Bottom Of The Pyramid Market Research Articles

Dynamic of Innovation in Services for Consumers at the Bottom of the Pyramid

Abstract This paper aims to analyze the dynamic of innovation in services for consumers at the bottom of the pyramid (BoP). For this purpose, a framework composed of innovation dimensions, capabilities and infrastructure was developed. To assess the framework behavior in the business practice, a case study was carried out in a retail firm operating in Brazil’s Northeast region whose target consumers are at the BoP. The results showed adherence of the proposed framework to the dynamics of innovation conducted by the studied firm. Considering the theoretical-academic perspective, the framework helps explain the interaction between dimensions, capabilities, and elements of the market infrastructure. As for its practical relevance, it explains how service innovations occur and how to adapt them to the BoP market. In addition, as the structure of the proposed framework includes both external and internal elements, innovation is then considered from different perspectives.

Brand Consciousness of BOP Consumers in South Africa

Bottom of the pyramid (BOP) consumers are not just basing their purchase decisions on price and affordability but on the value derived from good-quality brands. Hence, this study assesses the brand-consciousness of South African BOP consumers in terms of brand awareness, differentiation, recognition, loyalty, trust and preferences for leading brands. The aim is to understand the brand consciousness of the South African BOP market so that suitable brand management strategies may be formulated to profitably serve the needs of this market. The population (2 556 422 elements) included BOP consumers living in relative poverty within the rural areas of South Africa from which a sample of 600 subjects was drawn using area sampling. Data was collected using a self-development questionnaire whose psychometric properties were statistically assessed and analyzed using descriptive and inferential statistics. The findings reflect that there is a high degree of brand awareness amongst BOP consumers, the majority of BOP consumers are able to easily differentiate between the various brands based on the brands’ logos, design and/or coloring, a significant segment displays brand loyalty which alters when price becomes a factor for consideration and BOP consumers lack trust where new brands are concerned and prefer good quality brands. Furthermore, BOP consumers’ brand consciousness and purchase decisions are influenced by education and income respectively. It can also be concluded that the majority of South African BOP consumers are brand-conscious; hence, brands play an influential role in their consumer decision-making process. Beneficial recommendations are presented for business organizations.

Brand Consciousness of BOP Consumers in South Africa

Bottom of the pyramid (BOP) consumers are not just basing their purchase decisions on price and affordability but on the value derived from good-quality brands. Hence, this study assesses the brand-consciousness of South African BOP consumers in terms of brand awareness, differentiation, recognition, loyalty, trust and preferences for leading brands. The aim is to understand the brand consciousness of the South African BOP market so that suitable brand management strategies may be formulated to profitably serve the needs of this market. The population (2 556 422 elements) included BOP consumers living in relative poverty within the rural areas of South Africa from which a sample of 600 subjects was drawn using area sampling. Data was collected using a self-development questionnaire whose psychometric properties were statistically assessed and analyzed using descriptive and inferential statistics. The findings reflect that there is a high degree of brand awareness amongst BOP consumers, the majority of BOP consumers are able to easily differentiate between the various brands based on the brands’ logos, design and/or coloring, a significant segment displays brand loyalty which alters when price becomes a factor for consideration and BOP consumers lack trust where new brands are concerned and prefer good quality brands. Furthermore, BOP consumers’ brand consciousness and purchase decisions are influenced by education and income respectively. It can also be concluded that the majority of South African BOP consumers are brand-conscious; hence, brands play an influential role in their consumer decision-making process. Beneficial recommendations are presented for business organizations.

How to Make Strategic Alliances to Enter BoP (Bottom of the Pyramid) Markets in Developing Countries

How to Make Strategic Alliances to Enter BoP (Bottom of the Pyramid) Markets in Developing Countries

Co-creation of value at the bottom of the pyramid: Analysing Bangladeshi farmers' use of mobile telephony

Existing literature offers scant evidence of how BoP (bottom of the pyramid) consumers with limited product knowledge and interaction with product designers and marketers can co-create value. The current paper addresses this issue by analysing Bangladeshi farmers' use of mobile telephony. The findings suggest the value-in-use is facilitated or inhibited by product features, socio-economic practices, individuals' capabilities and the appropriation of mobile telephony. The paper demonstrates how BoP customers can co-create value with or without direct support from marketers and offers a theoretical framework for the co-creation of value and contributes to the current understanding of BoP market dynamics.

Poor markets: perspectives from the base of the pyramid

This brief perspective article presents and synthesizes few of the dominant themes emerging in the extant literature on BOP (bottom of the pyramid) marketing, in the backdrop of this special issue dedicated to ‘re-thinking marketing’ in a fresh light. The article draws on how the extant understanding of poor customers pales in comparison to how much we know about non-poor customers. In the end the article proposes a brief wish list of few of the interesting research domains that can be taken up by emerging and new BOP scholars in the area of ‘Poor Marketing’. Few interesting research questions include the following: (1) How poor consumers re-invent their new social image in the light of the constraints of the poor markets? (2) What role consumption plays to enhance the impact of pleasure on various aspects of the lives of the poor consumers? (3) How formation of communities helps the poor consumers to enhance the cooperation in resource-lean environments? (4) How social stratification (e.g., caste system in India) impacts social transformation of poor markets, and BOP market development? and (5) How BOP entrepreneurship impacts on social transformation at BOP?

Enhancing youth's attitudes towards microcredit in the bottom of the pyramid markets

AbstractThe bottom of the pyramid (BOP) market comprises a huge customer size of approximately 4 billion globally; hence, segmentation is necessary within this market. The BOP market refers to an aggregate of customers who survive on relatively low‐income levels. In this respect, youth in war‐affected regions can be considered to be a segment of the BOP market. However, there is scant research on customers' attitudes and purchase behaviours in the BOP markets or segments therein. Hence, the purpose of this research is to investigate war‐affected youth's attitudes towards microcredit and the related drivers of these attitudes. The literature revealed four types of attitudes towards microcredit: positive affect, perceived benefits, perceived deterrents and default risk perceptions. Also, knowledge of microcredit and entrepreneurial desire were considered to be the drivers of these attitudes. A total of 795 valid completed surveys were collected from youth aged 18 and above who live in the Northern Province of Sri Lanka. The findings revealed that positive affect enhanced intentions to obtain microcredit, whereas perceived deterrents reduced them. Knowledge of microcredit enhanced attitudes towards microcredit. Also, entrepreneurial desire enhanced the association between positive affect and intentions to obtain microcredit and it decreased the negative association between perceived deterrents and intentions to obtain microcredit. The implications to theory and practice have been discussed which will go a long way in enhancing the attitudes towards microcredit among war‐affected youth and possibly those in the other segments of the BOP market.

Corporate Social Responsibility: Linking Bottom of the Pyramid to Market Development?

In this article, we develop theoretical and empirical linkages between corporate social responsibility (CSR) initiatives of business organizations and their market development efforts at the bottom of the pyramid (BOP). We use qualitative in-depth interviews of 21 CSR heads of business organizations and its CSR partner organizations in India (an emerging market) to explore, develop, and explain plausible theoretical linkages between CSR initiatives of the organizations and its market development efforts at BOP using theory of market separations. Using theoretical frameworks from CSR literature and sub-theory of market separations from marketing literature, the study suggests that market development at BOP is enhanced using the CSR route in several ways. These are, (1) making the BOP market development less risky, (2) mask the CSR initiative as a BOP pilot project to generate internal traction within the organization, (3) integrating the BOP communities with the last mile of the supply chain of the organization, (4) bringing government intervention to accelerate scale-up, and (5) developing BOP as future markets for consumers and supply chain partners to make business more sustainable. Our study has several theoretical as well as managerial implications linking organizations’ market development efforts at BOP with its CSR initiatives.

Marketing to the Bottom of the Pyramid and subsistence markets - A research agenda

The concepts of Bottom of the Pyramid (BOP) and subsistence markets have attracted substantial academic and managerial attention in recent years. The BOP thesis states that there are opportunities for multinational companies to achieve significant revenues and profitability by designing and implementing marketing programs aimed at people who occupy the lowest tier in the world's economic pyramid. The number of people in this segment has been estimated to be between 2.7 billion and 4 billion. This paper reviews the academic literature on BOP and subsistence markets and identifies important issues related to marketing to these consumers. The review is based on journal articles that have appeared in peer-reviewed journals and on case studies published by reputed academic institutions. The literature review first identifies a number of business issues like size of BOP market, motivations for undertaking BOP initiatives, ethics and linkages. Then specific marketing issues related to the BOP segment such as consumer analysis, company analysis, collaborators, competition and context, segmentation and positioning and issues relating to marketing program design and implementation are analyzed. Based on this analysis, the paper develops a research agenda for future research on BOP and subsistence markets.

What drives the customer of world's largest market to participate in value co-creation?

Purpose– The purpose of this paper is to explore the drivers of customer participation for value co-creation among bottom of the pyramid (BOP) customers. In addition, the difference, if exists, between the perception of customer and marketers belongs to this segment about the drivers of customer participation is also studied.Design/methodology/approach– Qualitative study has been conducted to investigate the drivers of customer participation for value co-creation in BOP market. Data collection are done through in-depth interviews from BOP customers and marketers. Spearman rank correlation is used to find out the relationship between the BOP customers and marketers responses.Findings– The findings enrich understanding of value co-creation in the BOP market by suggesting the various drivers that instigate BOP consumers to participate in value co-creation activities. The study also shows a strong relationship between the customers and marketers perspective on what drives BOP customers to participate in value co-creation.Research limitations/implications– The study is conducted qualitatively hence results cannot be generalized. The sample used for data collection is limited to one state of India.Practical implications– Twenty-seven factors are identified that an organization can leverage or develop to successfully practice value co-creation in the BOP markets.Originality\value– The paper provides a comprehensive view to help organizations manage value co-creation through customer participation in BOP market. According to author's knowledge, no prior study in BOP as well as on value co-creation literature discusses empirically the drivers of customer participation in value co-creation.

Marketer's Mindset: Key to Develop Bottom of the Pyramid Market

In the current scenario, marketers have a major role to play in the development and bringing advancement at the bottom of the pyramid (BOP) market by spreading awareness about meaningful consumption, need based consumption, preferential and purposeful spending on the utility products & services and promotion of the village based communities in production and production related activities. In this humongous task, change in the mindset of the marketers, policy and decision makers is collectively foreseen to bring out changes in the ideology and perception of the change makers. This paper proposes for an importance of change in mindset of the marketers ready to enter in the emerging markets with the pursuit of developing and serving the market. Exploratory research design is used as the research methodology to an exhaustive study of the available literature on BOP. The factors that may influence the mindset of the marketers have been extracted from the research papers available in the field of sociology, psychology and management and business studies. The paper foresees the emergence of an understanding through the confluence of scholarly work done within and outside the academic researches done on the BOP consumers. The change in the marketer's mindset is one of the significant enabler in influencing the way BOP market is looked upon as and carries the potential of treating BOP market as equally profitable markets. The study will help the researchers and practitioners to develop and investigate a structured form of research for the issue proposed, which may give direction to few strong empirical researches.

Being on top of your game at the bottom of the pyramid

This paper analysed the viability of Prahalad’s Bottom of the Pyramid (BOP) proposition within the South Africa context as a mechanism to eradicate/minimize poverty by ensuring a joint collaborative effort by government, NGOs, large domestic firms, multinational corporations (MNCs) as well as the poverty stricken citizens themselves. It conceptualized the BOP proposition and, having reviewed statistics on the extent of poverty globally and in South African in particular, confirmed that the BOP is a lucrative market in the South African context. From the paper, it is evident that the BOP proposition, if effectively implemented, has the potential to reduce poverty in South Africa and increase the profits of MNCs. It then reviewed Prahalad’s twelve Principles of Innovation and strategically divided these into six differentiation and six low-cost strategies. The paper concludes by articulating creative strategies (based on Prahalad’s 12 principles of innovation) for active participation and competitive advantage at the bottom of the pyramid, which are vividly presented in a model for strategic partners especially multinational corporations (MNCs) to adopt when expanding their scale of operations to incorporate the BOP market.

Technology in impoverished markets and new business formation rates

Purpose – While it has been speculated for some time that technology market development at the bottom of the pyramid (BOP) will create millions of new entrepreneurs in developing countries, as the BOP is the largest untapped market, to date, there is hardly any macro‐level cross‐country study investigating the extent to which such market development at the BOP influences new business formation “rates” in developing countries. The purpose of this paper is to examine the role of technology market development at the BOP in the information and communications technology (ICT) sector in influencing new business formation rates in developing countries.Design/methodology/approach – The study draws on cross‐country data from developing countries from World Resources Institute and the World Bank. Several steps were taken to ensure robustness.Findings – First, a connection is established between a developing country's level BOP market for ICT and the county's “rate” of new business formation. Second, it is suggested...

Brand Orientation as a Strategy That Influences the Adoption of Innovation in the Bottom of the Pyramid Market

AbstractIf brand orientation is used as a strategy ensuring the “relative advantage” attribute of an innovation in the “bottom of the pyramid” market, it may influence the adoption of an innovation in the developing and emerging economies.

Pump up the Volume: fluid and firm mechanics for engaging the sociotechnical in developing economies

It has been stated that developing sustainable and value-creating business in the Bottom of the Pyramid-markets is a tall order, and there is an increasing awareness that value creation in these ...

Tapping into the bottom of the pyramid (bop) market in South Africa: possible? And how?

Prahalad (2005) believes that the bottom of the pyramid (BOP) proposition can fulfill both the social goals of poverty eradication and the business goals of profits. The current ominous state of poverty in South Africa together with South Africa’s commitment to the United Nations Millennium Declaration to halve poverty by 2015 has motivated the researchers to consider Prahalad’s proposition of collaborating with the various constituencies including the multinational corporations (MNCs) to address the needs of the BOP market. This paper aims to evaluate the feasibility of implementing Prahalad’s Bottom of the Pyramid (BOP) proposition in the South African market and to conceptualize alternative approaches to developing marketing strategies for the South African BOP consumers. The study adopts a theoretical research study. It reviews statistics on the extent of poverty in South Africa. Arguments for and against the BOP proposition are examined and the researchers assess how the BOP proposition may work in the South African context. The secondary data indicates that the BOP is a lucrative market in the South African context. The authors conclude that the BOP proposition, if effectively implemented, has the potential to reduce poverty in South Africa and increase the profits of multinational corporations (MNCs). The researchers recognize the importance of MNC’s buying into the BOP proposition from the standpoint of corporate social responsibility (CSR). They also propose a 6As Framework for the implementation of the BOP philosophy and a model for eradicating/minimizing poverty through profits.

Revisiting the Debate over the Bottom of the Pyramid Market

Scholars have debated the nature of the market at the bottom of the pyramid (BOP). Challenging assumptions about these customers, C. K. Prahalad has described numerous success stories of multinational companies who targeted low-income people as their customers. However, other scholars have raised questions about Prahalad’s propositions and the economic and ethical realities facing firms doing business at the BOP. Interestingly, though many projects have failed with the BOP market, firms operating in emerging markets have successfully implemented these programs in the mass market. Thus, many products and services, such as automobiles and hotels, have now become an affordable possibility for the mass segment. This commentary summarizes the debate over Prahalad’s propositions and explains their current status.

Sourcing or selling: the Value Flame at the Base of the Pyramid

PurposeMuch has been written concerning the value and validity of the bottom of the pyramid (BOP) model, as a strategy for multi‐national corporation (MNC) growth. The model presented in this paper adds to the discussion of strategic possibilities to tap the potential of emerging markets. This paper seeks to address these issues.Design/methodology/approachThe paper first discusses trends in economic growth in emerging markets, global strategies, and the BOP market, then analyzes the blue ocean strategy (BOS) of value innovation.FindingsThe paper develops the Value Flame at the Base of the Pyramid (VFBOP) model by combining BOP and BOS strategies to potentially offer opportunities for MNC market entry as well as market supply, to drive revenues and expand global market share.Research limitations/implicationsAs a concept, the model must be validated by empirical and case research to ascertain the shape and dynamics of the model. Future research can establish the parameters of the flame.Originality/valueIt is believed that the VFBOP model is the first to address some of the limitations of BOP strategy while profiting from the BOS model, in order to fully benefit from sourcing and selling to emerging markets.

Branding paradigm for the bottom of the pyramid markets

PurposeThis paper aims to deliver new models of brand management in bottom‐of‐the‐pyramid (BoP) markets, considering the personality traits, image, technology and reputation of firms associated with the brands.Design/methodology/approachReviewing the previous research studies, the paper advocates new strategies for enhancing the performance of global brands in BoP market segments, improving brand‐positioning approaches, measuring brand performance and consumer value, evaluating brand attributes, and underlining brand dynamics in the competitive marketplace.FindingsThe study argues that the performance of global brands in low‐profile consumer market segments is constrained by high transaction costs and coordination problems along the brand promotions, consumption and consumer value chain. Hence, firms looking towards managing brands in BoP market segments need to reduce brand costs by increasing the volume of sales and augmenting consumer value. Brands of BoP market segments are socially and culturally embedded. They are co‐created by consumers and firms, and positioned with the influence of brand equity of the premium market. Unlike traditional brands, BoP brands may be sufficiently malleable to support brand interpretations in the rural and suburban consumer segments.Research limitations/implicationsAcquired brands need to be merged into the existing structure, especially where these brands occupy market positions similar to those of existing brands. A balance needs to be maintained between the brand name and its equity. Managers should keep themselves better informed about consumer needs, market changes and company initiatives, thereby enabling staff to help consumers to improve service quality, which in turn can improve market positioning.Practical implicationsIn today's rapidly changing product markets, a firm needs to focus on a limited number of strategic brands in international markets in order to consolidate and strengthen its position and enhance brand power. The paper offers new business strategies to managers on brand positioning and targeting in suburban and rural markets with convenience packaging, pricing and psychodynamics.Originality/valueNew initiatives to manage global brands in BoP markets comprising suburban and rural markets that need to be implemented in the existing organizational culture are discussed.

Marketing to the bottom of the pyramid: opportunities in emerging markets

The significance of emerging economies to global marketing within the context of a paradigm shift of international business is enormous. The purpose of this paper is to show that emerging markets have two separate areas of opportunity for multinational corporations: to buy and to sell. The paper first involves a discussion of economic growth in emerging markets, and the importance to the global marketplace, and the emergence of the bottom of the pyramid (BOP) market. Then, recent strategies by companies to address this potential are analysed. Emerging markets do not consist of one market. They are diverse and can require separate market entry and market development strategies. With more manageable risks, ease of communications and transportation, higher income growth and increasing consumer purchasing power, there are both low cost, high quality resources to buy from and new opportunities for multinational corporations to sell to, at the BOP. The paper suggests that managers address both high-end developed markets as well as low-end emerging markets. The paper reviews many key concepts involved with managing profitable BOP market growth related to operating in emerging markets. It analyses strategies to satisfy consumer needs globally by both entering emerging markets and sourcing from them.