Monday, November 06, 2006

The Fortune at the Bottom of the Pyramid

I finished reading CK Prahalad’s 'The Fortune at the Bottom of the Pyramid' about the ignored potential that lies in marketing products and services to people who live below the poverty level. There are more than 4 billion people who live on less than $2 a day and even with these limited means, this market is teeming with potential. CK Prahalad writes about the characteristics that define the BOP (Bottom of Pyramid) market and how to reach them, by systematically breaking down the barriers and common misconceptions that stop companies from marketing to them.

The biggest misconception about the BOP market is that there is no money. This is simply not true at all. Bottom of the Pyramid customers have requirements for a lot of service and products like other markets and due to the unorganized functioning of the system, usually have to pay more for the same services and products than do better off customers. People in shanty towns pay higher amounts for almost everything such as telephone calls to rice to basic medication.

Contrary to common belief, the BOP markets are extremely brand conscious. These customers aspire to improving their lives, and aspiring to own a particular brand of product is their way of achieving status in their society. The BOP market is also able to adapt to modern technology, such as personal computers and cell phones.

The entire book is full of examples of organizations, companies and people who have made a difference in focusing on the BOP market. The biggest problem lies in the rest of the world changing their opinion about the bottom of the pyramid customers. In the first page of the book, CK Prahalad states, “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.”

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