jade kramer
A critical discussion of marketing to the bottom of the pyramid
The bottom of the pyramid refers to the 4 billion poorest people in the world who live on less than R25 a day and refers mainly to India and Africa which have the highest levels of poverty in the world. The BOTP can’t access global markets so have to pay more for products and services. Big companies don’t view them as a viable market- infact this group actually represents the biggest market in the world if companies can offer affordable products and services more efficiently. The reason for the wealth that lies at the bottom of the pyramid is mostly due to the fact that most big organizations such as Wal-Mart and Costco market to the top tier of the pyramid, the fortune at the bottom of the pyramid reverses the pyramid to get companies to meet the need of the worlds poorest. This gets the companies not to view them as victims but as entrepreneurs being able to work in the most difficult circumstances and value driven consumers. The focus is on inclusive capitalism which creates mutually beneficial partnerships based on trust and respect.
The aim of the organizations that are marketing to these individuals is to offer their products at extremely low prices and margins and hope to generate high enough profits by selling huge quantities. There are however, flaws that these companies need to take into consideration when targeting the BOTP- We will look into the assumptions that most people have about the BOTP that may hide the real potential that exists in terms of the BOP market such as; the BOTP can’t afford to buy the MNC; the poor are only concerned with necessities and not luxury products; The poor don’t have the required skills for the use of advanced technology. There are however many benefits for companies who wish to market to the bottom of the pyramid sustainably such as the economic potential, which requires; innovation; margin versus volume; and targeting aggregated customers.
The
The bottom of the pyramid refers to the 4 billion poorest people in the world who live on less than R25 a day and refers mainly to India and Africa which have the highest levels of poverty in the world. The BOTP can’t access global markets so have to pay more for products and services. Big companies don’t view them as a viable market- infact this group actually represents the biggest market in the world if companies can offer affordable products and services more efficiently. The reason for the wealth that lies at the bottom of the pyramid is mostly due to the fact that most big organizations such as Wal-Mart and Costco market to the top tier of the pyramid, the fortune at the bottom of the pyramid reverses the pyramid to get companies to meet the need of the worlds poorest. This gets the companies not to view them as victims but as entrepreneurs being able to work in the most difficult circumstances and value driven consumers. The focus is on inclusive capitalism which creates mutually beneficial partnerships based on trust and respect.
The aim of the organizations that are marketing to these individuals is to offer their products at extremely low prices and margins and hope to generate high enough profits by selling huge quantities. There are however, flaws that these companies need to take into consideration when targeting the BOTP- We will look into the assumptions that most people have about the BOTP that may hide the real potential that exists in terms of the BOP market such as; the BOTP can’t afford to buy the MNC; the poor are only concerned with necessities and not luxury products; The poor don’t have the required skills for the use of advanced technology. There are however many benefits for companies who wish to market to the bottom of the pyramid sustainably such as the economic potential, which requires; innovation; margin versus volume; and targeting aggregated customers.
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