The Fortune at the Bottom or the Middle of the Pyramid?

Abstract

ness, propelled by C. K. Prahalad’s The Fortune at the Bottom of the Pyramid. Given the enormous attention the concept has attracted, it has the potential to impact the world’s billions of poor people—as well as the managerial practices of multinational corporations. This double potential makes it important to analyze how large corporations can serve low-income customers profitably. Prahalad and Stuart Hart argued in 2002 that multinational corporations (MNCs) have only targeted customers at the upper end of the economic pyramid and have ignored BOP customers, assuming that they are inaccessible and unprofitable. Prahalad and Hart argued further that MNCs should view BOP markets as an unexploited opportunity and be proactive in fulfilling the needs and wants of low-income consumers. To tap the vast markets at the BOP, MNCs must specially design and develop quality products and services, or they must select some to alter and make available at lower cost. Serving BOP customers is a profitable opportunity for corporations. It is also a social imperative, given that two-thirds of the human population (about four billion people) are at the bottom of the economic pyramid. By addressing the BOP, they say, MNCs can curtail poverty and improve the living conditions of the world’s poorest. In these arguments, however, BOP proponents do not take a holistic perspective. Several weaknesses in the BOP theory often go unacknowledged. Considering the far-reaching implications of these proposals, the underlying premises demand careful scrutiny. Several questions need to be answered: Is there really a “fortune” at the bottom of the pyramid? If so, can MNCs tap it as easily as BOP proponents suggest? And—is there also a fortune for the bottom of the pyramid? In answering these questions, I offer an alternative perspective on the BOP concept: I believe that we must help the poor to become selective consumers. That is, we must avoid both undesirable inclusion and exclusion. Undesirable inclusion means marketing products to the BOP that are not likely to enhance their wellbeing or that they are likely to abuse. Exclusion means failing to offer them products or services that are likely to enhance their well-being. I also suggest a frame-