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ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 6The e-choupal is an internet-based informationkiosk purveying updates onweather, agri-inputs, cropping patterns,and other relevant information to thesmall and marginal farmers at BOPhelping them increase their farm productivitywhile building a relationshipwith ITC as an agriculture advisor. Thefarmer who sells produce at ITC’schoupal sagar fetches a better pricecompared to one who sells to the government-ownedmandi (wholesale foodgrain market). Adjacent to grain procurementpoint is the choupal sagar retail-storewhere the farmer can go andshop using the cash that he or she acquiredfrom selling the farm produce.This choupal initiative from the ITC atBOP in India illustrates how companiescan profitably treat BOP individuals asboth producers as well as consumers.In this article we have used the Bartels’(1968) theory of market separations toargue that markets can be developed atthe bottom of the pyramid if market separationsbetween producers and consumersin the markets are reduced, ifnot removed altogether. Bartel proposedthat new markets could be developed ifthe following four kinds of market separations(between producers and consumers)were reduced:1) Spatial separation or the physicaldistances between producers andconsumers.2) Temporal separation or the time differencebetween production and consumption.3) Informational separation or the informationalasymmetry between producersand consumers related toproducts and market conditions, and4) Financial separation or the lack ofconsumers’ purchasing power whenthey are willing to fulfill their needs.Bartel also theorized that marketing iscontextualized in society and sincemembers in the society are interdependenton each other such market separationsare not sustainable. Bartel furtherargued that one of the primary roles ofmarketing is to reduce or remove theseseparations and facilitate the process ofconsumption. The nature of marketingactivities would depend, therefore,“upon the character of the market separationsfound in the particular social environment”(Bartel, 1968; p.32).We find Bartel’s theoretical perspectiveof reducing market separations for developingnew markets at BOP to be bothmanagerially and theoretically elegant.We have developed and extended thetheory to explain how Digital EmpowermentFoundation (DEF), our case organization,successfully helped to develop amarket for traditional handloom weavingproducts like saris, fabrics, and apparelsfor women at Chanderi, a village inMadhya Pradhesh’s Ashok Nagar district.We also extend the Bartel’s marketseparation perspective by exploring afifth new market separation-knowledge/capabilityseparation that isequally important for poor producers/consumers at BOP to participate in themarket, and help it to develop further.We used a case study approach to studyDEF’s Chanderiyaan initiative. Ourmethodology primarily involved collectingand analyzing secondary data, followedby site visits to Chanderi, andconducting in-depth interviews ofweavers, master weavers, customers,and employees of DEF, besides interviewingDEF founder, Mr. Osama Manzar,and Chanderiyaan project head, Mr.Shahid, and his team members. All interviewswere audio-recorded and transcribedfor analysis purposes.DEF set up Chanderi Weavers ICT ResourceCentre (CWIRC) in 2009 as aself-sufficient community informationresource center, primarily for the poorChanderi weavers to save the dying traditionalhandloom weaving art form in6From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt
ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 7Chanderi. The primary tasks involvedskills’ enhancement in weaving and textiledesigning, which would lead to incomeenhancement and socialwell-being. The products manufacturedand sold include saris dupattas, stoles,salwar suits, tablecloth, zaris, and fabric.This process of market developmentat BOP in Chanderi (Chanderi weaversearned approximately Rs 3000 permonth or less on average) was drivenwith the larger objective of reducingtheir dependency on (often) unscrupulousmiddlemen who exploited them outof market opportunities and kept themout of market. In less than three yearsmany weaving families in Chanderi havebeen actively participating in the marketfor finished woven sarees and otherforms of Chanderi art.Our case study throws light on how nonprofitorganizations like DEF can createan ecosystem of partnerships with otherNGOs such as Media Lab Asia (MLA) byworking closely with Government ofIndia’s Ministry of ICT as well as weaversand other intermediaries as stakeholdersto successfully develop the market atBOP. To begin with, we go by the accepteddefinition of a market being anarrangement whereby buyers and sellerscan interact to determine the prices andquantities of a product or service(Samuellson & Nordhaus, 1992). Marketsessentially serve three main functions,(1) matching demand and supply (or buyers,and sellers), (2) facilitating exchangesor transactions, and (3)providing institutional infrastructure(Bakos, 1998). In the first function, identificationof buyers and sellers, matchmakingproduct offerings with needs, aswell as price discovery is important. Inthe second function, logistics, paymentmechanisms, and facilitation of creditalong with communication between buyersand sellers become important. Finally,the third function includes theenforcement of legal and regulatorymechanisms. While formal markets,achieve all three functions efficiently dueto the free flow of information betweenbuyers and sellers underdeveloped marketsface more complications as each ofthese functions may require active interventionof external agencies with themandate to ensure that the marketswork efficiently by reducing informationasymmetry in the markets. Externalagencies like NGOs are actively helpingdevelop markets in undeveloped informalmarkets in many parts of India. Onesuch NGO that we have undertaken thecase study on is DEF with its CWIRC initiativein Chanderi. To be more specific,the three functions of the market arehampered in the BOP due to constrainedphysical access of poor consumers orsellers to or from BOP areas, whichmakes logistics, distribution, and retailingan expensive proposition. Moreover,information asymmetry is rampant inBOP regions due to the widespread lackof numeracy and literacy and the prevalenceof superstitions and other culturalbeliefs, not to mention the poor marketfor education or low media penetration.The problem has been compounded bylow levels of education, scant exposure tomedia, and high levels of dependence onlocal and confined community and socialnetworks (Viswanathan & Rosa, 2007;Viswanathan, Gajendiran, & Venkatesan,2008). Due to high normative prevalenceof social, and cultural norms, the governingmechanisms are informal in natureand strongly influenced by sociopoliticalfactors such as religion and local community(Sheth, 2011), and less by legalor regulatory norms.We will now discuss in detail how DEF wentabout developing the three functions of wellfunctioningmarkets by reducing one of themost important factors of market separationin Chanderi, that of information market separation.From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt7
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