Nokia and Bop Markets Essay

5782 Words Apr 16th, 2013 24 Pages
Supplemental In-Depth Integrative Case

Nokia Targets the Base of the Pyramid
One of the most widely used clichés in the world of business is the so-called 80/20 rule. In the realm of sales, the rule is sometimes interpreted as “80 percent of our sales come from 20 percent of our customers.”1 One recent business theory that has challenged this rule is the so called BOP or Bottom of the Pyramid perspective, developed and popularized by C.K. Prahalad.2 It refers to the around 4 billion people at the bottom of the economic pyramid with a purchasing power of US$2,000 per year or less. Prahalad and colleagues have proposed that these low-income consumers represent great potential but require a unique mix of pricing, promotion, low cost
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Moreover, rapid market growth is expected to continue for some time:
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In both Africa and India less than 15 percent of the population has mobile phones.6 Asia has the largest measured regional BOP market for ICT, $14.3 billion, reflecting the region’s significant BOP population of 1.49 billion. Its estimated total BOP market for ICT (including the Middle East) is $28.3 billion, including the spending of 2.9 billion people. Not far behind is Latin America’s measured BOP market, $11.2 billion, accounting for the ICT spending of 276 million people. The region’s estimated total BOP market is $13.4 billion (360 million people). In Eastern Europe the measured BOP market for ICT is $3.0 billion (148 million people); the estimated total market is $5.3 billion (254 million people). In Africa the measured BOP market is $2.0 billion (258 million people), and the estimated total BOP market $4.4 billion (486 million people). Though smallest, the African ICT market is the most rapidly growing one—and it has already generated very profitable companies and significant wealth.7 The

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