This is the nineteenth in a series of posts discussing themes raised in The Fortune at the Bottom of the Pyramid by C K Prahalad. In chapter 2 the author refers to the issue of distribution systems. There are often significant transport infrastructure barriers in the way of achieving cost-effective distribution of products and services to bottom-of-the-pyramid markets. Innovations in distribution methods are as critical as innovations in products and processes.
The author describes as an example the move by the financial institution ICICI into retail banking in India in 1997. The primary approach of other banks involved building branches for retail customers, but ICICI innovated with multiple distribution channels and managed to garner the largest share of customers who access banking services via PC, as well as creating the largest and fastest-growing network of automatic teller machines, and using a number of other innovative channels.
Hindustan Lever Limited found that it was unable to distribute goods to remote villages through traditional distribution channels, so it began to recruit village women as distributors for villages which were not services by normal distributors. This new mode of distribution is expected to reach more than 200 million potential customers who were not reached by other means.