This document summarizes strategies for businesses to profitably serve customers at the bottom of the economic pyramid. It discusses C.K. Prahalad's concept of the bottom of the pyramid referring to billions of people living on less than $2 per day. Companies like ICICI Bank and Jaipur Rugs are highlighted for developing innovative and sustainable business models that provide employment, financial services, and products to low-income consumers while also generating profits. The challenges of maintaining a large grassroots workforce and meeting international standards are also noted.

1. BOOK REVIEW
GROUP-3
BOTTOM OF
PYRAMID

2. 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 )

3. ERADICATING POVERTY
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.

4. The Economic Pyramid
Tier 1
Tier 2-3
Tier 4
Tier 5<$1500
4000
$1500
$1500-$2000
>$20000 75-100
1500-1750

6. An insight into Base of the
pyramid
 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
money products.
 The solution to the above stand lies in the 4 „I‟s: Introduction,
Infrastructure, Innovation, and Improvement

7. THE POWER OF DOMINANT
LOGIC :
 Exploitation of poor people by Private sector.
 Rural population was primarily poor & urban population was
relatively rich.
 Private sector businesses , especially MNCs logic about BOP.

8. ECONOMIC DEVELOPMENT AND
SOCIAL TRANSFORMATION APPROACH
Economic
development
andA social
transformatio
n
Private
enterprise
Developm
ent and aid
agencies
BOP
Consumers
and
Enterprenu
ers
Civil
Social
Organisati
on and
local
Governme
nt

9. 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

10. MARKET DEVELOPMENT
IMPERATIVE
 Create the capacity to consume
 The need for new goods and services
 Dignity and choice
 Trust is a Prerequisite

11. BENEFITS TO THE PRIVATE
SECTOR
 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.

12. PRODUCTS AND SERVICES FOR
THE BOP
 A philosophy for developing products & services for
the BOP
- small unit packages
- low margin per unit
- high volume
- high return on capital employed

13. Principles of BOP :
 Price Performance
 Innovation: Hybrids
 Scale of Operations
 Sustainable Development: Eco-Friendly
 Identifying Functionality
 Process Innovation

14. Contd….
 Deskilling of work
 Education of Customers
 Designing for Hostile Infrastructure
 Interfaces
 Distribution: Accessing the Customer
 BOP Markets essentially allows us to challenge the
conventional wisdom in delivery of Product

15. BOP : A Global Opportunity
 BOP : A Global Opportunity Some BOP markets are very large
and attractive
 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

16. ENGAGING THE BOP
Developing a unique approach
to BOP markets and learning
from the experience
Fine-tuning the
traditional approach Learning from the BOP
Fine tuning the
traditional
approach

17. Two innovative models to serve the
BOP :
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.

18. 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”
_ By
Chanda Kochhar, Executive Director Retail Banking,
ICICI Bank

19. Three-tier System
6 Promoters
Formation of new SHG’
6 coordinators
Formation of new SHG’s
Monitor the action of
promoters
Project Manager
Approve loan applications
Helps with the development of
SHG’s

20. SHGs :
Self Help Groups
-15 to 20 members
- from same village
- married
- between the ages of 20 and 50
- existing below poverty line

21. 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.

22. Results
 Number of SHGs increased from 1500 in 2001 to 8000
in 2003.
 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
government institutions.

23. Jaipur Rugs

24. Introduction
 Founder : Mr. Nand Kishore Chaudhary
 Founded in 1978
 Manufactures a range of handmade carpets
 Winner of the Ernst & Young 2010 Indian Entrepreneur of the
Year
 Award.
 Eradicating Poverty Through Profits.
 Labour intensive industry.

25.  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
remote areas.
 By not compromising with the quality of the product they offer.

26.  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.

27.  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
grow business.

28. “Finding yourself through
using yourself, the more I
use myself the more I find
myself.”

29. Challenges
 Maintaining large workforce.
 Providing International level working conditions.
 Evaluating global market scenario.

30. Case: HLL

31. Conclusion
 Add any video