Santanov Chaudhuri The key overarching principles that characterize successful business strategies at the BOP are scalability

and replicability, engagement with communities and use of pre-existing sales, distribution and marketing channels, and the importance of branding and loyalty in establishing stickiness and barriers to entry. Innovation in the BOP has less to do with finding new customers than addressing issues of product acceptability, affordability, availability and awareness. One of the biggest hurdles companies face is ensuring products and services are affordable for the BOP consumers who have low disposable income. Successful companies are able to design products that are able to match the cash flows of the consumers (e.g. micropacks for shampoos, soaps and food has been effectively used by Unilever and P&G; prepaid mobile calling cards have been used by mobile telecom operators across India and South-East Asian countries). Scalability allows BOP businesses to reduce fixed costs per unit while ensuring high penetration rates. Replicability allows companies to leverage sales, distribution and marketing channels (e.g. Project Shakti). Engagement with the community is essential in creating, implementing and shaping the business itself and successful engagement is paramount to overcoming consumer inertia and addressing product acceptability (e.g. microfinance in Bangladesh, Roshan in Afghanistan). Often complementing the product or service with the financing mechanism itself can help address acceptability and availability; hence, the importance of communities as a risk-mitigating tool. Another critical aspect of serving low-income consumers in developing markets is ensuring the availability of products and services and marketing. In the developing world, that often means establishing distribution channels when none exist and learning how to generate market demand. A model that is suited for BOP customers is the micro franchise sales and distribution model. In India, Hindustan Unilever is creating a similar distribution model, training local women to sell shampoo, detergents and other health and hygiene products through Project Shakti. Beyond the challenges of distribution, companies often face basic issues of exposure: how to reach potential customers who may not be familiar with their products and who can¶t be contacted with conventional advertising. In India, for example, only 41% of poor rural households have access to TV, and in other developing markets the levels are even lower. As a result, companies need to develop other, grass-roots-style marketing methods.