...Innovating for the bottom of the pyramid 1. Why are companies such as Siemens, GE and Procter and Gamble targeting the “bottom of the pyramid”? These companies are targeting the bottom of the pyramid because this segment represents two-thirds of the world’s population (4 billion people). However, those people live on less than $2 per day and 1.5 billion people have no access to electricity. Companies such as the ones mentioned above have found out that this situation has provided an opportunity to create innovative sources renewable energy. Another reason why they are doing this is because growth in mature markets tends to slow down. Therefore, many global companies are realizing that the ability to serve the needs of the world’s poorest consumers will be critical source of competitive advantage in the near future. These companies see the bottom of the pyramid as a potential market. In fact, they are already developing products and launching products specially designed for this segment. They are segmenting global markets by income and population and targeting millions of poor consumers with innovative products and appropriate positioning strategies. However, they have to understand the importance of skillful global market segmentation and targeting while trying to reach low-income consumers in emerging markets. Rural markets are dispersed and distribution is not well established. One problem is to persuade low-income consumers to change their behaviors by buying new products...
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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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...| 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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...| To Study the Effect of CEllphones on the BottOm of the income PyraMID of INdia | Group-8Section-A | | 11/17/2012 | Empirical analysis of the socio economic appreciation brought by mobile phones at the bottom of the pyramid | | Contents S/No | Title | Page No. | | | | 1 | Abstract | 3 | 2 | Introduction | 3-7 | 3 | Research Methodology | 8-9 | 4 | Limitations and Assumptions | 9 | 5 | Conclusion | 9-10 | 6 | References/Bibliographhy | 10 | | | | | | | | To Study the Effect of Cell phones on the Bottom of the Income Pyramid of India Abstract: The aim of our project is to study the effect of mobile phones on the bottom of the income pyramid and assess whether the penetration of these cell phones have empowered them in one way or the other. In other words, the study would analyze whether these mobile phones have been a marginal appreciator in their socio economic transition pushing them above in the hierarchy of the pyramid. The study would comprise several parameters to assess any changes and the output of the survey conducted would be analyzed accordingly on the basis of these parameters. The intention of the project is purely academic in nature. Its outcome would be to facilitate understanding and have a critical and comprehensive opinion on how the mobile phones have helped the masses in terms of the number of ways and the degree of impact. Introduction: 5 b)Establish alternate hypothesis As the name of the...
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...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 process " Customer: what they need is to understand customers and their needs. Then how customer needs and to ensure that the product will buy it is to judge people. Product: The product is developed according to the customer that is the second...
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...Management Dr. Paweł Krzyworzeka 2015/2016 Grades There are two components: Group presentations (10 points) • We are going to discuss six cases (sessions no. 2, 3, 5, 6, 7, 9) • All groups have to read carefully all six cases and be prepared to give an oral presentation (ad-hoc, at least two times during our course) based on assigned questions (see the table below). • Group can earn up to 5 points for a presentation • Groups are fixed and preassigned (see the list) • Do not prepare any PowerPoint presentation, however, you may want to write up your answers in a form of short paper (1-2 pages) Take-home exam (10 points) Session Date Topics Readings 1 17.03.2016 Thursday Introduction • Globalisation • Competitive advantage of nations Additional readings: Davies, H. & Ellis, P., 2000. Porter’s competitive advantage of nations: time for the final judgement? Journal of management studies, 37(8), pp.1189–1214. Dunning, J.H., 1993. Internationalizing Porter’s diamond. MIR: Management International Review, pp.7–15. Porter, M., 1990. The competitive advantage of nations. Harvard Business Review, 68(2), pp.73–93. 2 31.03.2016 Thursday Global value chain • Outsourcing vs offshoring • Global value chain • offshoring • outsourcing • Resource-based view • Transaction costs • Intellectual property infringement Case: Ecco – Global value chain management 1. Describe the competitive environment of ECCO and determine how well ECCO is positioned (vis-a-vis...
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...Executive Summary Introduction/Background of the study Objective of the study Scope of the study Methodology Project findings Recommendations 1. 2. 3. 4. 5. 6. References Executive Summary As Prahlad and Hat point out, the economies of vastly populated countries such as China, India,and the former Soviet Union present a profusion of consumers and immense growth potential for multinational corporations. The trick is for senior management to fully understand that this market possibility exists and that tapping into it may require a radical departure from the traditional, developed-economy mindset. As Nike’s financial record indicates, market saturation and intense competition in Tier One economies has squelched Nike’s growth trajectory. While the Swoosh continues to penetrate typical Western markets, tapping into the increasing numbers of “middle and lower class” consumers in emerging markets could offer a phenomenal expansion opportunity if the firm can create the right business model. In addition, beyond the potential economic benefits from this venture, Nike’s World Shoe Project also offers a credible response to the labor issues that have buffeted the company, and leverages their efforts to minimize the environmental impact of their production activities. • Introduction/Background of the study The words “Just make me the shoe!” echoed down the boardroom table to Tom Hartage a 17 – year veteran of the running shoe company, Nike Inc...
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...Sample questions – Global Marketing Management Please find below questions from previous years which will give you an idea as to the type of questions that you might get asked Competitive Advantage: * Consider the role of CSAs and FSAs in the development of a firm’s competitive advantage and critically assess how these can be transferred and used effectively to compete in foreign markets. Use one of the case studies featured in the module seminar programme to illustrate your answer. * Critically evaluate what is meant by competitive advantage and the key elements involved in it. Highlight the frameworks that may be useful to global marketers in the analysis of what constitutes their brand’s competitive advantage and whether this might be transferable to foreign markets. Use examples to illustrate your argument Culture * What is meant by culture and how can Hofstede’s cultural typologies and Hall’s contexts help Western marketers better understand foreign market cultures? Use examples of specific counties and/or regions to help illustrate your answer. * What is culture? Is it important for international marketers to take account of or is globalisation going to make it a thing of the past Standardisation/ adaptation * Highlight the distinguishing differences between localisation and adaption of products and analyse the advantages and disadvantages associated with standardised global product strategies. Using examples to help illustrate...
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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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...By: Allysha Farnham BEH/225- Introduction to Behavioral Science July 3, 2014 Joshua Paul - Faculty University of Phoenix Personality is what makes us who we are. It is the differences that each individual has that deals with the behavior patterns, cognition, and emotion. Now, each person is different, and there were a number of theorists that contributed to study of personality. The first theorist that is widely known today for his study of personality is Sigmund Freud. He was one of the most influential thinkers of all time. He came up with theories that shows his views on many different aspects of life. Some of those include personality, childhood, memory, and even sexuality. Sigmund Freud came up with a theory on the development of personality. He questioned what made us progress as individuals. Freud then found an obvious point. That point was that life is the drive that pushes us to progress as an individual. The need to have balance in our nervous system generates the motive to do things that we see is right in society. However, the appearance of the development of personality, in the case of Freud, was driven by the wanting of resolution for all of the problems that we face in life as a human being. This theory is incomplete though. What about the people who continue to have bad behavior? Or the people who continue to be suicidal? Or the person who wants to keep working because they want to keep pushing the limit and never finding a satisfaction...
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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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...strategy + business issue 26 The Fortune at the of the SECURITY AND S T R AT E GY Bottom Pyramid by C.K. Prahalad and Stuart L. Hart content strategy & competition Low-income markets present a prodigious opportunity for the world’s wealthiest companies — to seek their fortunes and bring prosperity to the aspiring poor. 2 With the end of the Cold War, the former Soviet Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world...
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...strategy+business The Fortune at the Bottom of the Pyramid by C.K. Prahalad and Stuart L. Hart from strategy+business issue 26, first quarter 2002 © 2002 Booz Allen Hamilton Inc. All rights reserved. e-Doc The Fortune at the of the Bottom Pyramid by C.K. Prahalad and Stuart L. Hart SECURITY AND S T R AT E GY content strategy & competition Low-income markets present a prodigious opportunity for the world’s wealthiest companies — to seek their fortunes and bring prosperity to the aspiring poor. 1 With the end of the Cold War, the former Soviet Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade...
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...The Fortune at the of the SECURITY AND S T R AT E GY Bottom Pyramid by C.K. Prahalad and Stuart L. Hart content strategy & competition Low-income markets present a prodigious opportunity for the world’s wealthiest companies — to seek their fortunes and bring prosperity to the aspiring poor. 1 With the end of the Cold War, the former Soviet Union and its allies, as well as China, India, and Latin America, opened their closed markets to foreign investment in a cascading fashion. Although this significant economic and social transformation has offered vast new growth opportunities for multinational corporations (MNCs), its promise has yet to be realized. First, the prospect of millions of “middle-class” consumers in developing countries, clamoring for products from MNCs, was wildly oversold. To make matters worse, the Asian and Latin American financial crises have greatly diminished the attractiveness of emerging markets. As a consequence, many MNCs worldwide slowed investments and began to rethink risk–reward structures for these markets. This retreat could become even more pronounced in the wake of the terrorist attacks in the United States last September. The lackluster nature of most MNCs’ emergingmarket strategies over the past decade does not change the magnitude of the opportunity, which is in reality much larger than previously thought. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income...
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...Supplemental In-Depth Integrative Case Nokia Targets the Base of the Pyramid One of the most widely used clichés in the world of business is the so-called 80/20 rule. In the realm of sales, the rule is sometimes interpreted as “80 percent of our sales come from 20 percent of our customers.”1 One recent business theory that has challenged this rule is the so called BOP or Bottom of the Pyramid perspective, developed and popularized by C.K. Prahalad.2 It refers to the around 4 billion people at the bottom of the economic pyramid with a purchasing power of US$2,000 per year or less. Prahalad and colleagues have proposed that these low-income consumers represent great potential but require a unique mix of pricing, promotion, low cost delivery, and effective communication in order to successfully reach.3 The key to selling to BOP consumers is that an MNC strategy be affordable, accessible, and socially driven. Nokia is one company that is taking this perspective seriously. Business interest in BOP markets is rising. Multinational companies have been leaders in this trend, especially in food and consumer products. And large national companies have also taken a leadership role, proving to be among the most innovative in meeting the needs of BOP consumers and producers, especially in such sectors as housing, agriculture, consumer goods, and financial services. And small start-ups and social entrepreneurs focusing on BOP markets are rapidly growing in number. But perhaps the strongest...
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