bottom of the pyramid

1. Welcome To Our Presentation
Topic
Bottom Of The Pyramid
Course Name: development economics
Course Code: 210
Prepared By
Md. Sifat Hasan

2. Name Roll
1. Md.Sifat Hasan 14132622
7. Maminur Rahman 14132608
3. Md.Badrul Alam 14132613
4. Mahmudul Hasan 14132614
5. MD. Al-Amin 14132615
6. Md.Rasel Mia 14132612
7. Maminur Rahman 14132607
8. Shafiqul Islam 14132620
9. Md. Zafor Ikbal 14132619
10. Saddam Hossain 14132616
11. Afsana Siddika Moni 14132627
12. Afruza Akter Sumi 14132640
13. Md.Iqbal Hossain 14132643
14. Masum Rana 14132646
Profile Of The Members

3. BOTTOM OF THE PYRAMID
More than $20,000
$ 1500~ $20,000
$ 1500~ $20,000
Less than $1,500
Less than $1,500
Tier 1
Tier2
Tier 3
Tier 4
Tier 5

4. The Bop Theory And Poverty
• Poverty can be alleviated through financially
profitable activity
• Gradual expansion of the concept beyond attention
to basic needs such as nutrition
• Per capita income at or below $1,500 or $2,000 per
annum

5. History Of Bottom Of The Pyramid
• “Bottom of the pyramid” was first used by U.S. President in his April
7, 1932 radio address, the forgotten man
• Current usage refers to the billions of people living on less than $2 per
day,
• as first defined in 1998 by professors C.K. Prahalad and Stuart L. Hart
• Expanded in The Fortune at the Bottom of the Pyramid by Prahalad in
2004
• Capitalism at the Crossroads by Hart in 2005.

6. Prahalad View On Bottom Of The Pyramid
• Businesses, governments, and donor agencies stop thinking
of the poor as victims.
• Bop mass are resilient and creative entrepreneurs as well as
value-demanding consumers.
• Tremendous benefits to multi-national companies in bop
market
• The poor of today are the middle class of tomorrow.

7. Twelve Principles Of Innovation For
Bop Markets
1. Focus On Price Performance Of Products And Services
2. Innovation Requires Hybrid Solutions
3. BOP Markets Are Large
4. The Developed Markets Are Accustomed To Resource Wastage
5. Product Development Must Start From A Deep Understanding
Of Functionality, Not Just Form
6. Process Innovations Are Just As Critical In BOP Markets As
Product Innovations

8. Twelve Principles Of Innovation For
Bop Markets
7. Deskilling Work Is Critical.
8. Education Of Customers On Product Usage Is Key
9. Products Must Work In Hostile Environments
10. Research On Interfaces Is Critical Given The Nature Of The
Consumer Population
11. Innovations Must Reach The Consumer
12. Paradoxically, The Feature And Function Evolution In BOP Markets
Can Be Very Rapid

9. The Nature Of The Bop Market
•There Is Money at the BOP
•Access to BOP Markets
•The BOP Markets Are Brand-Conscious
•The BOP Market Is Connected
•BOP Consumers Accept Advanced Technology
Readily

10. Philosophy For Developing Products And
Services For The Bop
1. the basic economics of the BOP market are based on
• small unit packages,
• low margin per unit,
• high volume,
• high return on capital employed
2. Social innovation: Creating products for those at the bottom of the
pyramid
3. ‘It’s not just about making products cheaper’

11. Products For The Bottom Of The Pyramid
Before After
Whitening Creams
• Fair & Lovely
• Fair & Handsome
• Fair & Lovely
Multi Expert

12. Products For The Bottom Of The
Pyramid
•Poverty and Alcohol
•Microcredit
•Market-specific products
•Innovation in the BOP
•Venture capital
•Brand in the Bottom of the Pyramid
Market

13. Bop: A Global Opportunity
• Engaging the BOP
Traditional approach
Business models
• Local growth opportunities
Large population base is one indicator of the size of
the market opportunity at the BOP
Per-capita income isn’t considered

14. Fortune Or Mirage At The Bottom Of The Pyramid
Fortune at the BOP
1. Market size is $13 to $15
trillion.
2. Much ‘untapped’ purchasing
power.
3. Profit margins in BOP markets
are high.
4. Often buy ‘luxury’ items.
5. Reduce prices without
reducing quality.
Mirage of a Fortune
1. BOP market size is $3 trillion.
2. little ‘untapped’ purchasing
power.
3. not so profitable.
4. little room for luxuries.
5. Reduce price, reduce quality.

15. Are The Poor Poor?
• poor countries are poor because they lack resources
• aid from rich countries to the governments of the poor countries
for specific projects (typically infrastructure) would reduce
poverty
• , investments in education and health care might have the largest
multipliers per dollar of investment in economic development
• The record of aid and loans from the various donor countries and
the World Bank, International Monetary Fund, and other
institutions is at best mixed

16. Criticism Of The Bop
•Weaknesses of the BOP Theory
•The Negative Aspects of the BOP
theory
1. Target Market
2. Affordability
3. Financing
4. Lower Prices or raise income
5. The poor as Producers

17. Known Problems And Known Solutions, What Is
The Missing Link?
The missing link is the need for-
• Investments in the education of customers,
• Technology to develop that solution into an
affordable product,
• The distribution channels to make it widely available.
• Health care for bop market needs to be increased

18. Final Thoughts
• Narrowing the global gap between rich and poor, it means
Lifting billions of people out of poverty and desperation;
It also means averting the social decay, political chaos, and so on.
• Economic miracles do not happen out of the blue; they are based on
education miracles.
• Free basic education and affordable technical education for the poor
through public-private partnerships.
• Creating a win-win situations between bop & top by removing
disparity.