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BOP MM 1

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10 views

BOP MM 1

Uploaded by

sreejachiluka2505
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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MARKETING AT

THE BOTTOM OF
PYRAMID (BOP)

PRESENTED BY
AAKANKSHA
SREEJA CHILUKA
RAKHEE
WHAT IS BOTTOM OF PYRAMID
(BOP)
• The Bottom of the Pyramid (BOP) concept refers to the largest
socio-economic group, comprising over 4 billion people living
on less than $2.50 a day. This market is characterized by
unique needs and high price sensitivity, often neglected by
traditional marketing strategies. Successful BOP marketing
focuses on affordability, accessibility, and innovative
distribution channels to meet the specific needs of these
consumers. Companies must recognize the potential for profit
while addressing social issues, leveraging partnerships with
NGOs, and utilizing technology to create sustainable
business models
Characteristics of the Bottom of Pyramid Market

1. Economic Status: The BOP market consists of individuals with very low
income, typically defined as those earning below $1,500 annually. This
group is characterized by extreme price sensitivity and a strong desire for
maximum utility from their purchases.
2. Market Structure: BOP markets are often informal and unorganized,
making traditional distribution channels ineffective. Companies need to
develop innovative distribution strategies that can effectively reach these
consumers.
3. Poverty Penalty: BOP consumers frequently face higher costs for basic
goods and services due to limited access to organized financial systems,
leading to what is termed the "poverty penalty." For example, they may
rely on informal lending sources that charge exorbitant interest rates
Strategies for Marketing to the Bottom of Pyramid

To successfully engage with BOP consumers; businesses must adopt tailored


strategies:
• Affordability: Pricing is crucial; products must be affordable without
compromising quality. Companies like Unilever have successfully marketed
low-cost items like Pure it, a water purification system aimed at improving
health outcomes.
• Innovative Distribution Channels: Traditional retail models may not work in
BOP markets. Businesses need to explore new distribution methods that are
cost-effective and accessible, such as partnering with local organizations or
using mobile technology.
• Leveraging Technology: Technology can enhance scalability and efficiency
in serving BOP consumers. For instance, Aravind Eye Care has utilized
innovative surgical techniques to provide affordable eye care services.
• Collaborative Approaches: Partnering with NGOs and government
organizations can amplify efforts in reaching BOP consumers and
Challenges and Critiques OF BOP

While the BOP market presents opportunities, there are notable challenges:
• Profitability Concerns: Many multinationals have struggled to achieve
sustainable profits within this segment, leading some critics to argue that
the BOP proposition may not be as lucrative as initially thought.
• Diversity Within the Market: The BOP is not homogenous; it includes a wide
range of income levels and consumer needs. This diversity complicates
marketing strategies and necessitates a more nuanced understanding of
different segments within the BOP.
• Skepticism about Impact: Critics also question whether marketing efforts
genuinely benefit impoverished communities or merely exploit them for
profit without addressing systemic issues like access to education and
healthcare.
Innovative distribution
channels used in BOP

Last-Mile Distribution:
Door-to-Door Selling: Directly Piggybacking on Existing
Utilizing agents with push-
reaching consumers in their Channels: Leveraging
carts or cargo bikes to deliver
homes, enhancing established distribution
products directly to
accessibility and personal networks to reduce costs and
consumers, ensuring
engagement. improve reach.
convenience and proximity.

Mobile Sales Units: Using


Retail Agents: Engaging local
branded containers or mobile
individuals as agents to sell
carts to sell products at
products within their
schools or community
communities, enhancing
events, increasing visibility
trust and local knowledge
and engagement
Conclusion

• The Bottom of Pyramid marketing concept highlights a


significant yet underserved market segment that
requires innovative approaches tailored to its unique
characteristics. While there are substantial
opportunities for businesses willing to adapt their
strategies, they must also navigate challenges related
to profitability and ethical considerations in serving
these communities. By focusing on affordability,
innovative distribution methods, and leveraging
technology, companies can potentially create value
for both themselves and the BOP consumers they aim
to serve.

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