Selco’s customers range from poor daily-wage laborers to institutions like schools and seminaries. All buy solar panels at the same rate: about $450 for a 40-watt system that can light several 7-watt bulbs for four hours between charges.

To make it work, Selco had to persuade rural banks to lend hundreds of dollars to people, like the rose pickers, who have almost no money – a tough sell. “Rural people don’t pay, I was told,” Hande recalls. Now fewer than 10 percent of his customers default, and Indian lenders have about $10 million available to rural customers for solar financing.

More at Business2.0

Related links
   Selco India
   The Fortune at the Bottom of the Pyramid

Two important factors in understanding price war distinctions are first, the state of each area’s market and second, the price sensitivity of consumers in each area.

“Chinese companies do have a lot more experience with price wars, which are widely reported business events,” says Zhang. “They are good at it. In the past 10 years, what triggered (the price wars) is the fact that the markets in China are growing. This business environment provides many profitable opportunities for [companies] to engage in price wars and to hone their skills. In a growing market, there are all different companies competing — some good, some bad — and the industry finds a way to consolidate. The only way to do that is a price war, where you bring down the prices and squeeze out the inefficient [companies].”

But the Western market is a more mature market, offering what Zhang calls “oligopolistic competition among mostly equals.” In lieu of price wars, this so-called mature market “encourages more finesse in devising marketing strategies” which may help explain why price wars are so frowned upon.

More at KnowledgeWharton