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Explore strategies for engaging with the base of the pyramid market, encompassing individuals living at income levels of $3,000 or less. Understand the market size, consumer challenges, and the need for modifications in business models to tap into this vast potential.
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Business Strategies at the Base of Pyramid World Economic Congress – May 16, 2008 Arlington. Virginia Sean Collins – University of Alberta
Collection of individuals living at income levels of $3,000 or less. • Estimated total the market size of over 4 billion people. • Concentrated in developing nations with nearly have of BoP consumers living in India and China Base of Pyramid - Definition
Demonstrates difficulty in using average prices for economic purposes Poverty Premium
Modification of business models have the potential to open up huge new markets • Likened to Henry Ford and the Model T • New Market • New production method • New business model • High costs to overcome barriers to entry • Lack of infrastructure • Significant efforts required to establish brand and corporate reputation – Aguas del Tunari’s privatization of Cochabamba’s water show drastic consequences of not establishing a reputation in a developing nation. • Language and cultural barriers exist from region to region. Returns to Scale
