Welcome To Our Presentation

TopicBottom Of The

Pyramid Course Name: development economics Course Code: 210

Prepared By Md. Sifat Hasan

Name Roll

1. Md.Sifat Hasan 14132622

7. Maminur Rahman 14132608

3. Md.Badrul Alam 14132613

4. Mahmudul Hasan 14132614

5. MD. Al-Amin 14132615

6. Md.Rasel Mia 14132612

7. Maminur Rahman 14132607

8. Shafiqul Islam 14132620

9. Md. Zafor Ikbal 14132619

10. Saddam Hossain 1413261611. Afsana Siddika Moni 14132627

12. Afruza Akter Sumi 14132640

13. Md.Iqbal Hossain 14132643

14. Masum Rana 14132646

Profile Of The Members

BOTTOM OF THE PYRAMIDMore than $20,000

$ 1500~ $20,000

$ 1500~ $20,000

Less than $1,500

Less than $1,500

Tier 1

Tier2

Tier 3

Tier 4

Tier 5

The Bop Theory And Poverty

• Poverty can be alleviated through financially profitable activity

• Gradual expansion of the concept beyond attention to basic needs such as nutrition

• Per capita income at or below $1,500 or $2,000 per annum

History Of Bottom Of The Pyramid

• “Bottom of the pyramid” was first used by U.S. President in his April 7, 1932 radio address, the forgotten man

• Current usage refers to the billions of people living on less than $2 per day,

• as first defined in 1998 by professors C.K. Prahalad and Stuart L. Hart• Expanded in The Fortune at the Bottom of the Pyramid by Prahalad in

2004 • Capitalism at the Crossroads by Hart in 2005.

Prahalad View On Bottom Of The Pyramid

• Businesses, governments, and donor agencies stop thinking of the poor as victims.

• Bop mass are resilient and creative entrepreneurs as well as value-demanding consumers.

• Tremendous benefits to multi-national companies in bop market

• The poor of today are the middle class of tomorrow.

Twelve Principles Of Innovation For Bop Markets

1. Focus On Price Performance Of Products And Services2. Innovation Requires Hybrid Solutions3. BOP Markets Are Large4. The Developed Markets Are Accustomed To Resource Wastage5. Product Development Must Start From A Deep Understanding

Of Functionality, Not Just Form6. Process Innovations Are Just As Critical In BOP Markets As

Product Innovations

Twelve Principles Of Innovation For Bop Markets

7. Deskilling Work Is Critical. 8. Education Of Customers On Product Usage Is Key9. Products Must Work In Hostile Environments10. Research On Interfaces Is Critical Given The Nature Of The Consumer Population11. Innovations Must Reach The Consumer12. Paradoxically, The Feature And Function Evolution In BOP Markets Can Be Very Rapid

The Nature Of The Bop Market

• There Is Money at the BOP• Access to BOP Markets• The BOP Markets Are Brand-Conscious• The BOP Market Is Connected• BOP Consumers Accept Advanced Technology

Readily

Philosophy For Developing Products And Services For The Bop

1. the basic economics of the BOP market are based on • small unit packages, • low margin per unit, • high volume, • high return on capital employed2. Social innovation: Creating products for those at the bottom of the pyramid3. ‘It’s not just about making products cheaper’

Products For The Bottom Of The Pyramid

Before After

Whitening Creams • Fair & Lovely • Fair & Handsome • Fair & Lovely

Multi Expert

Products For The Bottom Of The Pyramid

• Poverty and Alcohol• Microcredit • Market-specific products• Innovation in the BOP• Venture capital• Brand in the Bottom of the Pyramid

Market

Bop: A Global Opportunity

• Engaging the BOPTraditional approach Business models

• Local growth opportunities Large population base is one indicator of the size of the market opportunity at the BOP

Per-capita income isn’t considered

Fortune Or Mirage At The Bottom Of The Pyramid

Fortune at the BOP1. Market size is $13 to $15 trillion.2. Much ‘untapped’ purchasing

power.3. Profit margins in BOP markets

are high.4. Often buy ‘luxury’ items.5. Reduce prices without reducing

quality.

Mirage of a Fortune

1. BOP market size is $3 trillion.

2. little ‘untapped’ purchasing power.

3. not so profitable.

4. little room for luxuries.

5. Reduce price, reduce quality.

Are The Poor Poor?• poor countries are poor because they lack resources• aid from rich countries to the governments of the poor countries

for specific projects (typically infrastructure) would reduce poverty

• , investments in education and health care might have the largest multipliers per dollar of investment in economic development

• The record of aid and loans from the various donor countries and the World Bank, International Monetary Fund, and other institutions is at best mixed

Criticism Of The Bop• Weaknesses of the BOP Theory• The Negative Aspects of the BOP theory

1. Target Market 2. Affordability3. Financing 4. Lower Prices or raise income5. The poor as Producers

Known Problems And Known Solutions, What Is The Missing Link?

The missing link is the need for-• Investments in the education of customers, • Technology to develop that solution into an

affordable product, • The distribution channels to make it widely available.• Health care for bop market needs to be increased

Final Thoughts • Narrowing the global gap between rich and poor, it means

Lifting billions of people out of poverty and desperation; It also means averting the social decay, political chaos, and so on.

• Economic miracles do not happen out of the blue; they are based on education miracles.

• Free basic education and affordable technical education for the poor through public-private partnerships.

• Creating a win-win situations between bop & top by removing disparity.