Frugal engineering means developing
simple products for emerging markets and is becoming increasingly
important for many companies. Frugal products are not cheap or
inferior, they are simplified and yet qualitatively robust. But how
can frugal products be developed successfully?
A company that wants to successfully
enter the emerging markets normally has to adapt and customize its
products to often completely new market conditions. The customers
there are demanding and price-cautious at the same time. They require
the high quality of industrialized countries, yet they are not ready
to pay for this quality.
“Frugal
is not cheap or inferior, but simplified and good enough.”
Frugal engineering does not mean
slimming the complex Western products to make them cheaper. How can
for example a high-end European fridge-freezer machine be simplified
for the Indian market, if there is neither enough space nor
sufficient power supply in the narrow Indian kitchens? A lot of
high-end products are simply not implementable in the emerging
markets.
But how to develop products tailored to
the emerging markets? The word “frugal” means “simple, but
good”. In the industry it means designing functionally reduced and
thus lower-priced, but qualitatively robust products. Frugal is not
cheap or inferior, but simplified and good enough.
Local knowledge as
innovation management
fundament
The strategy of frugal engineering is
to innovate in the target market on the basis of the local knowledge.
The most important aspect is to identify the basic conditions and
local customer needs through monitoring and active on-site
participation. To understand the utility of a product it is
absolutely essential to have access to the field, to approach local
customers systematically and to be constantly present on-site, and
thus receive the necessary insights.
“Frugal:
Functional, Robust, User-friendly, Growing, Affordable, Local.”
Fundamental
requirements for frugal products
For the construction of frugal products
one should keep in mind the acronym that displays six main
requirements for the frugal products:
- Functional: The product has to come with high-graded functionality. It cannot include any unnecessary extras or superfluous knickknacks and has to satisfy all fundamental needs in its basic functions. Its functional scope can be considerably limited, but it has to be tailored exactly for the key demands of local customers.
- Robust: The product developed for the emerging markets has to be highly resistant, low-maintenance and robust against climate factors, dust and poor infrastructure.
- User-friendly: The product has to be comprehensible, uncomplicated and easy to operate in both its composition and functioning.
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