The presentation is about frugal innovation. Its about how innovators can innovate their product to serve the volume markets. One challenge is how high value and high margin brands create products for volume markets and low margin markets. The presentation reduces the complexity of the concept and dwells on the discussion on brand innovation and brand translation in frugal markets. Typically firms operating in frugal markets end up positioning themselves as poor mans product, thus labeling an individual are poor. This strategy can backfire, on the other hand using unethical methods of marketing products to marginal markets can stigmatice the whole industry. Thus product developers have to be critical and thoughtful while innovating for low margin markets. One fine example for frugal innovation is Life-boy soap and Nirma washing powder.

1. Anirudh Agrawal, PhD Fellow, CBS CSR

2. Contents
• Frugal Innovation
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Transportation
Microfinance
FMCG : fast moving consumer goods
Energy
Drinking Water
• Water Harvesting
– Sanitation
– Telecommunication
– Health Care
• Activity: Brand Management
• Theoretical Perspective on Frugal Innovation
• Criticisms
Anirudh Agrawal, PhD Fellow, CBS CSR

3. http://www.youtube.com/watch?v=FYIwa3Y1KA
o#t=157
Anirudh Agrawal, PhD Fellow, CBS CSR

4. Frugal Innovation
• Design to extreme affordability
• Strategic thinking towards volume markets
• Creativity and innovation towards extreme
affordability
• Design, engineer and produce for marginal
markets
• Translating and innovating a high margin brand
for low margin markets
• Creating and innovating towards branded and
quality products for marginal markets
Anirudh Agrawal, PhD Fellow, CBS CSR
Frugal innovation blogpost, stanford.edu, uni. Santabarbara – frugal innovation centr

5. Frugal Innovation Market Potential
Anirudh Agrawal, PhD Fellow, CBS CSR
Source : WRI 2008

6. Anirudh Agrawal, PhD Fellow, CBS CSR

7. Transportation
120 billion dollars
Anirudh Agrawal, PhD Fellow, CBS CSR

8. Anirudh Agrawal, PhD Fellow, CBS CSR

9. Anirudh Agrawal, PhD Fellow, CBS CSR

10. Anirudh Agrawal, PhD Fellow, CBS CSR

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12. Anirudh Agrawal, PhD Fellow, CBS CSR

13. Anirudh Agrawal, PhD Fellow, CBS CSR

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15. Electric Tricycle
Anirudh Agrawal, PhD Fellow, CBS CSR

16. Micro-Finance
Anirudh Agrawal, PhD Fellow, CBS CSR

17. Financial Services Pyramid
Anirudh Agrawal, PhD Fellow, CBS CSR

18. What Is Microfinance?
• Microfinance is the offer of financial & non-financial services to
people excluded from the traditional banking system. The services
are adapted to the needs of the target populations.
MICRO
• Micro-entrepreneurs
• Self-employed
• Low income populations
• Excluded populations
FINANCE
• Business & educational loans
• Savings
• Micro-insurances
• Remittances
• Micro-entrepreneur training
• Coaching & workshops on
health, hygiene, etc.
Anirudh Agrawal, PhD Fellow, CBS CSR

19. Microfinance Stories
• Grameen bank
• SKS Microfinance
Anirudh Agrawal, PhD Fellow, CBS CSR

20. Fast Moving Consumer Goods
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Sampoo
Bathing Soaps
Beauty Items
Utensils
Coolers and ACs
Refrigerators
TV sets
Washing Machine
Anirudh Agrawal, PhD Fellow, CBS CSR

21. Anirudh Agrawal, PhD Fellow, CBS CSR

22. Anirudh Agrawal, PhD Fellow, CBS CSR

23. Anirudh Agrawal, PhD Fellow, CBS CSR

24. Washing machine
Anirudh Agrawal, PhD Fellow, CBS CSR

25. Story of Nirma
Anirudh Agrawal, PhD Fellow, CBS CSR

26. Story of Lifeboy
Anirudh Agrawal, PhD Fellow, CBS CSR

27. Cooling in Summers
Anirudh Agrawal, PhD Fellow, CBS CSR

28. Earthen Refrigerator
Anirudh Agrawal, PhD Fellow, CBS CSR

29. Water Cooler
Anirudh Agrawal, PhD Fellow, CBS CSR

30. Grameen Danone
Anirudh Agrawal, PhD Fellow, CBS CSR

31. Estimated Frugal Market for Energy
500 billion dollars
Source: WRI 2008
Anirudh Agrawal, PhD Fellow, CBS CSR

32. Anirudh Agrawal, PhD Fellow, CBS CSR

33. Anirudh Agrawal, PhD Fellow, CBS CSR

34. Anirudh Agrawal, PhD Fellow, CBS CSR

35. Anirudh Agrawal, PhD Fellow, CBS CSR

36. Frugal Market for Water
Source: WRI 2008
Anirudh Agrawal, PhD Fellow, CBS CSR

37. Anirudh Agrawal, PhD Fellow, CBS CSR

38. Anirudh Agrawal, PhD Fellow, CBS CSR

39. Water Harvesting
Anirudh Agrawal, PhD Fellow, CBS CSR

40. Anirudh Agrawal, PhD Fellow, CBS CSR

41. Grameen Veolia Business Model
Anirudh Agrawal, PhD Fellow, CBS CSR

42. Sanitation: Story of Sulabh
Anirudh Agrawal, PhD Fellow, CBS CSR

43. Pay as you use model for Sanitation
Anirudh Agrawal, PhD Fellow, CBS CSR

44. Sanitation: Poop Truck
Anirudh Agrawal, PhD Fellow, CBS CSR

45. Health Care
• GE Portable device
• http://www.youtube.com/watch?v=yB47wxb6sY
Anirudh Agrawal, PhD Fellow, CBS CSR

46. Arvind Eye Care
Anirudh Agrawal, PhD Fellow, CBS CSR

47. Aravind Eye Care Van
Anirudh Agrawal, PhD Fellow, CBS CSR

48. Emergency Medical Services
Anirudh Agrawal, PhD Fellow, CBS CSR

49. Life Spring Hospitals
Anirudh Agrawal, PhD Fellow, CBS CSR

50. Estimated Frugal market of Housing
Anirudh Agrawal, PhD Fellow, CBS CSR
Source: florence rizzo and anirudh agrawal YT summer school

51. Modular Housing
Anirudh Agrawal, PhD Fellow, CBS CSR

52. Prefabricated Houses
Anirudh Agrawal, PhD Fellow, CBS CSR

53. ICT
Anirudh Agrawal, PhD Fellow, CBS CSR
Source: florence rizzo and anirudh agrawal YT summer school

54. Examples
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Nokia Asha for developing Markets
100 dollar laptop
20 dollar tablet
Grameen Telenor Joint Venture
Anirudh Agrawal, PhD Fellow, CBS CSR

55. Activity
• Discuss in group of 3-5, how will a high margin
brand strategise its brand and manage frugal
innovation.
• Example: Arla innovating high energy, high
nutirient yogurt for poor countries
Anirudh Agrawal, PhD Fellow, CBS CSR

56. Theoretical Perspective
Anirudh Agrawal, PhD Fellow, CBS CSR
www.frugal-innovation.com

57. Criticism and Caution
• Ethical Marketing
• Quality Management
• Labeling and Framing
Anirudh Agrawal, PhD Fellow, CBS CSR

58. Ethical Marketing
Anirudh Agrawal, PhD Fellow, CBS CSR

59. Ethical Marketing
Anirudh Agrawal, PhD Fellow, CBS CSR

60. Labeling and Framing : Poor Mans’ car
Anirudh Agrawal, PhD Fellow, CBS CSR

61. Further readings
Anirudh Agrawal, PhD Fellow, CBS CSR
Source: florence rizzo and anirudh agrawal YT summer school