Bottom of the Pyramid Essay

Words: 9069
Pages: 37

The quest for the fortune at the bottom of the pyramid: potential and challenges
Dennis A. Pitta
The University of Baltimore, Baltimore, Maryland, USA, and

Rodrigo Guesalaga and Pablo Marshall
´
Pontificia Universidad Catolica de Chile, Santiago, Chile
Abstract
Purpose – The purpose of this article is to examine the bottom of the pyramid (BOP) proposition, where private companies can both be profitable and help alleviate poverty by attending low-income consumers.
Design/methodology/approach – The literature on BOP was reviewed and some key elements of the BOP approach were proposed and examined.
Findings – There is no agreement in the literature about the potential benefits of the BOP approach for both private companies and
…show more content…
Companies can use standard market segmentation and product differentiation to satisfy these tiers.
Dealing with these customers requires professionalism, but the normal market research processes, product development, channels of distribution, promotion, and credit functions should result in success. Thus, Zeithaml and her coauthors showed companies how to use their tried and trusted marketing approaches to maximize effectiveness and profitability. The key is to serve those customers most likely to generate profits instead of losses. The justification is clear: companies have limited resources and should concentrate their efforts where the returns will be the highest. They demonstrated the value at the top of the pyramid (TOP) and shared strategies for serving those customers while discouraging or even “firing” the lower, money-losing tiers.
For profit seeking companies, the customer pyramid approach is appropriate and allows them the best chances to survive in typically competitive markets.

Not surprisingly, the “top of the pyramid” (TOP) approach is at the heart of Western business practice. Traditionally, businesses require a set of four conditions to operate successfully in a market segment. The segment must be identifiable, measurable, substantial, and accessible. In
Western economies, business and communication infrastructures are developed sufficiently to