...Marketing to the Bottom of the Pyramid 2. Marketing to the BOP raises a number of issues revolving around the social responsibility of marketing efforts. Write a position paper either pro or con on one of the following: Question 2a: It is not exploitation for a company to profit from selling soaps, shampoo, personal computers, and ice cream, etc., to people with little disposable income. In the corporate world, there is little or no attention of the multinational companies on marketing the products and services to poor people because they cannot afford the products, which are sold to middle and higher income customer segments. Due to more attention of the firms on these middle high class segments, the major markets are being oversaturated. At the same time, the B.O.P. has been ignored by the firms in perspective of marketing. In this global business scenario, there is intense competition in major markets that has reduced the profit margins of the firms considerably. Marketing to the B.O.P. is an effective way for the companies to engage the poor into commerce and get an opportunity to uncover the potential of tapping the BOP. The poor people with aspiration and high desire to purchase some of these products contribute significantly in total purchasing power as there is need for the firms to focus on them as well. In business transaction, the seller’s job is to market and sell the products and it is the decision of the buyer to accept or reject the marketed product of the...
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...MARKETING TO THE BOTTOM OF THE PYRAMID 1. Before starting the general guidelines, I would like to explain the concept of BOP segment, this concept was first used by Professor C. K. Prahalad. As we can see in the text, the definition of this term is “a group of some 4 billion people who subsist on less than $2 a day. By some estimates, these “aspirational poor,” who make up three-fourths of the world’s population, represent $14 trillion in purchasing power, more than Germany, the United Kingdom, Italy, France, and Japan put together. Demographically, it is young and growing at 6 percent a year or more.” So it means that the entire world is full of poverty and year by year is growing up. So this segment of the market has a lot of limitations because “The Poor can’t afford most products”. So to start the guidelines we have to know that The BOP market requires many considerations that depend on the type of product, the purchasing power of people in the region, their particular needs, infrastructure, and distribution channels among others. Based on this, some guiding questions could be: *Product, all the things we have to know related with the product such as: What products need? -Packaging -Products Radicals product modifications or actual packaging Price -Functions / uses -If the product can operate in harsh, noisy conditions, with little health education on the producers if they need -Adaptability -Eco-friendly products *Technology: -If you need energy and...
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...Case Study-Marketing to the bottom of the pyramid 1) Bottom of the pyramid refers to the largest but poorest group that consists of 2.5 billion people who live on less than $2.50 a day. This group of people has relatively different needs as compared to the urban society due to the fact that their living environment is very different from the big urban cities. Culture of the target market the company is heading into should be one factor that the company should look into. The demographics of the population like their age groups, employment rate, purchasing power and language spoken are factors that should be discussed. We must understand what their culture values and what they detest and avoid so that the product can be better adapted to their preferences. The external environment must also be analysed and evaluated to better understand the environment surrounding the target market. This can be analysed through the PESTEL factors which consists of namely, political, economic, socio-cultural, technological, environmental and legal. This will tell us about the business laws in the country, what is appropriate for sale and what is not. The economy of the country whether it is stable or fluctuates drastically as transaction will be done in a different currency so rate of currency fluctuation is important. The population demographics, the environmental issues the country counters against and lastly the kind of technology they have in the country. This will tell the company how...
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...Case Study Assignment ------------------------------------------------- Marketing to the Bottom of the Pyramid Case Study: Bottom Of The Pyramid 1) Firstly, firms have to understand that the BOP market is living in a vastly different environment from the urban countries hence they have to cooperate with the local government to reach out to this segment. Marketing to the BOP market require major considerations on the type of product to be marketed, technology availability, distribution channels, mode of transport and infrastructure as well as the purchasing power and need of the people. We will thus look into the 4P’s to determine a checklist for firms to look into before venturing into the BOP market. Product Firms have to tailor its product mix to their needs and repackage the product in smaller portions to make it affordable for them. Also, firms should not eliminate the fact that the BOP market requires technologically advanced products as these products (e.g. cell phones) could help to improve their living conditions. 1) What are the BOP segment’s product needs? 2) What do the BOP segment lack in their respective countries? 3) What are the special functions in the product that is catered to the BOP market? 4) How are the products packaged? 5) Is the product reliant on technology and do the BOP segment have access to the relevant technology required? 6) What are the prior knowledge and uses do they understand about the product? ...
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...Business Research Marketing to subsistence consumers: Lessons from practice Kelly L. Weidner a,⁎, José Antonio Rosa b, Madhu Viswanathan c a b c University of Illinois at Chicago, Department of Managerial Studies, 601 S. Morgan Street (MC 243), Chicago, IL 60607, United States University of Wyoming, Department of Management and Marketing, Dept. 3275, 1000 E. University Ave., Laramie, WY 82071, United States University of Illinois at Urbana-Champaign, 61 Wohlers Hall, 1206 South Sixth Street, Champaign, IL 61820, United States article info Article history: Accepted 1 February 2009 Keywords: Subsistence marketplaces Subsistence consumers Bottom of the pyramid abstract Over 4 billion people live in what is commonly referred to as the “bottom of the pyramid” or as subsistence marketplaces. These individuals and families live in substandard housing, with limited or no access to sanitation, potable water, and health care, have low levels of literacy, and earn very low incomes. Scholars and practitioners alike suggest that the problems existing in subsistence marketplaces demand the attention and involvement of responsible businesses and that doing business with consumers in such marketplaces can be both socially responsible and profitable. This research explores the strategies and tactics currently being used across commercial and social enterprises engaged in subsistence marketplaces. The analysis leads to recommendations about marketing practices currently...
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...Theoretical Background Customer satisfaction is a marketing term that measures how products or services supplied by a company meet or surpass a customer's expectation. Customer satisfaction is important because it provides marketers and business owners with a foundation that they can use to manage and improve their businesses. The concept of customer satisfaction has drawn the attention of practitioners and academics from last several years based on the fact that customers are the primary source of profit for most of the firms operating in the market (Tam, 2004). According to Churchill and Surprenant (1982), “customer satisfaction is an outcome of purchase and use resulting from the buyers' comparison of the rewards and costs of the purchase in relation to the anticipated consequences”. It is also defined in terms of an emotional state that usually arises in response of evaluating a particular service (Westbrook, 1981). The former concept highlights the fact that satisfaction is determined through a cognitive procedure by comparing what customers give up to get a service( cost) and what they receive in response ( reward), however the later concept takes satisfaction as an emotional feeling that results during the process of evaluation (Tam, 2004). Consistent with this concept, we can say that “customer satisfaction is defined as an emotional response, which results from a cognitive process of evaluating the service received against the costs of obtaining the service” (Woodruff...
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...Mini-Case 3: Marketing to the Bottom of the Pyramid 1. Establish a set of guidelines a. How will the company emphasize the value of their product? i. Low-income consumers have less discretion when it comes to what they can spend their funds on so it is important to promote a product by emphasizing its long term value and cost savings compared to a competitor’s product. b. What are the best media avenues for reaching low-income consumers? ii. Many low-income consumers rely on their mobile devices as their primary connection to the internet in order to save money that would be spent on home internet service. It would be beneficial to create an excellent mobile experience that would entice them to view and buy the products along with other marketing channels. c. How frequently will the product be advertised? iii. Low-income consumers tend to buy things only on an as–needed basis. So, would it be best to advertise frequently? Consider that they also do not usually buy in bulk. d. Where will the product be targeted? iv. Low-income consumers generally live in less than spacious neighborhoods. With the right kind of ad, those that live in neighborhoods within a close proximity to a store carrying the product would be a great place to start because word of mouth may spread easily and since they only shop as-needed the ad would reach them at just the right times. 2. Is it exploitation for a company to profit...
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...____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ : Bottom of the Pyramid INTRODUCTION: Global poverty exists today at a startling scale; while the exact numbers are debated, some estimate that four billion people worldwide live on less than two dollars a day.1 According to C.K. Prahalad and Stuart Hart, both Aspen Institute Faculty Pioneer Award recipients, companies should not ignore these traditionally overlooked people, collectively dubbed the “Bottom of the Pyramid,” because of their considerable combined purchasing power.2 Thus, if companies are innovative enough to create or tailor their products to the economic realities and life needs of these people, a significant profit can be won. At the same time, this group’s entry into the market would hopefully better their quality of life and aid in regional economic development. Three well-publicized examples will help illustrate the base-of-the-pyramid concept. First, Grameen Bank was started by Nobel Prize laureate Muhammed Yunus in Bangladesh to offer mini-loans to entrepreneurs who wouldn’t qualify for traditional bank loans based on collateral.3 As of May 2007, over seven million people have borrowed from the Bank with incredibly high levels of repayment.4 Second...
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...Role of Sustainability in Marketing Public Relations at the retail level products that were environmentally safe, sustainable commitment to the process of promoting the practice is known as a permanent market. Alternatively, in other words it is a better business, better relationships, and most importantly it is a practice of making a better life. For example, Apple, as well as for the betterment of the world in all its goods uses recyclable products. Plays an important role in the marketing of the firm. It is like a bridge between corporate responsibility and profitability. For example, a company that produces beverages fewer pesticides, chemicals unnecessary packaging and flavor instead uses natural ingredients that can design a product. To complete the product, the firm has to invest significant money. They will love their new product to consumers based on its new features and buy the product that the company will make the investment. It is also known as the triple bottom line (the customer, the environment and the benefits of Corporate) - this way, business analysts have to keep in mind about Basics of Marketing Marketing is a central building. Marketing and its elements are what every trader should have a clear knowledge. Some people have a promotion or advertising of products marketed as misunderstood. " Marketing, making pricing, delivery , and facilitate relationships with customers satisfactory exchange of goods , services and ideas to promote the...
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...Marketing to the Bottom of the Pyramid Until recently, the least important market segment has been the most poor, lower-income individuals and families. According to Professor C.K. Prahalad, the “bottom of the pyramid”, also referred to as the BOP, is made up of nearly 4 billion people who survive on $2 a day or less. Making up approximately a quarter of the world’s population, these four billion people hold $14 trillion in purchasing power and this group is growing each year. In the past, this market segment couldn’t afford to purchase most products and were definitely not looking at the latest and greatest technologies. However, with some markets becoming more and more competitive, potential for making more profit from bottom of the pyramid consumers began to grow. Today, more and more stores such as Wal-Mart specifically cater to low-income families, just as Sears Roebuck had. Companies such a Singer offering payment plans for consumers who purchased their sewing machine led the way in marketing to this group. It seems that as time goes on, the BOP seems to have access to more and more higher end products that they once couldn’t afford. While the process of marketing to the BOP has proven to turn a profit, marketers need to keep in mind the challenges that they face in regards to offering advanced technology, financing, distribution, and packaging. One challenge that many companies faced was being able to create technologically advanced products that could be made affordable...
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...| Case Study 03 Marketing to the Bottom of the Pyramid | MKT3120 International Marketing | Name : Andrea Manampulle Student Id : 10200729 / MAAMD81 Class : Monday 6 p.m. Due Date : 1st October 2010 Answers 1. In evaluating the potential of a BOP market segment there are certain factors that need to be analyzed in order to develop a marketing strategy. The following will be used as a guideline to establish possibility and viability of marketing to the BOP. Market opportunity Being the “poor sector” of the pyramid is there a marketing opportunity? Will people who struggle to survive buy convince goods? In analyzing the market opportunity of the BOP, as the case suggest with major markets being more competitive and profits margins per supplier reducing, organizations are now uncovering the potential of tapping the BOP. The BOP is a group that consists of over 4 billion people, that accounts for ¾ of world’s population. Given the size of the market, profitability is obtained by volume of sale rather than an individual sale. (Rafeek, 2009 March 16) For example the Indian BOP market with its vast size and demand, offers a huge opportunity for companies. Out of the 1.12 billion population, 70% live in rural areas, accounting to more than 700 million people at 6,27,000 villages. India’s rural population comprises of 12% of the world’s population presenting a huge market opportunity. As at 2008, this market has grown at an impressive rate of 25%....
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...There are more than 4 billion people that live at the bottom of the pyramid living on less than $2 a day. “Traditionally the poor have not been considered an important market segment. The poor can’t afford most products; they will not accept new technologies; and except for the most basic products, they have little or no use for most products sold to higher income market segments – these are some of the assumptions that have, until recently, caused most multinational firms to pay little or no attention to those at the bottom of the pyramid.” Marketing to the bottom of the pyramid is something companies need to venture into. The major markets are being oversaturated and the bottom of the pyramid are being forgotten and not marketed to. I feel that it is not exploitation for a company to profit from selling soaps, shampoo, personal computers and ice cream and so on, to people with little disposable income. When engaging the poor into commerce this is giving them a chance to move up the poor distribution ladder. This is also a good thing for companies because the ‘aspirational poor’ represent about $14 million in purchasing power so I believe it is necessary for companies to look into this. When companies overlook the bottom of the pyramid they are not letting the people of this segment enjoy the benefits of quality products. By marketing to this segment, the market creates more choices and also expands the market so more profit can pour in. It is not exploitation when company...
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...Case 3-4 Marketing to the Bottom of the Pyramid Central Issues The concept of the Bottom of the Pyramid (BOP) market was originally developed by C.K. Prahalad in “The Fortune at the Bottom of the Pyramid” to highlight a large potential market made up of a large segment of the world’s population that has, until recently, been an ignored market segment among multinational companies. In an age of increasing global competition and near-saturation for some products in more mature markets, this multi-cultural segment, made up of people from all parts of the world that earn less than two dollars a day, can generate significant revenues and be profitable for companies who have developed appropriate strategies for reaching this market segment. Among the issues related to BOPMs are establishing appropriate distribution channels, developing and pricing products that have value for those in these markets, and finding creative ways for financing. In terms of financing, this would include not only that related to the purchase of a product for those with relatively low incomes, but would also include strategies for financing business initiatives on the local level. Perspectives Stakeholder would include the local populations that make up the BOPMs. Cultural considerations must be a key component of product development and advertising. Care must be given that products will not harm those to whom they are marketed. Also, companies are stakeholders in that new strategies including...
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...MKS0119 Nokia’s Rural Marketing Strategies in India: Reaching Out to the Bottom of Pyramid “The rural consumer is discerning and the rural market is vibrant. At the current rate of growth, it will soon outstrip the urban market. The rural market is not sleeping any longer. We are.”1 – Adi Godrej, Chairman, Godrej Group of Industries To expand its presence, Nokia is planning to launch a new service ‘Nokia Life Tools’ that would provide information on market price, weather, etc., to information-starved farmers. While the idea is not new, the challenge in front of Nokia is to convert the 70 million rural mobile users in using its service, amidst competition from local input dealers and ITC e-Choupal that offers similar services. Rural Marketing in India: Demographics and Economics Out of India’s population of over 1 billion, 70% lives in rural India.2 India consists of 627,000 villages3 with 13% of them having a population of above 2000.4 For the people of rural India, agriculture is the main occupation. Agriculture contributes 17.8% to India’s GDP with about 60% of the workforce employed in the agriculture sector in 2008.5 Since independence, rural India went through a socio-economic transformation due to the various initiatives taken by the ministry of rural development.6 However, till 1990s, the gap between rural and urban development remained wide. With the implementation of minimum support price (the rate at which the government buys the farm produce to prevent farmers from...
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...(18027991) Email: jennilyn_phan@hotmail.com The Fortune at the bottom of pyramid Procter & Gamble Company The Fortune at the bottom of pyramid Procter & Gamble Company According to Pervez, Maritz and Waal (2013), recently when poverty continues to be one of the global key issues and also one of the biggest challenges facing the society at large, the solutions to alleviate the continuing economic misery have become increasingly popular. The release of new theory called “Bottom of the Pyramid”, which is also known as “base of the pyramid”, by Prahalad and Hart has helped figure a new way of thinking about the intersection of business strategy and poverty alleviation (London & Anupindi, 2012). However, it does not seem like the business will always be profitable when doing the expansion to the low-income market, the challenges facing to the businesses also arise. This paper is to describe and discuss in-depth the Bottom of the Pyramid concept and also to go through the approach to the BoP venture that the selected company, Procter & Gamble, has undertaken in their business strategy in the Chinese market. Dinica & Motteau (2012) stated that: "The distribution of money in the world looks like a pyramid". The “bottom of the pyramid” concept mentions that not too many people could earn a lot at the top of the pyramid but a big amount of people who are poor at the bottom of the pyramid. It is estimated that approximately four billion people that make up...
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