Group_3_Consumer Behaviour at the Bottom of the Pyramid

7/24/2019 Group_3_Consumer Behaviour at the Bottom of the Pyramid

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CONSUMER BEHAVIOUR ATTHE BOTTOM OF THE PYRAMID

(B.O.P)

Submitted By : Group 3

Ankit AgrawalNeha SuriSejal Changia

Aatish MathurMohitAnmol Grover


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Introduction

The term Bottom of the Pyramid was coined by C.K. Prahalad in

2005 in his work, The Fortune at the Bottom of the Pyramid .

Population of the world who are extremely poor

and earns less then $2 per day comes under BOP.

Total Population- 7 Billion

BOP Share- 4 Billion (approx 60%)


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Some Facts

BOP population are aware of product and service they use and arebrand conscious as well.

Despite income and resource constraints they look after the fulfilmentof higher needs of Maslows Hierarchy once the psychological needs

are fulfilled.Among Dharavi residents, 85% own TV, 75% own cooker and mixer

grinder, 56% own stove followed by 21% having telephone

connections.

MNCs are now considering BOP as a most profitable segment and

drivers of innovation.


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BOP Characteristics

Consumers buy in small quantities due to low disposable income.They spend more on fundamental needs and personal care products.

Culture plays a major role as this market is governed by rituals,festivals, harvest seasons etc.

Consumers have very poor brand awareness and thus showcasedifferent buying behaviour.

India has emerged as one of the largest consumer markets not onlyfor middle class but also for the bottom of the pyramid segment.

Many fast moving consumer goods companies like HUL, Cavin Care,ICT, Dabur, Tata, Godrej and Nirma have attempted suitable andsuccessful marketing strategies:

Limitations:Poor infrastructure

Poor or no channels of distribution

Lack of legal framework

No access to information


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Buying Behaviour

BOP segment has different need and wants being the most powerfulforce in the consumer segment.

According to a study, BOP respondents said that increase in incomeresulted in more disposable income.

Younger people in the age group of 20-35 have more inclinationtowards buying from retail marts.

Low prices and the possibility to find deals and bargains ore the keybuying points for this segment.

Some of the researches highlight the dominance of the husband in

the purchase of products in BOP markets in India, the role of the wifeand children are also very well emphasized in the findings.

Source : 1.

Source: 1. http://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdf.2. International Journal of Retailing & Rural Business Perspectives Volume 1, Number 1, July -September 2012
http://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdfhttp://www.nmims.edu/NMIMSmanagementreview/pdf/april-may-14/decision-making-process-bottom-of-the-pyramid-consumers-surabhi-piyush-and-hari.pdf


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4 Ps

Companies are modifying their marketing mix to suit theexpectancy and pockets of the bottom of thepyramid consumers.

Product

Companies have come up with products which are capable of meetingthe untapped demands of the bottom of the pyramid consumers with anaffordable price. Coca-Cola came up with Chota Coke to make softdrink affordable.

Price

Its difficult to offer smaller packaging at lower prices due to the

additional cost. To overcome this, Nirma adopted backward integrationand produced its raw material as well. It also used simple and cheaperpackaging material.


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Place

Urban bottom of the pyramid consumers have access to retail outlets.

But in rural areas companies like HUL have come up with conceptslike using self-help groups to distribute and market its products. ITClaunched e-chaupal and attempted to capture the rural bottom of thepyramid segment.

Promotion

The consumers of this segment are not native English speakers orthey hardly know the language. Companies promote their products inregional dialects to make it easier for the local people. In southernIndian states, advertisements are made in regional languages withlocal movie stars as endorsers so that people can relate with them

easily.


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Challenges faced by companies in

understanding Consumer Behaviour atBOP is due to..

Poor Situation Analysis data

Fragmented market Complex purchase decision

Difficulty in meeting latent need of customers

Recreating business and pricing models

Understanding political and social actors


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Purchase Decision Influencer at BOP

Source: Vishvanathan et al 2010.


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Typical Products purchased by BOPpopulation


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Some strategies for influencing ConsumerBehaviour at BOP. Educate about product or services

Price sensitivity (Eg. Reducing quantity and keeping prices same.)

NGOs Involvement (Eg. Swayam Shiksha by HUL.)

Distribution Channel (Eg. Amul Milk collection)

Resource Allocation (Eg. E-Choupal by ITC) Brand Experience (Eg. Coca Cola)

Interaction


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THANK YOU!!

Documents

Group_3_Consumer Behaviour at the Bottom of the Pyramid