( Eradication of poverty through profit )

Prepared by-Shivam jainRaghvendra bhadoriaUdita madan

More 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

75~100 million people

1,500~1750 million people

4,000 million people

o Total population is divided into 5 tiers.o Teir 4& 5 is bop.o Very less purchasing power. o 400 million people in Indiao billions of people living on less than $2 per dayo Unable to fulfil basic needs.o Huge unseen opportunities

REGION BOP POPULATION

(MILLIONS)

BOP POPULATION

(SHARE OF TOTAL

OPULATION

BOP INCOME

(BILLION $)

BOP SHARE

OF TOTAL

MARKET

AFRICA 486 95% 429 70.5%

ASIA 2858 83% 3470 41.7%

EASTERN EUROPE 254 64% 458 36%

LATIN AMERICA 360 70% 509 28.2%

GLOBAL 4000 72% 5000

Only GOVERNMENT and NGO’S will serve the bop .

Poor cannot afford our products.

Managers in MNCs, public policy makers, suffers from division roles.

Huge opportunity is hidden behind bop which will eradicate poverty as well profit for MNC’S.

Poor cannot be a profitable consumer.. Product is our focus, not functionality. We focus on product and process innovations and not business

innovations. We do not see the bottom of the pyramid forcing us to innovate

around sustainable development. Bop is illusion . Bop needs can not be profitable, Bop market cannot afford innovation. High cost and very less profit.

Size

Rapid growth

Less competitive environment

Opportunities for cost-saving

Opportunities for innovation

Cash poor consumers

Geographic, economic, and cultural distance

Limited product awareness

Working with longer time frames

A philosophy for developing products & services for

the BOP

- small unit packages

- low margin per unit

- high volume

- high return on capital employed

-Optimum quantity

AWARENESS

ACCESS

AFFORDABLE

AVAILABLILITY

An illustration of the successful execution of this strategy comes from Hindustan Lever Limited (HLL), a subsidiary of Unilever, widely considered the best managed company in India. Like most MNCs, for over 50 years it catered to the needs of the elite of India- the top of the pyramid.

A local firm, Nirma, challenged HLL in its detergent business, by creating a new business system - a new product formulation, new manufacturing process, distribution, packaging, and pricing. HLL like most MNCs, initially dismissed Nirma as a low end producer.

As Nirma grew rapidly, HLL realized both its new opportunity as well as its vulnerability. Nirma was attacking, in its detergent business, from the bottom of the pyramid.

HLL responded with its own offering for this market - drastically altering the traditional HLL business model.

HLL created a new product formulation which dramatically reduced the ratio of oil to water in the detergent, thereby reducing significantly the pollution associated with washing cloths in rivers and other public water systems.

They decentralized the production, marketing, and distribution of the product to take advantage of the abundant labor pool in rural India and quickly penetrate the thousands of small outlets where people at the bottom of the pyramid shop.

They reinvented the cost structure of the business, enabling the introduction of the product at a price point affordable to those at the bottom.

Bottom of the pyramid can not be ignored because it is an huge opportunity .

Outdated assumptions are resulting false and peoples can pay for innovation and quality products.

Proper product and services should be designed to provide the maximum satisfaction to bop

Marketing managers have to create awareness about product and services in these markets.

The product should be available and affordable for the people.1

NGO‘S and GOVERNMENT is not only to serve bop and business organizations can also fulfill their needs.