Conference Presentation in Sweden Addresses Need to Focus on Services in Emerging Economies
Every
two years, the Service Research Center at Karlstad University in south-central
Sweden co-sponsors a conference on a theme broadly related to quality
in service (QUIS). These conferences alternate between Karlstad and a
North American site. In 2002, QUIS8 was held at the University of Victoria
in BC, Canada. In June, 2004, when QUIS9 returned to Karlstad, Christopher
Lovelock was an invited plenary presenter. He spoke about a new research
project on which he is starting work with several collaborators on several
continents, “Developing
Services for the Bottom of the Economic Pyramid: A Management Challenge
and Research Opportunity.”
Building on the pioneering work of Professor C.K. Prahalad of the University of Michigan, Christopher and his colleagues seek to study how services can be developed for and marketed to the bottom two-thirds of the world’s population, who have an annual per capita income of less (often much less) than US$2,000. The first step is to look at the services that already exist and see what lessons—managerial, economic, social, and cultural—can be learned.
Conference participants were fascinated as Christopher described four preliminary case studies currently in progress:
- In Bolivia, PRODEM has developed a low-cost approach to providing
small loans (microfinance) to poor Bolivian farmers, using off-line
electronic delivery systems designed to be user-friendly for both illiterate
and semi-literate people
In
Mexico, Banco Azteca is the nation’s newest bank, founded in 2002
to cater to the 16 million households with incomes of US $250-1300 per
month (jointly, they have with a combined annual income of US$120 billion).
Existing banks consider such small accounts to be “a nuisance.”
Banco Azteca’s outlets are located in hundreds of Elecktra appliance
stores, owned by the bank’s holding company. Christopher initiated
this case study with a visit to a branch in Puerto Vallarta.
- In Bangladesh, Grameen Telecom’s Village Phone concept involves
making a micro-loan to a village woman of high status and with a prior
credit history. This loan enables her to buy a mobile phone, purchase
minutes at wholesale rates, and sell calls to villagers, whom she times
with a stopwatch and charges at retail. Here the marketing unit of analysis
becomes an entire village. The average monthly revenue per community
is $120, somewhat more than a typical American pays in monthly cellphone
charges.
In
India, Nutan Tiffin Box Suppliers Association (NTBSA) of Mumbai (Bombay),
has been in operation since the 1890s. It is famous for its 5000 dubbawallahs
who, organized into cooperative teams of 30, daily pick up 175,000 hot
meal containers from wives and mothers in suburban communities and deliver
these to their menfolk working in the city, returning the empty containers
at the end of the day. Despite a low-tech delivery system (riding into
the city on suburban trains, sorting the containers by hand on a paved
area outside the station, and walking to their final destinations carrying
trays of lunchboxes on their heads), and the need to aggregate and sort
boxes twice, they achieve a better than Six-Sigma record on delivery,
amounting to one lost box in six million transactions! Christopher described
how he had studied the dubbawallahs in action on a recent visit to Mumbai
and discussed with Indian managers and academics the transferability
of the concept to other cities and other product categories.
Fellow researchers now actively involved in this project include Professors Jochen Wirtz of the National University of Singapore and Javier Reynoso of Tec de Monterrey in Mexico. Others will be added from different countries.
Phase I, which is already underway, comprises a literature review and
development of case studies in several emerging economies on different
continents. Some of these case studies will be originated by the members
of the research team, others will build on and expand the prior work of
other researchers.
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Last Updated 2005-03-29