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Bottom of Pyramid (BOP) Market Segment: Bangladesh Perspective

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Aug 29, 2012

BOP Market Situation in Bangladesh:

Bangladesh, having an enormous basket of population, got a tag of ‘developing country’ many decades ago which actually can’t help assume anyone to estimate it’s economic or development situation. Its 39 % population live below the poverty line (World Bank Report: 2011) which also can’t help anyone to perceive its adverse condition, but it is perceivable this specific portion surely lies at Bottom of Pyramid (BOP) segment, who can’t afford their minimum life requirements. And it doesn’t mean people of this segment are dying for scarce of food, rather they can afford minimum life expectation consuming necessary little goods and services. And the other 61% population enjoy more living standard in case of product/service consumption, but all of them don’t live at ‘Upper level of the pyramid’ rather they possess little difference with the BOP segment because their income distribution curves little. It is estimated that around 5% of the total population lies in ‘Upper level of the pyramid’ and the rest 95% lays in middle and Bottom of the economic pyramid.

Little difference in income-generation among middle and bottom line people helps the ‘business people’ to provide equal standard and priced product. For example, Equal standardized and priced ‘Close Up toothpaste’ or ‘Sunsilk Shampoo’ is provided by Unilever Bangladesh Limited regardless of its variation in consumer’s income. These are also provided regardless of variation in regions and social classes and it’s been possible because people of same income level got homogenous consumption and buying behavior.

But, it is also true that, recent changes in consumer’s choices, perceptions, income-affordability perplexing business people and making them compelled to customize their product other than providing homogenous products to all. But, this change isn’t as rapid as to shift the whole consumer behavior to be customized. And still the market of the most consumable products have become inelastic in case of consumers disposable income. With this, it is true that demands of some products are constantly increasing as more people are having affordability and getting more life expectation. But, the BOP market is still an unchanged market segment that is poise to occupy, to grab and to reform.

BOP Market, Business Decisions & Business Potential:

Usually, businesses when decide to offer products/services they have to undergo three phases: First, they need to ‘choose a product or service’ that can create value and add benefits and satisfy customer needs. This is an ideation/planning or strategic phase. Second, they need to arrange necessary resources to make or provide the product or service. This is an execution and product formation period. Third, they need to arrange all sorts of initiatives to communicate the product or service to its targeted customers. It’s also an execution phase which vitally works to make communication with the consumers to sell their products and retaining customers. This three phase process is also known as ‘value creation process.’

We have seen that the first phase of this value creation process is choosing value, that is also considered as strategic or ideation stage. Business decisions are formulated in this phase. This strategic phase, which works for planning/idea of making product, includes major decisions on:

 (1) Segmenting market/customer: Bases of customer segmentation including- where they lives or resides, their age, gender, race, income, family size, life cycle stage, geographic location, lifestyle, how much they can buy or occasion of buying,  what benefits they want etc.

(2) Selecting/focusing market (customer): After segmenting the customers in different criteria the businesses select a specific customer segment (like customers who buys low priced products) which is seemed to be profitable to them.

(3) Deciding Value (Product or Brand) Positioning: After selecting the specific customer segment then businesses thinks how the product will be positioned in the minds of the customers.

This value creation process seems much theoretical and tiresome but in case of BOP market- the strategic planning/ideation phase becomes easier to the businesses while planning for offering products, as many common information and traits of this segment are found in and already been estimated.             

Commonly targeted BOP segment in Bangladesh includes:

  • The village folks specially village farmer-family
  • Downtown lower income people
  • Poor slum-resided-people,
  • Garments workers and
  • Urban working class people like the rickshaw puller, house workers etc.

Potential products for BOP include:

  • Toiletries
  • Slipper
  • Soap
  • Detergent
  • Bread
  • Nutritious food
  • Medicine   

For BOP market segment usually advertising cost is lower, if personal selling team work actively the advertising cost can be zero and if selling agents from any particular community interacts in product distribution, the value chain cost can be lessened and then the products can be offered in much lower prices.

But it is also true that BOP people have less money to buy and they are much sensitive to changes in price and in some cases this segment is not profitable in comparison to upper level of the pyramid. Thus, some critics say this segment is not for usual business, this is for the social enterprises because these enterprises do business for the development of the BOP people.


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