We interviewed Dr Harvinder Singh, visiting professor of the International Week course Making a Social Impact at the Bottom of the Pyramid through Marketing. Dr Singh is a Professor in Marketing and Chairperson of Part Time Programs for working executives at the Institute of Management Technology (IMT) Ghaziabad, India. His interests include Marketing to the bottom of the pyramid, Marketing analytics, retail management and geopolitics and business.
Dr Singh has published research articles in journals of international repute and his case studies are registered with Richard Ivey case repository and are available on the Harvard Business School Publishing Portal.
Dr Singh’s course focuses on the potential of markets at the bottom of the income pyramid and the untapped potential for growth and social impact in this segment.
What is the key to making a social impact at the Bottom of the Pyramid?
To make an impact on people’s lives at the Bottom of the Pyramid (BoP), companies must provide them with quality products at the right price – while earning reasonable profits. If the business model is not sustainable, companies will not be able to improve people’s lives on a long-term basis. In my course, I discuss cases of rural healthcare models like Narayana Hridayalaya and e-Healthpoint wherein companies have serviced people at the bottom of the pyramid by providing health services on par with the First World at the price of Third World countries.
What is the biggest difference between the top and the bottom of the pyramid?
Consumers at the top of the pyramid are global citizens who could be living in New York, London, Barcelona or Mumbai. These people have a similar lifestyle characterised by high income, refined tastes, international mobility, and a global mindset. They end up buying the same products and brands.
Interestingly, people living at the bottom of the pyramid are also similar whether they live in India, Peru, Mexico or Kenya. But their life is characterised by a meagre income, low-level or no education, poor healthcare, non-existent infrastructure and lack of opportunities. They also end up buying similar products and brands.
Why is it important for companies to make a social impact at the bottom of the pyramid?
Improving people’s quality of life is a very important reason for companies to serve the BoP. However, companies also have a selfish reason to pursue these markets: most developed markets are near saturation levels and it makes sense for them to invest in BoP markets where there is less competition. The sheer size of the BoP market is huge. Moreover, a significant number of BoP consumers will climb up the social ladder in the near future to the next income segment. The pioneering companies will have a competitive edge over others in such cases.
Why do you think companies are unable to tap into the BoP’s potential?
Most companies make the mistake of looking at the individual potential of a BoP individual or family. It is important to understand that the inherent potential of BoP markets is related to their size, and the synergies arising out of this. Companies can make similar (or larger) profits from BoP markets by selling a large number of units to a large population at a smaller margin. The aggregate potential of these markets makes them attractive and profitable.
The key to changing people’s life is knowing exactly what they need. BoP consumers do not need second-hand urban products. Their needs and context are specific. Companies must design and manufacture relevant products to the consumers at the BoP. To do this, companies need to examine the BoP consumer more closely and frequently.
Do not show mercy to BoP people; give them the same attention and respect as you would consumers from any other market.