Bottom of the pyramid marketing

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You can engage one without the other, but they go together. Most of that money is spent on traditional items purchased in traditional ways. Basic medicines if you can afford them or if death is the only alternative.

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The predominance of certain adverse factors has historically de-motivated firms seeking to enter into the bottom-of-the-pyramid BoP markets due to the perception that BoP markets are impoverished and therefore unable to afford their products. This chapter, therefore, explores how some multinational corporations MNCs may have successfully implemented BoP marketing in Nigeria against the backdrop of diffusion of innovation DoI theory. The DoI theory tries to explain how and why new ideas, product, structures, or phenomena innovationsspread across users and social systems.

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Prahalad, and his colleague Stuart L. Hart debuted a simple but radical idea. They argued that the 4 billion poor people around the world represented a vibrant consumer market, that this market could best be tapped with for-profit models, and that the poor themselves had to be partners in the process.

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The bottom of the pyramid BoP refers to the four billion poor people in the world. They have no access to global markets and thus, have to pay more for goods and services. In fact, this group represents the biggest market opportunity in the world if companies can offer affordable products and services more efficiently. Tier 2 and Tier 3 represent the 1.

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They also need to raise the price point for a single transaction. This combination of higher margins and higher price points increases the contribution—the amount of money that goes to covering fixed and operating costs—generated from every transaction. Achieving sustainable margins in low-income markets requires a margin-boosting platform that integrates three common approaches—bundling products, offering an enabling service, and cultivating customer peer groups—into a coherent strategy.

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The bottom of the pyramidbottom of the wealth pyramid or the bottom of the income pyramid is the largest, but poorest socio-economic group. In global terms, this is the 2. Management scholar CK Prahalad popularised the idea of this demographic as a profitable consumer base in his book The Fortune at the Bottom of the Pyramidwritten alongside Stuart Hart.

In marketing, everybody knows about the 4Ps, but what happens when talking about the specific BoP market that is still quite fresh in terms of academic research? I found two of those approaches in the field of marketing that are quite interesting, among others things because they do not highlight the same problematics. His focus is on the BoP as a source for breakthrough innovation.

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An underutilized productive segment and a source of untapped entrepreneurial energy, this massive economic sector demands huge amounts of products, services and technology. How are the contemporary business and economic models giving the BoP its much needed access to mainstream economy? We find out. These people have difficulty in accessing global markets, and traditional product and service distribution and delivery networks.

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Bottom of the pyramid BOPalso called base of the pyramidterm in economics that refers to the poorest two-thirds of the economic human pyramid, a group of more than four billion people living in abject poverty. More broadly, BOP refers to a market -based model of economic development that promises to simultaneously alleviate widespread poverty while providing growth and profits for multinational corporations MNCs. This concept has been increasingly adopted by firms in different industries e. Alleviating global poverty was identified as a top priority in the United Nations Millennium Development Goals.


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