Marketing at the bottom of the pyramid

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Marketing at the Bottom of the PyramidGroup No- 08 Mansi Rawat Nidhish Babu Mathew Abraham Akash Ranjan PatraRaghavendra 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. PresidentFranklin D. Roosevelt Billions of people living on less than $2 per day, was defined by Professors C.K. Prahalad andStuart 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

4As of BoP Marketing:

Opportunities at BoP: Targeted marketing opportunityProduct redesign Distribution extensionNew channel creationNew product developmentConquest of competitors marketGreenfield-market expansionNew business-model developmentNew 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 behaviorRethinking 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 BoPconsumers 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 pyramidmarket 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 pyramidsegment

Other Companies doing BoP Marketing:

Conclusion:Huge market opportunity at BoP cant 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