What is Bottom of Pyramid?.....
In economics, the bottom of the pyramid is the
largest, but poorest socio-economic group
It is also often referred to as the "Base of the
Pyramid" or just the "BoP"
Current usage refers to the” billions people living
on less than $2 per day”
-As defined by Professors C.K. Prahalad and
Stuart L. Hart (in 1998 )
THROUGH PROFITS :
The Bottom of the Pyramid (BOP) has emerged as a dominant
concept in business, -Propelled by C.K Prahalad‟s (2005)
Has the potential to impact the world‟s billions of poor people
– by the managerial practices of multinational corporations.
Important to analyze how large corporations can serve low-
income customers profitably.
An insight into Base of the
An insight into Base of the pyramid Bottom of the pyramid
consumers are ready to accept the new products.
But the question arises? How the marketers go about to meet
the need profitably?
Therefore here the challenge for the marketers lies in not
providing cheap products but also in providing value for
The solution to the above stand lies in the 4 „I‟s: Introduction,
Infrastructure, Innovation, and Improvement
THE POWER OF DOMINANT
Exploitation of poor people by Private sector.
Rural population was primarily poor & urban population was
Private sector businesses , especially MNCs logic about BOP.
ECONOMIC DEVELOPMENT AND
SOCIAL TRANSFORMATION APPROACH
ent and aid
THE NATURE OF BOP MARKET
There is money at BOP.
Access to BOP markets.
The BOP markets are Brand – Conscious.
The BOP market is connected
BOP consumers accept advanced technology readily
Create the capacity to consume
The need for new goods and services
Dignity and choice
Trust is a Prerequisite
BENEFITS TO THE PRIVATE
Huge market potential with 4 to 5 billion underserved
people and economy of more than $ 13 trillion PPP
The needs of the poor are many.
Thus, the case for growth opportunity in the BOP
markets is easy to make.
PRODUCTS AND SERVICES FOR
A philosophy for developing products & services for
- small unit packages
- low margin per unit
- high volume
- high return on capital employed
Principles of BOP :
Scale of Operations
Sustainable Development: Eco-Friendly
Deskilling of work
Education of Customers
Designing for Hostile Infrastructure
Distribution: Accessing the Customer
BOP Markets essentially allows us to challenge the
conventional wisdom in delivery of Product
BOP : A Global Opportunity
BOP : A Global Opportunity Some BOP markets are very large
Local innovations can be leveraged across other BOP markets
Some innovations from the BOP markets will find applications
in developed markets
Lessons from the BOP markets can influence the management
practices of global firms
ENGAGING THE BOP
Developing a unique approach
to BOP markets and learning
from the experience
traditional approach Learning from the BOP
Fine tuning the
Two innovative models to serve the
The Direct Access, Bank-led Model
- Catalyzed by the merger with Bank of Madura.
- Utilizes its power to promote and grow SHGs.
- Indirect Channels Partnership Model
- Looks to leverage current infrastructure and relationships
of MFIs and NGOs.
ICICI Bank: Innovations in Finance
“I think we have to recognize that a whole lot of potential
is going to come out of the bottom of the pyramid”
Chanda Kochhar, Executive Director Retail Banking,
Formation of new SHG’
Formation of new SHG’s
Monitor the action of
Approve loan applications
Helps with the development of
Self Help Groups
-15 to 20 members
- from same village
- between the ages of 20 and 50
- existing below poverty line
How it Works?
Each member contributes Rs 50 to a joint savings account
Leader responsible for collection and opening up of savings
account in the bank.
The savings are converted into fund.
Used for emergency lending to an individual within the group.
Eligible for loan after one year of formation.
Number of SHGs increased from 1500 in 2001 to 8000
ICICI has utilized its financial expertise to fashion a
model that is economically viable. ICICI has positioned
itself as socially conscious corporate citizen.
Helps ICICI‟s bargaining power with the RBI and other
Founder : Mr. Nand Kishore Chaudhary
Founded in 1978
Manufactures a range of handmade carpets
Winner of the Ernst & Young 2010 Indian Entrepreneur of the
Eradicating Poverty Through Profits.
Labour intensive industry.
Involves 60 processes for each final product.
All processes accomplished by grassroots level people
developed and trained by jaipur rugs foundation.
Working for upliftment of poverty struck people in the most
By not compromising with the quality of the product they offer.
By far has helped 52,000 jobless people become artisans.
Target : 1,00,000 till 2016
Annual turnover ₹ 82crore .
Every artisan is an entrepreneur.
Provides direct employment opportunity for needy villagers
earlier dependent on shrewd middlemen.
Give more and better facilities to weavers which resulted in
better outputs and loyal employees.
Happier and satisfied the workers, more the productivity.
Understand your employees as well as your customers to
“Finding yourself through
using yourself, the more I
use myself the more I find
Maintaining large workforce.
Providing International level working conditions.
Evaluating global market scenario.