Strategy for the Base of the Pyramid

Topics: Emerging markets, Developed country, Developing country Pages: 4 (1300 words) Published: March 14, 2012
The 4 billion people comprising the base of the pyramid,they earn less than $2,000 each per year. The base of the pyramid is poorest but largest socio-economic group. In 2012, two billion to three billion people live in poverty worldwide. This huge base of the pyramid has an estimated $5 trillion in purchasing power.While the developed markets are well saturanted, the base of the pyramid become more attractive for many enterprises.The base of the pyramid may indeed provide strong growth engines,not only for emerging economies but also for developed markets. Many companies are actively exploring this approach with a variety of goods meant to reach consumers with limited expendable income: this is called a “the base of the pyramid” strategy. There are lots of opportunities and potential profit .How to find the huge fortune form the base of the pyramid? To know what the are more attractive industries for the base of the pyramid , firms will need to pursue relationships with local delivery providers, social development players, entrepreneurs, government officials and potential customers. Because the base of the pyramid has a very low income, so consumers will tend to choose compass consumer behavior. They will be spending money on necessary for living things. They haven’t been conditioned to think that the products being offered are something one would even buy. And they haven’t adapted their behaviors and budgets to fit the products into their lives. A consumer market is nothing less than a lifestyle built around a product. Food dominates the base of pyramid household budgets. As incomes rise, however, the share spent on food declines, while the share for housing remains relatively constant-and the shares for transportation and telecommunications grow rapidly. In all regions half of the base of the pyramid house hold spending on health goes to pharmaceuticals. And in all except Easter Europe the lower income segments of the base of the pyramid depend mainly on...
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