Targeting the Bottom of the Pyramid Essay

410 WordsOct 15, 20122 Pages
Summary Many big companies tried to target the bottom of the pyramid but often fail. So many investors and companies feel that it is too risky. At first, they thought it was the high prices that demotivated the consumers. Then, few companies tried to develop product that is extremely low in prices but they still fail to capture the consumers because they cannot change their long-entrenched behaviors by paying for new products and integrating them into their lifestyles. So the next question arises, “how to change the behaviors of the consumer?” Few companies have successfully integrate their products into the lifestyle of the bottom of the pyramid. The key to the companies success is not to change the peoples’ lifestyles but to fit products into their lifestyles. So companies like Hindustan Unilever developed a product called Pureit that sells for $43. Then they used people over in India to demonstrate the products in local houses and deliver them door-to-door. Now, more than 3 million Indian homes have Pureit systems. Discussion Questions 1. Why are companies such as Siemens, GE, and Procter & Gamble targeting the “bottom of the pyramid”? These companies target the bottom of the pyramid(lower class market) because they want to expand their business by diversifying their target market segment. Very few companies and firms have successfully penetrate the lower class market because they set high prices for their products. Companies overestimate the size of the market and end up selling to the middle class, instead of the lower class. So they decided to create a new low-cost market. Another problem companies face is even if they have the right product with the right price, they cannot persuade the low-income consumers to buy new products. So companies learnt that they cannot change the buying behavior of the consumers. Only few companies managed to fit

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