By Chris Orwa
Not everyone indulges in the pleasures of devouring roadside delicacies, but these micro-markets pack tons of insights for corporate managers and entrepreneurs. It might not be obvious to everyone, but smoky mini-kiosks are fast replacing mutura “outlets”, or at least that’s true for where I live. If you are not familiar, mutura, pronounced (moo-too-rah), is a Kenyan blood sausage prepared by stuffing blood, spices, and meat into cow or goat intestines, then boiling and grilling the “sausages.” Such local “delicacies” are normally sold on the roadsides of low- to middle-income neighbourhoods and is a preferred snack for pedestrians.
So, what does mutura have to do with entrepreneurship? The product came into existence to serve a need - the need to provide a protein source for low-income earners - and it quickly became popular with dwellers of informal settlement due to the low price point (Kshs. 10) and the need to bridge a dietary deficiency. For a long time, this market segment existed without any competition, and in fact became a de-facto standard for low-priced meat products. Then came in the big brand name, “Farmer’s Choice”, with their “smokie” sausages that are not only tastier, but also rival the price point of mutura (at Kshs. 15). Not only that, the new “smokie” vendors have more hygienic equipment and with that hygiene and the brand reputation of “Farmer’s Choice,” comes a sense of trust that is lacking in the case of mutura.
Therefore, the average consumer will naturally drift to the superior product that has a price-point they are willing to pay. As economics 101 states, the Homo Economicus strives to maximize pleasure for as little as possible. This enters the realm of consumer product competition; the hallmark of all game-changing products is significantly reducing cost to consumer or providing superior services at affordable costs, something that the smokie was able to do well. Another quality of disruptive products is the ability to draw in a wider consumer-base and consolidate the niche market, something the smokie epitomises. Due to sanitary concerns and taste, the mutura was locked to a consumer category of young males, but today you’ll find women and children, as well as young males, crowded at a smokie vendor awaiting their turn for a bite.
Now let’s move away from the low-end meat market and think of technology. The pager came in and consolidated the short message communication market, quickly becoming a household commodity. Then the mobile phone arrived and disrupted the market by integrating voice and text, effectively retiring the pager. Another product you might not have heard of is the electronic typewriter. Just before the personal computer invaded homes, engineers were busy tinkering with the mechanical typewriter to produce an electronic version. But PC makers beat them to it and provided a far more versatile product at an affordable price, further consolidating and dominating the personal publishing market to date.
Companies that beat competition understand the concept of product evolution, a good example being Kodak, which for more than a century evolved from storing images on velox paper to tapes to digital memory cards. But even Kodak went under when it couldn’t beat the competition of new media such as Instagram and cameras embedded in smartphones. Like mutura, Kodak cameras had reached a product saturation level where no more tweaking could save it from cutthroat competition. Perhaps in such a situation, you might want to adopt Sharp ’s strategy, a company which moved from making TV sets to solar panels: same raw materials, different product.
As an entrepreneur, it is good to have a good product that you evolve periodically to meet consumer needs, as well as to fend off competition. But the wise realise that when a product is getting too much competition from new and better products, you should think about retiring it gracefully, or looking for a new market.