case 3 3 Marketing to the Bottom of the Pyramid

Powerful Essays
CASE 33 Marketing to the Bottom of the Pyramid
Professor C. K. Prahalad’s seminal publication, The Fortune at the Bottom of the Pyramid, suggests an enormous market at the
“bottom of the pyramid” (BOP)—a group of some 4 billion people who subsist on less than $2 a day. By some estimates, these
“aspirational poor,” who make up three-fourths of the world’s population, represent $14 trillion in purchasing power, more than
Germany, the United Kingdom, Italy, France, and Japan put together. Demographically, it is young and growing at 6 percent a year or more.
Traditionally, the poor have not been considered an important market segment. “The poor can’t afford most products”; “they will not accept new technologies”; and “except for the most basic products, they have little or no use for most products sold to higher income market segments”—these are some of the assumptions that have, until recently, caused most multinational firms to pay little or no attention to those at the bottom of the pyramid. Typical market analysis is limited to urban areas, thereby ignoring rural villages where, in markets like India, the majority of the population lives.
However, as major markets become more competitive and in some cases saturated—with the resulting ever-thinning profit margins— marketing to the bottom of the pyramid may have real potential and be worthy of exploration.
One researcher suggested that American and European businesses should go back and look at their own roots. Sears, Roebuck was created to serve the lower-income, sparsely settled rural market. Singer sewing machines fashioned a scheme to make consumption possible by allowing customers to pay $5 a month instead of $100 at once. The world’s largest company today, Walmart, was created to serve the lower-income market. Here are a few examples of multinational company efforts to overcome the challenges in marketing to the BOP.
Designing products for the BOP is not about making cheap stuff but about making

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Case 3-4 Marketing to the Bottom of the Pyramid Central Issues The concept of the Bottom of the Pyramid (BOP) market was originally developed by C.K. Prahalad in “The Fortune at the Bottom of the Pyramid” to highlight a large potential market made up of a large segment of the world’s population that has, until recently, been an ignored market segment among multinational companies. In an age of increasing global competition and near-saturation for some products in more mature markets, this…

    • 585 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    The Market at the Bottom of the Pyramid urn on your television and you will see calls for money to help :he world's 4 billion poor-people who live on far less than $2 a day. In ict, the cry is so constant and the need so chronic that the tendency for nany people is to tune out these images as well as the message. Even :hose who do hear and heed the cry are limited in what they can :ccomplish. For more than 50 years, the Vorld Bank, donor nations, tarious aid agencies, narional governments, and…

    • 6745 Words
    • 27 Pages
    Powerful Essays
  • Good Essays

    Caso- 3-4 Marketing to the Bottom of the Pyramid (BOP) 1. Key questions that need to be addressed if the company decides to look further unto the possibility of marketing to the BOP segment. Mercadear al BOP requiere de muchas consideraciones que dependerán del tipo de producto, el poder adquisitivo de las personas de la región, sus necesidades peculiares, infraestructura, canales de distribución entre otros. Basado en esto, algunas preguntas guías podrían ser: a. Producto:  ¿Qué productos…

    • 602 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    markets. Example:- Kellogs entered in INDIA in mid 1990’sIts sales was only $10 million in 3 yrs which is less Reason:- Advertisement was not appealing to the masses & Prices were high Revised their strategy – introduced chocobuiscuits (Rs. 5 for 50 gms ),used extensive distribution coverage. MNC’s have resisted targeting the local consumers preferring to transplant offerings developed for their traditional markets.3 reasons for reticence to localize are:-Mass market is not large enough to justify the…

    • 581 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Bottom of the Pyramid

    • 9081 Words
    • 37 Pages

    The quest for the fortune at the bottom of the pyramid: potential and challenges Dennis A. Pitta The University of Baltimore, Baltimore, Maryland, USA, and Rodrigo Guesalaga and Pablo Marshall ´ Pontificia Universidad Catolica de Chile, Santiago, Chile Abstract Purpose – The purpose of this article is to examine the bottom of the pyramid (BOP) proposition, where private companies can both be profitable and help alleviate poverty by attending low-income consumers. Design/methodology/approach…

    • 9081 Words
    • 37 Pages
    Powerful Essays
  • Powerful Essays

    Bottom of Pyramid

    • 5393 Words
    • 22 Pages

    through the definition of marketing management and its ethical concerns towards Bottom of Pyramid (BOP) group of people. Besides, the element of Corporate Social Responsibility (CSR) also included in this introductory paragraphs. Marketing is growing and keep on changing with time and age. To manage marketing, one must be knowledgeable and really understand regarding the marketing concept to be applied when doing a particular business. Wikipedia has defined marketing management as a business discipline…

    • 5393 Words
    • 22 Pages
    Powerful Essays
  • Powerful Essays

    Bottom of the pyramid

    • 2581 Words
    • 11 Pages

    An evaluation of the merits of targeting customers at the “bottom of the pyramid”. In what sectors and in which ways, if any, do the considerations raised by this approach alter the strategies of multinational corporations selling into emerging markets? Graduate Institute of International Studies, Geneva May 2007 Maja Rüegg May 2007 International Business Second Assignment The income pyramid in emerging markets can be divided in four segments: From top down, it contains…

    • 2581 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    The Bottom of the Pyramid

    • 2193 Words
    • 9 Pages

    Nguyen. Mexico. A comprehensive development agenda for the New Era. 2001 [Prahalad, 2005] C.K. Prahalad. The fortune at the bottom of the pyramid. 2005 [Ann Bernstein 2010] Ann Bernstein. The case for business in developing economics. 2010 [Lustig, 2006] Nora Lustig. Mexico, the remaking of an economy. 2006 [Prahalad 2009] C.K. Prahalad. The fortune at the bottom of the pyramid. 2009 [Economy Watch] http://www.economywatch.com/market/world-markets/mexican-market.html…

    • 2193 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    the existing literature with regards to low income earners or bottom of the pyramid (BOP), barriers to enter the BOP, challenges of sustaining business at BOP and success factors for business at BOP. Also it explicates the telecommunication network supporting the business at BOP and the possible synergies through partnerships with business ventures that are typically unaffordable to the BOP. 2.2 Bottom of the Pyramid (Base of the Pyramid) The distribution of wealth and the capacity to generate incomes…

    • 1204 Words
    • 5 Pages
    Good Essays
  • Best Essays

    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…

    • 4711 Words
    • 19 Pages
    Best Essays