Bottom of the Pyramid Analysis

YOLOR �team � GROUP � 11 �

BOTTOM OF THE PYRAMID �

YOLOR �team �

“ � The real source of market promise is not the wealthy few in the �developing world, or even the merging middle-income consumers; �

It is the billions of aspiring poor who are joining the �market economy for the first time.�

�” �

C.K. Prahalad �

YOLOR �team �

2 �

ORIGINS�

YOLOR �team �

3 �

14th CENTURY �

YOLOR �team �

4 �

PRESENT DATE �

YOLOR �team �

5 �BOTTOM �

MIDDLE �

TOP � $20,000 � 80 MILLION�

$15,000 � 1600 MILLION�

< $3,000 � 4000 MILLION�

PRESENT DATE �

YOLOR �team �

6 �

BOTTOM �

MIDDLE �

TOP �

< $3,000 � 4000 MILLION�

YOLOR �team �

7 �

BASE �

MIDDLE �

TOP �

< $3,000 � 4000 MILLION�

YOLOR �team �

BOP �

CHARACTERIZATION�

SECTOR MARKETS�

STRATEGIES�

BANGLADESH �

YOLOR �team �

“ � The term was coined by the management guru to describe the�Poor and the underserved section of the market. The BOP market in India is about �

$1.205 trillion, in PPP terms, makes up 84.8% of the total $1.42 trillion�National household market. � ” �

C.K. Prahalad �

YOLOR �team �

BOP �

8 �

COSMPOLITON� MIDDLE AND UPPER INCOME �

DEVELOPING � ELITES� $20,000 � 80 MILLION�TOP �

YOLOR �team �

BOP �

9 �

POOR CUSTOMERS� RISING MIDDLE CLASS�

DEVELOPING � DEVELOPING � $15,000 � 1600 MILLION�MIDDLE �

YOLOR �team �

BOP �

10 �

HALF OF THE WORLD �

LEAST DEVELOPED � DEVELOPING � $3,000 �

4000 MILLION�

BOTTOM �

AGGREGATE POWER OF $5 TRILLION�

YOLOR �team �

BOP �

11 �

DIVIDED � PARTS�

BOTTOM �

6 �

YOLOR �team �

BOP �

12�

500 – 1,000 �

1,000 – 1,500 �

1,500 – 2,0000 �

2,000 – 2,5000 �

2,500 – 3,000 �

<500 �

ASIA�

$3,470 BILLION�

YOLOR �team �

BOP �

13�

500 – 1,000 �

1,000 – 1,500 �

1,500 – 2,0000 �

2,000 – 2,5000 �

2,500 – 3,000 �

<500 �

EASTERN EUROPE �

$458 BILLION�

YOLOR �team �

BOP �

14�

500 – 1,000 �

1,000 – 1,500 �

1,500 – 2,0000 �

2,000 – 2,5000 �

2,500 – 3,000 �

<500 �

LATIN AMERICA�

$509 BILLION�

YOLOR �team �

BOP �

15 �

500 – 1,000 �

1,000 – 1,500 �

1,500 – 2,0000 �

2,000 – 2,5000 �

2,500 – 3,000 �

<500 �

AFRICA�

$429 BILLION�

YOLOR �team �

BOP �

MISCONCEPTIONS �

YOLOR �team �

BOP �

16 �

REALITY �

#1 �THE POOR HAVE � NO� MONEY �

MISCONCEPTIONS �

YOLOR �team �

BOP �

17 �

REALITY �

#1 �LITTLE MONEY IS� STILL � MONEY �

YOLOR �team �

BOP �

18�

MISCONCEPTIONS �

#2 �THE POOR CAN� NOT� USE ADVANCED TECHNOLOGIES�

YOLOR �team �

BOP �

19 �

#2 �REALITY �

YOLOR �team �

BOP �

20 �

MISCONCEPTIONS �

#3 �THE POOR BUY � CHEAP � PRODUCTS�

YOLOR �team �

BOP �

21�

#3 �THE POOR BUY � FUNCTIONAL � GOODS & SERVICES�

REALITY �

YOLOR �team �

BOP �

CHARACTERIZATION�

SECTOR MARKETS�

STRATEGIES�

BANGLADESH �

YOLOR �team �

CHARECTERIZATION�

22 �

SIGNIFICANT� UNMET� DEMANDS�

MAJORITY � BANK ACCOUNT� ACCESS TO FINANCIAL SERVICES�

LIVE WITHOUT ACCESS TO SANITATION & ELECTRICITY �MANY �

YOLOR �team �

CHARECTERIZATION�

23 �

DEPENDENCE � ON� INFORMAL LIVELIHOOD �

SUBSISTENCE � LACK ACCESS TO PROPER MARKET�

EXPLOITED ON MIDDLEMEN� VULNERABLE TO WEATHER �

YOLOR �team �

CHARECTERIZATION�

24�

PROBLEMS� OF� BEING IN A BOP �

PAYS MORE THAN WEALTHEIR NATIONS� LOW QUALITY �

LOAN SHARKS� EXUBERENT INTERESTS�

YOLOR �team �

CHARACTERIZATION�

25 �

DEMOGRAPHIC � OF� AN AVERAGE BOP �

LITTLE OR NO EDUCATION� PREDOMINANTLY RURAL �

70%� WORKING IN THE INFORMAL SECTOR �

S� UNTAPPED 4000 MILLION�

W�

FAST TECHNOLOGCAIL ADAPTATION�

UNFAVORABLE COST STRUCTURE �

VERY HIGH MARKET PENETRATION REQUIRED �

RESILIENCE �

SWOT ANALYSIS�

S� UNTAPPED 4000 MILLION�

W�

FAST TECHNOLOGCAIL ADAPTATION�

UNFAVORABLE COST STRUCTURE �

VERY HIGH MARKET PENETRATION REQUIRED �

26 �

RESILIENCE �

O�DEMAND FOR BASIC NEEDS�

T�

LACKS LOW COST, GOOD QUALITY ACCESIBLE GOODS �

POLITICAL INSTABILITY �

ENVIRONMENTAL HAZARDS�

27�

HIGH PURCHASING POWER �

CULTURAL DISSENTION �

YOLOR � 28 �

ASIA�

MARKET� SIZE �

2.86 BILLION PEOPLE � $3470 BILLION AGGREGATE INCOME �

83% OF POPULATION�

CHARACTERIZATION�

42% OF AGGREGATE PURCHASING POWER �

YOLOR � 29 �

LATIN AMERICA�

MARKET� SIZE �

360 MILLION PEOPLE � $509 BILLION AGGREGATE INCOME �

78% OF POPULATION�

CHARACTERIZATION�

28% OF AGGREGATE PURCHASING POWER �

YOLOR � 30 �

AFRICA�

MARKET� SIZE �

486 MILLION PEOPLE � $429 BILLION AGGREGATE INCOME �

95% OF POPULATION�

CHARACTERIZATION�

71% OF AGGREGATE PURCHASING POWER �

YOLOR � 31�

WHERE DOES THE INCOME GO?�CHARACTERIZATION�2%�

71% �

4%�

4%�

8%�

11% �

WATER & ICT�FOOD �HEALTH �TRANSPORATION�HOUSING �ENERGY �

IN BILLION USD �

YOLOR � 32 �

HOW DO BOP HOUSEHOLDS SPEND �CHARACTERIZATION�USD PER YEAR �

AFRICA� ASIA� EASTERN EUROPE � LATIN AMERICA�

ICT� 34 � 54 � 56 � 107 �HEALTH CARE � 154 � 131� 152 � 325 �

TRANSPORATATION� 211� 211� 141� 521 �FOOD � 2087 � 2643 � 3687 � 3050 �

YOLOR � 33 �

THE BOP PENALTY �CHARACTERIZATION�

WEALTHIER MARKETS HAVE � 7 TIMES�

LACK ELECTRICITY �24% OF BOP �

HIGHER COST OR LOWER QUALITY TRAP �

MORE ACCESS TO PIPED WATER �

BOTTOM HEAVY BOP AND � RURAL AREAS� LOW ICT AND PHONE ONWERSHIP �

YOLOR �team �

BOP �

CHARACTERIZATION�

SECTOR MARKETS�

STRATEGIES�

BANGLADESH �

YOLOR �team �

“ � In an informal suburb of Guadalajra, Mexico, a growing family is� struggling to expand their small house. Help arrives from a major industrial �

Company in the form of construction designs, credit, enabling rapid completion� of the project at less overall cost � ” �

SCENARIO 1 �

YOLOR �team �

“ � In Maddhya Pradesh, an Indian farmer gains access to soil testing�Services, to market price trends that help him decide what to grow and when to sell, �

And to higher prices for his crop than he can obtain in �the local auction market.�

�” �

SCENARIO 2 �

YOLOR �team �

“ � In a small community outside Tianjin, China, a small merchant �Whose children have been repeatedly sickened by drinking water from a heavily -�Polluted river is distraught. He finds help not from the local government but from�

A new, low-cost filtering system developed by an �entrepreneurial company.�

�” �

SCENARIO 3 �

YOLOR �team �

SECTOR MARKET�

34 �

$183 A YEAR � UGANDA�

HALF IS SPENT ON SELF MEDICATION�

HEALTHCARE INDUSTRY�OVERLOOK�

YOLOR � team �

SECTOR MARKET�

35 �

ASIA�

HEALTHCARE INDUSTRY�SPENDING �

2.9 BILLION�

AFRICA� 486 MILLION�

L.A.� 360 MILLION�

E.E.� 254 MILLION�

YOLOR � team �

SECTOR MARKET�

36 �

WHERE IS THE MARKET?�

HEALTHCARE INDUSTRY�

ASIA� RURAL 2.4 TIMES LARGER THAN URBAN�

AFRICA� URBAN AND RURAL ROUGHLY SAME �

L.A.� URBAN IS 3.5 TIMES THE RURAL �

E.E.� URBAN IS 61% LARGER THAN RURAL �

YOLOR � team �

SECTOR MARKET�

37�

MORE THAN�

HEALTHCARE INDUSTRY�WHAT DO THEY BUY?�

50%� SPEND MONEY ON�

PHARMACEUTICALS�

YOLOR �team �

SECTOR MARKET�

38 �

IT MAY SEEM OBVIOUS� BUT THOSE IN BOP �

JOIN THE GLOBAL ECONOMY �

ICT INDUSTRY �OVERLOOK�

CAN’T�

UNLESS THEY ARE CONNECTED �

YOLOR � team �

SECTOR MARKET�

39 �

ASIA�

SPENDING �

2.9 BILLION�

AFRICA� 486 MILLION�

L.A.� 360 MILLION�

E.E.� 254 MILLION�

ICT INDUSTRY �

YOLOR � team �

SECTOR MARKET�

40 �

LARGELY CENTERED �

WHERE IS THE MARKET?�

URBAN�

ICT INDUSTRY �

YOLOR � team �

SECTOR MARKET�

41 �

PHONE �

WHAT DO THEY BUY?�

V� COMPUTERS�

AVERAGE PHONE � $30 MSRP �

PREPAID SERVICES�

ICT INDUSTRY �

YOLOR �team �

SECTOR MARKET�

42 �

MORE THAN� LACKS CLEAN WATER �

POLLUTED WATER SOURCES�

WATER INDUSTRY �OVERLOOK�

1 BILLION�

URBAN WATER NETWORKS AGING �

YOLOR � team �

SECTOR MARKET�

43 �

ASIA�

SPENDING �

2.9 BILLION�

AFRICA� 486 MILLION�

L.A.� 360 MILLION�

E.E.� 254 MILLION�

WATER INDUSTRY �

YOLOR � team �

SECTOR MARKET�

44�

WATER INDUSTRY �

AFRICA� VARIED FROM COUNTRY TO COUNTRY �

ASIA� URBAN SPENDING DRIVES MARKET�

E.E.� MAJORITY URBAN REGION�

WHERE IS THE MARKET?�

L.A.� MAJORITY URBAN REGION�

YOLOR �team �

SECTOR MARKET�

45 �

LACK OF� AFFORADABLE ENERGY �

HARMFUL FUELS USED IN COOKING �

ENERGY INDUSTRY �OVERLOOK�

POLLUTION�

YOLOR � team �

SECTOR MARKET�

46 �

ASIA�

SPENDING �

2.9 BILLION�

AFRICA� 486 MILLION�

L.A.� 360 MILLION�

E.E.� 254 MILLION�

ENERGY INDUSTRY �

YOLOR � team �

SECTOR MARKET�

47 �

ON AN AVERAGE �

WHERE IS THE MARKET?�

ENERGY INDUSTRY �

RURAL BOP USES� 45%� LESS ENERGY THAN URBAN�

YOLOR �team �

SECTOR MARKET�

48 �

MORE THAN � OF BOP BUDGET�

% SPENDING ON FOOD DECREASES�

FOOD INDUSTRY �OVERLOOK�

AS INCOME RISES�

HALF�

YOLOR � team �

SECTOR MARKET�

49 �

ASIA�

SPENDING �

2.9 BILLION�

AFRICA� 486 MILLION�

L.A.� 360 MILLION�

E.E.� 254 MILLION�

FOOD INDUSTRY �

YOLOR � team �

SECTOR MARKET�

50 �

WHERE IS THE MARKET?�

FOOD INDUSTRY �

AFRICA� RURAL 1.6 TIMES LARGER THAN URBAN�

ASIA� RURAL MARKET IS 2.5 TIMES THE URBAN �

L.A.� URBAN IS 2.4 TIMES THE RURAL �

E.E.� PREDOMINANTLY URBAN�

YOLOR � team �

SECTOR MARKET�

51�

NECESSITIES�

WHAT DO THEY BUY?�

NOT ENSURING NUTRITION�

FOCUSED MORE ON LOCAL SUSTENANCE �

FOOD INDUSTRY �

YOLOR �team �

BOP �

CHARACTERIZATION�

SECTOR MARKETS�

STRATEGIES�

BANGLADESH �

YOLOR � team �

STRATEGIES�

52 �

FOCUSING ON THE BOP � UNIQUE PRODUCTS AND SERVICES�

OFTEN REQUIRE REIMAGINING OF ORGANIZATIONAL RESOUCES�

GENERIC �

YOLOR � team �

STRATEGIES�

53 �

LOCALIZING VALUE CREATION� THROUGH FRANCHISING �

TREATING COMMUNITY AS A CUSTOMER �

GENERIC �

USUALLY INVOLVE SUBSTANTIAL INVESTMENT �

YOLOR � team �

STRATEGIES�

54 �

ENABLING ACCESS TO GOODS AND SERVICES�

FINANCING �

GENERIC �

PREPAID �

PACKAGING INNOVATIONS�

YOLOR � team �

STRATEGIES�

CAPITALIZING THE MARKET AT THE BOP �

YOLOR � team �

STRATEGIES�

55 �

CAPITALIZING THE BOP �

SHAPE ASPIRATIONS �

INCLUSIVE GROWTH �

SUSTAINABLE DEVELOPMENT�

MUTUAL VALUE CREATION�

YOLOR � team �

STRATEGIES�

56 �

CAPITALIZING THE BOP �

INCLUSIVE GROWTH �

YOLOR � team �

STRATEGIES�

57�

CAPITALIZING THE BOP �

TAILOR LOCAL SOLUTIONS�

MARKET SPECIFIC PRODUCTS �

CO-CREATION INSTEAD OF SELLING �

BRANDING �

INNOVATION�

YOLOR � team �58 �

INNOVATION�

ENIVORFIT�

YOLOR � team �

STRATEGIES�

59 �

CAPITALIZING THE BOP �

SACHET�

YOLOR � team �

STRATEGIES�

60 �

CAPITALIZING THE BOP �

INCREASING BUYING POWER �

MICROCREDIT�

MOBILE BANKING �

VENTURE CAPITALS�

JOINT VENTURE �

YOLOR � team �

STRATEGIES�

61 �

CAPITALIZING THE BOP �

IMPROVE ACCESS �

INFRASTRUCTURAL DEVELOPMENT�

COMMUNICATION LINKS�

COUNTRY COLLABORATIONS�

YOLOR � team �

STRATEGIES�

62 �

TAILOR LOCAL SOLUTIONS��

- MARKET SPECIFIC PRODUCTS�- CO CREATION�- BRANDING �

- INNOVATION�

INCREASE BUYING POWER ��

- MICROCREDIT�- MOBILE BANKING �- VENTURE CAPITALS�

- JOINT VENTURE �

SHAPE ASPIRATIONS��

- INCLUSIVE GROWTHPRODUCTS�- SUSTAINABLE DEVELOPMENT�

- VALUE CREATION�

IMPROVE ACCESS��

- INFRASTRUCTRUAL DEVELOPMENT�- COMMUNICATION LINKS�

- COUNTRY COLLABORATION�-  PUBLIC PRIVATE PARTNERSHIP �

YOLOR � team �

STRATEGIES�

DIGITIZATION�

YOLOR � team �

STRATEGIES�

63 �

DIGITIZATION�

YOLOR � team �

STRATEGIES�

64 �

DIGITIZATION�

YOLOR � team �

STRATEGIES�

65 �

DIGITIZATION�

YOLOR � team �

STRATEGIES�

66 �

DIGITIZATION�

YOLOR � team �

STRATEGIES�

67 �

DIGITIZATION�

UNLOCK UNTAPPED MARKET� CURRENTLY LEGACY MODEL �

CAN’T SERVE THE BOP � ALSO FACE HIGH TRANSACTIONAL COST�

NOT BEING ABLE TO ACCESS REMOTE LOCATIONS�

YOLOR �team �

BOP �

CHARACTERIZATION�

SECTOR MARKETS�

STRATEGIES�

BANGLADESH �

YOLOR � team �

BANGLADESH �

68 �

CAN THERE BE A BRAND FOR BOP?�

PROVIDE A CLOTHING BRAND �

YOLOR � team �

BANGLADESH �

69 �

CAPITALIZE ON LEATHER PRODUCT�

CATER TO BOP MARKETS�

YOLOR � team �

BANGLADESH �

70 �

PHARMACEUTICALS COMPETITIVENESS ADVANTAGE �

GENERIC DRUGS IN LDC COUNTRIES�

YOLOR � team �

BANGLADESH �

71 �

FINANCING SERVICES TO THE BOP �

BKASH MODEL �

YOLOR � team �

BANGLADESH �

72 �

#1 IN DISASTER MANAGEMENT�

CO-ORDINATE WITH AID �

YOLOR � team �73 �

BANGLADESH �

NGO WASTE CONCERN�

YOLOR �team �

THE � POTENTIAL � MARKET�

IS� LIMITLESS�

BOTTOM OF THE PYRAMID �

YOLOR �team � THANK� YOU�