Marketing to the Bottom of the Pyramid
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Synopsis: This case discusses the fortune at the bottom of the pyramid, some companies look at this market as enormous, the bottom of the pyramid consist of a group of about 4 billion people, who are making less than 2 dollars a day. Traditionally this market is ignored by large multinational companies because they believe people cant afford the products or services they offer. This case describes how BOP marketing requires various type of commitment from a company to be success in these types of markets. Some examples of areas of focus that can positively affect BOP markets are advance technologies, if a company can develop advanced technologies that can offer quality products at a cheap price then they can be profitable in a BOP market. Creative financing, if a company can be creative and incorporate a finance plan that will help consumers pay for the items they need and be able to repay without creating bad debt the company can also be profitable in a BOP market. Effective distribution and affordable packaging, can also be extremely beneficial to companies. Health benefits are being promoted with the distribution of everyday necessities to BOP markets.
Questions:
As a junior member of your companys committee to explore new markets, you have received a memo from the chairperson telling you to be prepared at the next meeting to discuss key questions that need to be addressed if the company decides to look further into the possibility of marketing to the BOP segment. The ultimate goal of this meeting will be to establish a set of general guidelines to use in developing a market strategy for any one of the companys products to be marketed to the “aspiration poor.” These guidelines need not be company or product specific at this time. In fact, think of the final guideline as a checklist–a series of questions that a company could use as a start in evaluating the potential of a specific BOP market segment for one of its products.
As a junior member on this company committee, if we want to explore selling a product in a bottom of the pyramid market we should consider these factors.
What need can we satisfy in a BOP market?
What BOP countries should we consider expanding to?
Can we make a profit in a BOP market?
Is there a problem that one of our products can solve in a BOP market?
Do we have the capitol to develop advanced technology to successfully satisfy the needs on consumer in the BOP market?
Since we will be working in a poor market can we develop a creative financing plan that will allow our consumer in the BOP market to pay on time?
Can we avoid bad debt with our financing plan?