BASE OF THE PYRAMID MARKET
In order to develop the concept of Base of the Pyramid (BoP), we need to outline the four main consumer tiers that make up the Pyramid: tier 1 is characterized by the upper-income people from developed countries and the rich from developing countries, tier 2 and 3 are composed by the middle-income consumers which were the main target for Multinational Corporations (MNCs), tier 4 is the most interesting one according to this research since they are the focus and new target that MNCs should invest in. Tier 4 are the 4 billion people that live with less than $2 a day and thus are not considered an attractive market but thanks to Prahalad and his book: “Fortune at the Bottom of the Pyramid” this topic has been much more …show more content…
One of the main critic is Aneel Karnani from Michigan University. He wrote some important paper and books, such as “Fighting Poverty Together: Rethinking Strategies for Business, Governments, and Civil Society to Reduce Poverty”, in which he clearly criticize some key concept of Prahalad. Thus, an interesting debate started where the two contenders tried to defend their ideas and clarify their main arguments. Karnani with his paper named “Mirage at the bottom of the pyramid: How the private sector can help alleviate poverty” criticized in a detailed manner some of the Prahalad’s strongest point. Firstly, Karnani explains the exaggeration of the numbers regarding the BoP market that Prahalad provided since the potential market is not 4 billion but much less and thus also the target market and the potential profits. One of the most important Karnani’s critique to Prahalad are the example the latter uses in order to prove the profitability of the BoP strategies. For instance, Prahalad mentioned many times Hindustan Unilever Limited (HUL) in India as the perfect example of his ideas explaining the strategies of product such as Annapurna salt and the ice cream, but Karnani instead stated that these product were profitable but were not addressing the BoP market. In particular for the ice cream sector, it has been clearly affirmed that the target in which they gained more money was the top of the
In order to develop the concept of Base of the Pyramid (BoP), we need to outline the four main consumer tiers that make up the Pyramid: tier 1 is characterized by the upper-income people from developed countries and the rich from developing countries, tier 2 and 3 are composed by the middle-income consumers which were the main target for Multinational Corporations (MNCs), tier 4 is the most interesting one according to this research since they are the focus and new target that MNCs should invest in. Tier 4 are the 4 billion people that live with less than $2 a day and thus are not considered an attractive market but thanks to Prahalad and his book: “Fortune at the Bottom of the Pyramid” this topic has been much more …show more content…
One of the main critic is Aneel Karnani from Michigan University. He wrote some important paper and books, such as “Fighting Poverty Together: Rethinking Strategies for Business, Governments, and Civil Society to Reduce Poverty”, in which he clearly criticize some key concept of Prahalad. Thus, an interesting debate started where the two contenders tried to defend their ideas and clarify their main arguments. Karnani with his paper named “Mirage at the bottom of the pyramid: How the private sector can help alleviate poverty” criticized in a detailed manner some of the Prahalad’s strongest point. Firstly, Karnani explains the exaggeration of the numbers regarding the BoP market that Prahalad provided since the potential market is not 4 billion but much less and thus also the target market and the potential profits. One of the most important Karnani’s critique to Prahalad are the example the latter uses in order to prove the profitability of the BoP strategies. For instance, Prahalad mentioned many times Hindustan Unilever Limited (HUL) in India as the perfect example of his ideas explaining the strategies of product such as Annapurna salt and the ice cream, but Karnani instead stated that these product were profitable but were not addressing the BoP market. In particular for the ice cream sector, it has been clearly affirmed that the target in which they gained more money was the top of the