Question & Answer: Ainds of business March 2011 most encouraging business-model nnovations at the mld adaptations but…

Ainds of business March 2011 most encouraging business-model nnovations at the mld adaptations but new, groundbr not incremental When it decided to pursue low-income cust strategy consumers. a radical chose emium product early 2000s, al vendors selling the 500-mi its Cool Pac brand a and touting the product’s higher quality. water Controling costs was a problem, at first. Voltic produced the water costs to areas it soon found that the the and delivery outside the given So the company set up plants with more than a dozen franchisees, which had access to their own capital and an ability through street hawkers. managing daily the product provided on split the operating margins with Voltic. the capital costs, made no investment in trucking capabilities, and control over the brand. Nearly half a million Cool Pac sachets are sold e was in 2009 by SAB Miller.) Hollard Group. com based in Johannesburg, a different approach: t entered a largely informal market developing a unique way selling and servicing a nsurance usually only marginally successful at the bottom of the pyramid. Demand is low, and distribution costs are high. But in 2008, Hollard entered the funeral insurance market in Africa. The continent has a tradition of elaborate and expensive funerals, whose costs were often devastating to poor Informal burial societies and others were already providing services for this market, so funeral coverage was hardly a new idea. But Hollard introduced simple policies with affordable monthly premiums and sold them through PEP a clothing and home wares retailer with 1,100 branches that targets th bottom of the pyramid in Africa. A policy can be bought at the checkout counter as easily as a batch of cell-phone minutes. Hollard uses text messaging remind about payments, and claims and processing are handled through mobile phones, rather than agents, reducing service costs. Consumers can pay their monthly premiums at any PEP outlet cash. The firm has created a base of more than 600,000 customers in five years to create new businesses at the bottom of the to open markets that have been the The housing industry in the India has the past decade, but the sprawling of households. Some 40% urban residents li in slums, and many others live in neighbourhoods with limited facilities

Expert Answer

a) Yes, We Can Manage large Number of Low Margin and low Value transactions.

In the Above article it is clearly seen that Voltic has has increased it distributed it plants with as well as increase the Number of Franchaises in different Locations.And those Franchaises sold those water saches even through street hawkers to make the profit.

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Hollard,the Insurance company also gone to bottom of pyramid by insuring the funeral cost also.

Indian real estate player Monitor made the profit by going to bottom of pyramid and sold Low Income home even at $6500 per low income home.This sector opportunity has worth of $220 Billion.

b) Tose questions will be:

1.Will the Product for Bottom of Pyramid have enough requirements as it will be in huge volume?

2.Does the Price of the Product matches up with bottom of pyramid pricing to have highest demand in volume?

c) Main marketing Plans are:

Medium of advertisement should be through mass marketing by using channels of direct sales not any paid advertisements.

Pricing should match up with affordability of the bottom of pyramid consumers for gaining in Volume.

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