Tapping the BOP Segment - Opportunities Galore - Free Resources - Articles

Tapping the BOP Segment - Opportunities Galore

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Busting the Myths
Some of misconceptions that used to prevail about consumers belonging to the bottom of the pyramid are as follows:

• People living at the BOP do not have enough money to buy good products:
But, if we go by the available data, developing countries like China, India, Mexico, and Brazil have a considerably good GDP than many other developed countries like Japan, Germany, etc. Hence, the prospects of gaining consumers in this pyramid depend on the marketers’ potential to understand the market, the consumers, and their ability to serve them effectively.

• Marketers do not have proper distribution channels in rural areas and hence marketing to rural customers is a difficult task:

Even though this is true, there have been efforts from companies to reach the rural consumers through direct distribution channels. The best example is HLL’s “Project Shakti” in which HLL selects a woman from every village who possesses entrepreneurial qualities. The company then trains these women to become its distributors.

• Marketers believe that BOP consumers are just value conscious and not brand conscious: This, in fact, is just an assumption as it is observed that though they do not spend heavily like those in towns and cities, they too have ambitions and aspirations. So, the opportunity for marketers lies in identifying their requirements and offer aspirational brands at affordable prices for these consumers.

• BOP consumers are not well-connected because of poor communication facilities: The rapid development of telecommunications and their reach to the rural markets nullify the above statement. Mobile phone users are increasing day-by-day and BOP consumers are not far from using this technology. Cellular operators have now started providing network connections to the BOP market. They have also started considering decreasing the prices of mobile phones, so that they become more affordable to those in this segment. Therefore, it’s high time that marketers shed the false beliefs and assumptions and realize the importance of this huge untapped market potential. They need to create the BOP into a consumer market, for which they have to create the “capacity to consume”. Capacity to consume is based three “A”s: Affordability, Accessibility, and Availability. The private sector needs to enter this market in order to develop new products and services for them. Companies need to develop trust in the BOP consumers, and see that they are valued. To what extent marketers will be successful in benefiting from this market depends on their ability to study the market, and respond to the requirements of the market.

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