ébé en Santé is a French company that makes premium, luxuriously packaged baby formula for the wealthy European market. During a trip South Africa, the CEO, in an attack of conscience, realized that her company could help to improve the nutrition of infants in developing countries, where the malnutrition rates are between 20 -30%.

More pointedly, the World Health Organization (WHO) reports that undernutrition is linked to 2.7 million child deaths annually, or 45% of all child deaths.

The WHO Infant and young child feeding is a key area to improve child survival and promote healthy growth and development. The first 2 years of a child’s life are particularly important, as optimal nutrition during this period lowers morbidity and mortality, reduces the risk of chronic disease, and fosters better development overall.

The CEO Bébé en Santé has asked the students in an international business class to develop a business plan for her company to provide baby formula to poor people throughout the world. The CEO wants the students to keep in mind how best to reach the “base of the pyramid” market segment.

For those who might be wondering what exactly is meant by the term, the base of the pyramid is a socio-economic concept that allows us to group that vast segment - more than about four billion - of the world’s poorest citizens into a defined cohort.

These 4 billion folks constitute an invisible and unserved market blocked by challenging barriers that prevent them from realizing their human potential for their own benefit, those of their families, and that of society's at large.

Following are the students' proposals. In your opinion, which one best positions Bébé en Santé to effectively and efficiently serve the base of the pyramid market segment?

A) Bébé en santé should use it marketing leverage to induce large supermarkets and grocery chains to establish stores in these developing markets, where they can sell food to the huge population at the base of the pyramid.

B) Bébé en santé should sell the same product at the bottom of pyramid, because they have expertise and success in that product. They can form partnerships with local government, civic societies, and other local organizations to educate the poor on the benefits of providing their babies with premium quality formula. The large, beautiful packages will attract local attention. They will be able to generate big profits from the huge volume of product they will sell in developing countries.

C) Bébé en santé should develop a new baby formula with high quality ingredients and nutrition. Simple, single serve packaging that is easily distributed will work best. Price must be low to make it affordable. The company may partner with local distribution networks and markets to place their baby formula where the poor shop. It may develop partnerships with health organizations to legitimatize their baby formula and build trust. It should also change its name from to something that makes more sense in the market, like Gesonde Baba (Afrikaans).

D) Bébé en santé should partner with large banks to infuse capital into these bottom of the pyramid markets. This will help the people and the local economy by providing access to capital, providing business loans and mortgages, and generating opportunities to create local wealth. This will improve the livelihood of the people who currently live in poverty, and enable them to buy Bébé en santé products.

E) Bébé en santé should not enter the market at bottom of the pyramid. It is not possible for a company to generate profits and remain in business when trying to sell to the poorest people in the world. There is no possibility for those living in poverty to be innovative, to adapt to new technologies, or to move into the middle class.

Question

ébé en Santé is a French company that makes premium, luxuriously packaged baby formula for the wealthy European market. During a trip South Africa, the CEO, in an attack of conscience, realized that her company could help to improve the nutrition of infants in developing countries, where the malnutrition rates are between 20 -30%.

More pointedly, the World Health Organization (WHO) reports that undernutrition is linked to 2.7 million child deaths annually, or 45% of all child deaths.

The WHO Infant and young child feeding is a key area to improve child survival and promote healthy growth and development. The first 2 years of a child’s life are particularly important, as optimal nutrition during this period lowers morbidity and mortality, reduces the risk of chronic disease, and fosters better development overall.

The CEO Bébé en Santé has asked the students in an international business class to develop a business plan for her company to provide baby formula to poor people throughout the world. The CEO wants the students to keep in mind how best to reach the “base of the pyramid” market segment.

For those who might be wondering what exactly is meant by the term, the base of the pyramid is a socio-economic concept that allows us to group that vast segment - more than about four billion - of the world’s poorest citizens into a defined cohort.

These 4 billion folks constitute an invisible and unserved market blocked by challenging barriers that prevent them from realizing their human potential for their own benefit, those of their families, and that of society's at large.

Following are the students' proposals. In your opinion, which one best positions Bébé en Santé to effectively and efficiently serve the base of the pyramid market segment?

A) Bébé en santé should use it marketing leverage to induce large supermarkets and grocery chains to establish stores in these developing markets, where they can sell food to the huge population at the base of the pyramid.

B) Bébé en santé should sell the same product at the bottom of pyramid, because they have expertise and success in that product. They can form partnerships with local government, civic societies, and other local organizations to educate the poor on the benefits of providing their babies with premium quality formula. The large, beautiful packages will attract local attention. They will be able to generate big profits from the huge volume of product they will sell in developing countries.

C) Bébé en santé should develop a new baby formula with high quality ingredients and nutrition. Simple, single serve packaging that is easily distributed will work best. Price must be low to make it affordable. The company may partner with local distribution networks and markets to place their baby formula where the poor shop. It may develop partnerships with health organizations to legitimatize their baby formula and build trust. It should also change its name from to something that makes more sense in the market, like Gesonde Baba (Afrikaans).

D) Bébé en santé should partner with large banks to infuse capital into these bottom of the pyramid markets. This will help the people and the local economy by providing access to capital, providing business loans and mortgages, and generating opportunities to create local wealth. This will improve the livelihood of the people who currently live in poverty, and enable them to buy Bébé en santé products.

E) Bébé en santé should not enter the market at bottom of the pyramid. It is not possible for a company to generate profits and remain in business when trying to sell to the poorest people in the world. There is no possibility for those living in poverty to be innovative, to adapt to new technologies, or to move into the middle class.

Accepted Answer

Market segmentation is the process of dividing a market into smaller groups of consumers with…