THE WELFARE BENEFITS AND KEY FEATURES OF FRUGAL INNOVATIONS FOR THE BOTTOM OF THE ECONOMIC PYRAMID: THE CASE OF FAST-MOVING CONSUMER GOODS IN NIGERIA
Samson O. AWOYEMI, Olawale O. ADEJUWON and Waheed O. OLADELE
DOI: 10.26480//bedc.01.2024.19.24
ABSTRACT
This paper attempts to fill the gap in three facets of frugal innovation literature using the fast-moving consumer goods (FMCG) sector in Nigeria. The first is the nature of features of frugal innovations from the perspective of Bottom-of-the-pyramid (BoP) consumers. Second, whether frugal innovations actually provide welfare benefits to the BoP consumers and third, to fill the gap of scarcity of frugal innovation studies on non-durable goods. The study was conducted among 126 respondents residing in one of the areas of highest level of head count per-capital poverty rate in southwestern Nigeria. Respondents in the study area were found to earn less than $1.70 a day. They were also found to purchase low-cost small-sized FMCG offerings of personal and home care products and food and beverages. The study shows that respondents in the study area considered (on a five-point agreement scale) quality (4.18), affordability (4.15), availability (4.10) and sustainability (4.08) to be the sought-after features they consider when procuring the products. Furthermore, results also reveal that respondents indicated (on a five-point impact scale) that the frugal products consumed were very impactful (4.59) on improving personal hygiene. They also indicated that the frugal products were somewhat impactful on reducing household expenditure (3.50) and effecting less incidences on diseases (4.00) while they suggested that the products had a moderate impact (3.40) on providing entrepreneurial opportunities. The study concludes that firm strategies not geared towards creating these features in frugal innovations may not be successful in the FMCG BoP market and that low-cost small-sized FMCG products actually provide welfare benefits to BoP persons
KEYWORDS
Frugal innovations; Bottom-of-the-pyramid; Fast-moving consumer goods, Welfare benefits; Product features
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12 June 2018
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