Go and look

The story

Alcock’s book is full of businesses that formal companies never saw. The one that stuck with me is the kota: a quarter loaf of bread, hollowed out and packed with chips, polony, atchar and whatever else the shop does well. He describes one outlet that takes delivery of 600 unsliced loaves every morning and turns them into 2 400 kotas a day. By his count the owner clears around R12 000 a day. And that is one shop. There is a kota or vetkoek stand on practically every township street in Gauteng.

Now put a cheese slice on it. Parmalat had planned to pitch its slices for English-style sandwiches. Alcock talked them into the kota and the gwinya instead. He got the factory to brand every individual wrapper, which the factory thought was madness, because the only Parmalat a kota customer ever sees is a single slice, not a packet. Then the campaign taught people to ask for “a Parmalat” rather than “a cheese slice”. By the time he wrote the book, he reckoned 13 slices were being eaten every second, more than 200 million a year, worth around R400 million a year in this sector alone.

His line on it is the one I keep coming back to: “There are invisible markets all around us.” His point is sharper than it sounds. The market was never invisible. Marketers drove past it daily and chose not to see it, because they were chasing higher-income spenders and had never stood in a kota queue.

The second story is smaller and, to me, more useful. Alcock could not understand why rural households bought half-litre packs of milk when the litre was cheaper and resealable. So he spent a week in the Eastern Cape asking. A Mrs Gugushe explained: she puts out one half-litre each morning, and when it is finished there is no more milk that day. If she put out a litre, the children would finish that too. Thirty half-litres a month is a pack a day, which is how she budgets. And with no fridge, half a litre left over would spoil. The “irrational” purchase was the rational one, on terms the spreadsheet had never been told about.

That is the whole lesson. Your customer is making sense. If their behaviour looks wrong to you, your model is wrong, and the only fix is to go and look.