5 Ps To Make A Social Enterprise ‘P for Perfect’

By Pooja Rani Bhatia

The number of companies considering themselves social enterprises has dramatically increased in the past ten years, and has become the “new” thing this season. Although oft misunderstood simply as “do-gooders,” socially driven ventures promoting market-based approaches are actually making a bigger splash than ever, especially in the drinking water space. In a recent study on consumer perceptions and demand dynamics of filtered drinking water, the Rural Market Insight (RMI) team at Centre for Development Finance (CDF), in partnership with Sarvajal, winner of the Sankalp 2010 Awards, identified five key factors that underpin the biggest issues facing today’s social enterprises such as sustainability and scalability.

In the month-long study in rural Rajasthan, we observed surmountable insights in five areas related to sustaining and scaling up social enterprises. We grouped these insights into what RMI calls the Social Entrepreneur’s 5 Ps: Population, Problem, Product, Process and Partnerships. Unlike McCarthy’s standard Marketing Mix, this framework is for social ventures with the dual mission of scaling up and ensuring that their reach positively impacts people at the Base of the Pyramid (BoP). The 5 Ps put BoP consumers at the front of the problem and solution through a user-centered approach. Thinking through the 5 Ps in terms of both vertical and horizontal growth, will make it easier to become sustainable at any scale—making doing good even better.

The Social Entrepreneur’s 5 Ps:

1. Population Profile

Who are your potential consumers? What do they really care about?

Understanding the target population is the single most important aspect to scaling up. Do your research: spend time to understand your consumer’s behaviors, perceptions and, many times, misperceptions. It will ensure your product is useful, relevant and can easily integrate into consumers’ lives.

2. Problem Identification

What are the existing economic and environmental conditions that would impact a product/service?  Are there already other players in the market?

Identifying the problem correctly is essential to defining the market socio-economic context and helping make decisions around what works, will work and what to do if the solution is not working. In various design stages, deploy the product in communities and spend time studying how consumers use and interact with the product. Incorporating this feedback can improve the final product design, adoption and usage.

3. Product ­Explanation

Do your users and/or potential consumers know exactly what they are using?  Do they understand the benefits?

We all know that explaining the product is important to effective consumer education. For a social enterprise, the benefits of a product must be clear to consumers and should align with social goals. Only when consumers can vocalize the product benefits in their own words, will they effectively communicate these benefits to others.

4. Process Outline

How do products reach users?  Who is involved in the distribution process?

Outlining roles and responsibilities for producing and/or distributing the product is important in scaling up a business. If consumers are involved in the process, they can provide feedback, communicate with others and build trust in the product and business.

5. Partnership Building

How can stakeholders be involved in the process to ensure trust?  What type of ecosystem is supporting the product?

Building a support network for the venture is important in every community. In smaller towns and villages, relationships often drive purchase decisions. When potential customers know who supports a product, the level of trust increases as does the likelihood new customers will purchase the product. Reliable partners and stakeholder support is critical to sustain a presence in communities.

Success for social enterprises can be unlocked through devoted time and learning; these 5 Ps can address the most pressing challenges for social enterprises, sustainability and scalability, as they work to become ‘P for Perfect.’

Pooja R. Bhatia is a Research Analyst at Rural Market Insight at the Centre for Development Finance, IFMR.