Innovating for the bottom of the pyramid
1. Why are companies such as Siemens, GE and Procter and Gamble targeting the “bottom of the pyramid”? These companies are targeting the bottom of the pyramid because this segment represents two-thirds of the world’s population (4 billion people). However, those people live on less than $2 per day and 1.5 billion people have no access to electricity. Companies such as the ones mentioned above have found out that this situation has provided an opportunity to create innovative sources renewable energy. Another reason why they are doing this is because growth in mature markets tends to slow down. Therefore, many global companies are realizing that the ability to serve the needs of the world’s poorest consumers will be critical source of competitive advantage in the near future. These companies see the bottom of the pyramid as a potential market. In fact, they are already developing products and launching products specially designed for this segment. They are segmenting global markets by income and population and targeting millions of poor consumers with innovative products and appropriate positioning strategies. However, they have to understand the importance of skillful global market segmentation and targeting while trying to reach low-income consumers in emerging markets. Rural markets are dispersed and distribution is not well established. One problem is to persuade low-income consumers to change their behaviors by buying new products and integrating them into their lifestyles. These companies have to grasp the value of local research and developing programs in emerging and rural markets.
2. How might an understanding of the characteristics of innovations help marketers succeed in emerging markets? According to Everett Rogers, there are five major characteristics of innovations, which are factors that affect the rate at which innovations are adopted. I believe that each one of them is really important for...
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