Generic customer self-service options for developing country markets

Description

Customer self-service options can reduce the delivered cost of products while enabling customers to customize them during final assembly. The cost advantages of self-service are typically greater in developed countries, where labor is scarce and expensive, and where customers are generally more familiar with self-service technologies. In contrast, customers in developing countries often have access to inexpensive local labor, may be less familiar with self-service processes, and are therefore less likely to adopt such options unless they offer significant cost savings. Additionally, lower literacy levels and difficulty in following written instructions can render conventional self-service models less effective in these contexts. Nevertheless, shifting final assembly to customers can still generate substantial cost savings in developing countries. Compact packaging reduces transportation costs, minimizes transit damage, and lowers packaging expenses. In this paper, we identify a set of self-service models tailored to developing country contexts that leverage these cost efficiencies alongside the availability of low-cost labor. These models enable firms to achieve greater market penetration by offering lower prices. Drawing on examples from various industries in India, we illustrate how firms have successfully developed product–service combinations that utilize inexpensive local labor to enable “last-mile” customization. These self-service approaches demonstrate significant potential for expanding access and affordability in developing markets, while also adapting to local economic and socio-cultural conditions.

Publication Date

1-1-2014

ISBN

978-1890843298

Publisher

Institute Of Electrical and Electronics Engineers Inc.

Keywords

Commerce, Compensation (Personnel), Costs, Developing Countries, Sales, Wages, Compact Packing, Customized Products, Developed Countries, High Potential, Market Penetration, Packaging Costs, Price Sensitive, Transport Costs, Cost Reduction

Conference

PICMET '14: Portland International Center for Management of Engineering and Technology; Infrastructure and Service Integration: 27-31 July 2014, Kanazawa, Japan

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