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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

!ort"ne at the Bottom of the Pyramid# to highlight a large potential market made "p of a large segment of the

world$s pop"lation that has% "ntil recently% been an ignored market segment among m"ltinational companies. &n an

age of increasing global competition and near'sat"ration for some prod"cts in more mat"re markets% this m"lti'

c"lt"ral segment% made "p of people from all parts of the world that earn less than two dollars a day% can generate

significant reven"es and be profitable for companies who have developed appropriate strategies for reaching this

market segment. mong the iss"es related to BOPs are establishing appropriate distrib"tion channels% developing

and pricing prod"cts that have val"e for those in these markets% and finding creative ways for financing. &n terms of

financing% this wo"ld incl"de not only that related to the p"rchase of a prod"ct for those with relatively low incomes%

b"t wo"ld also incl"de strategies for financing b"siness initiatives on the local level.

Perspectives

*takeholder wo"ld incl"de the local pop"lations that make "p the BOPs. C"lt"ral considerations m"st be a key

component of prod"ct development and advertising. Care m"st be given that prod"cts will not harm those to whom

they are marketed.

lso% companies are stakeholders in that new strategies incl"ding BOPs may be important ways for a company to

grow organically. &n e+tension% many large m"ltinational firms are p"blic'traded companies. s s"ch% shareholders

are the owners and increasing shareholder val"e is a goal.

Discussion

,thics of marketing certain prod"cts to people in the BOP.

&ss"es related to distrib"tion channels.

&t seems that companies marketing to BOPs m"st think beyond the traditionally accepted distrib"tion channels.

any people in BOPs live in remote% harder to reach% areas.

&ss"es related to advertising.

Television and radio advertising are one approach% b"t may not be the best way to reach the target market.

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Action!ecommendation

-istrib"tions Channels

s"ccessf"l strategy for marketing to these segments wo"ld incl"de more direct marketing% with people getting paid

on commissions. !or retailers% marketing efforts sho"ld be geared toward lower vol"me sales in smaller stores. &n

contrast to what we are acc"stomed to in o"r domestic market in which we shop in large retails stores where the

prices per "nit decreases as the prod"ct sie increases% BOPs wo"ld re/"ire a different approach. These markets

wo"ld re/"ire smaller% possibly individ"al'sie prod"cts that co"ld be p"rchased for a relatively small amo"nt of

money for people that probably do not have credit and do not have a significant amo"nt of money on any given day.

Prod"ct -evelopment

&n addition to the sie of prod"cts offered% other important factors need to be considered. &n terms of packaging%

climate is important0prod"cts may be offered in small% more or less open'air stores in hot climates% for e+ample.

ore important for prod"cts that have a technical component% consideration also needs to be given to the level of

feat"res available. 1hereas some feat"res %s"ch as battery capacity0important as noted in the case for those

witho"t reliable so"rces of electricity0may be critical for prod"ct s"ccess% others may not be "sef"l and my

"nnecessarily increase the price or the comple+ity of the prod"ct.

pproaches to prod"ct doc"mentation and service need to be developed.

"ustification and Conse#uences

2eference3 Cateora% Philip 2.% 4ohn 5. 6raham.International Marketing 13thed.7ew 8ork3 9::;.