The Fortune at the Bottom of Pyramid
Lessons from the Field:
Sales at the Bottom of the Pyramid
By Heidi Krauel and Joel Montgomery, 2009 Acumen Fund Fellows April 2010
Summary
Enterprises serving bottom of the pyramid (BoP) markets have tremendous opportunity to create commercial and social impact, but are often illequipped to do so. A particular question that needs to be studied is: how can we sell more effectively to BoP consumers? In this piece, Acumen Fund Fellows Heidi Krauel and Joel Montgomery draw on their field experiences and research to explain how we can build more effective sales organizations to serve the BoP.
Contents
Summary Introduction The Survey + Profile of Companies + Overview of Findings + Performance Rating Methodology Step One: Recruit Ambassadors Step Two: Realize Potential Step Three: Reinforce Training + Data Collection + Compensation Conclusion References About the Authors 1 1 2 2 2 3 4 5 6 7 7 8 8 9
Introduction
The business world has heard about "The Fortune at the Bottom of the Pyramid" for some time. In his seminal work, CK Prahalad asserts that multinational corporations (MNCs) can stimulate commerce at the bottom of the economic pyramid to improve the lives of the four billion people in the world living in poverty and turn a healthy profit along the way.i This assertion is supported by various case studies, suggesting that the bottom of the pyramid (BoP) is a source of untapped profits for corporations that target local people as both producers and consumers and inspire innovation for new technologies and commercial activities.ii A 2008 empirical study by Rodrigo Guesalaga and Pablo Marshall compares the buying power index (BPI) of the BoP market relative to the BPI of middle and high-income market segments and finds that “relative to the total market, the BoP sector accounts, on average, for more than 50 percent of the purchasing power in developing countries.iii” Large groups of poor consumers have the power to reject or accept what an MNC wants to
Sales at the Bottom of the Pyramid
By Heidi Krauel and Joel Montgomery, 2009 Acumen Fund Fellows April 2010
Summary
Enterprises serving bottom of the pyramid (BoP) markets have tremendous opportunity to create commercial and social impact, but are often illequipped to do so. A particular question that needs to be studied is: how can we sell more effectively to BoP consumers? In this piece, Acumen Fund Fellows Heidi Krauel and Joel Montgomery draw on their field experiences and research to explain how we can build more effective sales organizations to serve the BoP.
Contents
Summary Introduction The Survey + Profile of Companies + Overview of Findings + Performance Rating Methodology Step One: Recruit Ambassadors Step Two: Realize Potential Step Three: Reinforce Training + Data Collection + Compensation Conclusion References About the Authors 1 1 2 2 2 3 4 5 6 7 7 8 8 9
Introduction
The business world has heard about "The Fortune at the Bottom of the Pyramid" for some time. In his seminal work, CK Prahalad asserts that multinational corporations (MNCs) can stimulate commerce at the bottom of the economic pyramid to improve the lives of the four billion people in the world living in poverty and turn a healthy profit along the way.i This assertion is supported by various case studies, suggesting that the bottom of the pyramid (BoP) is a source of untapped profits for corporations that target local people as both producers and consumers and inspire innovation for new technologies and commercial activities.ii A 2008 empirical study by Rodrigo Guesalaga and Pablo Marshall compares the buying power index (BPI) of the BoP market relative to the BPI of middle and high-income market segments and finds that “relative to the total market, the BoP sector accounts, on average, for more than 50 percent of the purchasing power in developing countries.iii” Large groups of poor consumers have the power to reject or accept what an MNC wants to
References: i x Robinson, Larry J.B, "Role Playing as a Sales Training Tool," Harvard Business Review, May 1, 1987