ASSIGNMENT 4

PRODUCTS AND SERVICES FOR BOTTOM OF PYRAMID LEVEL

20MIA1145
VARUN VAISHNAV
INTRODUCTION:
Bottom of the pyramid (BOP), also called Base of the pyramid, term in
economics that refers to the poorest two-thirds of the economic human
pyramid, a group of more than four billion people living in abject poverty.
More broadly, BOP refers to a market -based model of economic
development that promises to simultaneously reduce widespread poverty
while providing growth and profits for MultinationalCorporations (MNCs).

This is the world economic pyramid, it consists of three levels. Mature

markets are for affluent people who have annual per capita income more
than 20000$, it consists of 75-100 million people. Then we have the
Emerging Markets which consist of people who have annual per capita
income between 1500$-20000$, this market consists of about 1.5 to1.75
billion people. We have the BOP(Bottom of the pyramid) who have an
annual per capita income less than 1500$, this market consists of about 4
billion people.
Why are businesses interested in BOP markets?
On-the-ground engagement with BOP organizations and markets
provides a powerful source of staff development and social impact.
Profits are critically important for ventures targeting the bottom of the
economic pyramid, more than 4 billion people who individually earn less
than $1,500 per year. Compared with a social responsibility project, a
profitable business stands a better chance of being able to increase its
scale and impact.

Pepsico India was established in the year 1989 and they have been
successful in India for more than 3 decades. They have introduced so
many brands into the market like:
 Pepsi, Miranda, Mountain Dew etc
 Lay’s, Kurkkure, Cheetos
 Quaker oats
 Gatorade Energy drinks
 Doritos
And many more products into the market but when pepsico first
entered India, they started selling Bulk versions of their products,
That attracted less customers because in India most people belong
to the Bottom of the Pyramid(BOP),so their products were not sold
on large scales.
So they can up with ideas and started selling smaller versions of
their products, even when they were selling bigger versions of the
same snack or beverage too.
These are some of the products which they started selling smaller
versions of, and it was a huge success!. Pepsico understood the
Indian market and changed their products according to it that is
why they have survived for over 3 decades in India. You can see
pepsi for 70/- and 10/- too in the shops so customers can choose
what size they want and buy it accordingly.

So the basic idea is that, you can buy any size of my product but you
must consume only my product, this is the rule for many MNCs and
their reason for creating big and small versions of the same product
but for different markets. Pepsico India has employed this method
and made themselves a market in the BOP.

Conclusion:
We can conclude by saying that selling products to the BOP is very
profitable compared to Mature and Emerging markets and by
selling products to the BOP we can reduce their poverty atleast to
an extent and the MNCs can also make huge profits. This will also
gain the company a loyal customer base overtime. So overall,
selling products to BOP is profitable more than any other market.

Thank You.