not all people would like you to take their picture without permission, so try to ask first or be very discrete.

USE IN COMBINATION WITH Deep dialogue (page 58) Activity map (page 62) Social map (page 64)

GET STARTED WITH THE RAPID VERSION Plan to walk around and make observations of sites and people on the first days upon your arrival. Make time to change direction or search for people you met during your walk. When finding relevant places or people, be prepared to undertake observations and interviews in the moment. People are more open to allow you to observe, follow and interview them if you explain to them that their participation will be anonymous, or you buy something from their shop or give them a free sample of the product they will need to use during the observations.

CASE DESCRIPTIONS Rapid market assessment (featuring AAK, page 18) Distribution system (featuring CBS, page 34) Distribution system (featuring Danisco, page 32)

PARTICIPANTS Observe and follow one or a very small group of people. If you are in a big group, then try to divide into smaller groups in order to explore different areas or Follow and observe different people.

TIME Walking communities or to follow the activities of a supply chain can take a full day, while observing the use of a product can take as little as 1/2 an hour.


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List of target groups, areas, situations or products you wish to observe Notebook and pens (may include a template to structure observations) Camera, video or smartphone Map of the area can be a good idea



Go the extra mile, spend time with people from your target group, and participate in their daily activities.

OUTCOME Build trust and respect in the community to accelerate other activities Insight into needs and desires outside of the “opening hours” People’s honest ideas, feelings and critiques Everyday life and activities Time and place to undertake other activities at a time when people are not busy with other daily activities

TYPE OF ACTIVITY Interview Observation

STEP 1: Consider homestay if you need to build trust with one community or a local household to be allowed to undertake a number of activities or to gain insight into their life from morning to evening.

Homestay can have great value even when only spending one or two nights locally. Depending on your target group, people will most likely give you the possibility to stay in some of their best facilities. The conditions may not be much different than the nearest lodge or hostel, but may give you a very different experience.

STEP 2: Prepare by making sure you will have clean drinking water, some nutritional snacks, protection against local diseases, and required sleeping equipment.

GOOD PRACTICE Be prepared to participate in local social activities that you may not have planned on but may happen during your stay, such as to be invited to a local wedding, Sunday church 3 or a funeral.

STEP 3: Identify who could arrange for the homestay through relatives of your local contact, the NGO, or community chief of a local community. Depending on the given community, safety and climate, you may consider bringing your own tent, 1 finding accommodations in a public building 2 , or sleep in a private home.

When you are presented with a variety of the local foods, drinks and snacks, try to taste before saying no to anything or be very diplomatic in your rejection, saying that you have allergies, certain beliefs, etc. 6

STEP 4: Show appreciation in your gesture and openness of the limited facilities available. Give only small gifts of, for example, household supplies, as appreciation for the people hosting you.

Roles are reversed when you work alongside the locals. You will not be the expert but trying to learn how to undertake local daily activities and through this learn about their problems. Let your target group become the teacher and you “the student.” 5

STEP 5: Participate in the daily activities and express your interest to not be treated as an “outsider” by the community but your interest is to learn from them. The homestay is a good chance to undertake some of your other research activities. STEP 1: Define the kind of daily activities or processes that are relevant for your research and how you may be able to work alongside your target group to experience and observe 4 . Examples could be learning to understand the cooking culture by helping a woman in the full cooking process from purchase of ingredients to the cooking itself, or to understand a consumer’s reason to purchase specific products by becoming a sales assistant in a small roadside shop 4 . STEP 2: Start by arranging the possibility for you to work with a local through your local partners; or approach a shop during your first days to ask if you can work there; or seek permission to set up a small road side table, purchase some local products, and sell them along the street. If you are positive, open-minded and show interest, most local people will find your interest amusing and allow you to undertake the work alongside of them. STEP 3: Observe, interview, and interact with the people you are working with on a very informal basis during your activities to tap into their current situation and request for changes. Have a list of important key questions in your notebook, such as a discrete checklist of the key research-aspects to address. Keep in mind that you are new to these activities and your personal challenges might not be the same as your local target group’s.



Honesty, reflections and good ideas are often expressed while people work together or during informal chats in the evenings. Follow and participate in local daily activities to build your own experience of the daily life challenges and create an informal environment for dialogue. Consider the value of spending time with your target group in the evening, night, and early morning to discover their use of services and products, and what new challenges they may face at a time when research is rarely done. Build empathy and interest for your research, and show respect for local conditions by arranging a homestay for one or two nights in the community.



Follow these steps:

Ask your target group how you can participate in their daily activities – if it is related to their work, then make sure you do not endanger their work by taking too much time, lowering the quality, or acting like the expert rather than the student. The experiences you have when working alongside locals are not necessarily the same as your participants, since you are inexperienced and may not do the task correctly. It can be a good idea to share your experiences during the activities to hear whether your participant shares the same experiences. It is a honor to be invited to spend the night in a community or with a local family. Do not expect that the allowance is guaranteed and it is therefore a good idea to get advice or help from your local partner on whom to ask for permission. Be modest and show appreciation when sharing your interest to spend the night near your target group.

USE IN COMBINATION WITH Deep dialogue (page 58) Concept assessment (page 84)

GET STARTED WITH THE RAPID VERSION Consider during what times people would be using your product or service. If it is relevant, then arrange to also undertake Follow and observe activities and Deep dialogue during the later evening or early morning. This may only be feasible if you spend the night locally, so explore this possibility through your local partner, a trustworthy contact or someone from a local community committee. To get into the mind-set of your target group, then put yourself in their place by asking a person from your target group if you can work alongside him or her for a few hours. Share your experiences of the work with your “co-worker� to start a dialogue on his or her experiences. Consider offering a few hours to help in a local shop where you will get an opportunity to ask consumers to reflect on their choices at the moment of purchase.

CASE DESCRIPTIONS Customers and end-users (featuring Vestergaard Frandsen, page 22)

PARTICIPANTS Best to have one or two primary people of your target group who you work alongside and/or one family that you stay with overnight.

TIME Depending on your interest, working alongside can take from 1 hour to a full day and overnight stays from 1 night to longer stays of several months.

MATERIAL NEEDED List of questions you can ask when working alongside Notebook, pen, camera or smartphone

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Follow these steps:

Research and analysis activity to identify specific attributes of a target group that are similar and dissimilar to other groups, and to identify and customize your markets.

STEP 3: Collect information on your different types of target groups through local researchers or by yourself.



Structured insight into your target group • Knowledge, attitudes, and practices • Opportunities and challenges Aspects that define differences within your target groups Segmentation of target groups

TYPE Interview Focus group

STEP 4: Review information gathered and assess the need to define new types of target groups if the ones initially defined do not reveal the actual differences within your group. For example, it could be that gender does not represent any clear differences in attitudes and values in comparison to social classification or level of education. STEP 4: Develop material that can summarize the characteristics of different target groups. Consider to arrange learning’s from similar people in one format to create a “Persona” 4 that is a fictive but representative person-profile that can represent someone from a given target group. Make the personas personal by giving them a name as well as including quotes and pictures to visualize what you learn.

STEP 7: Analyze the segmentation in relation to relevant key questions for your market creation – e.g., whether you are developing solutions for the right target groups, what to focus on in marketing, and if there are current non-users that could become future users.

Target group segmentation could also be done without developing elaborate “Personas” but through a workshop where local opinion leaders or representatives of various groups both outline the different types of, for example, consumers and their attributes by which they are grouped and segmented. It is a good idea to crosscheck analysis and assumptions by following up with a deep dialogue with people from the clustered target groups.

GOOD PRACTICE Developed “Personas” 4 can be useful material for your design team to make sure the solution is developed with their characteristics in mind. The profile can also be used in other field research activities, such as inviting locals to develop ideas for service-delivery to this type of target group.


STEP 5: Define meaningful and actionable segmentation attributes of your target groups, such as demographics that affect consumer needs (gender, age, belief, status, profession, rural/ urban), behavior (such as open to change/content, user, non-user, etc.), or lifestyle characteristics. STEP 6: Develop a digital or physical map where you place your target groups in accordance to two of the segmentation attributes. It can be interesting to develop different maps based on different segmentation attributes – some attributes may be relevant for marketing while others relate to, for example, pricing 5 . Depending on the data available, you can indicate an estimated size of each target group. Segmentations can be used to focus on whom to create a market for and who could be future customers/ end-users.

The activity set focuses on segmentation that is based on qualitative data where aspects such as target group’s behaviors and attitudes are addressed. Information on demographics and lifestyle may be available online or through local agencies in to be able to undertake segmentations with some significant evidence.

Consider how other activities can provide valuable insight to develop the “Personas,” e.g., by learning about peoples’ values through the “Value of features” activity or daily activities by creating an “Activity map.”


Target group segmentation is an activity that helps you create a market for a target group of relevant market size, as well as being able to estimate and draw the characteristics of future market segments.

STEP 2: Plan how you will collect the information: through deep dialogue, self-documentation, larger surveys using local researchers, or during your visits to a community where you can collect some of the information using other activities, such as “Ranking of values.” EXECUTION

The activity provides you with templates on what type of information can be relevant to collect about your target group in order to understand their similarities and differences as customers and end-users. Based on the target group’s characteristics, you will be able to segment these in accordance to your parameters. The parameters to segment target groups should be relevant for you to address the opportunities, size and challenges of the market.



STEP 1: List the type of information you would like to collect about your target groups such as information about demographics, behavior and lifestyle. Consider including people who may not be current consumers of similar services but are relevant for future markets 1 3 . Develop your questions as a questionnaire or have a more open format for your dialogues 1 4 , addressing the aspects shown in the illustration 2 .

Be aware that your segmentation and profile of target groups will be strongly influenced by the few individuals you include in the study 1 3 . It can be a good idea to undertake deep dialogue with the same type of people in places or regions to see if there are any differences. Crosscheck your assumptions by presenting findings to local NGOs or grassroots organizations. For markets where the customer and consumer are not the same, such as the case of relief products, it is relevant to undertake two target group segmentations to address both purchase and consumption patterns.


Deep dialogue (page 58) Self-documentation (page 60) Activity map (page 62) Designing value proposition (page 80)

GET STARTED WITH THE RAPID VERSION Define who could be your potential customers, e.g., the “rural/urban mom and rural/urban teenage girl” for a beauty product. Print pictures of different beauty products or bring your prototype. Develop a onepage “Persona” template similar to 4 listing topics 2 and space for your notes. Use the persona when you undertake deep dialogues. After collecting the information, compare what you have learned and see if you need a more appropriate way to differentiate your target group, such as by behavior and motivation (“teenage/adult feminine and teenage/ adult natural”). Visit a local shop that sells beauty products and ask the shopkeeper to share experiences on what and how to sell to each of the Personas. During the dialogue, try to do a target group segmentation e.g. based on the Persona’s willingness to buy new products such as yours.

CASE DESCRIPTIONS Rapid market assessment (featuring AAK, page 18) Marketing and communication (featuring Arla, page 44)

PARTICIPANTS From 10 – several hundred people depending on the scope, use of information and resources.

TIME 1 hour for Deep dialogue, 1-2 hours for segmentation activity with focus group if Personas were developed beforehand.




Template to develop the “Persona” Notebook, pens, camera, video, computer Paper cards, poster to make the segmentation



73 uppeR


SeTTleD COnTenT ReSIgneD


up & COmIngS



Open TO CHAnge




Follow these steps:

OUTCOME Story or illustration of a situation you would like to communicate. Information on your target group that is easy to access, understand and use within your project team. Tool for you to make abstract questions easier to understand for your target group.

TYPE OF ACTIVITY Development of communication material (Activity to support) Focus group sessions (Activity to support) Deep dialogue

Use material from people’s “Self-documentation” activities, pictures, notes and other material from your first days of field research to create new or more descriptive scenarios.

STEP 4: Develop the material that can support others’ understanding of the scenario, such as:

Make your questions less abstract by creating a “sacrificial concept”: Turn abstract questions into concrete, scenariobased questions with two options, for example: “If you had to choose between…”

Notes in your book about the story line and key questions A few cards with basic illustrations or writing that may, in combination, become different scenarios 3 Picture, diagram or drawing 5 6 A short movie clip from earlier research done elsewhere

While you can present a full story to them, you may also give a more general and less detailed story for your participants to discuss. You could present the beginning of a story that includes some of the local dilemmas and ask your participants to develop the continuation of the story. Peoples story can be presented in a focus group. Give people time talk and to interpret the story. 2 STEP 6: Document the discussion of the scenario and outcome by taking notes and video 2 . Consider making illustrations that shows your participants greater detail of the scenario so that they can confirm or elaborate on what they see. 4

Create scenarios for your target group to “fill in the gaps” of a story. Present the “beginning” and “the end” on two separate papers, which could be scenes of “now” and “future” or “without” and “with” scenarios, and ask the participants to come up with realistic and/or “outrageous” ideas about what has happened in between.

When a translator is needed, ask around if there is anyone who is good at storytelling who might also be good at presenting your scenario and facilitating the focus group session. 4 6 You can also ask if there is anyone who likes to draw who may assist you in creating illustrations. 4

STEP 3: Consider how you will present the scenario depending on your available time, facilitation skills and target audience. While you may try to explain the scenario in words, it is often a good idea to include a few illustrations or the surroundings to support your storytelling and for people to understand the situation. 1 5 6

STEP 5: Use the scenario to tell a story – be descriptive, specific and open to elaboration on the story with input from people who will try to reflect themselves in the story and adapt it to their situation. 1 4

Scenarios can be prepared from home and planned to clarify abstract key questions or, in other cases, developed “on the spot” during an activity where you face the challenges in getting participants to give answers to abstract questions.




This activity is a guide on how to build scenarios or situational stories to contextualize your questions. Scenarios are good to use for deep dialogue or focus group meetings and can be used in situations where you want your target group to understand a complex situation or question. Creating scenarios can also be useful for you to triangulate your findings. Develop a story that sums up your understanding and then present it to your target group for clarification and feedback. Creating scenarios can help you to compile and easily communicate your findings from the research to your project team. Scenarios can be both fictive and realistic and presented through storytelling, an illustration, a diagram or other visual material.


Build situational stories to make it easier for your target group to understand abstract questions and for you to communicate what you have learned to your project team.

STEP 2: Draft a simple story line for the scenario that may be a situation, a small story, or a set of different scenarios to address and elaborate on the same question. Contextualizing is important and it is good to build the scenario using local words and images of the conditions. Consider whether you will include fictive people with names in your scenario or include your target group as the people in the scenario. It is often easier for people to be open, critical and subjective if the scenario includes fictive, but realistic, characters.



STEP 1: Review your key research questions for your field trip – are there any that might be complex to explain and would be more easily expressed through creating a scenario or telling a story? Scenarios can become relevant if you want to talk about sensitive topics, desires for the future or a product that does not exist.

Create scenarios to present the relevant information you have learned from your field research to your project team using pictures, video, quotes and personas.

Addressing the future can be difficult, so instead of asking your target group “what will the solution be?”, create a scenario where the solution already has been implemented and ask your participants, “(Imagine) What has the solution done to make them…”

WATCH OUT Build realistic scenarios that people can relate to. If you address solutions that do not exist, then try to describe a fictive family.


Deep dialogue (page 58) Self-documentation (page 60) Customer segmentation (page 72) Price mapping (page 78)

GET STARTED WITH THE RAPID VERSION When facing abstract questions during a deep dialogue or focus group activity, try to think of how you can contextualize your question by telling a fictive story your participants can relate to. Rephrase your question into a story and consider making a few simple drawings to support the content of your story. Develop three daily-life scenarios that visually and structurally communicate your field research and what you have learned to your project team. Personalize and contextualize each story by including pictures you have taken. Scenarios can be based on relevant forecasts, such as different scenarios on how to create a market and how your product will be put into use to create value for your consumer.

CASE DESCRIPTIONS Service and maintenance (featuring InnoAid Ambulance, page 50)

PARTICIPANTS One person to develop the scenarios, maybe with the help of local artist. Scenarios can be presented to individuals or a smaller focus group.

TIME From 5 minutes to 3 hours of preparation

MATERIAL NEEDED Illustrations, drawings, or cards to write on Notebook and pens Camera and video (or smartphone)

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Follow these steps:


The activity prepares you to develop material for an individual or focus group session where participants will rank a number of alternative products, services or aspects relevant to your research. By asking people to prioritize, participants will start a mental evaluation process to both address what “value” in general means and how different solutions or alternatives are rated on a scale that is predefined or defined by the participants themselves. The activity is simple in its format but can lead to valuable discussion between participants when they have to address their own as well as common perception of value and how this is embedded in a given number of alternatives.


TYPE OF ACTIVITY Interview Focus group

Some alternatives may be more costly than others so consider a ranking activity where you give people real or fictive money to “buy” a number of the alternative – but they have to rank and prioritize, as they will not be able to afford them all. Start with a “Value ranking” activity before a focus group discussion on value creation and perception since this may seem very abstract to your participants at first. Invite participants to present their value ranking to each other and then start a deep dialogue about values at a point where the participants have been actively and mentally involved in expressing their own values.

GOOD PRACTICE Review your printed images with a local partner or someone with local knowledge to know whether participants will understand the images or not. Include a name of the value on the image and an ID number that you can write down to easily record the ranking for a later comparison. Ask a local contact to write in local language the meaning on the picture.

STEP 4: Ask the participants to rank the alternatives. 1 2 3 4 You should act only as facilitator and give participants freedom to undertake the activity themselves. Try to only have one activity at a time and sit in the background to observe and listen. STEP 5: Clarify and support the understanding if needed. If you have not defined the scale of what is “high value and low value,” then ask participants to define this, giving valuable insight into their way of perceiving value.

Consider undertaking the same Ranking values activity with other participant than your customers as it may be relevant to address other decision makers ranking of values for you to create a market – e.g., the consumer of candy may be kids but it will be the mother making the decision to purchase.

STEP 6: Review the final rankings of the alternatives and ask the participants to talk about their priorities. 1 6

Make sure you meet participants at a place where there will be space to sit with the cards.

STEP 7: Follow-up by addressing some more general questions, either from the session or that you have prepared beforehand. If you had asked participants to rank, for example, different labels of milk products, then you could ask them to rank in accordance to what they consume the most and what the unit price is – you may find that there are different perceptions on “quality” and purchasing value.

WATCH OUT Try to do the activity in a quiet place since your presence will create a lot of attention and others will come to interrupt with their opinions. This is especially important with women. The cards might be misunderstood and this could affect the rankings. Motivate the participant to feel free to continuously review and change the ranking order while explaining the ranking to a focus group.

STEP 8: Repeat the session with others from the same target group but also try to address the possibility of other relevant target groups, e.g., asking the street food vendor about his priorities to see if they align with the consumers. STEP 9: Document the process with notes/video and take pictures of the final ranking of paper cards. Write down the key points you learned from the session and if any new options were discovered. 1 STEP 10: Assess the variation in priority within a specific target group and among different target groups.


Value Proposition and consumer expectations – what and how people value and prioritize Differences between individuals and target groups People’s perceptions, knowledge and understanding People’s valuation of products and services Diagram that can be used for quantitative studies

STEP 3: Invite one or several people from your target group to participate. Present the topic, quickly go through the alternatives you have brought, and show the scale on which they should rank the alternatives 5 . Motivate participants to include new alternatives they value under the topic given, by including a new paper card.


Challenge your target group to actively value and rank products, services or detailed aspects of a solution in accordance to their perceived value.

STEP 2: Develop and write one small paper cards, each of the alternatives or solutions. Depending on literacy levels and your time, consider printing images to symbolize the options or to develop a list of the alternatives and then ask a local contact to write the paper cards in the local language. You could evaluate the alternatives using a scale shaped like a pyramid, a line or a circle.



STEP 1: Generate a list of topics that you would like people’s perceived valuation of. A topic could be “considerations when buying street food.” Select one or two topics and generate a list of maximum 25 different alternatives or solutions within each of the topics, e.g., “price, hygiene, location.”



Deep dialogue (page 58) Customer segmentation (page 60) Creating scenarios (page 74) Designing value proposition (page 80)

GET STARTED WITH THE RAPID VERSION Develop a list of 5-10 values that you have thought to be possible unique selling points for your solution, e.g., for a radio to last for five years, have digital screen, available in three colors, etc. In addition, generate 10 alternative values that you think may affect your customers’ choice of what to buy, such as transportable on bike, price, waterproof, connects to car, plays tapes, etc. Invite five boys and five girls, divide them into two groups, and have them undertake the ranking of values in the groups. Ask participants to include other values that you may have forgotten. Have each group present their rankings, talk about the differences in their rankings, and their reasons for the rankings. Write the values in English and also the local language on post-it notes and ask participants to rank them on a poster.

CASE DESCRIPTIONS Rapid market assessment (featuring AAK, page 18) Including end-users (featuring InnoAid Street Food, page 28) Distribution system (featuring Danisco, page 32)

PARTICIPANTS Individual or small focus group of maximum of seven participants in each group.

TIME From ½ – 2 hours depending on discussion that will follow the ranking

MATERIAL NEEDED Illustrations, drawings, or cards to write on Paper to write a scale Notebook, pens, camera, video, or smartphone

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Follow these steps:

The activity provides you with tools on how to involve your target group in mapping different types of economic information. The map allows you to do simple analyses together with your participants and address their capacity to invest in new solutions and, through this, also address value proposition from an economic point of view.


Current prices on the market Target groups’ financial liability and cash flow People’s spending and if they pay more for less Value proposition People’s current skills and priorities in making budgets


STEP 4: Break the ice by asking people to write their names on paper cards, have them introduce themselves, and stick the nametags in a row on the wall. 1 2 STEP 5: Ask participants for their inputs on an aspect that should be relatively easy for them to indicate – such as the name and price of a product they own and serve a similar purpose as your solution. Place a card with the name of the aspect on the wall and ask the participants to write their individual answer on a new paper card and stick it underneath their name. 1

Use scenarios when you have more complex questions that you wish to ask to your participants.


STEP 6: Address new aspects by, for example, asking the participants to write other products they know on the market on a new card. Have them list the product names as well as the estimated price in local currency.

STEP 8: End the mapping by drawing some conclusions related to individual revenue streams or general observations that can lead you into asking how new investments could support their economy in relation to the functionalities of your product. Take pictures of the map and notes from the discussion. 6

The activity works well in groups if you only address a few aspects to map as it may be a very time-consuming activity.

Complete a few “Resource flow” activities with similar target groups and hang the posters that came out of this activity up on the wall before you start the price mapping activity. Use these posters as a point of reference when you undertake the price mapping since the posters will list a number of local type of spending’s you may wish to address during the price mapping. See Resource flow poster on the upper left on picture 5 .

STEP 5: Allow participants to discuss and help each other to write the cards. 3 Clarify the meaning of the cards by asking participants to elaborate verbally on what they wrote on the card.

STEP 7: Continue the mapping on the wall with other, maybe more complex aspects for people to share insights on. Try to develop an order of aspects where the former map can help participants give input to the next. Address products, spending, values, profits, etc. 5

Consider giving selected participants a list of things they should write down the price and amount of a few days before the activity. This gives them time to collect some information from the market as well as address the household economy with the household members since it may be difficult to remember if not being prepared.

Make use of paper cards in various colors to provide a visual structure of the mapping, e.g., aspects in one color, spending in a different color, and revenue in yet another color. 5

WATCH OUT It may be sensitive for people to map their revenue stream in front of others. Their rough estimation may result in showing false revenue that exposes them to the village. Therefore, it is important to emphasize that numbers are relative and address the need to complete the activity in small groups in enclosed areas. DATA COLLECTION

Observation Interview

STEP 3: Select and invite selected people from your target group to a session where you will brief the participants on the content and purpose of the focus group. It should be at a place where you can use the wall for the mapping so everyone can see.

Use the Toolbox Activity “Activity map” to map a distribution chain or service delivery before making the price mapping activity. This way you can use the activities map to address the expenses and revenues for each of the distribution activities, e.g., to address the cash flow of a milk farmer from cow to point of sale. 6


STEP 2: Prepare the aspects you wish to address by writing each one on a color paper card and have a local assistant write the meaning in the local language. 1 EXECUTION

Organize a group session where your target group maps economic information that is then used to identify value propositions.



STEP 1: Decide on what type of revenue and cash flow you wish to map with your target group to identify value propositions and opportunities for investments. Participants could map prices of competitive products, their own type of spending’s, and what values they see in the competitive products, or map the cash flow of your target group’s household to understand their liability.


USE IN COMBINATION WITH Deep dialogue (page 58) Resource flow (page 66) Creating scenarios (page 74)

GET STARTED WITH THE RAPID VERSION What will be the type of value propositions of your product? – Productivity, business, status, convenience, health? List a number of aspects that can structure a session where you will first map your target groups current spending’s, then values and lastly challenges to provide you the insight and basis to address what value your product should be able to deliver. Invite five people from your target group to a session where you guide them to indicate on cards oneby-one their individual answers to your questions by starting with general and easy questions before you ask deeper questions about resource flow and pricing.

CASE DESCRIPTIONS Distribution system (featuring Danisco, page 32) Pricing and finance (featuring Worldbarrow, page 38)

PARTICIPANTS Group session of maximum five people within the same type of target group.

TIME Should take maximum 2 ½ hours, including some snacks and a break. Time needed will largely depend on the number of participants, number, detail of aspects and the complexity of your questions.

MATERIAL NEEDED Paper cards in various colors, Sticky Tack to stick them onto the wall Pens for each of the participants Camera and notebook

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This activity focuses on first identifying what values and experiences your target group would want to include in your product and service. You will then invite selected people from your target group to a small co-creation activity where they will be asked to create ideas and concepts of how you should translate the value into specific solutions. Local perceptions of products and services can differ greatly from your own. Therefore, a dialogue on how your target group experiences design is relevant to both design of the marketing and packaging material and well as the product itself to make sure it will communicate value through the right messages and design features. 80


TYPE OF ACTIVITY Focus group Co-creation

STEP 3: Present the pictures and products 5 as if you are interpreting the pictures together with your participants. It is important to not tell anything about specific use, price, or perceived values of the products, including your solution. End your presentation by presenting the two scenarios where you ask open questions about why they think the women are having different experiences while looking at their phones.

Have people use the product for several days with no or little introduction to the product to find out how people will make use of the product. Your target group may use your product in unexpected ways and therefore give insight on unexpected product values or challenges (See case of Vestergaard Frandsen page 22). Try to repeat the activity with different types of target groups to map differences. If possible, consider having the different groups present their final ideas to other target groups to get feedback and start a discussion about how to meet different values or the need for a selection of products and services.

GOOD PRACTICE Look for people who like to draw in the community, they could be kids, and include them as participants or to support participants in visualizing their ideas.

Ask participants in the end of the activity when people have listed their own values whether they also see the values of your solution that you had initially designed for. Consider including some physical products that people can touch and use in order to look for additional values and use as a reference to support your target group to explain the values they find in your product.

STEP 5: Review the list of experiences generated and invite participants to add more experiences if any are missing. STEP 6: Focus on what to co-create, e.g., packaging material (can be good if your product is a service and less tangible), or co-create a physical product.

WATCH OUT Not all people may like to be involved in an activity where they have to be very creative. Therefore assess the interest and skills of your participants in making drawings or prototypes and design the activity according to this level of creativity and interest. Consider involving a local artist to support.

STEP 7: Invite your participants to share ideas about how to design the packaging material or product in accordance to the list of desired experiences developed in step 5 – the ideas can relate to the choice of materials, information given, size, color, features, etc. List the ideas next to the desired experiences. Motivate the participants to suggest different ideas and list them all even though they may be different. Invite participants to sketch or draw on the pictures you have brought for the changes they desire. 3 6 STEP 8: Invite participants to detail their ideas for a group presentation. This could be done as a one-hour session or a several day task. People could go home to their families and, with the help of their children, draw the product they would value. Subsequent to this, the target group would present the results at a group presentation.

Invite people to design the packaging material by giving participants a white poster or a paper box that they can then decorate and draw on to present their ideas for the packaging, giving insight on key messages, slogans, illustrations that communicate value, etc.

Make sure not to “sell” your solution when you introduce it but be very general and only tell what people can see themselves.

STEP 4: List people’s comments to the scenarios on paper cards or a poster. Continue to talk about people’s experiences and values by showing the other pictures and products to get more ideas from people about what is a good or bad experience about mobile phones and why certain products are so valued 2 3 . You can also ask leading questions by addressing relevant topics such as status, safety, durability, beauty, etc.


What people perceive as important values and how they think it should be integrated in a new product Concepts of marketing and packaging material to communicate the desired experiences Concepts of product solutions that can give the user desired experiences

STEP 2: Invite people from your target group for a small focus group session. Try to invite people with similar characteristics such as age, gender, income level and maybe profession. 1 EXECUTION

Co-creation activity to design products and services according to your target group desired benefits.

STEP 1: Prepare relevant questions and visual material that focuses on the type of product or market you target. If your ideas are in the very early stages, print out a picture of or purchase similar types of local products. For example, designing mobile phones for women could mean collecting different local mobile phones, other technologies popular for women, or women products popular in general. If you have a prototype, then illustrate or bring it along with “similar” products purchased locally. Develop two simple illustrations of different scenarios: one with a woman looking angry with a mobile phone and a woman who looks happy about a mobile phone. Seek inspiration from illustration 4 .



Follow these steps:


Deep dialogue (page 58) Self-documentation (page 60) Creating scenarios (page 74) Concept assessment (page 84)

GET STARTED WITH THE RAPID VERSION Prepare an A3 paper where you include images of locally available products similar to yours – it can be images of products in use, packaged or an advertisement. Select pictures where the products are in similar conditions, such as all being new. Print also 2 images that expresses “to like” and “to dislike” 4 . Arrange to meet four people from a specific target group and ask them to share their insights on what a person like themselves would like or dislike with the type of product you are developing and what he or she may look for when deciding on the purchase. Then ask them to share ideas about how the product should be designed to comply with these values and be attractive for them to buy.

CASE DESCRIPTIONS Customers and end-users (featuring Vestergaard Frandsen, page 22)

PARTICIPANTS Four to six people in a focus group

TIME From 2 hours per workshop, depending on the group size and number of aspects you will address.


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4 “It is great! I will buy it!”

“i don’t like I will not buy!”


Images or products similar to yours Two Scenarios on a A4 paper – can be as simple as (4) Questions or notes to address specific values you will talk about Pens, paper, paper boxes to draw and create ideas Notebook, camera, video, smartphone



STEP 1: Decide on what level you would like to involve people in the design of your solution, e.g., to design concepts 11 , detail part of your solution 8 , address local manufacturing 1 2 or develop the marketing.


The activity supports a creative and practical process where your target group becomes active participants in converting identified needs and challenges into conceptual or physical solutions. Address important aspects such as local acceptability, manufacturing, service and maintenance. Your target group can provide great insight for the design and prototyping. A deep understanding of local needs and markets does not ensure that you will translate these into the right solutions. Include your target groups or local manufacturers to share their ideas on detail design or overall solutions to inspire your product design. 82


TYPE OF ACTIVITY Focus group Observation Co-creation workshop

End-users: by promoting a drawing competition to gain insight on appearance 4 End-users: by providing sketches of your ideas for people to color and detail in a focus group session 7 End-users: by giving them a pack of different modeling material for them to have on days on their own to develop 3D prototypes they can later present 9 End-users: by giving them initial prototypes or product samples to further develop or change 8 10 Local manufacturers: who you will show drawings or manufacturing manual to construct the solutions using local process and materials 1 2 3 5 STEP 4: Support the prototyping by being available to help and consider involving kids or a local artist to communicate visually the ideas that people have for prototypes. For local manufacturing, develop 3D sketches or manuals beforehand and observe and follow the prototyping for a continuous dialogue and discussion on the design. STEP 5: Invite the focus group and local community to present and assess the prototypes for you to collect additional comments. Try to conclude on the important design aspects mentioned through this dialogue, perhaps by trying to illustrate the new details or conceptual solutions that come up. Elaborate on the concepts by creating scenarios with the product for people to clarify and elaborate on their intended use and value of their solution. STEP 6: Document the activity and prototypes developed through video, pictures and notes as material for your further design process.

It can be easiest to present prototypes of service solutions through a poster, a role-play or enacting a scenario 6 . For inspiration, see the case of InnoAid Ambulance.


Support participants’ creativity and skills to develop models of their ideas by involving local artists. Local artists can be contracted to help participants in making the models whether the artist is a painter, blacksmith or ceramicist. Inform participants that local artists will be available and that they can get support from these artists to make their models. It is important that participants still take the lead in the modeling and that it is not the artists’ ideas but participants’ ideas that will be communicated in final models. Plan the participants’ creations to be evaluated and presented to a local “jury” to not only motivate people for the chance of “winning” but to learn more about the criteria upon which the local jury will evaluate participants’ creations.

WATCH OUT Involve people in prototyping activities that match their skills and time available so participants will not be overwhelmed by the challenges presented to them. Consider what material can be developed to support the process while still not giving too many boundaries that would prevent the expression of new ideas. Greatest value of the activity is not the prototype itself but the reasoning and ideas behind the prototype– remember to capture the reasoning and ideas! DATA COLLECTION

Conceptual, detail or complete solutions presented through physical models or drawings for product assessment Prototypes with focus on local service delivery, maintenance, cost, sustainability, materials Local skills for manufacturing Ideas on what to name and how to brand your solution How locals translate needs and values into concrete solutions

List of challenges and opportunities you have identified that people can consider when prototyping; this could be developed as a persona (see “Creating scenario” activity) Sketches of existing solutions or your initial ideas that people can detail 7 Manufacturing manual to build and detail specific prototypes 1 STEP 3: Involve people from your target groups depending on your ideas about the prototypes. Some examples include:


Include local materials that enable participants to create models of their ideas and solutions. Select materials based on local availability but consider including clay, paper, cloths, sticks, recycled material such as cans, etc. Provide some material but also motivate people to use what they find appropriate.


Give your target group the opportunity to prototype solutions derived from local needs, skills and resources.

STEP 2: Develop material to inspire what type of solutions participants should prototype as well as material that can enable people to communicate their ideas to you. Consider how you can help participants to deliver relevant ideas and creations:


Follow these steps:

USE IN COMBINATION WITH Deep dialogue (page 58) Customer segmentation (page 72) Concept assessment (page 84)

GET STARTED WITH THE RAPID VERSION Print out a black/white outline, sketch of your solution or illustrations of existing solutions and invite people in a focus group to color and detail the drawings based on their personal preferences – make sure that participants present their ideas that went into the design. Consider giving people time to go home, detail the drawings, and return two days later for a presentation and talk.







During a product assessment activity or when people are giving feedback on your ideas and solution, then ask them to suggest what a better solution might look like – making 3D models by using material from the surrounding area 3 or making drawings in your notebook. Ask people why they would recommend this solution.

CASE DESCRIPTIONS Including end-users (featuring InnoAid Street Food, page 28) Service and maintenance (featuring InnoAid Ambulance, page 50)

PARTICIPANTS The number of participants depends largely on whether you are opening up the competition for people to submit their drawings. There could also be people working closely with a local manufacturer to develop a 1:1 prototype.

TIME Depends largely on what type of prototype will be developed.





Material to present your scope of the prototypes, such as a list of needs to prototypes solution for, 3D drawings or a manufacturing manual Material to develop prototypes or identify manufacturer that will use his own materials available Video, camera, smartphone Notebook and pens

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Follow these steps:

Your target group’s critical assessment of your concept or solution.

Outcome 84

TYPE OF ACTIVITY Interview Observation Focus group

Test your prototype under extreme conditions to identify weaknesses.

preparation STEP 3: Plan a focus group. Before showing your solution, ask participants to mention and assess where there are existing solutions that target the same needs – you may have some pictures or samples of these.

GOOD PRACTICE Make sure to emphasize that your target group should feel free to speak honestly and critically, as you are not there to impress them with a finished solutions but to learn how to improve your product.

STEP 4: Present and explain your solutions by only introducing the functionalities and not trying to “sell the product.” Capture the participants’ first impression by asking: “what would you use it for?” or “why is it better or worse than other solutions?” or “what would you change?” or “what does it remind you of?” or “what does is cost?” 4

STEP 6: Document feedback by writing on the illustrations about the concepts or on post-it notes. Feedback on the aspects can be a rating of your different concepts or statements on what to keep, add or change. 1 STEP 5: Diversify people’s way to assess by initiating different activities, such as: have someone use your product by themselves for a period of time; Follow and observe people using the product and give them specific tasks to undertake; assess the product by addressing specific assessment aspects defined in step 2; undertake deep dialogue at the place where similar products are sold to have some initial market assessment. 4 5 6 STEP 6: Develop and present to your target group your understanding of how the solutions could be improved based on the participants’ assessments to understand if you are translating feedback into the right changes. STEP 7: Document people’s interactions with your physical prototypes on video and pictures for later assessment.

Consider getting help from local contacts to identify opinionated people. In a focus group, you could provoke discussions by having people from different target groups represented who may not intend to use the product the same way.


Feedback on your solutions from your target groups about aspects such as usability, acceptability, affordability and durability Ideas for re-design or further detailing Ideas for services or new solutions

STEP 2: Develop a list of aspects to assess such as related to product appearance, affordability, availability, acceptability, durability, usability, etc. 3

STEP 5: Structure feedback: Present functionalities of the concept or catalogue of various concepts one-by-one. Display an illustration of each concept on the wall or make them available on a table. Present the assessment aspects you have defined one at a time and ask people to assess your concepts based on the appearance of the products in relation to affordability. Create scenarios for people to understand better your illustrated ideas or questions. 4

If you have a 1:1 prototype, try to give it to people with no prior introduction or even intentionally “forget” a sample of your product in a community. Make a visit several days later to see what potential end-users have used it for when they have not been given any information from your side. Try to use your product yourself under the local conditions as this may foster new insight on how to improve the product.


The activity can give you ideas on how to obtain local feedback on your concepts to be able to further detail and develop the solution to meet local needs and markets and forecast the later local use of and interest in your product. The activity is relevant when you have developed a concept or prototype and you would like your target group’s assessment of the concept. Concept assessment can address local available solutions for your target group to identify weaknesses and needs for improved solutions.



STEP 1: Develop visual material that best describes your concepts and solution. It is good to illustrate a variety of solutions or detail solutions that are different to force people to distinguish and select their preferences. Consider purchasing or illustrating local existing solutions to use as a reference in your activity 1 . Service solutions are best presented through illustrations, video, a scenario or a role-play. 2 5


Consider including illustrations or pictures from a similar village and not just from the ones you will visit to make sure that critical feedback does not become personal or sensitive.

WATCH OUT Pay attention to the level of abstraction, size, choice of materials, and possibility for participants to adapt to the prototypes. Would you like people to give inspirational feedback on your prototype at an early stage of your project or critical feedback to finalize details of your product? Develop appropriate illustrations. It can be difficult for participants to fully understand abstract and symbolic illustrations and prototypes, because participants may try to understand the concept too literally. If you, on the other hand, present a very detailed “new and shiny” prototype, they will be too overwhelmed by the details to address the concept as a whole or not be critical to important details, as it looks “modern and high-tech.”


Deep dialogue (page 58) Activity map (page 62) Follow and observe (page 68) Creating scenarios (page 74) Prototyping (page 82)

GET STARTED WITH THE RAPID VERSION Laminate 5-10 illustrations, through pictures and drawings, which can present a solution in already in use or for sale. 1 Include five bullets for each product specification and functionality. Write the aspects you would like to assess about your solutions based upon on separate paper cards. On each paper card, list five key questions and a scenario that can elaborate on the aspect. Present the concepts to a focus group of different end-users. Ask participants to assess the concepts by addressing one aspect at a time that you have written on your cards. Write the feedback on new cards and place next to the concepts. Finalize the talk by having the target group rate their comments based on their importance.

CASE DESCRIPTIONS Customers and end-users (featuring Vestergaard Frandsen, page 22) Pricing and finance (featuring Worldbarrow page 38) Service and maintenance (featuring InnoAid Ambulance page 50)

PARTICIPANTS Different activities can be undertaken with up to 10 people in a focus group.

TIME Depends largely on how the activity is performed but a focus group would take 45 minutes – 1½ hours. User-tests can be done during several days but do not require your full participation.


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Material presenting your concept (illustrations, prototypes, etc.) Pictures or samples of local products targeting same market (optional) Notebook (including your assessment aspects and questions) Different colors of paper cards and pens



IN MARKET Display your prototype at a local point-of-purchase for your target customers to assess the product and the shopkeeper to co-create a sales strategy.


Outcome Characteristics of target customers Potential point of customer purchases Indications of margin and sales price Thoughts on marketing – how to brand the product Requests for further re-design of prototype to meet customer needs and values

TYPE OF ACTIVITY Interviews Target groups’ own activities

The potential point-of-sale may not be an established shop but a local health worker offering healthcare services from home, an ice cream vendor on his bike, a street vendor, or a place that may not sell similar products but where people often go, such as the collection point where farmers weigh and sell their crops.

STEP 2: Brainstorm on how you can best present and display your prototype or solution at the point-of-purchase. 1:1 functional prototypes allow customers to see, touch and test the use of your prototype 1 . Packaging material is important because service solutions are often intangible. Customers often assess food products or services by their packaging materia Posters or promotion material are often used to communicate and sell service solutions.

Do not be afraid to approach local shops but do not take for granted that they will be interested in participating. You will get further by being open and showing interest in and respect for their current practice. Undertake the activity at more than one type of potential point-of-sale to validate research already obtained insight or to identify diversity. In a shop that is very busy, consider if there would be a student worker who you could involve to ask customers for their feedback.

STEP 4: Develop visual material to attract the customer’s interest and motivate them to assess your product. It is a good idea to develop three to six short questions and illustrations relevant to your questionnaire. Either stick them on your package or poster, or print out and hang on your product 3 5 . Visualizations may communicate “I like” or “I do not like” or “I would like to change” or “The price is..?” STEP 5: Visit on your own or with a local partner relevant local markets and point-of-sales. Present your prototype – start to assemble it together 2 . Ask a few questions to understand the business, current products, and customers. Introduce your market research scope and present your interest in displaying your solution for customer feedback. If the person in charge seems to show interest and an understanding of the activity then ask for the possibility to display the product there for a number of days. STEP 6: Introduce the questionnaire by reviewing it together. Ask the businessperson or entrepreneur to help their customers to give feedback on the questionnaire. 1 Inform them that your prototype is still under development so it should not be sold to any customers. STEP 7: Help to display your prototype and material at a place where it is easy to see and close to any similar products. STEP 8: Plan how many days the prototype will be displayed to customers for feedback. Plan for a minimum of three days. STEP 9: Revisit the point-of-sale to follow-up on the activity or to review the questionnaires. Start a deep dialogue about the feedback and how to market the product as well as what changes there should be to the solution. 5 6

A small roadside vendor may not have time, employees or interest in having their customers spend time to answer a questionnaire. Develop a small list of key questions, along with the display of the prototype for the shopkeeper to ask more randomly when customers visit. Offer to give the vendor a notebook to take relevant notes during the days of the activity.


STEP 3: Develop a short questionnaire for the customers to fill out. Include maximum 10 key questions that the customer can answer by yes or no or a check the box 4 . Include questions related to the price, comparison to other products in the shop, and level of interest in the product. Make space for customers to illustrate ideas on how to improve the design.


STEP 1: List types of relevant point-of-sales, such as specific business, places or entrepreneurs who currently reach out to your target customers.


The activity can help you to create an early and motivated dialogue with potential local retailers or entrepreneurs who might already sell products and services to your targeted customers. You will engage a local salesperson to display and collect feedback on your prototype or visual material from his or her regular customers. After several days, you will collect customers’ feedback and invite the salesperson to share ideas on how to optimize the design and market based on the experiences gathered through the dialogue with customers.



Follow these steps:

Create incentives to encourage the point-of-sale and customers to participate. Giving small gifts, such as free pens or key rings, to customers participating and for the shopkeeper the prototype displayed can be enough for them to feel motivated and feel your appreciation. Ensure to communicate that critical feedback from the customers is valued to improve the solutions and that you are not only looking for the positive, pleasing comments and answers. Make sure you inform the shopkeeper that your solution is a prototype and not ready to be sold. The shopkeeper may see the interest and want to participate later, but needs to know that it is not happening “tomorrow.”

WATCH OUT Not all shopkeepers will be interested in participating. You should respect this. Also consult the shopkeeper about where to display your product so you are not just intruding on his or her business.

USE IN COMBINATION WITH Deep dialogue (page 58) Concept assessment (page 84)

GET STARTED WITH THE RAPID VERSION Bring up to five samples of your prototype or images of your solution. Develop a list of 10 easy, formulated key questions that you would like to get feedback on in relation to the customers’ perception of your product. Look for local shops or vendors selling products to your target group, approach them, and ask if they would like to help you to collect feedback on your solution for four days. In return, the customers will get a free pen after answering 10 questions. The shop or entrepreneur will be one of the first to receive a free prototype (or another PR gift). Arrange to come back at the end of your trip to meet the entrepreneur for a talk about the customers’ feedback and their personal recommendations on how to reach the customers and market the product.

CASE DESCRIPTIONS Pricing and finance (featuring Worldbarrow, page 38)

PARTICIPANTS Two to six local shops or roadside entrepreneurs

TIME 0.5 – 1 hours to introduce activity to local shopkeeper Three to 14 days for the activity (not by you but by the shopkeeper) 1 hour for the follow-up dialogue with the shopkeeper


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Solution represented through prototype, package or poster Printed visual image cards to hang on the prototype Questionnaire or other type of material for customer feedback Pens – many pens are needed if given as reward to participating customers Camera and notebook



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Market Creation Toolbox  

Your guide to entering developing markets

Market Creation Toolbox  

Your guide to entering developing markets

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