International Marketing– BUS343
People around the world need products and services to survive these days. From the filthy rich to dirt poor, they all have needs. Households with adequate incomes do not struggle to provide the basic necessities to their families but the households in the bottom of the pyramid do. Creating opportunities for the bottom of the pyramid market can be a win, win scenario for the consumers and companies. Guidelines need to be put in place to ensure consumers aren’t exploited and challenges are overcome without incident.
Bottom of the Pyramid or BOP refers to 4 billion people who live on less than two dollars a day. They make up three-fourths of the population in the world but also have the spending power of $14 trillion. The BOP population have been profiled as not needing or accepting of technology, not able to afford most products, and only needing basic products but in reality, these consumers are just as much in need of technology and most products the rest of the population take for granted.
Marketing to the bottom of the pyramid comes much later in the process, first companies that want to enter this market need to focus on the product. The product needs to be something this population needs to survive, improve health, or help them solve a problem, which cannot be done without adequate research. Companies must develop products that are affordable to this population as well as turn a profit. An example of bottom of the pyramid success is with Gillette in the Indian market. Their razors were available to this market for years but profit was flat. Gillette spent many hours, days, weeks and month visiting and interviewing the BOP Indian men about their shaving habits. Gillette discovered that price was not the only hinderance but many BOP Indian men lacked running water and sat on the floor while shaving. The Gillette Guard was created specifically for this market, it was designed with all the hurdles they discovered while doing marketing research and at a price these consumers could afford (Scamazzo, (2014). A great example of a win, win scenario.
Pros & Cons
There are pros and cons to marketing to the bottom of the pyramid, some believe selling items such as soaps, shampoos, computers and ice cream is exploitation. Consumers at the bottom of the pyramid have just as much right to make smart or poor decisions just like every other consumer. Some argue that marketing to this segment could possibly divert funds from essential items to non-essential items. In the words of Kirk Davidson (2009, pg 2), “it would be patronizing, demeaning, and just plain wrong to suppose that the BOP consumers cannot or should not make these decisions for themselves.” Bottom of the pyramid consumers are cost conscious but just like the majority of consumers splurge from time to time.
Global marketers could encounter many challenges when targeting the bottom of the pyramid. One challenge is selling a product to the bottom of the pyramid that they need and is cost effective to the company. A lot of consumers at the bottom of the pyramid stick with their tried and true products. They don’t go to the market or store and think to themselves, Oh I wonder what’s new today, they shop for what they need (Godin, 2010). This is a fine line to walk and takes a lot of research and development to create a new product to this segment.
The bottom of the pyramid is a large market that can be included in marketing tactics if the right approach is taken. Being successful in this world will come with challenges and not everyone believes it’s the right place to focus marketing to but many consumers at the bottom of the pyramid need products, innovations and services that companies have offer.
Case 3-3 Marketing to the Bottom of the Pyramid (n.d.).
Cateora, P. (2016). International marketing (17th ed.). Retrieved from https://redshelf.com/
Davidson, K., (2009). Ethical Concerns at the Bottom of the Pyramid: Where CSR meets BOP. Retrieved from https://www.businesstoday.in/magazine/lbs-case-study/gillette-innovated-improved-its-market-share-in-india/story/204517.html
Godin, S., (2010). Marketing to the Bottom of the Pyramid. Retrieved from https://www.fastcompany.com/1687863/marketing-bottom-pyramid
Scamazzo, L., (2014). Sharp focus. Retrieved from https://www.businesstoday.in/magazine/lbs-case-study/gillette-innovated-improved-its-market-share-in-india/story/204517.html