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Some facts..
Four billion people around the globe with less than $5 a day in disposable income They are not only potential consumers to be tapped; they're also potential producers as well a co-creation solution companies in BOP markets can't just operate to make profits, they also must create social value in the areas where they operate
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Challenges
cultural distance between corporate decision makers and the poor. serious lack of infrastructure in poor markets that can make operating at the base of the pyramid difficult, and potentially costly Absence of a framework to guide decision making. difficult to find ways to bring BOP initiatives to scale and sustainability within the time frames dictated by traditional corporate targets
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Counterarguments by Prahalad
Poor are very value conscious If people have no sewerage or drinking water should we also deny them TVs and cell phones?
Social links
High when incomes are high, have relatives in the cities for more than one generation, children go to metros for education. Medium when incomes are high, agriculture dependant, first generation to attain financial status, relatives are first generation migrants, children may be studying in metros but are not detached from agriculture
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Facts
64% of Pakistani population is in the rurals Rural stratification: Strata 1: villages with more than 3k population (65% of rural population in about 9000 villages) Strata 2: villages with less than 3k population (35% of rural population in the rest) Average rural household size is 7, with approximately 3 rooms/house Average monthly rural household income: 73 A rural household mainly uses wood as cooking medium, get water via hand pump, though many have electricity in their homes.
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Maslows Hierarchy
Personal care, Hygiene and Beauty products; clothing; negative goods; household durables; entertainment
Transportation, health, basic education and vocational training
Source: An Integrated Approach to understanding consumer behavior at BOP, Journal of Consumer Marketing, 2008
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Distribution
Trickle down phenomenon Rural van operations
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Effect On Research
The Japanese look for information from the actual buyers rather than the potential buyers In countries such as India, Pakistan, Bangladesh, national income estimates do not reflect underreported or unreported income. Traditional values often prompt people in many countries to give socially desirable responses rather than true responses.
Product/brand launch
Launch the product Set action standards to gauge performance
PRE
POST
PRE
POST
Quantitative Concept tests Product tests Single monadic Paired Blind tests Ad tests
Early Brand evaluation Usage and attitude study Brand equity studies Satisfaction / Loyalty studies Ad pre and post air testing Marketing mix testing 4 Ps Continuous tracking tools Consumer Panel Retail Audit Communication and Equity tracking
Consumer Behavior
Pakistan presents
.a great market opportunity for marketers
Nearly 55% of the population is below 20 years of age Fastest growing market in terms of mobile usage
From 4 m users in 2004 to 90 m users in 2009
Greater connectivity
One of the fastest growing markets in the world
By Jul 2009 cellular subscribers in Pakistan had crossed 90 million compared to only 4 million in 2004!
Changing lifestyles
Budding fashion industry thats gained recognition in international markets More women entering the workforce, getting education and empowerment Growing restaurant and coffee shop culture eating out with friends and family
Awareness Familiarity
Post-purchase
Active evaluation