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Article
Publication date: 31 October 2008

Sofie Van den waeyenberg and Luc Hens

The purpose of this study is to examine which changes companies need to implement in their transactional marketing strategy to sell to the poor when launching a product…

4572

Abstract

Purpose

The purpose of this study is to examine which changes companies need to implement in their transactional marketing strategy to sell to the poor when launching a product innovation in low‐income countries.

Design/methodology/approach

The paper confronts the literature on thebottom of the pyramid” with the diffusion of innovations theory in order to identify the country characteristics that call for marketing changes when entering low‐income markets. The authors investigate for one case (the Tata Nano) whether – and how – the company implements changes to respond to these conceptually identified challenges. The case study is systematically analysed and structured according to Kotler's four Ps.

Findings

The case shows that companies can create products with functionality and cost advantage for the poor without compromising on safety and comfort. Creating an innovative distribution system pushes costs and builds trust between the company and the customer.

Research limitations/implications

The study examines one case from the automobile industry. Marketers would benefit from multiple case studies.

Originality/value

The study's originality springs from the confrontation between the bottom of the pyramid and the diffusion of innovations theories. The study is valuable to marketers targeting the bottom of the pyramid. The case study is interesting because the industry (automobile) surprisingly targets a poorer non‐traditional customer base (the upper bottom of the pyramid).

Details

Journal of Consumer Marketing, vol. 25 no. 7
Type: Research Article
ISSN: 0736-3761

Keywords

Book part
Publication date: 3 December 2018

Wasana Jayawickramarathna, Kaleel Rahman, Rajendra Mulye and Tim Fry

The market-based approach to catering for the poor mainly focusses on companies making profits while helping the poor enhance their lives. This concept presented the

Abstract

The market-based approach to catering for the poor mainly focusses on companies making profits while helping the poor enhance their lives. This concept presented the possibility of there being a ‘fortune’ to make at the Bottom of the Pyramid (BoP) market that was an opportunity for both businesses and consumers. The notion of the BoP market has been widely studied using urban and rural contexts as distinct classifications; yet many argue that the opportunity does not in fact exist in the rural BoP markets. In this chapter the authors examine the prospects in the rural BoP in Sri Lanka through a qualitative study using insights provided by industry practitioners who operate at the BoP level. Findings show that a large percentage of the income of multinational companies is derived from rural BoP markets. Compared to the urban sector, the rural BoP market indicates relatively higher disposable income and is viewed as an attractive market segment by industry practitioners. The findings also show that rural BoP people have more resources and skills than their urban counterparts, although the former commonly have lower levels of education. Moreover, the youth segment in both the urban and rural BoP markets was found to heavily consume social media. The authors conclude their discussion by providing several key proposals for organisations looking to seize opportunities in this market.

Details

Bottom of the Pyramid Marketing: Making, Shaping and Developing BoP Markets
Type: Book
ISBN: 978-1-78714-556-6

Keywords

Book part
Publication date: 10 August 2016

Paul N. Gooderham, Svein Ulset and Frank Elter

The purpose of this chapter is twofold. First, to investigate how multi-domestic, multinational corporations (MNCs) can develop business models that are appropriate to …

Abstract

The purpose of this chapter is twofold. First, to investigate how multi-domestic, multinational corporations (MNCs) can develop business models that are appropriate to “Bottom-of-the-Pyramid” (BOP) settings. Second, to address how they can apply elements of BOP business models across their operations. We use the case of the entry of the Norwegian mobile telecom MNC Telenor into India as the empirical context. Prior to India, Telenor had operated successfully in Asian emerging economies by adapting its business model to local conditions. However, it had only operated in the upper income tiers of these countries. In India, its late entry meant that for the first time in its history it had to move beyond these upper income tiers and develop a business model suited to BOP. We apply an economic model terminology as a means to gauging the degree of business model innovation Telenor undertook. Telenor succeeded in its development of a BOP business model by working in close partnership with local firms. Although Telenor in India was operating at BOP, a number of the resultant innovations were deemed by Telenor to be transferable to top-of-the-pyramid operations across Telenor. In order to succeed in developing BOP business models MNCs must go beyond local responsiveness and engage closely with local partners. However, transference of elements of BOP business models to other parts of the MNC is contingent on there being a centralized integrating capability.

Details

Perspectives on Headquarters-subsidiary Relationships in the Contemporary MNC
Type: Book
ISBN: 978-1-78635-370-2

Keywords

Article
Publication date: 31 October 2008

Dennis A. Pitta, Rodrigo Guesalaga and Pablo Marshall

The purpose of this article is to examine the bottom of the pyramid (BOP) proposition, where private companies can both be profitable and help alleviate poverty by…

11755

Abstract

Purpose

The purpose of this article is to examine the bottom of the pyramid (BOP) proposition, where private companies can both be profitable and help alleviate poverty by attending low‐income consumers.

Design/methodology/approach

The literature on BOP was reviewed and some key elements of the BOP approach were proposed and examined.

Findings

There is no agreement in the literature about the potential benefits of the BOP approach for both private companies and low‐income consumers. However, further research on characterizing the BOP segment and finding the appropriate business model for attending the BOP can provide some answers to this issue.

Practical implications

The article provides some guidelines to managers as to how they need to adapt their marketing strategies to sell to the BOP market, and what type of partnerships they need to build in order to succeed.

Originality/value

The article presents a thorough analysis of the key elements involved in the BOP initiative: companies' motivations, characterization of the BOP consumers, and the business model to attend the BOP.

Details

Journal of Consumer Marketing, vol. 25 no. 7
Type: Research Article
ISSN: 0736-3761

Keywords

Book part
Publication date: 3 December 2018

Ogechi Adeola and Yetunde Anibaba

The predominance of certain adverse factors has historically de-motivated firms seeking to enter into the bottom-of-the-pyramid (BoP) markets due to the perception that…

Abstract

The predominance of certain adverse factors has historically de-motivated firms seeking to enter into the bottom-of-the-pyramid (BoP) markets due to the perception that BoP markets are impoverished and therefore unable to afford their products. However, Prahalad’s seminal study on BoP markets as potential sources of wealth may have influenced the mindset of marketers around the world to view the demographic at the BoP as prodigious product markets waiting to be mined. This chapter, therefore, explores how some multinational corporations (MNCs) may have successfully implemented BoP marketing in Nigeria against the backdrop of diffusion of innovation (DoI) theory. The DoI theory tries to explain how and why new ideas, product, structures, or phenomena (innovations), spread across users and social systems. It posits among other things that there are at least five conditions that define the rate of adoption of an innovation, including relative advantage, compatibility, complexity, trialability, and observability. The authors find in the context of case companies, MTN Communications, Promasidor (Cowbell), and Dufil Prima Foods (Indomie) Nigeria that these elements contribute to building a viable explanation for the wide adoption of their products in the Nigerian BoP markets. Regarding the economic viability of BoP markets, the authors find that MNCs may have to embrace a commitment to long-term profitability, focus on economies of scale as a basis for competitiveness, and realize that in BoP markets, defining a marketing model is a continuous process.

Details

Bottom of the Pyramid Marketing: Making, Shaping and Developing BoP Markets
Type: Book
ISBN: 978-1-78714-556-6

Keywords

Article
Publication date: 25 May 2012

Raed Elaydi

The purpose of this paper is to examine the social bottom line in subsistence markets or base of the pyramid. This examination aims to suggest that social strategies for…

Abstract

Purpose

The purpose of this paper is to examine the social bottom line in subsistence markets or base of the pyramid. This examination aims to suggest that social strategies for the second bottom line should be focused at the community level in measurement, assessment and impact.

Design/methodology/approach

A discussion of the double bottom line is presented. Social strategies are then discussed in terms of impact assessment at the community level and an impact assessment framework is developed reflective of the subsistence marketplace perspective. Implications are discussed in terms of poverty alleviation in subsistence markets and business

Findings

This examination suggests social strategies for the second bottom line should be focused at the community level in measurement, assessment and impact. Focusing social strategies at the community level reframes the role of firms and promotes a business in service of the community approach. Assessing impact at the community level creates a long‐term sustainable focus to business in subsistence markets. This perspective is a more holistic view that incorporates the social, economic and environmental ecology of the community from a multi‐generational perspective that requires entrepreneurs to commit their life's work to developing and servicing the community they live in. Using “And beyond Africa” as a case example of the community‐level social strategy the theory and practice are integrated and the conceptual ideas can be understood as a holistic reflection of the community. Further, examining how social strategies at the community level are understood in terms of the individual and humanity level creates greater awareness of the importance of a social strategy at the community‐level. Suggesting that a social strategy focused on the community level can make the largest impact on all three levels (individual, community and humanity). By considering more than customer impact, a social strategy can look at a business's impact on the community and better understand its impact on humanity. This conclusion changes the role of the entrepreneur and business to be in the service of the community.

Originality/value

This paper develops a community‐level social strategy view to the double‐bottom line in subsistence markets or base of the pyramid.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 6 no. 2
Type: Research Article
ISSN: 1750-6204

Keywords

Article
Publication date: 17 April 2009

The purpose of this paper is to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.

4435

Abstract

Purpose

The purpose of this paper is to review the latest management developments across the globe and pinpoint practical implications from cutting‐edge research and case studies.

Design/methodology/approach

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

Findings

Since the term “bottom of the pyramid” was coined, the poor living in low‐ and middle‐income countries have received increasing attention. The bottom of the pyramid attracts multinational companies because of its large population with pending demand, low consumer expectations and slight competition.

Practical implications

The paper provides strategic insights and practical thinking that have influenced some of the world's leading organizations.

Originality/value

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to‐digest format.

Details

Strategic Direction, vol. 25 no. 6
Type: Research Article
ISSN: 0258-0543

Keywords

Article
Publication date: 31 October 2008

Van R. Wood, Dennis A. Pitta and Frank J. Franzak

This paper aims to contend that four significant ideas must be comprehended, and their connection and interaction understood if successful marketing to the 4 to 5 billion…

9121

Abstract

Purpose

This paper aims to contend that four significant ideas must be comprehended, and their connection and interaction understood if successful marketing to the 4 to 5 billion undeserved bottom of the pyramid (BOP) people in the world, by multinational firms is to be realized. These ideas are: the bottom of the pyramid (BOP) market itself; share of the heart versus consumer animosity; the nature and influence of global “umbrella” brands and responsible marketing as a guiding principle for all firms including those focusing on the BOP. Each of these ideas, in and of itself, represents an important dimension in today's global business environment, but taken together they offer a clearer understanding of how companies, particularly multinational companies, can do well (profit) and do good (improve humanity).

Design/methodology/approach

The paper briefly overviews the BOP literature, highlighting those parts most relevant to this work; expands upon the notion of “share of heart” and its twin components consumer affinity and consumer animosity; delineates the nature and impact of global “umbrella” brands in BOP marketing; synopsizes the notion of “responsible marketing” in the BOP context, and proposes a conceptual scheme of how these ideas are connected, how they interact in today's business world, and how they can lead to ongoing business success.

Findings

Mutlinational firms (MNFs) wishing to successfully pursue BOP markets need to blend their understanding of BOP uniqueness, with a clear understanding of the other three concepts, namely share of heart, gobal umbrella brands and responsible marketing. Tapping the potential of the BOP requires not only radicallly lowered priced products but also consumers with higher income. Marketers must address both parts of the problem since acting on either in isolation will not be effective.

Originality/value

Global umbrella brands of the rich world (BrandAmerica, EuroBrand, BrandNippon, etc.) must also play a part in successful BOP marketing. The future of such global umbrella brands lies to a great degree with BOP markets as these markets are still growing, and thus represent and will continue to represent either enormous partners or enormous rivals. MNFs that truly understand the nature, scope and potential of BOP markets, and act in concert to market responsibly to consumers in such markets, will not only garner the needed share of heart related to long‐term success in such markets, but will see their own global umbrella brand continue to thrive and prosper in the ever evolving global market arena.

Details

Journal of Consumer Marketing, vol. 25 no. 7
Type: Research Article
ISSN: 0736-3761

Keywords

Book part
Publication date: 3 December 2018

Madhu Viswanathan, Arun Sreekumar and Roland Gau

The authors look back and forward in terms of challenges and opportunities for marketing, viewed from the vantage point of the subsistence marketplaces stream. The authors…

Abstract

The authors look back and forward in terms of challenges and opportunities for marketing, viewed from the vantage point of the subsistence marketplaces stream. The authors discuss how marketing can evolve and expand to address the scale and scope of challenges that lie ahead. By way of challenges, the authors discuss the confluence of uncertainties, such as inherent in the Base of the Pyramid (BoP) contexts, in environmental issues, and in the arena of technological solutions, as well as the confluence of unfamiliarities among managers, students, and researchers. The authors discuss opportunities for marketing through a bottom-up approach and argue for evolving marketing with rapidly changing reality in BoP markets, a harbinger and an innovation laboratory for all contexts.

Details

Bottom of the Pyramid Marketing: Making, Shaping and Developing BoP Markets
Type: Book
ISBN: 978-1-78714-556-6

Keywords

Book part
Publication date: 4 January 2014

Jenny Hillemann and Alain Verbeke

The purpose of this chapter is to demonstrate that sound, mainstream international business (IB) thinking should be applied when assessing the economic opportunities…

Abstract

Purpose

The purpose of this chapter is to demonstrate that sound, mainstream international business (IB) thinking should be applied when assessing the economic opportunities available to multinational enterprises (MNEs) in Bottom of the Pyramid (BOP) markets.

Design/methodology/approach

We describe and evaluate critically the key points made in the BOP literature about the alleged attractiveness of BOP markets, and the alleged strengths of MNEs to penetrate these markets successfully. We revisit the managerial implications from the BOP literature using an internalization theory lens.

Findings

We demonstrate the weak conceptual grounding of conventional BOP thinking, which suggests that MNEs from developed economies should be very entrepreneurial and should systematically serve BOP markets with new products and business models. We also show the fallacy of the idea that a “success template” in one BOP market would be easily replicable in other BOP markets and would allow the MNE to earn economies of scale and scope.

Research implications

IB researchers should start conducting serious studies on the attractiveness of BOP markets for MNEs. They should also analyze seriously the micro-foundations of successful knowledge recombination in BOP markets and the limits to the transferability of success templates. Mainstream IB theory, namely internalization theory, is particularly well equipped to analyze the costs and benefits of entering BOP markets, building upon a comparative institutional logic.

Practical implications

Senior MNE managers should not allow themselves to be blinded by BOP gurus, advocating the alleged great benefits of penetrating BOP markets. BOP markets may be especially challenging international expansion targets for MNEs because of large institutional voids, high uncertainty, high “distance” vis-à-vis the home country market and the difficulties of transferring relevant knowledge from one BOP market to another.

Originality/value

This chapter is the first to show that mainstream IB research can be usefully applied to analyze the “real” attractiveness of BOP markets for MNEs. Comparative institutional analysis is proven to provide substantially more insight to make BOP market penetration work than past guru-talk on BOP markets.

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