Vasco: Explore opportunities in the BoP

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By Eva Dijkema, Pauline Simons and Koonlada Sasasmit.

During the course Strategic Value of Design at the faculty Industrial Design Engineering (Delft University of Technology) we founded the design consultancy Vasco. The name Vasco is short for Vasco da Gama, a Portuguese explorer, which refers to the specific focus of the design consultancy: BoP-countries. BoP stands for Base of the Pyramid and mainly contains developing countries. With the Vasco’s exploring dices, Vasco helps healthcare companies to find opportunities to expand their market into the BoP countries.

On this website the profile and the focus of Vasco are wider elaborated. Furthermore the usage of the Vasco’s exploring dices will be shown by means of a case study.


BASE OF THE PYRAMID

The population of BoP is the largest among the three divisions (MVO Nederland, 2012). In contrast to the world population pyramid, the current industry looks more like a reverse triangle as shown in figure 1. Most design and business (schools) are focusing on the top and middle of the pyramid and still a few on the base of the pyramid (Diehl, 2014). This means that there is a big market with just a few companies, which results in a lot of opportunities.

Figure 1 The business opportunity in BoP market

By developing products that are adapted specifically for this target group, a company can help the population to spend theiralready tight budget in a more efficient way and thereby get a more contented life. For example, with a thermometer, a family is able to diagnose the flu themselves instead of visiting an expensive general practitioner, and therefore save money on that. Vasco helps companies to find opportunities like this.

For companies it is very interesting to invest in BoP countries, not only because of the high market potential. Due to the globalization culture, more and more companies are becoming internationally focused (Hitachi Research Institute, 2014). Doing business in the BoP offers opportunities to expand their markets overseas and helps the companies to contribute to a better world. Vasco strives to not only help the company in doing their business, but also would provide knowledge and skills to the local population.


FOCUS OF VASCO

As a stepping-stone for Vasco, we focus on finding business opportunities in Eastern Africa especially for B2C clients in healthcare industry. Since 2010, foreign health-related companies’ interests in this emerging market have been rising steadily (Doherty, 2011). World Health Organization indicates “Health is increasingly recognized as a key aspect of human and economic development”(World Health Organization, 2013). As Africa’s economies continue to grow concordantly with the needs for a better healthcare system, there is a potential opportunity for new investments in health infrastructure, products, and services (The corporate council on Africa, 2013). As can be seen in figure 2, the total health expenditure per capita in East Africa is relatively high comparing to other African BoP areas and is constantly increasing (World Health Organization, 2014).

 Figure 2 Health financing in Africa.

In figure 3, the BoP in Africa is shown more detailed: the BOP500 which are the 20% is really poorest people in BoP; they have less than $2,- per day. This group of people is mainly helped by charities and therefore not in the focus of Vasco. The remaining 3,2 billion of people form a big market with many possibilities for companies.

Figure 3 Africa BoP Spending and Population (% of BoP total) (Hammond et al, 2007)

By developing products for the users themselves, Vasco and their client can help the local community immediately. Therefore, B2C companies form the starting point for Vasco. We think that context mapping and consumer research are essential in the development process of B2C companies, since their client is their user.

However, as Vasco is growing, we will broaden our focus to other demographic areas starting from the African countries nearby and also broaden our expertise in B2B and other industries which are important for BoP market such as agriculture.


STRATEGY

As design consultancy, we help our clients to explore the opportunities of seeing Eastern African countries as novel commercial spaces and we help the local society to expand their knowledge and skills. For healthcare companies that are interested in expanding their market into the BoP-countries in Eastern Africa, Vasco is a design consultancy providing a special tool that helps exploring the opportunities within these markets.


EXPLORING DICES

2Dices

Figure 4 Examples of the dices

Vasco uses their excellent visualization skills to develop the Vasco’s exploring dices (see figure 4). These dices make it possible for all parties to better understand the current and future market (Calabretta et al, 2013).The tool is a human centered way of doing research, which helps the company to create empathy with the consumers. The consumers are stimulated to express their needs and wishes better.

The dices take care of an open research: both the client and consumer do not know the strict answers/stories beforehand. The discussion depends on the interpretation of the face-up dices and the inspiration the client get from these pictures. With this toolkit Vasco embraces discontinuity and open-endedness (Calabretta et al, 2013). Vasco’s exploring dices changed context mapping into a playful game.

The population in BoP countries like Eastern Africa are often illiterate. For them it is easier to understand a tool with pictures, like the Vasco exploring dices. If you adapt the faces of the dices a bit, the tool also can be used in other parts of the world. By using the dices in the BoP first, it is approved that they are working.

Vasco’s exploring dices consists of a set of eight standard dices, as shown in figure 5. Each dice has its own specific theme that users can relate to their experience. Two dices are shown in more detail as an example in figure 6.

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Figure 5 Standard set of the dices

 

Figure 6 Examples of the standard dices

Depending on the client, one or more customized dices can be added to the standard set to suit the company’s situation. The example of the usage of the dices will be elaborated in the case study below.


CASE STUDY – HIGIÉNIA

The company Higiénia develops a hygienic gel in Europe and wants to expand their market to households in rural areas. One of the owners visited Uganda and was inspired to help the Ugandan population. They want to perform a context mapping study to learn if there is market potential for the product here. From the research, they also want to find out if adaptations are necessary and how the users are dealing with hygiene currently. That is why they contacted the design consultancy Vasco.

Vasco had a first (free!) session with some of Higiénia employees. Vasco uses another set of dices to give some hands-on experience to Higiénia on how the dices work. The business set of dices will be elaborated in the business model section. From this session, Higiénia and Vasco have a clear understanding of the company’s expectations.

After that session Higiénia was very enthusiastic about doing context research using dices and decided to collaborate with Vasco. Since the hygienic focus of Higiénia, they decided to add two dices to the standard set, as shown in figure 7. One dice was with some cleaning symbols on it like a scrubber and a polishing cloth. Another dice was with symbols about care products.

2Dices_Higiena

Figure 7 Customized dices for Higiénia

Vasco went to rural Uganda with Higiénia and organized three sessions with different groups of participants. The first group was with children because they commute and eat stuff randomly. The second group is the money makers who works out of home because we wanted to see if they really want to buy the product. The last group consisted of teachers because we wanted to learn how they educate about hygiene. The session started with a small icebreaker to get each participant comfortable. After that, the participants chose a dice one by one and threw this dice on the floor. They are challenged to tell a story about their lives, thoughts, feelings etc. which was inspired by the faced-up dice. Each session took approximately one hour and ended with questions, whether they know what a hygienic gel is and to what extent they want to use it. These last questions were not only important for Vasco and Higiénia but also for the local participants. They felt appreciated that their voices were heard. Moreover, by telling stories about their own lives and listening to stories of their neighbors, they get experience to look at things from different perspectives.

After the three sessions Vasco and Higiénia had a recap meeting together: the evaluation. In this session, both parties showed their findings and results to each other. Vasco facilitated this session and helped Higiénia to translate these findings into guidelines for a market expanding to rural Uganda.

For other companies, the process will be comparable to this case with some small adjustments to suit the clients. The general process of Vasco’s way of working is shown in figure 8.

Figure 8 Vasco’s working process


FINAL PRODUCT

Ultimately, Vasco aims to enhance both the clients’ business and the local community simultaneously. Depending on the client’s situation, we will either give directions to develop products or services which best suit our clients’ capacities, instruct them on how to adjust their products and services to the market, or provide them guidelines on how to successfully launch their brands in the market. From another perspective, the community will be equipped with knowledge and skills to cope with the certain issue they are facing. Together with our clients, we will improve the local’s quality of life and sustainability.


BUSINESS MODEL

The collaboration between Vasco and a company can start in two ways: a company approaches Vasco, or Vasco approaches a company. The latter way can be done by visiting healthcare conferences or events focused on BoP countries for example.

Vasco provides the first session for new clients to help them understand and unveil their latent expectations for free. These new clients will have practical experience with the dices which will help them to clearly understand how the tool works. The session will persuade them to collaborate with Vasco later on. During this session, the business model dices are used. On these dices are symbols that indicate ‘who is paying’, ‘when to pay’, ‘for community or private’ and ‘service or product’.

If the company is enthusiastic after this session, Vasco will advice the company on the working process, see if the company needs more specific dices, and make a proposal for the process and associated costs for the company. In most cases, there are two predefined options for clients:

REGULAR: Make use of the general set of dices plus 1 specific developed one for your company. Vasco helps the company with facilitating and reporting the field sessions.

PREMIUM: Make use of at least 2 customized dices and let Vasco perform the process in the field. The company is present during the field sessions, but only to get involved and feeling with the local context. Vasco is doing the big work.

 


REFERENCES

Calabretta, Giulia, et al. (2013). Collaborating with Design Consultancy firms for Effective Strategic Decision-Making in New Product Development.

Diehl (2014), Design for the BoP. Delft.

Doherty, J. (2011). Expansion of the private health sector in east and southern Africa. EQUINET Discussion Paper 87. EQUINET: Harare.

Hammond, A. et al. (2007). The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid. Retrieved on June 15, 2014, from  http://www.wri.org/publication/next-4-billion

Hitachi Research Institute (2014). BOP business in developing countries. Retrieved June 12, 2014, from http://www.hitachi-hri.com/english/research/organ/vol05_02/index_4.html

MVO Nederland (2012). Base of the pyramid. Retrieved June 15, 2014, from http://www.mvonederland.nl/thema/base-of-the-pyramid

The corporate council on Africa (2013). Now it is time to invest in Africa. Retrieved June 12, 2014, from http://www.africacncl.org/health

World Health Organization. (2013). State of health financing in the African Region.

World Health Organization (2014). Health financing 2012. Retrieved on June 12, 2014, from http://gamapserver.who.int/gho/interactive_charts/health_financing/atlas.html?indicator=i3

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