Question & Answer: When selling to poor consumers, companies need to begin by doing something basic: They need to…

When selling to poor consumers, companies need to begin by doing something basic: They need to create the market By Erik Simanis. The world street Journal, Monday October 26 2000. Around the world, four billion people live in poverty, And Western companies are struggling to into customers. For the past decade, business visionaries have argued that these people, dubbed the Base of the Pyramid, make up an enormous, untapped market. Some of the worlds biggest, savviest corporations have almed to address their basic needs-by selling them from clean water to electricity. But, time and again, the initiatives have quietly fizzled out. Why? Because these companies were looking it all wrong. Put most simply: The Base of the Pyramid is not actually a market. True, those billions of low-income people have a lot in common. But they don’t have two of the vital characteristics you need to have a consumer market. They haven’t been conditioned to think that the products being offered are something one would even buy. And they haven’t adapted their behaviours and budgets to fit the products into their lives. A consumer market is nothing less than a lifestyle built around a product. Think of an example close to home. In the 1970s, bottled water was a foreign idea to most Americans-it wasn’t part of American consumers’ lifestyle. It took decades for large numbers of consumers to accept the notion of buying something you could get free out of a faucet-and turn bottled water into a big business. For many poor consumers, paying for dean water or sanitation products seems just as outlandish. What is the possible answer? Companies must create markets-new lifestyles-among poor consumers. They must make the idea of paying money for the products seem natural, and they must induce consumers to fit those goods into their long-held routines. That means working closely with local communities in developing products and businesses, to give consumers a stake in adopting the goods. What’s more, companies must take a wide-ranging approach in their marketing, to give buyers as many reasons as possible to give the products a try. *inertia means inactivity, inaction, disinterest or laziness a) Base of pyramid refers to the largest but poorest socio-economic group. The billionaire and philanthropist, Bill Gates describes base of pyramid as an intriguing blueprint for how to fight poverty with profitability. This article describes the situation, the problem and the solution of base of pyramid consumers. You are required to identify the situation, problem and solution described by the article. b) As an entrepreneur, what can you do to help those at the bottom/base of the pyramid? What are the marketing strategies that you can adopt or adept?
When selling to poor consumers, companies need to

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Situation: Any effort by huge corporation to tap potentially largest consumer base of bottom of pyramid had proved futile inspite thier best and rigourous attempt.

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Problem: Bottom of Pyramid is not exactly a consumer market. Companies are trying to sell product which they expect for free. Example Electricity, water etc is something which they believe is to be given to them freely since its govt obligation to provide basic needs. The bottom of pyramid is not actuaaly a market. The two important characteristics which make a consumer market, a) consumer are conditioned to buy products which are being offered b) Consumers have adapted their budget and behaviour to fit products in their life, are missing in bottom of pyramid

Solution: Companies needs to create new market by inducing lifestyle changes. Companies needs to induce them to pay for product they seemed natural and fit those product in their lifestyle. They need to work closely with the communities for identifying such products and needs. Companies needs to improvise in marketing and provide number of benefits and reasons for consumer to buy their products.


As an enterprenuer, we can help bottom of pyramid by providing products to improve their basic health and meet basic needs. This group cannot spend fortunes on their own health , so we may provide various products that can improve their helath, provide necessary nutrients at resonable price. We need to introduce new products that help improving their own well being at lowest possible cost.

We can adopt combination of following marketing strategies:

– Cause marketing : Giving a cause which both consumer and comapny cares about

– Relatioship marketing :  focus on building relationships with their customers instead of always exclusive trying to sell them something

-Diversity Marketing: Develop a customized marketing plan by analyzing different customer segments based on cultural differences including tastes, expectations, beliefs, world views, and specific needs

– Humanistic Marketing: Human needs are “a state of felt deprivation.” They distinguish between physical needs (food, shelter, safety, clothing), social needs (belonging and affection), and individual needs (knowledge, self-expression). Needs are a relatively narrow set of non-cultural states of felt deprivation.

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