Fortune at THE BOTTOM OF PYRAMID

Presented by: Augustine kujur Kartikeya Nayan Paritosh Anand Pawan Sable

Bottom of Pyramid Proposition

Low-income markets present a prodigious opportunity for the worlds wealthiest companies to seek their fortunes and bring prosperity to the aspiring poor.

The Bottom of Pyramid - China

China is the third largest country in the world and home to more than 1.3 billion people 125 million peoples income is below $1.25 per day 800 to 950 million residents 60000 residence in rurals and urbans decrease over the last 30 years in the number of people living in absolute poverty.

BOP

"Master Kong", of the Spring and Autumn Period.

The superior man understands righteousness;the inferior man understands profit. -Confucius (551 - 479 BC)

Role of Private Sector

Poor as Consumers
Facilitate purchase
Marginal impact
Actual customers are very small

Lower price without lowering quality

Lower price and lower quality

Alcohol and Poverty

The poorer people spend a greater fraction of their income on alcohol than the less poor.

Alcohol abuse exacerbates poverty: impact on work performance, health, accidents, domestic violence and child neglect.

IFADs strategy in China

It has provided loans for 23 rural development programmes project areas are located in Chinas remote and mountainous regions, where there are large numbers of poor indigenous peoples. land improvement and irrigation and water conservation, as well as production of food, cash crops, livestock and fish.

Target Market: BoP Costumers

Large number of customers. In wide geographical area. Challenges of distribution Selling directly to end users is not cost effective Fragmented distribution system Solutions Sophisticated infrastructure

Case Study: DELL

Computer based company(1984) Well known for sophisticated warehouse and efficient supply chain management. Failed because in rural areas want to see the product before they buy it July 2010, Dell boosts around 6000 stores and channel outlets around the tier 3 markets.

 Strategy
Penetration in low income vast Market Direct sales Dell chooses small, local retailers to which it directly delivers its products Establishing official service centre

WA HA HA

Hangshu Wahaha (1987) Beverage company marketing and distribution systems Sugar-and-alcohol distribution network co-operated with state Failed: Due to emerging private-run distribution networks New sales network by linking up with the powerful local distributors Hampered: Due to market for health and food products matured did competition increase Set up of own distribution network: consists of four layers

 Provides a lot of free consulting and support, staff and funding for advertizing campaigns They kept following this strategy and often put up shop in poor, underdeveloped areas, boosting the local economy Success: Very efficient and more cost optimization than total integration Profit optimization and social entitlement upliftment

afterwords
At present condition targeting BOP in China is profitable and it helps in uplifting of poor people also. And Chinese trying to penetrate BOP of other countries.

THANK YOU