Looking at the bottom of the pyramid

Welcome back!

Another book done, I am making the best use of my vacations, break or whatever you call this. ON@TCC done, now its TFATBOTP, well thats The Fortune at the bottom of the Pyramid, by CK Prahalad…my first Prahalad read.

Through the book, CKP tries to emphasize and elucidate the fact that the 4 billion at the BOP (Bottom of the Pyramid) can just not be ignored. We should not shunt the BOP as an unproductive, unprofitable lot but make them a boon to the so called mainstream business. There is a huge potential that is hidden, it has to be tapped soon. Poverty eradication is what is going to happen(ing) with such endeavors, apart from the company making(going to make) profits.. so thats a win -win…

The way companies do business in developing countries needs to be changed. Fighting poverty with profitability is the mantra and the case studies in the book clearly explain how this has been achieved by many. We should not underestimate the BOP. They are like anyone else, like anybody on the top of the pyramid; the difference is that they have not been a point of focus. The entrepreneurial capabilities and the “hidden” buying power is not seen by many. So when money comes to their lives they traverse to the top of the pyramid. An interesting concept told by the author is that the Pyramid is slowly taking a diamond shape, when they traverse to the top.

CKP has come out with a new perspective to the whole idea of who should be your target market and why you should not ignore BOP at all?

Okay, marketing to the BOP isn’t all that easy, they are media dark, they lack cash flow and have little access to credit.

There is money at the BOP, they accept technology and are brand conscious.

CKP has come out with 12 principles of innovation to be used in BOP markets, I am sure these principles will one day be taught in B-schools.

TGC, Transaction Governance Capacity ie transparency in deals is very important in doing business in BOP markets.

I am not happy with some of the case studies in the book. The reason being the style of writing in some of them , where the authors (not CKP) has made the case as uninteresting as possible. Cases included the success of Casas Bahias (Brazil) and their installment schemes to sell consumer durables, the Cemex Mexico’s way (Patrimonio Hoy-thats the name of the scheme)of helping women build one extra room ,of the HLL stories of Annapurna salt and Lifebuoy (to fight diarhhea) etc…

Lifebuoy story included even the Kerala pilot project which never took off. HLL planned to make Kerala better by making people use Lifebuoy before/after they eat, shit ,sleep and do so many other things. They chose Kerala in India and some dark nations like Somalia for the project. The logic of choosing Kerala along with Somalia was absurd but they might have done this because of their strong brand equity and distributor network in Kerala. And also some results could have easily been fudged. They could have done a survey to prove that diarrhea after Lifebuoy usage in a certain area is this much and then fudge the pre Lifebuoy diarrhea stats…so that a “marked change” appears….

The Swasthya Chetana efforts and the PPP(Private Public Participation) are discussed in detail.

The Annapurna story, the K15 technology used to encapsulate iodine, the LUP(Low unit pacakges) that they came out with, the Project Shakti all well covered.

Jaipur foot story is the topic for another case and it includes even the info of a MOU between ISRO and BMVSS(Bhagvaan Mahaveer Viklang Sahaya Samithi)of using ISRO’s Polyrethene technology thats a spinoff.(I have a personal connection with this technology transfer)

The innovative financial forays by ICICI bank have been included as a case and now I know why they acquired Bank of Madura.:-)

ICICI B’s rural initiatives like Micro Finance Initiatives have been documented in detail in this book.

The worst written case is that of Arvind Eye Clinic , which has been made drab and dull. They have killed the case.

A very interesting thing about some of the cases is that it speaks about the history of the brand, companies etc…

I did not know that Lifebouy was created by Lever Bros in 1894 from residue from the manufacture of Sunlight detergent, creselyc acid and red color…

ITC e-choupal has been explained to the core and I did not feel it to be rehash of now what is common knowledge.

The last case which I feel should have been explained a bit more in detail is a novel approach in which health status(occurrence of various diseases)of a population is fed into a central database using the latest technology, thanks to the health workers who do this data collection. The Voxiva story is from Peru and is interesting that they operate in India too.. they employed a surveillance system for Japanese Encephalitis in 2004.

And the book has a CD that explains all these cases, with videos shot at respective locations…feel like reading the book again…

Must read, must buy!!!(even though I dint buy…)..Gotta return this copy.

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4. Mumbai Masala-Part2
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