Innovating for the Bottom of the Pyramid - Case Study

856 Words Nov 17th, 2012 4 Pages
Innovating for the bottom of the pyramid 1. Why are companies such as Siemens, GE and Procter and Gamble targeting the “bottom of the pyramid”?
These companies are targeting the bottom of the pyramid because this segment represents two-thirds of the world’s population (4 billion people). However, those people live on less than $2 per day and 1.5 billion people have no access to electricity. Companies such as the ones mentioned above have found out that this situation has provided an opportunity to create innovative sources renewable energy. Another reason why they are doing this is because growth in mature markets tends to slow down. Therefore, many global companies are realizing that the ability to serve the needs of the world’s
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The perceived Relative advantage of a new product versus existing products is a major influence on the rate of adoption. If marketers create a substantial relative advantage over their competitors’ products in emerging markets, they are likely to gain quick acceptance and customers will start switching to their product.
The understanding of Compatibility, the extent to which a products is consistent with existing values and past experience of adopters, would help marketers to introduce new products into emerging markets. In order to assess whether a product is compatible with the target market, marketers need to know what the needs and wants, and values of that market are.
Complexity, the degree to which an innovation or new product is difficult to understand an use might slow down the rate of adoption. If marketers understand the degree of complexity of their products, they may be able to evaluate if a particular product is suitable for the target market or not.
Divisibility, the ability of a product to be tried and used on a limited basis without great expense, might help marketers to introduce a new product into an emerging market if that product can be used on a small scale for trial purposes because it tends to facilitate adoption. Promotions that involve small samples of products often produce satisfactory trial results. Since risk is one of the major considerations in the adoption process, divisibility is an important factor.