Marketing to the BOP: Maximizing Outcomes for All Customers - Essay Sample

Introduction

Marketing is one of the essential things in any business, and therefore nay marketing strategy should consider all customers. To maximize the outcome of marketing, the company must consider the whole market comprising of the political environment, global, and legal environment. The case is based on the term Bottom of the Pyramid (BOP). Professor Prahalad develops this as a thesis in the case and suggestions for the inclusion of low-income customers during any marketing process (Prahalad, 2006). BOP is based on an economic term that refers to the poor people in the society who happen to fall at the base of the pyramid when the market is categorized hierarchically. From global perspectives, many people live in poverty that the businesses should consider addressing because they make up a considerable market share and potential for every company.

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Generally, BOP reflects on a market-based structure of economic progress that is expected to simultaneously mitigate widespread poverty and provide benefits to the big business organizations. Prahalad identifies that there are over a billion people in the world who live on less than $2 per day; in critical situations, they will be referred to as the poor in society. There purchasing power range up to 14 trillion dollars (Prahalad, 2006); it is, therefore, a considerable market segment that has not been considered critical for marketers to invest in addressing them. This article, thus, provides a summary of case 3-3, "Marketing to The Bottom of The Pyramid." It identifies the principal issues addressed about BOP.

Marketing Issues in BOP

Marketing to BOP has thrown up several marketing issues as a result of its complexity and the assumptions that companies have concerning this market. Companies undertaking marketing at the lowest level of the pyramid require to address them; they include their perceptions or assumptions, financial creativity, technology, consumer analyses, market segment, and collaboration analyses. Before venturing into the BOP, a market that many companies have ignored, it is essential to develop an approach that addresses critical issues facing the market and how to resolve them. Case 3 identifies various aspects to consider about BOP.

Assumptions That Make Multinational Firms Not to Pay Attention to BOP

For a long time, poor people or the BOP have not been considered a significant market segment when developing and implementing marketing strategies. The BOP is assumed that they do not have enough resources to gather for their daily needs. As a result of their economic status, they are unable to access technological facilities that many of the companies use for marketing. Their income hardly satisfies their basic requirements; therefore, they remain with nothing to spend on most of the product services sold to the rich or those with considerate among of income. The assumptions that companies consider as to why they do not recognize BOP as a potential market affect the supply of goods and services to this market. In many cases, market analyses are based on the urban population, and less effort is considered for rural people (In Singh, 2019). It is, however, of a significant reason to consider exploring such markets because they are potentially beneficial for the companies, especially for countries like India, where most of the people live in rural areas.

It is necessary to put aside the assumptions on the expenditure and the level of income and explore this market. One of the research studies from the cases suggests that European and American business organizations should review their markets and consider their roots. The evidence that suggests BOP consideration includes; Roebuck and Sears, facilities that were developed to serve the people in the community with low income and those in life in the rural areas. Secondly is the Singer Sewing Machines, these are the schemes that were created to benefit the people with low-income. Thirdly is the Walmart, one of the leading business corporation in the world that was created to serve the BOP.

Consumer Analyses

It essential to understand the needs of the customer when designing a marketing approach; the products consumed by the BOP are identical because their power of expenditure is critically based on basic requirements. Globally they behavior in the market determines the products they need and the prices. The companies must consider using unique approaches to explore BOP markets (In Singh, 2019). Designing their products, therefore, should not be based on the cheap producing stuff but is be based on providing efficient access to information, and consider the availability of the essential infrastructural services such as electricity. Consumer behavior determine the cultural status of the market, it is, therefore, necessary to consider market or consumer analyses to ensure successful venture into the BOP

Issues of Technology in BOP Markets

Technology in many countries is a challenge; the BOP market is an acritical market segment that requires adequate technology and infrastructure. For successfully marketing to BOP, these two factors are essential. For example, a company called ITC in India developed computer-based kiosks in rural areas (In Singh, 2019). The project was to help farmers using intermediaries. The company wanted to improve the accessibility of information to check the offer provided by the company. As a result of this move, the farmers were able to acquire goods at affordable prices. As time goes by, the company gained loyalty and direct contact with the customer from the rural areas. The project required intensive resources as it involved the supply of computers and necessary equipment such as solar panels for power backup and telephones that use satellite technology. Besides, the company has to train the locals on how to use the devices. The company used global vision ion and marketing strategies to address the issue facing the community and provide necessary materials to explores the market.

Financing Consideration for BOP Marketing

Finance is also one of the issues facing marketing to BOP; the market is also the candidate for financial requirements; the marketers must consider the creative approach to finance the necessary facilities to achieve the objectives. The main point of concern is to provide low price product to the customers based on the power of expenditure. For instance, computer devices face high demand, but the price of these products matters to the BOP. The companies who would want to invest in BOP should, therefore, developed a creative finical approach to assist the poor in society. It evident that a positive approach to supporting the BOP can be successful; Cemex company is one of the examples of the companies that have successfully implemented this approach. The company identified lower-income Mexicans as market opportunities for its construction products through an elective and efficient financial approach.

Marketing to BOP has significantly gained more attention, given the considerate concept in the market, it is potentially beneficial to the world and the individual countries. Some of the developing countries face considerable challenges as a result of poverty and the level of income. It is; however, companies must consider this as a potential market (In Singh, 2019). Most of the companies are known to targeting the majority of the people from the top of the pyramid and ignore the BOP market. The assumption that BOP is unprofitable and inaccessible must change. The BOP should be considered as new markets to explore; therefore, it implies that they need to consider different marketing approaches form political, cultural, and global perspectives. These markets are the remaining opportunities for many companies to consider. Positive approaches to such markets would benefit the companies and fulfill the basic requirements of low-income customers in the society.

Benefits of Marketing to the BOP

Exploring BOP markets is vital for the government and the people. There are many essential items that the people from the base of the pyramid fail to access not only because of their income level but because of unavailability. Companies venturing into these markets would, therefore, improve the health conditions of the people by providing the basic product. Marketing into BOP creates convenient access to basic needs and health-related products. Walmart, for instance, has benefited the different societies across the globe through Kmart, Sams' Clubs, and Costco (In Singh, 2019), these businesses provide essential goods to locals at affordable prices.

Recommendations

Doing business based on BOP is beneficial for the society, and the government. It helps to reduce the level of poverty. Besides, the company investing in marketing to BOP is likely to benefit from economic opportunities such as increased market share. Marketing to BOP, therefore, becomes one of the positive approaches to elevating global poverty. It is, however, essential to consider the cultural context in the event of marketing; companies that consider exploring BOP must consider societal and cultural benefits for the locals. BOP markets provide.

Companies should consider BOP as an unexplored market that is full of opportunities, based on some of the evidence forms the companies that have successfully venture into BOP market is vital to consider marketing to BOP worth trail. Political and legal considerations, however, play an essential role in venturing into BOP markets. Government regulations should be regarded as to ensure positive outcomes. Walmart, for instance, has successfully ventured in cross-border trade, helping locals from different societies and cultures across the globe to meet their basic needs.

References

In Singh, R. (2019). Bottom of the Pyramid Marketing: Making, shaping, and developing BOP markets.

Prahalad, C. K. (2006). The fortune at the bottom of the pyramid: Eradicating poverty through profits. Philadelphia, Pa: Wharton School.