Bottom of the Pyramid Markets
Bottom of the Pyramid Markets Research Paper
Order Instructions:
For this paper it is critical that the writer include specific examples and ideas in the respond to the three main points been raised in this paper, and also the writer must clearly respond to each of the point .
Bottom of the Pyramid Markets
The bottom of the pyramid (BOP) market refers to the four billion people in the world who live on less than two dollars per day. These individuals are typically found in less developed countries. According to World Bank projections, the population of the BOP markets could increase to more than 6 billion people by 2050.
Some people suggest that BOP markets are not viable markets. Most people in the BOP markets live in rural villages or urban slums, have very low literacy rates, and usually do not hold legal title or deed to their assets. They are also hard to reach via conventional marketing channels or promotional vehicles.
Despite these sobering statistics, several articles and books have been written about the abundant market opportunities available in the BOP markets. These authors claim that managers of multinational companies are socialized to dismiss automatically the BOP markets because they judge the market solely based on income or selections of products and services appropriate for developed countries. They urge the managers of these multinational companies to go beyond the usual market opportunity recognition paradigms and meet the challenges posed by these BOP markets, challenges such as how to balance between low cost and high quality considerations in order to reap benefits in these BOP markets.
After reviewing the resources for this week, respond to the following:
• How should multinational companies manage the challenges posed in new product development for BOP markets?
• What are the ethical and strategic implications of marketing to or not marketing to these populations?
• How would this marketing differ from international marketing to more traditional populations?
• Be sure to include specific ideas and examples in your response.
Resources
Readings
Course Text
• Marketing Management
Chapter 20, “Introducing New Market Offerings”
This chapter describes the new product development process and how to most effectively market a new product or service.
Chapter 21, “Tapping into Global Markets”
This chapter discusses the challenges involved in doing business in a global market and outlines how companies can best develop international marketing programs.
Articles
– Anderson, J., & Billou, N. (2007). Serving the world’s poor: Innovation at the base of the economic pyramid. Journal of Business Strategy, 28(2), 14–21. Retrieved from Business Source Premier Database.
The authors of this article discuss the challenges of reaching customers in developing nations who often have limited income. They then suggest possible approaches to effectively serve this market.
– Nijssen, E., & Douglas, S. (2008). Consumer world-mindedness, social-mindedness, and store image. Journal of International Marketing, 16(3), 84–107. Retrieved from Business Source Premier database.
As communication technologies are more widely adopted, consumers are able to access information on products, as well as global, social, and ethical issues. The authors of this article develop measures of how this free-flow of information impacts consumers’ views of corporations and whether this type of information influences purchasing decisions.
SAMPLE ANSWER
Products from various markets that are delivered to the bottom of the pyramid segment have been increasing steadily. Multinational companies have found it easy to penetrate these customers despite them encountering a lot of challenges. The challenges faced by these multinational companies in their bid to venture the market include: non-existence distribution channel, corruption, poor infrastructure, war and even lack of robust and enforceable legal frameworks (Anderson & Bilou, 2007). The companies to some extend faces racial conflict, and end up facing enthusiasm from other companies who serve poor people and they are mostly stifled by violent in surgeries. Some companies have developed unique products with the heart to deliver them to their consumers despite others unable to do so due to insurmountable challenges. These companies have improvised strategies of dealing with these challenges which include experimentations, which involve the delivering of service propositions and unique products to most of their world needy consumers. These multinational companies have been able to curb these challenges by taking the responsibility of serving the poor and in return they even gain significant profits in such businesses. Moreover, these companies have also been able to be successful despite the mentioned challenges because they are affordable in the sense that they make their products and services that can within the reach of the bottom pyramid segment (Rhyne, 2009). These companies are well accepted by the people and are aware of the challenges faced by the poor people and so they have an easy time in their dealings.
The choice of operating or not operating at the bottom of the pyramid segment has ethical implications for both the businesses and their clients (Nijssen & Douglass, 2008). Ethically, a business should be in a position to serve their clients, regardless of their social ladder and their physical location. Customers are more sensitive to environmental challenges, and they are informed about the income gap between the rich and the poor in developed and developing countries where they can’t enjoy rights of good wages to be able to climb up the pyramid. It is the responsibility of a business not to neglect any portion of the population and serve all their customers equally. Moreover, it is advisable not to sacrifice the welfare of others because all clients are important in one way or another and those who have should share with those who are challenged by earning low salaries that keeps them at the bottom of the pyramid. The dignity of people should be the most important aspect of any society whereby their welfare is to be considered so as to ensure that they are not always at the bottom of the pyramid.
There is a great challenge of distributing products to the bottom of the pyramid due to lack of established infrastructure that can promote the transport and communication to such persons (Kotler &Keller, 2011). This is a great challenge since it is proved that companies need to improvise better methods of goods distribution to the locals whereas on the other side of international marketing goods are easily availed to the consumers easily. Many customers at the bottom of the pyramid are very much inaccessible to the media where they can get to see product advertisement and so only the one at the top of the pyramid get access to media hence familiarize themselves with many products (Prahalad, 2006). Many people in developing countries survive on daily wages and so money to them may be a problem and this makes them not to be able to afford goods the same way those at the top of the pyramid do. With regards to international marketing, infrastructure is already in place for businesses to exploit and this makes it very easy for them to reach their clients. Moreover, international marketing differs from the bottom of the pyramid marketing in the sense that the former fetches high prices per unit of goods sold.
References
Anderson, J., & Billou, N. (2007). Serving the world’s poor: Innovation at the base of the economic pyramid. Journal of Business Strategy, 28(2), 14–21
Nijssen, E., & Douglas, S. (2008). Consumer world-mindedness, social-mindedness, and store image. Journal of International Marketing, 16(3), 84–107
Kotler, P & Keller, K. (2011). Marketing Management, 14th edition. Prentice Hall
Prahalad, C.K. (2006).The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. Wharton School Publishing; 1 edition
Rhyne, E. (2009). Microfinance for Bankers and Investors: Understanding the Opportunities and Challenges of the Market at the Bottom of the Pyramid. McGraw-Hill; 1 edition
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