MODULE IV: ENVIRONMENTAL ANALYSIS FOR MARKETING

 Corporate and Marketing Plans

 Marketing proposals
 The Structure of Strategic Marketing
 Plan People, Power and Politics in organization
 Benchmarking in marketing
 Manage the marketing managers
 Rural consumptions vs. urban consumptions
 Entrepreneurial marketing and its role in 21st century

Corporate marketing planning is the process by which an organization sets its long-term priorities
regarding products and markets in order to enhance the value of the overall company. It plans the
relative share of the firms resources to be devoted to each product of product line.

To understand the difference between a marketing plan and a corporate plan, think of a corporate
plan as a sailboat and the marketing plan as its sails. Without all the components that make up a
sailboat -- the mast, hull, rigging -- sails are just sheets of material lacking momentum of their own.
Without sails, a sailboat floats directionless or might sit for days without moving forward. Both the
boat and sails are needed to move forward. And just like sailing, both types of business plans are
essential if a company wants to sail with purpose and compete in a race.

Corporate Plan

The corporate plan is the overall strategy that analyzes, governs and steers the company. All
functional units -- including finance, operations, human resources and marketing -- fall under the
corporate plan. The plan answers two important and fundamental questions: what business are we
in? And what business should we be in? A corporate plan sets objectives so management may make
informed decisions, such as where to commit resources. It also creates benchmark goals to help
motivate management as well as employees and assess how the company is performing

Marketing Plan

Traditionally, marketing plans are based on the objectives detailed in the corporate plan and do not
encompass other nonrelated functional units, such as human resources. However, marketing is so
critical to a business that the marketing plan should be the start of any business plan. Most
marketing plans, though, serve to define the corporate plan in greater detail as it pertains to
marketing. For example, a marketing plan may include customer and marketplace analysis,
promotion, pricing, positioning and packaging strategies, as well as define expected results of sales.

Effective Corporate Plan

Effective corporate plans are based on effective corporate planning processes. Yet three-quarters of
managers surveyed by Andrew Campbell in the “Harvard Business Review” article, "Tailored, Not
Benchmarked: A Fresh Look at Corporate Planning," said their company’s planning processes don’t
work. As such, it’s important to understand the ingredients that make for a good corporate plan.
These include a clear vision to build processes around, well-defined objectives and ways to
encourage buy-in from the businesses, employees or stakeholders affected by the plan.

An Effective Marketing Plan

According to Philip Kotler in “According to Kotler” most marketing plans are poorly done and lack a
meaningful strategy. To create a well-designed marketing plan, a business must have solid planning
processes in place. Kotler suggests using a six-step process that includes competitive and
environmental analysis, setting of objectives, defining a strategic direction, detailing marketing
tactics, creating a budget and establishing ways to measure and assess the marketing plan so that
the plan may be revised if needed.

Marketing proposal

A marketing proposal is a written document used by marketers to communicate a project to a client

for consideration, which can include strategy ideas, delivery time frames and estimated costs, before
finalizing the terms and signing a contract for approval. A proposal is designed to satisfy a client’s
business goals, intended to persuade a prospect to become a customer and can be specific to a type
of marketing, such as a social media marketing proposal.

How to Create a Marketing Proposal

Research the client

You may have written audience personas already on hand that can help you shape the tone,
language, plan or other components of the proposal. If not, perform research on the client’s target
audience, industry, products/services, past/current financials, keywords or topics and other relevant
details.

Ask about client pain points to better address them. You can get an idea of the client’s pain points
with questions like:

What are their challenges?

Do they have the resources to solve them?

Can they solve them in their desired time frame?

Can they measure their success using metrics?

Knowing their main pain points gives you a better understanding of how to market your products or
services as the best solution for their problems. Ask yourself how your experience, expertise or
background can meet these challenges.
List a Scope of Work

Like any reputable contractor, include a Scope of Work section in the marketing proposal that details
your services and how you plan to provide them. The proposal should fulfill demands for marketing
tasks that clients do not have the time or resources required for business growth or to meet other
goals. For a social media marketing proposal, a Scope of Work may include making a social media
content calendar, uploading or automating posts and analyzing social metrics.

Provide estimated time frames for deliverables

Projected times for deliverables are big factors in whether prospective clients decide to move
forward with the contract process. Include estimated time frames for deliverables like social media
calendars, graphics and other pieces of content based on your resources, tools and time
management.

Include costs and terms

Another crucial factor in accepting a proposal is the estimated costs for the project and the potential
terms of agreement.

Costs or terms you may want to include:

Pay rate (by word, week, etc.) or pricing strategy (flat or hourly rate)

Payment requirements (deposit required before project start, full payment due upon completion,
etc)

Work location (on-site or remote)

Any guarantees you may have

Situations that warrant the termination of a contract

Show how you plan to measure results

Marketers have a variety of metrics to measure the results of their proposed work, including organic
or paid traffic, social media engagement and conversions.

Pros of a Marketing Proposal

Establish a foundation of trust. Position yourself as an expert or authoritative figure in your proposal
to gain trust early in your client-marketer relationship.

Make yourself stand out from competitors. The proposal details what is unique about your business
that makes clients hire you instead of a competitor.
Communicate your products and services clearly. Your Scope of Work serves as an advertising
platform to showcase everything you can do and provide for potential clients and any referrals who
come your way.

The Structure of Strategic Marketing

A strategic marketing plan outlines the overall strategy within a market, connecting customers,
competitors and what the organization is capable of achieving. It typically focuses on products;
market segments and how marketing communications and campaigns achieve targets defined in the
strategic marketing plan.

The traditional approach to strategic marketing needs modification for bottom of the pyramid.

Social Marketing at the Base of the Pyramid

(Mis)approaches To The Problem: The Basic Needs Approach

The scholar Erik Simanis has argued that one of the main reasons why these efforts have failed is
because of an inability to properly market products to the BoP. He characterizes past efforts as
having strictly addressed material needs of populations, while losing sight of humanitarian aspects.
(This approach, which he calls the Basic Needs strategy, oversimplifies development and hence
economic growth. The result is both mediocre development results and meager profit margins.

According to Simanis et al., the Basic Needs strategy is flawed in a number of ways. First of all, it is
reliant upon traditional market strategies that only work when applied to a market. By “market,”
these companies mean a formalized network in which buyers and sellers exchange money in return
for goods or services. Nevertheless, this sort of established structure in large part does not exist for
the BoP; there are few to no effective product markets and there is a proliferation of informal trades
and exchanges. Since there are no product markets, there are no reference points to determine
whether a product has demand.

Moreover, traditional avenues for consumer feedback—such as online campaigns, mailing lists, or
mass media—do not exist or are poorly applied in developing countries. The results are sobering.
Companies with brilliant track records of marketing to the developed world have failed to launch
high-impact projects, such as Nike’s disappointing introduction of the US$15 World Shoe. Even more
striking is the example of Procter & Gamble—one of the world’s best marketing and management
firms—which, despite the identification of a “market need” of clean water, has been unable to
successfully market their PUR water purification technology to the BoP. Indeed, not a single
corporation has created a viable clean water business at the BoP, though there have been many
attempts. According to Simanis et al., part of the reason is that there is no “market” for clean water
—instead it is so ingrained in daily life that a stand-alone value is incalculable.

Others have questioned whether the current BoP marketing strategy is a thinly-veiled guise to “sell
to the poor,” and the perceived paternalistic exploitation of the concept has increasingly alienated
nonprofit and public sectors as well as the poor themselves, which has hindered business
partnerships and progress. As A.K. Jaiswal suggests, if the social goal of BoP marketing is truly to
reduce poverty by increasing income, the BoP ought to be perceived as producers rather than
consumers. Products sold to the poor should empower the poor to create a better living. For
example, Kickstart pumps enable rural farmers to irrigate their fields and vastly increase their farm
yields. Beyond that, the BoP ought to move from general consumption to selective consumption,
aimed towards products that can create profits or improve well-being. One problem with
consumption in the developing world is that counterfeit products are prevalent, which are difficult
for the BoP to distinguish, especially since many are illiterate and have little consumer awareness.
These products can be dangerous and deadly, and more regulation and education can be done to
minimize this problem.

Beyond Basic Needs: The New Commons Approach

Rather than trying to formulate a business model in the boardrooms of a developed country using
economic and business models optimized for the North American or European experience, there is
another way to launch businesses using an approach that has the potential to solve more poverty.
This approach engages the community as a business partner to help co-create a product, which is
then embedded within existing socio-cultural institutions. Simanis calls this approach the New
Commons.

The first step of the New Commons approach is to conduct a pre-field analysis to select the correct
site, team, partners, and community. The site ought to have long-term strategic interest to ensure a
constant flow of resources. The team should involve corporate team members who are passionate,
experienced, and ideally local, in addition to community members; all members are trained in core
BoP techniques to build a common set of skills and ethic. The local partner involved can provide
social capital, trust, and community knowledge, and is ideally socially ingrained within the
community. Throughout the whole process, significant funds should also be invested in R&D, as BoP
opportunities almost invariably require the development of new capabilities based on the local
setting.

The in-field work begins by building deep dialogue with the community. This involves the project
team entering a community without any preconceived notions on which products to pursue or how
to market the product. Corporate team members ought to be introduced to the community and
start homestays, in which the corporate member lives with a community member for at least a
week, an activity meant to build trust and rapport with the community. More community members
are selected to join the project team using participatory rural appraisal techniques (PRA), which
allows the selection of diverse villagers from different levels of wealth and status. To build teamwork
and communication, the entire project team participates in daylong participatory workshops, which
have the goals of building a shared business language, exploring joint capabilities, and identifying
community needs. Finally, the project team splits into smaller groups, brainstorms and assesses
ideas until all the groups converge on a single business concept that is feasible in a reasonable
timeframe, but is also imaginative enough to bring novelty to the community.

The next step of in-field work involves the co-creation of the organizational foundation and the
development of an initial product or service. The co-creation process establishes a shared
organization identity. Training via small group, hands-on exercises rather than lectures are
conducted to ensure that all team members maintain a shared knowledge about products and
technologies, as well as business concepts and contexts. Furthermore, these exercises allow sources
of expertise to be identified, which fosters a sense of mutual interdependence. Initial field
experiments involving the broader community are performed to help create market demand.

The business prototype can finally be adapted to a complete business model, ready to be scaled up.
Systems and skills to manage ongoing local operations are developed, such as accounting as
customer feedback. Community members shadow corporate members to help them transition into
active involvement and co-direction of the company. To ensure that there is a genuine demand for a
product, the project team continues to work with the broader community to develop the prototype.
This process encourages a sense of membership within the community and contributing to product
demand. As the product is being developed, the supply chain should be as local as possible, involving
local materials and services.

As the product or service continues to develop, the whole team must be aware of emerging issues.
Corporate and community team members ought to continue working together on the field to
generate creative solutions—one example is to conduct joint sales calls. At this point, flexibility is
imperative because the business model and revenue sources are uncertain; consequently, fixed
asset investment and permanent organizational structure decisions should be avoided. Any
performance targets at this time should only be in place to generate a baseline income, and should
overall be concentrated on emphasizing learning.

The final step involves scaling the project. For a corporation to invest the resources and time
required to implement the New Commons approach, the value that needs to be generated requires
the project to be replicated and embedded in hundreds or thousands of other communities. Scaling
the project follows an “open pollination model,” in which the original business supplies ambassadors
and the seed business concept to new communities, while simultaneously encouraging adaptations
to local needs. Formal organizational links are formed to accelerate development and exchanges
between the parent business and new project team. Following this, small-scale business pilots are
launched in the new sites, which embed the initial business model within the village community.
Throughout the process, the parent business maintains liaisons with the new community to transfer
lessons and business skills, flattening the learning curve. Once new communities have adopted the
product, they can in turn launch projects in other cities, scaling the project exponentially.

The Advantages of the New Commons Approach

The New Commons approach addresses many of the hot-button issues in BoP social marketing
today. It focuses on targeting aggregated communities rather than individuals. It develops products
by rooting product development in local communities rather than imposing a product from the top-
down. It ensures that the products address the specific needs of the BoP and that the potential for
improving the well-being of customers is maximized.Furthermore, this approach recognizes that
communities themselves can be drivers of change. A study conducted by the Acumen Fund found
that extensive training, as is seen in the New Commons approach, is correlated with meeting at least
75% of sales targets.

The approach has also been proven successful. The Solae Company followed the New Commons
approach to establish a project in an Indian slum in Hyderabad. The project team settled on the idea
to create a “Culinary Park Network,” which included converting slum rooftops into green spaces and
sites that sold affordable, high-protein food products. The business was also designed to educate
villagers about balanced diets, teaching them how to prepare nutritious meals at home. Community
“expos” helped to widely market the project. The project proved economically and socially
successful and quickly spread to two dozens of small villages within five miles of the initial site.

Another successful organization that follows the logic and practices of the New Commons approach
is the Grameen Bank, an Indian organization that provides small monetary loans to the rural poor.
Despite some criticisms of the microlending system, the Grameen bank is generally held to be a
developmental and commercial success.

People, Power and Politics in organization

Why people’s mindset should be changed?

Primitively, BOP population is seen as support led and support seeking markets over resource
generating market. The prominence of this thinking has led to the negligence of corporate
organization and policy makers to view BOP as potential value contributors in economic and non-
economic activities of the nation. BOP is considered to be as a subjugated and deprived set of
population living on donations and charity. Policy makers and marketers have always looked at this
market with the perception of being as underdeveloped, deprived and exploitative set of world
largest and poorest group. However, the new approach of Prahalad to view BOP as potential
consumers and promising entrepreneurs have changed the mindset of marketers around the world.
Since year 2002, BOP population has garnered huge attention because of certain peculiar
characteristics of markets, i.e. cumulative purchasing power and immense pool of creativity,
innovation, and tacit knowledge resources that constitutes for an important enabler for developing
products and services specifically for the BOP market. The involvement of marketers is suggested to
rightly address the needs and expectations of the BOP and to bring forth the ideas and profitability
from this section of the economic pyramid. However, the arctic behaviour of privat organizations
towards BOP has resulted in the loss of potential revenues and poor social capital, which, if develop
can lead to changes in the way BOP is looked upon as today. Therefore, organizations should address
their dual role of providing resources and knowledge to the BOP in such a manner that will
eventually lead to an enhancement in the varying level of participation with the perspective of
selfreliance of and by the BOP. However, to rightly address the BOP, change in the behaviour of the
BOP community and of the providers to view BOP markets differently is required. Since, behaviour
change is the outcome of mindset change; therefore, mindset change is an important change
element in the perception development for the BOP.

Economists like Adam Smith and authors like Stuart L. Hart, C.K. Prahalad and Eric Kacou (2011) in
their seminal work on the Wealth of Nation (1776), Capitalism at the Crossroad (2007), the Fortune
at the Bottom of the Pyramid (2005) and ‘Entrepreneurial Solutions for Prosperity in BOP markets’
have emphasized on the importance of change in the mindset of the corporate organizations and
policy makers in viewing the deprived and socially inferior section of world society. Prahalad (2002)
emphasized on the need to change the mindset of the managers, producers, entrepreneurs,
politicians and NGOs to serve or to develop the BOP market. Author repeated his thoughts on
‘mindset change’ of the marketers on viewing BOP as potential customers and promising
entrepreneurs in his book Fortune at the Bottom of the Pyramid markets- Eradicating poverty
through profits (2005). Kacou (2011) in his work has identified the outdated mind-sets that have led
to mistrust, dependence, and failure and has provided with seven new opportunities and suggested
human centric approach through which mindset can be changed and BOP can be transformed. The
literature over the last one decade has shown that academicians and marketers have emphasized
upon the importance of change in the mindset of the decision and policy makers to rightly
understand and address the BOP markets.

It has been observed that a change in the mindset has ripple effect on the change in organizational
culture and on the individual and organization behaviour. Since, change in the mindset is a long term
process and involves certain unwritten rules that eventually lead to changes in the behaviour,
therefore, should be altered in a way that can be reflected and exhibited in the activities of the
person for whom it has been targeted for. Author Edgar Schein in his book Organizational Culture
and Leadership first published in 1985 has highlighted that the activities performed by the leaders
are replicated by the followers. Therefore, managers with strong leadership intent and skills shall be
directed towards the development of BOP marketers. It other words, the result of a change in the
mindset of the marketers as reflected in their behaviour can become an example for others related
or non-related organizations to follow. However, apart from the mindset, perception also plays an
important role in changing the behaviour. It has been observed that change in perception of an
individual leads to a direct permanent change in the human behaviour (Steel, undated). However, it
is important to understand that change in the marketer’s mindset is important for rightly viewing
and addressing the BOP population.

What Is Power?

Power is the ability to influence the behavior of others to get what you want. Gerald Salancik and
Jeffery Pfeffer concur, noting, “Power is simply the ability to get things done the way one wants
them to be done.” If you want a larger budget to open a new store in a large city and you get the
budget increase, you have used your power to influence the decision.

The fact that we can see and succumb to power means that power has both positive and negative
consequences. On one hand, powerful CEOs can align an entire organization to move together to
achieve goals. Amazing philanthropists such as Paul Farmer, a doctor who brought hospitals,
medicine, and doctors to remote Haiti, and Greg Mortenson, a mountaineer who founded the
Central Asia Institute and built schools across Pakistan, draw on their own power to organize others
toward lofty goals; they have changed the lives of thousands of individuals in countries around the
world for the better.Kidder, T. (2004). Mountains beyond mountains: The quest of Dr. Paul Farmer, a
man who would cure the world. New York: Random House; Mortenson, G., & Relin, D. O. (2006).
Three cups of tea: One man’s mission to promote peace…One school at a time. New York: Viking. On
the other hand, autocracy can destroy companies and countries alike. The phrase, “Power tends to
corrupt, and absolute power corrupts absolutely” was first said by English historian John Emerich
Edward Dalberg, who warned that power was inherently evil and its holders were not to be trusted.
History shows that power can be intoxicating and can be devastating when abused, as seen in high-
profile cases such as those involving Enron Corporation and government leaders such as the
impeached Illinois Governor Rod Blagojevich in 2009.

In 2007, Fortune named Steve Jobs the “Most Powerful Person in Business.” In 2009, the magazine
named him “CEO of the Decade.”

How has Jobs done it? Jobs draws on all six types of power: legitimate, expert, reward, information,
coercive, and referent.

Legitimate power. As CEO of Apple, Jobs enjoys unquestioned legitimate power.

Expert power. His success has built a tremendous amount of expert power. Jobs is renowned for
being able to think of markets and products for needs that people didn’t even know they had.

Reward power. As one of the richest individuals in the United States, Jobs has reward power both
within and outside Apple. He also can reward individuals with his time and attention.

Information power. Jobs has been able to leverage information in each industry he has transformed.

Coercive power. Forcefulness is helpful when tackling large, intractable problems, says Stanford
social psychologist Roderick Kramer, who calls Jobs one of the “great intimidators.” Robert Sutton
notes that “the degree to which people in Silicon Valley are afraid of Jobs is unbelievable.” Jobs is
known to berate people to the point of tears.

Referent power. But at the same time, “He inspires astounding effort and creativity from his
people.” Employee Andy Herzfeld, the lead designer of the original Mac operating system, says Jobs
imbues employees with a “messianic zeal” and can make them feel that they’re working on the
greatest product in the world.

Mastering Organizational Politics: The Four Strategies Every Leader Needs

Mastering Organizational Politics

John Eldred says workplace politics has a bad rap. “People who aren’t good at it see it as a toxin or a
threat, something to avoid at all costs. Over time, they typically begin to realize they can’t hide from
it forever, and start to engage selectively. But it’s still perilous, and when a situation doesn’t work
out, they use politics as a handy excuse. We’ve all heard it: when we win on an issue, we call it
leadership. When we lose, we call it politics.”

On the other hand, those who’ve mastered organizational politics know when and how to engage.
Eldred, who teaches in the University of Pennsylvania’s Center for Organizational Dynamics program
and in Wharton Executive Education’s Leading and Managing People, says “mastery means
increasing your options for effective results. It’s not about winning at all costs, but about maintaining
relationships and reaching your goal at the same time.”

“When we win on an issue, we call it leadership. When we lose, we call it politics.”

John Eldred, Co-President, Transition One Associates, Inc.

How does that work, and how do leaders — many of whom have spent years thinking every battle
must be fought and won — master politics? First, Eldred says, you have to know what your goals are,
and be able to take a wide view of the issue or conflict you’re facing. “Slow down, get out of your
reactive mode, and reframe what winning the situation means in terms of your goal. There may be a
political mess, but if it’s irrelevant to your goal, why engage? It’s so easy to get distracted in highly
political situations, and it’s not always worth it to get involved.”

Even when a situation is relevant, it still might not make sense to engage. “You can’t take on
everyone,” says Eldred. “Be selective about when you’re willing to fight. There are antagonists in
every organization, and you shouldn’t allow yourself to be dominated by them. But you’re also not
responsible for taking on every antagonist.”

Once you’ve decided you need to get involved, Eldred says there are just four strategies to choose
among. Deciding which one is called for means understanding two critical dimensions: the balance of
power and goal confluence. Eldred says many of the executives he works with begin by saying they
don’t think they have power, “But that’s often just a feeling. They might have an excellent track
record and reputation for getting things done. Those are strengths you bring to the table.
Understand how much power you have relative to the other person, and, if it’s unequal, which of
you has more power.”

The second dimension is about whether your goals flow in the same general direction. “They don’t
have to be the same, but are they in alignment or are they at odds with each other? Once you’ve
figured out how power and goals line up, that dictates how you should respond.”

In the first scenario, both power and goals are out of alignment. “The appropriate strategy here is
domination. It’s not something people want to talk about, but that’s the way the world works. The
powerful person gets what he or she wants and isn’t concerned about whether the other party gains
or not.”

If your goals are aligned but power isn’t, the right strategy is influence. “Here, the more powerful
person works to influence the behavior of the other. You have more power and capability to get
things done, so you work to get others to go along with you.”

In the third scenario, goals are not aligned but power is balanced. “This situation calls for
negotiation. You’re both key players, but you can’t agree on which way to go. You have to negotiate.
In my work with management unions, we have stayed away from nice words like ‘buy-in.’
Negotiating is tough and time consuming — which is why it’s an appropriate strategy only in this
scenario — and you can only do it if the other party wants to.”
Finally, says Eldred, when goals are confluent and power is relatively equal, you need to cooperate,
building a coalition to achieve your goals. “You have to be good at all of these strategies,” says
Eldred, “but you don’t need to be great. Don’t pick a favorite and practice it no matter the
circumstances. Think about power and goals, and then choose your strategy. Politics really doesn’t
need to be any more complicated than that.”

Benchmarking bottom of the pyramid marketing

Benchmarking is the process of measuring a business's performance against competitors and

industry standards. Companies benchmark to analyze their success and get a better understanding
of how they are performing relative to their competition.

Based on the original six-point criteria developed by Alan Andreason, out Benchmark Criteria set the
out the key elements which comprise every successful social marketing programme. The criteria are
designed to support better understanding of social marketing concepts, promote a consistent
approach to review and evaluation and assist in the commissioning of social marketing services.

1. BEHAVIOUR

Aims to change people’s actual behaviour

 The intervention is focused on influencing specific behaviours, not just knowledge, attitudes
and beliefs.
 Clear, specific, measurable and time-bound behavioural goals have been set, with baselines
and key indicators established.

2.CUSTOMER ORIENTATION

Focuses on the audience. Fully understands their lives, behaviour and the issue using a mix of data
sources and research methods

 Goes beyond interviews and focus groups to use ethnographic techniques as well
 Uses a range of research analyses and combines data from different sources (qualitative and
quantitative)
 Gains key stakeholder understanding and feeds it into methods mix (Benchmark 8)
development
 Interventions are pre-tested with the audience
 Involves the target audience and local community, rather than treating them as research
subjects

3. THEORY

Uses behavioural theories to understand behaviour and inform the intervention

 The theory, or theories used, are identified after conducting the customer orientation
research
 Appropriate behavioural theory is clearly used to inform and guide the methods mix
(Benchmark 8)
 Theoretical assumptions are tested as part of the intervention pre-testing
4.INSIGHT

Customer research identifies ‘actionable insights’ – pieces of understanding that will lead
intervention development

 A deep understanding of what moves and motivates the target audience, including who and
what influence the targeted behaviour
 Insight is generated from customer orientation work (Benchmark 2)
 Identifies emotional barriers (such as fear of testing positive for a disease) as well as physical
barriers (such as service opening hours)
 Uses insight to develop an attractive exchange and suitable methods mix (Benchmarks 5 and
8)

5.EXCHANGE

Considers benefits and costs of adopting and maintaining a new behaviour; maximises the
benefits and minimises the costs to create an attractive offer

 Considers what the target audience values: offers incentives and rewards, based on
customer orientation and insight (Benchmarks 2 and 4) findings
 Replaces benefits the audience derives from the problem behaviour and competition
(Benchmark 6)
 The exchange offered is clearly linked to ‘price’ in the methods mix (Benchmark 8)

6.COMPETITION

seeks to understand what competes for the audience’s time, attention, and inclination to behave
in a particular way Addresses direct and external factors that compete for the audience’s time and
attention

 Develops strategies to minimise the impact of competition, clearly linked to the exchange
offered (Benchmark 5)
 Forms alliances with or learns from the competing factors to develop the methods mix
(Benchmark 8)

7. SEGMENTATION

Avoids a ‘one size fits all’ approach: identifies audience ‘segments’, which have common
characteristics, then tailors interventions appropriately

 Segmentation is drawn from the customer orientation and insight work (Benchmarks 2 and
4)
 Does not only rely on traditional demographic, geographic or epidemiological targeting
 Draws on behavioural and psychographic data
 Identify the size of your segment or segments
  Segments are prioritised and selected based on clear criteria, such as size and readiness to
change
 Interventions in the methods mix (Benchmark 8) are directly tailored to specific audience
segments

8. METHODS MIX

Uses a mix of methods to bring about behaviour change. Does not rely solely on raising awareness

 Uses all elements of the marketing mix (product, price, place and promotion) and/or primary
intervention methods (inform, educate, support, design and control)
 Promotion is used to ‘sell’ the product, price, place and benefits to the target audience, not
just to communicate a message
 Takes full account of existing interventions in order to avoid duplication
 Creates a new brand, or leverages existing brands appropriate to the target audience
 Methods and approaches are financially and practically sustainable

Manage the marketing managers

4A’S APPROACH

First of all, marketing managers working on BoP markets need to create an Awareness of the
product and service. Basically, it comes down to making sure that everyone there understands that it
is available and know how to use it.

Second, companies should generate an Access to it. These markets can be difficult to access and this
should be overcome.

Third, the supply should be Affordable for the local people’s wallet. This is a real challenge in the
sense that it means dividing product or service’s price by a 50 or 100 figure…

Fourth and last, what is produced should be Available. Building a relationship is of tantamount
importance since markets sometimes do not exist, and the companies should see this strategy not as
a market development one, but as a market creation one, with implies a different customer
relationship management.

5D’s APPROACH

The second approach is called the 5D’s and was proposed by Niti Bhan from Emerging Futures Lab.
She proposes that the first thing that should be taken into account it Development. By this, she
implies that selling any kind of product or service should have an immediate value for the Bop
Consumers. Keeping in mind that money is scarce, BoP people need to make trade-off everyday, so if
success is to be met, it is through a more or less immediate value creation.
Then comes Design. The underlying idea being that producing the same supply but lowering the
price will definitely not be sufficient. BoP customer are not as “trapped” in western style
consumerism as we are, and this makes an huge challenge in terms of adapting and redesigning the
supply.

Her point on Distribution is quite close from the one of Prahalad on Accessibility and Availability.
Here, we find new distribution strategies such as “piggybacking” or the one set up by Essilor in India.

Demand is about human centered analysis : how does a company manage its advertisement and
communication in order to resonate with the Bop consumer ?

Her last point on Dignity is extremely interesting and can be found in the “design for all” approach:
in creating a dedicated supply, company should ensure that it does stigmatize the BoP consumer.
Put differently, the product or service cannot be perceived as a “designed and produced for the
poor”. BoP consumers are like any other ones on this point and do not want to have something that
will highlight their current economical situation.

It is quite interesting to see that these two analyses both underline the complexity of the BoP
consumer and the difficulty to address them. Marketing managers from Western countries will really
have to change their mindset and develop new sets of tools if they want to work efficiently, but is
also seems that there is much left to be done in order to fully understand BoP question.

Rural consumptions vs. urban consumptions

The economic liberalisation way back in the 1990s had opened up the market in India and set the
ball rolling, leading to a number of foreign brands entering the country and creating more choices
for consumers. However, the rural market was not looked at as a profit centre because of low
income, lack of proper distribution channel, low awareness and stronghold of unorganised players.

The GDP in 1991 was $266 billion and per capita income was $300. Against this backdrop, there has
been an improvement in the living standard of the rural population since last two-and-a-half
decades. In FY18, the annual consumption growth in rural India stood at 9.7 per cent while the urban
consumption grew 8.6 per cent. Rural Indian households are now spending more on consumer goods
like durables, health and personal care, food and beverages and services than that a few years ago.

The economy is now set to be driven by rural demand due to rising income levels, changing lifestyle,
habits, taste, increasing literacy level and increasing expectations of rural consumers.

The consumption habits of the rural consumer are also gradually mirroring those of their urban
counterparts; still, the composition of the Indian rural market is different from the urban market on
a number of aspects such as the physical environment, marketing environment, the consumer
profile, etc. .

Today almost all leading FMCG brands are available in rural parts of India and rural consumers are
using them regularly. It is estimated that the rural FMCG market would grow to $220 billion by 2025
from just $23.6 billion in FY18.

The Indian FMCG sector has grown from $31.6 billion in 2011 to $52.4 billion in 2017, expanding at a
CAGR of 8.8 per cent. The sector is further expected to post explosive growth of more than 20 per
cent CAGR to cross the $100 billion by 2020.

Entrepreneurial marketing and its role in 21st century

C.K. Prahalad and Stuart Hart’s seminal book The Fortune at the Bottom of the Pyramid gained a
wide audience when it was published in 2004 and has continued to be widely read ever since. Its
iconic phrase, “bottom of the pyramid,” entered the English lexicon. The book was a call to action to
the world’s largest companies to develop new products for the four billion people living on $4 a day
or less—a market representing what was in effect the new frontier for corporate expansion.

What was the result of this stirring cry a decade ago?

On the fifth anniversary of the book’s publication, Professor Prahalad was interviewed by
Knowledge@Wharton. He was asked “what impact have your ideas had on companies and on poor
consumers?” Prahalad asserted that the impact had been “profound,” citing the $200 laptop
computer, the spread of cell telephones, and Kenya’s M-PESA text- messaging funds transfer service.
But the concept of the $100 laptop was a project that emerged from MIT, not a large company, and
was judged a failure; cell phones spread rapidly through developing countries was a result of local
entrepreneurship, not multinational initiative; and M-PESA was a Kenyan innovation.

Five years further along, there is scant evidence that multinational corporations have expanded any
further into the bottom-billions market. We believe they’re unlikely to do so, and that entrepreneurs
working solo or in teams are far better positioned to go serve these customers. The reason is that
multinationals face the constant temptation to apply their substantial resources to extend the reach
of their existing businesses, rather than starting from scratch. Entrepreneurs, by contrast, start from
scratch almost by definition. For reasons we’ll describe, that approach is essential to successfully
serving the bottom of the pyramid.
The tendency for too many multinationals is to design products for the bottom of the pyramid by
stripping features from existing products. But this approach seldom works. In our experience,
products and processes must be designed not merely to reduce prices by, say, 30% below developed
world prices, which might be achieved by removing features; success requires prices close to 90%
less. As you can imagine, this puts pressure on product design, and this focus has become the
centerpiece of “zero-based design” which seeks to build inexpensive products from the ground up.
Entrepreneurs, unconstrained by pressure to expand existing brands and product lines, are better
positioned to utilize this approach.

This zero-based design approach also avoids a reliance on preexisting business models. One of the
greatest challenges at the bottom of the pyramid is “last mile” distribution. A large number of the
world’s poor live in villages without much infrastructure. Delivering products in this environment
adds to the cost, making it further unlikely that preexisting product lines can be tweaked and
brought to market successfully. By designing products from the ground up, entrepreneurs are better
positioned to consider the challenges of distribution early on, and account for them in their products
and business model.

Moreover, most multinational corporations are, inevitably, bureaucratic enterprises riddled with
barriers to doing things differently. If someone far down the chain of command does devise a great
solution to a problem the company had never before considered, it’s a fairly sure bet that his idea
will be vetoed somewhere up the line. (Remember the two guys named Steve who took their idea
for a personal computer to HP? Whatever happened to them?) The difficulty is compounded if the
proposed project requires a wholly fresh approach to design, marketing, and distribution and must
be carried out in an exotic locale in an unfamiliar language and confounding culture. Somewhere up
the ladder in the corporate hierarchy, someone is sure to balk.

Finally, success in nascent markets requires a commitment to agility and constant refinement. This
means not only tweaking products, but everything about the business. Here again, entrepreneurs
are able to incorporate their learning more quickly, as opposed to multinationals whose teams often
have to run changes up the flag pole.

For all these reasons we believe it will be new companies more than old ones that help those living
on a few dollars a day move out of poverty. Of course, we’d love to be proven wrong – there’s
certainly plenty of room at the bottom of the bottom of the pyramid for experimentation and
collaboration. For companies of any size serious about these markets, it is critical to remember that
lessons learned selling to richer consumers likely do not apply.
Suggested Readings:

http://www.thebopstrategy.com/

https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/
10780/IM_2018_02_Pizzagalli.pdf

http://dspace.iimk.ac.in/bitstream/handle/2259/83/01-12.pdf?sequence=1&isAllowed=y

http://regardssurlaterre.com/en/bringing-bottom-pyramid-business-focus

http://www.iosrjournals.org/iosr-jhss/papers/Vol.%2021%20Issue9/Version-8/I2109085671.pdf

Kumkum Bharti et al. / Procedia - Social and Behavioral Sciences 133 ( 2014 ) 169 – 179

https://economictimes.indiatimes.com/markets/stocks/news/indias-consumption-story-why-you-
just-cant-ignore-this-opportunity/articleshow/66346111.cms?from=mdr

https://www.marketing-schools.org/types-of-marketing/entrepreneurial-
marketing.html#:~:text=Entrepreneurial%20marketing%20is%20less%20about,for%20large%2C
%20well%20established%20firms.

Suggested Videos:

https://www.youtube.com/watch?v=ILtEtamt-VQ