Fast Lessons: products that can be repackaged

How can a wireless carrier grow if most of its subscribers earn only $6 a day or less, and use their mobiles only for text messaging? For Smart Communications, the Philippines's top carrier, the answer was an all-digital "telecom in a sachet": Some 800 000 retailers buy text-messaging airtime in bulk from Smart and resell it (also via text message) in micro-denominations of as little as 50 cents per packet. The result: Smart's 22 million customers get anytime service at a price they can afford. Smart's retailers (typically, neighborhood-store owners) get a "logisticsless" product that doesn't add inventory and delivers 15% margins. And Smart, unlike Western companies, gets paid before it delivers $80 million worth of "e-loads" monthly. Smart, indeed. - Fast Company Fast 50

The telecoms firms have become expert at selling their products in the smallest possible quantities. While retailers are cramming more and more into the box to increase their prices and margins, while aggregating costs, they are putting their products further and further out of reach of the poor. Even services not normally able to reach the poor have been repackaged.

Discovery Health and Vodacom are bringing cellphone technology to the funeral cover market. Using the same methodology as purchasing prepaid cellphone airtime the venture is pioneering a new marketing and selling channel for funeral cover aimed at the low-income market. Hylton Kallner, general manager of marketing for Discovery, says that a new marketing model was needed when Discovery Life decided to enter what is a "very competitive market."

"Cellphone penetration in SA is amongst the highest in the world. So we decided to "piggyback" on the knowledge and habits of a very technologically sussed market to deliver a product which offers convenient access and value-for-money," says Shameel Joosub, Managing Director, Vodacom South Africa. "People are already very familiar with purchasing pre-paid airtime for their cellphones and we expect them to find it just as easy and convenient to use the same process to buy funeral cover now."

Fast lessons for products that can be repackaged:

• Smaller volume sizes can be ready-contained in POS display packaging ready for spaza shops and by informal traders - easy for distribution, easy for bulk purchase without the need to break down the product-sizes later (e.g. shampoo, maize-meal, and so on)
• Financial services products can be disintermediated and designed to allow irregular payments (e.g. insurance and retirement savings plans)
• Existing channels can be used in new ways by partnering with others already selling compatible products (e.g. Vodacom and Discovery)