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Marketing ‘Potential Eco-Innovations’ Successfully: A Case Study of Banka BioLoo*

CASE STUDY, STRATEGY
ET Cases - GSMC, 9 Pages
AUTHOR(S) : Prof. Runa Sarkar (Associate Professor - Economics, IIM Calcutta), Deepika (Doctoral student, Fellow Programme in Management (Economics) - IIM Calcutta)

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Marketing ‘Potential Eco-Innovations’ Successfully: A Case Study of Banka BioLoo

 

Banka BioLoo’s vision and mission (Exhibit I) proved its desire to serve the marginalized sections of society and set up eco-friendly toilet facilities where there were none. In this regard, its challenge was to decide whom to serve and how. Namita Banka (Namita), the founder and CEO, Banka BioLoo and Sanjay Banka, the Managing Director, Banka BioLoo, were facing twin dilemmas. The first issue was whether to serve the rural market with affordable bio-loos for households or cater to the  underserved market of public toilets for urban women. The second was how to market the bio-toilets to the chosen segments.....................................

Brief History of Banka BioLoo

When Namita Banka shifted to Hyderabad in 2008, moving away from her jewellery business, she set up Banka Enterprises. The firm started supplying eco-friendly products to corporations. Then, Banka Enterprises moved to function as a service agent for Vibhu Composite Works and Aikon Technologies Pvt. Ltd, which was Original Equipment Manufacturers (OEM) of Controlled Discharge Toilet System (CDTS)............

Banka BioLoo Pvt. Ltd: Past and Current Business Performance

Banka BioLoo facilitated eco-friendly sanitation solutions (manufacturing, installing and maintenance) to a variety of users which included large construction firms for their on-site operations, the Indian Railways, schools, resorts and industrial factories. It also provided rentals and operations and maintenance of mobile bio-digesters (such as in trains) and consultancy for the development of large bio-tanks...............

Motivation

Around 50% of the Indian population defecates in the open. Out of this 50%, the majority are rural people. This was a big enough motivation for Namita to enter the bio-toilet business. Often, open defecation is considered to be a rural problem. However, while Namita realized the importance of introducing toilets in rural areas, she also believed that the problem was as serious for urban women. She maintained that the rural women could at least find spaces in village for open defecation............

Bio-digester

A bio-digester (Exhibit V) uses anaerobic bacteria to decompose fecal waste. Anaerobic digestion is a natural process in which bacteria break down organic matter in the absence of oxygen to form biogas and digestate2.Anaerobic digestion uses bacteria to break down waste organic materials into methane and other gases, which can be used to produce electricity or heat. Anaerobic decomposition is a complex process that occurs in three stages...........

Banka BioLoo’s Bio-digester

DRDO developed the technology of using anaerobic bacteria for decomposing fecal waste in India. In 2010, DRDO extended the technology to the civilian population by licensing the biotechnology to commercial firms. This technology took shape in the form of an eco-innovation called the bio-digester. One of the firms to use this technology was Banka BioLoo..............

Benefits of Bio-toilets

The environmental benefits of bio-toilets included treating of waste at source without using energy. The bio-toilet had lower water requirements than a conventional septic toilet. After treatment, the effluent left was 1.5 times lower in volume than the waste in a septic toilet. The treatment in bio-tanks did not emit any foul smell of decomposition. The water released from the system was pathogen free which could be utilized in purposes like gardening or construction...........

Financial Growth

The founders’ and promoters’ personal savings contributed to the startup capital of INR1.25 crore. As the business grew, bank credit line was put in place, along with external investment. In July 2015, the company had equity capital of over INR2.2 crores and loans of nearly INR2.5 crores............

Partners

DRDO and the Indian Railways provided technical support to Banka BioLoo. Banka BioLoo worked with NGOs and the non-profit sector to install toilets in rural areas. Some mentionable partnerships were Banka BioLoo’s work with Githam University and Engineers Without Borders (EWB) at Rudraram village near Hyderabad............

Business Model

Banka BioLoo operated on a build (the sanitation infrastructure) and maintain (in case of entities such as Railways) basis. It built and sold the system to independent owners - railways, construction companies, schools, industries with or without the toilet superstructure. Often, Banka BioLoo did the maintenance and re-installation for a fee (Exhibit VI)..........

Organizational Structure

Banka BioLoo had a flat organization structure (Exhibit VII). Due to the elimination of mid-management, the decision making was quick and based on shared decision making, which saved costs and made the work culture adaptable and innovative.............

Challenges

The challenges that Banka BioLoo faced in its initial years could be summed up in Sanjay’s words. “Getting the license was not easy. Banka Enterprises was a small firm, with not a lot of financial strength compared to bigger players. A lot of convincing to the DRDO officers and scientists was required. A couple of visits were made to the DRDO offic............

Assignment Questions

I. The bio-toilet/digester has been referred to as an eco-innovation in the case. From the distinction pointed out between eco-innovations and ‘potential eco-innovations’, do you think the bio-toilets are still eco-innovations in the context of the targeted segments?
II. ............

Exhibits

Exhibit I: Banka BioLoo’s Vision and Mission

Exhibit II: Banka BioLoo – Journey so Far

Exhibit III: Size of the Expected Social Impact

Exhibit IV: Future Expectations (2015-16)

Exhibit V: A Bio-digester

Exhibit VI: Business Model of Banka BioLoo

Exhibit VII: Organizational Structure – Banka BioLoo

Exhibit VIII: Biases against Toilets in India

Teaching Note Preview

Marketing ‘Potential Eco-Innovations’ Successfully: A Case Study of Banka BioLoo

 

Synopsis

Banka BioLoo, a firm engaged in providing eco-friendly sanitation solutions, wanted to scale up. In order to do so, the firm’s management was exploring additional customer segments to enter. Banka BioLoo offered eco-friendly sanitation solutions with an eco-innovation called the bio-digester. The bio-digester technology developed by the DRDO was licensed to Banka BioLoo in 2012. Bio-digesters are chemical toilets that use anaerobic bacteria to break up the waste in the absence of air and little water. The firm being socially and environmentally responsible aimed at maximizing benefits economically, socially and environmentally. Often in such instances, the choice is between profits vs. environment or social well-being. However, in Banka BioLoo’s case, the dilemma was not only profit but to meet the needs of the section that required it the most. Banka BioLoo could either choose to serve the rural market with affordable bio-loos for households or cater to the underserved market of public toilets for urban women.

Pedagogical Objectives

  • • To understand that ‘context’ can make the same innovation a ‘potential eco-innovation’ and an eco-innovation.
  • • To discuss and debate whether Banka BioLoo should explore the rural household market or public toilets for urban women keeping in mind that in order to market the ‘potential eco-innovation’ successfully, the product will have to be diffused.
  • • To understand how Banka BioLoo should market the bio-toilets to the chosen segment, the readers need to realize how to make the users adopt an innovation. This includes customization, standardization and pricing.

 

Assignment Questions

  • I. The bio-toilet/digester has been referred to as an eco-innovation in the case. From the distinction pointed out between eco-innovations and ‘potential  eco-innovations’, do you think the bio-toilets are still eco-innovations in the context of the targeted segments?
  • II. Which customer segment should Banka BioLoo serve? How should Banka BioLoo market the bio-toilets to the chosen segment?
  • ..................................


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Abstract

Like all economic entities, firms have limited resources at their disposal. With social and environmental responsibilities becoming as important to firms as their profits, often firms must deal with choosing one over the other. A popular strategy for balancing the three is to serve the socially-excluded, through the market, by eco-innovations. But, the socially-excluded are not a homogeneous category. Serving each sub-segment requires a different strategy. India has the largest number of open defecators in the world. The macroeconomic issues of lack of toilets and lack of tap water are two structural causes of this problem. However, a deeper exploration shows that people defecate in the open not only because they do not have access to toilets but also because they do not feel that toilets are required. Banka BioLoo offers eco-friendly sanitation solutions with an eco-innovation called the bio-digester which decomposes fecal waste in the absence of air and very little water. Bio-toilets were first manufactured for the Railways. However, after successfully launching bio-toilets in several segments, Banka BioLoo wanted to explore the rural household and the urban public toilets for women. Banka BioLoo had some experience setting up bio-toilets in the rural areas but not urban public ones. However, Banka BioLoo's CEO, Namita Banka, strongly felt that the urban segment had strong potential. The dilemma was which segment to enter?



Pedagogical Objectives

  • To understand that ‘context’ can make the same innovation a ‘potential eco-innovation’ and an eco-innovation
  • To discuss and debate whether Banka BioLoo should explore the rural household market or public toilets for urban women keeping in mind that in order to market the ‘potential eco-innovation’ successfully, the product will have to be diffused
  • To understand how Banka BioLoo should market the bio-toilets to the chosen segment, the readers need to realize how to make the users adopt an innovation. This includes customization, standardization and pricing

Case Positioning and Setting
This case is relevant to graduate or post-graduate students of Strategic Management and Environmental Economics.


* GSMC 2016, IIM Raipur

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