The Bottom Half of the Pyramid
Michael Goldman, Lecturer in Marketing, Innovation and Strategy with the Gordon Institute of Business Science, wrote a brief piece about C K Prahalad’s concept of reaching the world’s poor in MarketingWeb. Read it here.
The key is a radical rethink and some serious innovation, especially around the “price-performance” ratio. “This kind of innovation requires an ability to discard traditional approaches to price-performance improvements. It means a relentless focus on tailoring the specific value offering to the needs and context of this market, while rethinking the delivery of the offering to the consumer in order to provide value at a significantly reduced cost.”
Prahalad’s book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (buy it at Amazon.com or Kalahari.net), suggests 12 innovation principles that every business should consider. See the summary below.
12 Principles of Innovation for Bottom of the Pyramid Markets
C K Prahalad, in his book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (buy it at Amazon.com or Kalahari.net) provides the following building blocks for creating products and services for Bottom of the Pyramid markets:
1. Focus on (quantum jumps in) price performance.
2. Hybrid solutions, blending old and new technology.
3. Scaleable and transportable operations across countries, cultures and languages.
4. Reduced resource intensity: eco-friendly products.
5. Radical product redesign from the beginning: marginal changes to existing Western products will not work.
6. Build logistical and manufacturing infrastructure.
7. Deskill (services) work.
8. Educate (semiliterate) customers in product usage.
9. Products must work in hostile environments: noise, dust, unsanitary conditions, abuse, electric blackouts, water pollution.
10. Adaptable user interface to heterogeneous consumer bases.
11. Distribution methods should be designed to reach both highly dispersed rural markets and highly dense urban markets.
12. Focus on broad architecture, enabling quick and easy incorporation of new features.
A summary is available here.
Technorati tags: management, business, poverty, prahalad, innovation
Related posts:
- Oprah and Supply Chains We all know about Oprah’s ability to significantly impact sales....
- A changing global landscape The RBS Economic Unit in conjunction with The Economist...
- In a Web 2.0 world, business has it’s head buried firmly in the sand I’m curious. Curious about business’ lack of engagement with Twitter...
- The Meaning of the 21st Century One of the most important books I have read in...
- Secrets of success in The Emotion Economy The industrial economy was based on ‘make and sell.’ Take,...
Related posts brought to you by Yet Another Related Posts Plugin.

[...] a car for the people in the “bottom half of the pyramid” should come out of India (see previous post on selling profitably to the world’s poor). For some, it may be a sad truth, but it is true [...]