International Markets and the bottom of the Pyramid

http://www.myfreecoursesonline.com/marketing/marketing-to-the-bottom-of-the-pyramid Slide1 WELCOME BACK to Module4 where we will study the BOTTOM OF THE PYRAMID. Earlier in this course you may have seen reports of luxury markets, however you should not jump to the conclusion those are most of the profit is concentrated. The poorer markets by contrast, represents a MASSIVE opportunity in the world. There IS, unfortunately a growing gap between rich and poor. In memory of professor C.K. Prahalad who passed away in 2010, we would like to refer to this segment as “The bottom of the Pyramid” SLIDE2 The aim of THIS module is to explore THE LARGEST marketing opportunity in the world. We will learn that it is possible to improve the lives of people at the bottom of the pyramid whilst also adding profit to the company Our objectives are to: Briefly look at Case examples in Brazil and India, then to explore what Professor Prahalad taught the world, to look at Opportunities at the bottom of the pyramid, and finally, to discuss Longtail theory. Did you know that Jorge Paulo Lemann who owns Anheuser Busch is the richest man in Brazil. He did this not by selling upmarket wines to the wealthy sector, but by selling CHEAP BEER to the bottom of the pyramid Did you know that Dilip Shanghvi, the founder of Sun Pharmaceutical Industries is India’s second richest man. He did this not by selling expensive drugs to the wealthy, but by producing mass producing products so that it becomes affordable to the bottom of the pyramid. SLIDE4 Professor CK Prahalad produced valuable insights in 2004 already when he predicted growth at the bottom of the Pyramid. The fundamentals of this segment are as follows: 1. The poor ARE brand conscious, thus if a brand acknowledges this by making adaptations to provide a range that caters for the poor, it will experience a huge surge in volume 2. MicroFinance and VentureCapital which is willing to take a RISK on the bottom of the pyramid, can experience VERY HIGH yields 3. When NOKIA recognized the POOR segment in India by providing specific solutions to the problems of farmers, it has managed to outperform every other phone provider in India, as a result of strong endorsement by the poor. More than anything, Nokia and Professor CK Prahalad demonstrated that companies CAN do a lot to IMPROVE the lives of people at the bottom of the pyramid, whilst adding a profitable segment. If this appeals to your sense of philanthropy, may want to consider further studies into the field of sustainable development. SLIDE5 Now we will briefly explore opportunities at the bottom of the pyramid: Mukesh Ambani, Indias RICHEST man stated that “AFRICA IS THE FINAL FRONTIER”. He has moved into Africa with mobile phone communications. The sheer volume of the population in Africa – and the fact that many people there will only ever access the internet by mobile phone, demonstrates the size of the opportunity there is for the mobile market in Africa. Carlos Slim was the richest man in the entire world at one stage. He already achieved in Mexico and Latin America what Mr. Ambani hopes to achieve in Africa. This new democratization of the developing world through technological enablement will through Low cost mobile solutions will open the door to many other opportunities. These opportunities include: Mobile payment solutions ( known as M-pay) which is aimed at helping the poor can bring incredible value to poor regions, education solutions for mobile phones and various other intangible services internet entrepreneurs can provide Another opportunity is Microfinance. This industry developed a problematic reputation. However, there is an opportunity to bring better value to poor markets through more ethical forms of Microfinance. These markets include all of Africa, India, parts of Latin America and Asia. If you are a smaller trader or marketing firm looking for new market opportunities, Alibaba.com is a great starting point. It is easy to gauge supply and demand through these research tools. SLIDE7 Now you might look at the information presented and ask the question: Is the bottom perhaps inverting? Well: As millions of people are changing class, moving up the pyramid, there are also other markets that benefit. One such example is the UK education system. It now receives MORE students from China and India than it receives from the entire EU. [CLICK ENTER] This brings us to a very interesting philosophy that an International Marketer should always remember: If we look at the “OTHER” segment which is circled in RED, we see that it is a large number. This would represent ALL the small countries, who by themselves, are not significant in terms of the number of students they send to the UK. However, when we consider their COMBINED volume, it is very substantial. What we have just seen is LONGTAIL theory in action