Bottom of the Pyramid Markets
� How should multinational companies manage the challenges posed in new product development for
BOP markets?
� What are the ethical and strategic implications of marketing to or not marketing to these populations?
� How would this marketing differ from international marketing to more traditional populations?
� Be sure to include specific ideas and examples in your response.
BOTTOM OF THE PYRAMID MARKETS 2
Products from various markets that are delivered to the bottom of the pyramid segment
have been increasing steadily. Multinational companies have found it easy to penetrate these
customers despite them encountering a lot of challenges. The challenges faced by these
multinational companies in their bid to venture the market include: non-existence distribution
channel, corruption, poor infrastructure, war and even lack of robust and enforceable legal
frameworks (Anderson & Bilou, 2007). The companies to some extend faces racial conflict, and
end up facing enthusiasm from other companies who serve poor people and they are mostly
stifled by violent in surgeries. Some companies have developed unique products with the heart to
deliver them to their consumers despite others unable to do so due to insurmountable challenges.
These companies have improvised strategies of dealing with these challenges which include
experimentations, which involve the delivering of service propositions and unique products to
most of their world needy consumers. These multinational companies have been able to curb
these challenges by taking the responsibility of serving the poor and in return they even gain
significant profits in such businesses. Moreover, these companies have also been able to be
successful despite the mentioned challenges because they are affordable in the sense that they
make their products and services that can within the reach of the bottom pyramid segment
(Rhyne, 2009). These companies are well accepted by the people and are aware of the challenges
faced by the poor people and so they have an easy time in their dealings.
BOTTOM OF THE PYRAMID MARKETS 3
The choice of operating or not operating at the bottom of the pyramid segment has ethical
implications for both the businesses and their clients (Nijssen & Douglass, 2008). Ethically, a
business should be in a position to serve their clients, regardless of their social ladder and their
physical location. Customers are more sensitive to environmental challenges, and they are
informed about the income gap between the rich and the poor in developed and developing
countries where they can’t enjoy rights of good wages to be able to climb up the pyramid. It is
the responsibility of a business not to neglect any portion of the population and serve all their
customers equally. Moreover, it is advisable not to sacrifice the welfare of others because all
clients are important in one way or another and those who have should share with those who are
challenged by earning low salaries that keeps them at the bottom of the pyramid. The dignity of
people should be the most important aspect of any society whereby their welfare is to be
considered so as to ensure that they are not always at the bottom of the pyramid.
There is a great challenge of distributing products to the bottom of the pyramid due to
lack of established infrastructure that can promote the transport and communication to such
persons (Kotler &Keller, 2011). This is a great challenge since it is proved that companies need
to improvise better methods of goods distribution to the locals whereas on the other side of
international marketing goods are easily availed to the consumers easily. Many customers at the
bottom of the pyramid are very much inaccessible to the media where they can get to see
product advertisement and so only the one at the top of the pyramid get access to media hence
familiarize themselves with many products (Prahalad, 2006). Many people in developing
countries survive on daily wages and so money to them may be a problem and this makes them
not to be able to afford goods the same way those at the top of the pyramid do. With regards to
international marketing, infrastructure is already in place for businesses to exploit and this makes
BOTTOM OF THE PYRAMID MARKETS 4
it very easy for them to reach their clients. Moreover, international marketing differs from the
bottom of the pyramid marketing in the sense that the former fetches high prices per unit of
goods sold.
References
Anderson, J., & Billou, N. (2007). Serving the world’s poor: Innovation at the base of the
economic pyramid. Journal of Business Strategy, 28(2), 14–21
Nijssen, E., & Douglas, S. (2008). Consumer world-mindedness, social-mindedness, and store
image. Journal of International Marketing, 16(3), 84–107
Kotler, P & Keller, K. (2011). Marketing Management, 14 th edition. Prentice Hall
Prahalad, C.K. (2006).The Fortune at the Bottom of the Pyramid: Eradicating Poverty through
Profits. Wharton School Publishing; 1 edition
Rhyne, E. (2009). Microfinance for Bankers and Investors: Understanding the Opportunities and
Challenges of the Market at the Bottom of the Pyramid. McGraw-Hill; 1 edition.
