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Context 5: CONSUMPTION DYNAMICS – When Demand Has a Ceiling

Let’s stay neutral first.

In small, low-income habitats, demand is not elastic.

People don’t buy more vegetables just because they are available—or cheaper.

Consumption is capped by:

•    household income,
•    cooking habits,
•    storage ability,
•    and daily meal patterns.

Back to Radha.

With 2 extra lauki, her immediate market absorbs it easily.
With 5 extra lauki, something breaks.

Not price.
Capacity to consume.

Her nearest 20 households may already:
•    cook lauki once a week,
•    not want to store it,
•    or simply not need another one.

So even at a lower price, consumption refuses to expand.

👉 Critical insight:
In micro markets, the problem is often not finding buyers—it is hitting a consumption wall.

This is why:
•    discounts don’t clear stock,
•    awareness doesn’t create appetite,
•    and “better marketing” doesn’t help.

The market isn’t failing.
It’s behaving rationally.

What classical marketing misses:
It assumes demand can stretch.
In poor habitats, demand plateaus quickly.

My clear opinion (this deserves emphasis here at IIM):

For tiny and micro enterprises, marketing must be preceded by consumption mapping, not customer profiling. 

If Sphere 1 has a daily absorption limit of 2 lauki, producing or harvesting 5 is a planning error, not a marketing failure.

NRLM strategies should ask:

“How much can this habitat actually eat?”

Not:

“How do we sell more?”