Home > Articles > Business & Management > Finance & Investing

  • Print
  • + Share This
This chapter is from the book

Who and What Is the Bottom of the Pyramid? What Have We Learned?

There is a lot of discussion on what the Bottom of the Pyramid market is and who constitutes that market. The original definition of the Bottom of the Pyramid was based on a simple premise. The concept was originally introduced to draw attention to the 4-5 billion poor who are unserved or underserved by the large organized private sector, including multinational firms. This group, until recently ignored by the private sector, could be a source of much needed vitality and growth. The assumptions influencing the focus on the Bottom of the Pyramid were also explicit: “Four billion poor can be the engine of the next round of global trade and prosperity. Serving the Bottom of the Pyramid consumers will demand innovations in technology, products and services, and business models. More important, it will require large firms to work collaboratively with civil society organizations and local governments. Market development at the Bottom of the Pyramid will also create millions of new entrepreneurs at the grass root level—from women working as distributors and entrepreneurs to village level micro enterprises (page 2 in the original book).

Needless to say, four billion people cannot be a monolith. They represent extreme variety—in their levels of literacy, rural-urban mix, geographical mix, income levels, cultural and religious differences, and every other conceivable basis for segmentation. This extreme variety does lead to multiple perspectives on the Bottom of the Pyramid. The Bottom of the Pyramid is like a kaleidoscope. No single view illuminates the total opportunity. Every twist helps focus on a specific facet of the opportunity or problem. This variety supports major disagreements among scholars and practitioners on what constitutes the Bottom of the Pyramid. Moreover, the term Bottom of the Pyramid evokes different images. Not surprisingly, readers tend to attribute their own definition to the idea. I called it the Bottom of the Pyramid because that was the reality as I saw it. The goal was to ensure that the rich—the top of the pyramid—could be sensitized to those who are less fortunate. Some did not like the idea of the bottom of the pyramid; they called it the Base of the Pyramid—a bottom-up view.5 Segmenting the 4 billion was not far off. Some talked about the Next Billion.6 Some focused on the Next 4 Billion.7 Some focused on the Bottom Billion.8 Some tried to get back to the old ways of categorizing the market as A to E; categories C, D, and E constituting the BOP. There is also significant debate on who are at the Bottom of the Pyramid—people living on less than $2/day? Less than $1/day? What about people earning more than $2/day but still in poverty without adequate access to world class (not the same as luxury) goods and services? The extensive study by World Resources Institute/International Finance Corporation has given granularity to the composition of the next 4 billion by country and by income level. It has also shown that Bottom of the Pyramid consumers account for $5 trillion in Purchasing Power Parity terms.

The Bottom of the Pyramid debate has led to new perspectives on the opportunity. There is a focus on the Middle of the Pyramid, or the aspiring middle class. A recent study by the Economist concluded that half the world can be classified as the emerging middle class; defined as a population living on $2–13 at 2005 Purchasing Power Parity prices. They have discretionary income and spend on education, health, energy, transportation, and personal care. This market by some estimates includes 2.6 billion people in 2005 and is rising fast. Asia alone is expected to have approximately 60 percent of the global middle class.9 Many firms now classify the Bottom of the Pyramid market as “emerging consumer markets” or just emerging markets. Obviously this is a more emotionally neutral term. More important, this view of Bottom of the Pyramid markets—the emerging consumers—shows the respect and the commitment of managers in large firms who have spent time and resources to understand this opportunity. This is a significant change from the position even five years ago.

We can draw multiple lessons from the heated debates about what constitutes the Bottom of the Pyramid during the last five years:

  1. There is a clear recognition that four billion micro consumers and micro producers constitute a significant market and represent an engine of innovation, vitality, and growth. This is a new category for all—be it managers, governments, or civil society organizations. We need to understand it. It is clear, however, that this emerging market will force a fundamental rethinking of our approach to business.

  2. The 4 billion people who constitute the Bottom of the Pyramid are not a monolith. For those who want to engage in this opportunity, there is no single universal definition of the Bottom of the Pyramid that can be useful. The definition must fit the focus for productive engagement. For example, micro-finance organizations in India might have a different definition of the poor from ones in Kenya or Brazil or the USA.

  3. We can choose to serve any segment of the 4 billion. No institution—a firm or nongovernmental organization—needs to serve all of the Bottom of the Pyramid. They can pick and choose. Serving the “next billion” is as legitimate as serving “the bottom billion.”

  4. There is a segment of the 4 billion who are so destitute, so deprived, and so consumed by war and disease that they need other forms of help. Government subsidies, multilateral aid, and philanthropy are all legitimate tools to deal with this segment. Even here, our goal should be to build capacity for people to escape poverty and deprivation through self-sustaining market-based systems.

  5. Active engagement at the Bottom of the Pyramid markets requires a new and an innovative approach to business. Retrofitting business models from the developed markets will not work.10

I believe that the debate of what the Bottom of the Pyramid is will continue. But the world of business is moving beyond definition. The concept of the emerging consumer allows each firm to decide which segment of the Bottom of the Pyramid it wants to serve. Some firms, such as Unilever that have a long history of working in developing markets, now focus on “Straddling the Pyramid”—participating across the entire spectrum of opportunities often with the same category of products. It is fair to say that the idea of the Bottom of the Pyramid as an opportunity has taken root. Does this mean that it represents a viable business?

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020