case 3 3 Marketing to the Bottom of the Pyramid

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CASE 33 Marketing to the Bottom of the Pyramid
Professor C. K. Prahalad’s seminal publication, The Fortune at the Bottom of the Pyramid, suggests an enormous market at the
“bottom of the pyramid” (BOP)—a group of some 4 billion people who subsist on less than $2 a day. By some estimates, these
“aspirational poor,” who make up three-fourths of the world’s population, represent $14 trillion in purchasing power, more than
Germany, the United Kingdom, Italy, France, and Japan put together. Demographically, it is young and growing at 6 percent a year or more.
Traditionally, the poor have not been considered an important market segment. “The poor can’t afford most products”; “they will not accept new technologies”; and “except for the most
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Motorola went thorough four redesigns to develop a low-cost cell phone with battery life as long as 500 hours for villagers without regular electricity and an extra-loud volume for use in noisy markets. Motorola’s low-cost phone, a no-frills cell phone priced at $40, has a standby time of two weeks and conforms to local languages and customs. The cell-phone manufacturer says it expects to sell 6 million cell phones in six months in markets including China, India, and

There is also demand for personal computers but again, at very low prices. To meet the needs of this market, Advanced Micro
Devices markets a $185 Personal Internet communicator—a basic computer for developing countries—and a Taiwan Company offers a similar device costing just $100.
For most products, demand is contingent on the customer having sufficient purchasing power. Companies have to devise creative ways to assist those at the BOP to finance larger purchases. For example, Cemex, the world’s third-largest cement company, recognized an opportunity for profit by enabling lower-income Mexicans to build their own homes. The company’s Patrimonio Hoy Programme, a combination builder’s
“club” and financing plan that targets homeowners who make less than $5 a day, markets building kits using its premiumgrade cement. It recruited 510 promoters to persuade new customers to commit to building additions to their homes. The
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