PRACTICE QUESTION (NOT IN THE EXAM)

Question 1

Global Consumer-Products Companies Target Low-Income Consumers

Overview: In “Frugal engineering.” “Indovation.” “Reverse innovation.” These are some of the terms
that marketers at GE, Procter & Gamble, Siemens, and Unilever are using to describe efforts to
penetrate more deeply into emerging markets. As growth in mature markets slows, executives and
managers at many global companies are realizing that the ability to serve the needs of the world’s
poorest consumer will be a critical source of competitive advantage in the decades to come.

Two-thirds of the world’s population, more than 4 billion people, live on less than $2 per day. This
segment is sometimes referred to as the “bottom of the pyramid” and includes an estimated 1.5
million people who live “off the grid”.

Not every company has been successful targeting the low-income segment.

Which types of marketing communications may be necessary to launch an innovative product such
as Procter & Gamble’s PUR in emerging markets?