Merits of targeting customers at the bottom of the pyramid

companies serving the base of the pyramid

As the Unilever example makes clear, the starting assumption must be that serving Tier 4 involves bringing together the best of technology and a global resource base to address local market conditions. The objective is to harness existing nontraditional channels that can quickly and easily reach consumers.

Although the cleaning business acquired a number of customers and delivered on its service promise, it did not meet its financial objectives and could not be considered a viable business investment for the company.

unilever bottom of the pyramid

Inafter market research revealed that poor adolescent girls in India often suffer from iron deficiency, PepsiCo worked closely with consumers in two districts in Andhra Pradesh to create a line of iron-fortified cookies and snack puffs under the brand Lehar Iron Chusti Lehar Iron Health.

Today, spin-offs such as Grameen Telecom a provider of village phone service and Grameen Shakti a developer of renewable energy sources are helping Grameen Bank build a technology infrastructure to automate its processes.

The goal is to establish a competitive advantage in a mass-market category by designing and engineering a product to be affordable and robust.

Bottom of the pyramid concept in marketing

Assumption 3 Only developed markets appreciate and will pay for new technology. Computerization of microlending services not only makes the overall operation more efficient, but also makes it possible to reach many more people — lending money to individuals with no collateral and no formal address. To do this, MNCs must combine their advanced technology with deep local insights. As a consequence, many MNCs worldwide slowed investments and began to rethink risk—reward structures for these markets. The objective is to build, from the ground up, a parallel distribution and sales channel that can penetrate hard-to-reach rural areas. Exhibit 3 suggests some but by no means all areas where an entirely new perspective is required to create profitable markets in Tier 4. They see the logic in moving into a wide-open market in Tier 4 rather than trying to force their technology prematurely into applications for the developed markets, where incumbents and institutions stand in their way. Consider the experience of the Grameen Bank Ltd. In fact, Nirma created a new business system that included a new product formulation, low-cost manufacturing process, wide distribution network, special packaging for daily purchasing, and value pricing. We have seen how the disenfranchised in Tier 4 can disrupt the way of life and safety of the rich in Tier 1 — poverty breeds discontent and extremism. He has identified the BoP Perspective as a unique market-based approach to poverty alleviation. The company pledges to deliver the product within 50 minutes of the time an order is called in. The greater the novelty, the greater the disruption, and people with limited means and limited product experience see extreme novelty in many products.

The product runs on a battery, weighs less than 10 pounds, and keeps food fresh and cool at temperatures between 40 and 60 degrees Fahrenheit. Targeted marketing opportunity.

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Profits at the Bottom of the Pyramid