Marketing at the Bottom of the Pyramid

Group No- 08

Mansi Rawat Nidhish Babu

Mathew Abraham Akash Ranjan Patra

Raghavendra Trivedi

What is “Bottom of the Pyramid” ? • “Bottom of the Pyramid” is the bottom of the wealth

pyramid that is the largest poorest socio-economic group

• Total population is divided in 5 tiers where Tier 4 & 5 comes under BoP

• People at BoP have less purchasing power • 400 million people at BoP live within Rs.120/day • People at BoP have their basic needs unfulfilled

History:

“Bottom of the Pyramid” was first used by U.S. President Franklin D. Roosevelt

Billions of people living on less than $2 per day, was defined by Professors C.K. Prahalad and Stuart L. Hart in 1998

Prahalad proposed businesses, governments, and donor agencies stop thinking of the poor as victims instead start seeing them as value-demanding consumers

He proposed there are tremendous benefits to multi-national companies serving these markets in ways responsive to their needs

The Wealth Pyramid

Market Creation by BoP Approach:

Over 4 billion poor represent huge market, despite their reduced purchasing power. To exploit this, the conventional business models are re-designed completely

“Sachet Revolution”, the marketing approach to package shampoo and other items in sachets to make them affordable to poor people

Markets do not initially exist for safe water, sanitation, reforestation and mosquito nets. These markets is created by public investments

4A’s of BoP Marketing:

Acceptability Affordability Accessibility Awareness

Opportunities at BoP:

Targeted marketing opportunity Product redesign Distribution extension New channel creation New product development Conquest of competitors’ market Greenfield-market expansion New business-model development New market creation

Misleading Assumptions about BoP:

Poor people cannot be considered as profitable consumer

Focusing on product rather than its functionality BoP is illusion No profit can be gained at BoP No innovation can take place at BoP High cost and less profit

Challenges in Marketing at BoP:

Changing consumers’ behavior Rethinking the way products are made and delivered to customers Most widely underestimated Cash poor customers Limited product awareness No internet access More preference to local brands than big brand products

How Companies do Marketing at BoP ?

Companies come up with products which are capable of meeting the untapped demands of the BoP consumers with an affordable price

Coca-Cola came up with “Chota Coke” to make soft drink affordable Micromax and Spice have captured the bottom of the pyramid market

with low-priced but high featured mobile handsets Nirma, from being a local player emerged as a major detergent brand

preferred by BoP consumers Chic shampoo sachets were available at 50p initially and now at

Re.1. This pioneered the sachet packaging fiasco ITC launched e-choupal and attempted to capture the rural bottom of

the pyramid segment

Other Companies doing BoP Marketing: Bajaj

Allianz General

Insurance Godrej appliance

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Hindustan Unilever

Tata NanoPepsico India

Vortex

Zaya Labs

Conclusion:

Huge market opportunity at BoP can’t be ignored

False assumptions and challenges should be addressed

Proper awareness of products should be made at BoP

Products should be suitably designed

Products available at BoP must be priced reasonable

Not only Indian Government, more private companies should

serve BoP consumers

Thank You