The Mirage of Marketing

to the Bottom of the

Pyramid:
HOW THE PRIVATE SECTOR
CAN HELP ALLEVIATE POVERTY
Aneel Karnani

Presented By: Anirban Das

 Key Idea
֍ Poor are in general illiterate, lacks information and suffers from economic
/social/cultural deprivation, but comes in terms of it just because of necessity of
survival.
֍ MNCs do not venture to serve poor since the they can’t make a fortune out of it.
The market is too fragmented, locality normally lacks infrastructure, and unable to
utilize EoS. They must exercise caution if they want to do so, one way of doing this
is to innovate for poor.
֍ Govt need to facilitate creation and growth of private enterprises in labour
intensive section of economy (infra, capital market sectors)
 Key Quote
“Private companies should try to market to the poor. However, the profit
opportunities are modest at best and I suggest a cautious approach. Large
companies that require scale economies should be even more hesitant……The
private sector can help alleviate poverty by focusing on the poor as producers.
One way to do this is to make markets more efficient such that the poor capture
more of the value of their outputs.”
 Key Issue
֍ Presents a myopic representation of ideas, fails to note that the
MNC can also benefit from a long term and cyclic developmental
effort. The cycle can just begin with skilling /re-skilling the poor and
that can be brought in with a minimal amount of investment.
֍ Underplays the role of development by MNC investment. It is clear
today that MNCs also attempting to be part of inclusive growth.
֍ Appears to be in a war of words with Prahlad, but fails to grasp the
underlying magic solution that Prahlad proposes.
֍ Suggests that a private sector can help alleviate poverty by focusing
on the poor as producers, but fails to explain how to turn poor to
producer, and with his own logic, whether a producer is indeed
poor.