What is the Bottom of the Pyramid and its Implications for Marketers

Marketers around the world are discovering that there is a fortune to be made by targeting their efforts at the Bottom Billion or those who are near the lower end of the income pyramid. This means that they can market specific products and brands to these customers who traditionally were served by local brands and other products from the unorganized industry.

The term Fortune at the Bottom of the Pyramid has been coined by the noted management expert and author, C K Prahalad, and describes the business opportunity that marketers have if they are smart enough to target this segment.

The targeting of brands and products like Sachet Shampoos and Mini Cola bottles appeals to this segment as they usually do not have the capacity to buy bigger sized products as their daily consumption is dictated by the wages that they get.

In other words, this segment typically has the means to spend less than a Dollar or Two on each product and considering the vast size of the market in both the developed world and the emerging markets, the potential for profits is enormous.

Multinational Success Stories

For instance, in India, Unilever markets its brands in mini and micro sizes wherein the product is priced at ten rupees or less and this means that this bottom of the market can afford it.

Further, Coca Cola has mini bottles that cost less than ten rupees making it affordable and within reach of this segment. Moreover, companies like Proctor and Gamble have also latched on to this segment by packaging and targeting products that are within the reach of this customer segment.

The point here is that many of these customers aspire to buy products and consumer brands but are limited by the amount of money that they can spend.

Therefore, by targeting them by specialized marketing and at the same time, not diluting the product can ensure that this consumer segment is tapped and the rich source of profits is leveraged.

This is especially the case in emerging markets in Asia where there is a significant class of consumers in this category and as the examples cited above reveal, marketers can make good money by targeting this niche segment.

Further, the fact that these emerging markets have significant rural populations means that marketers can go the extra distance and target these segments in rural areas to multiply their earning opportunities.

Social Responsibility and Social Entrepreneurship

Talking about reaching out to poor and rural consumers, it needs to be mentioned that apart from the profit making chances for such marketing, there is also the added advantage of actualizing social responsibility.

For instance, the Nobel Laureate, Mohammed Yunus pioneered the microcredit revolution in Bangladesh by targeting rural women who had the potential to save and grow their businesses but did not have the means to access capital. By providing them with seed capital and small loans or the micro loans, Yunus ensured that these women fulfill their dreams of being financially independent and at the same time, be profitable in their businesses.

Similarly, in India, the White Revolution or the game changing Amul brand of milk products revolutionized the production and distribution of milk products. This was done under the leadership of Varghese Kurien who ensured that the bottom of the pyramid is tapped for its profitability as well as a means of actualizing social responsibility.

Apart from these, there are many more examples of social entrepreneurship in the Asian countries that resulted from visionaries like Yunus and Kurien realizing the importance of the bottom segment of the consumers and targeting them accordingly.

Concluding Thoughts

Finally, as we have discussed, both giant multinationals and social entrepreneurs can profit from targeting the bottom half of the consumer segment and these initiatives have lessons for the next generation of capitalists and entrepreneurs.