No one gave a more apt comment on the common man than the Late Abraham Lincoln, former President of the United States of America- “God must love the common man, He has made so many of them”. Well, if we see the trend of the last few centuries, yes centuries, we see that the wealth that has made way into the pockets of the rich and the uber-rich has been from the toil and sweat of the common man. Marketers have been targeting this wealthy segment presenting before them every kind of luxury that is conceivable by the human mind, ignoring the not-so-privileged all this time.
Tables have turned now. If you read the newspaper and browse the internet, you’ll find it proliferating with the issues of social cause, availability of lower priced versions, inclusion of features in products which are completely revolutionary, new on launch of innovative schemes of microfinance and so on. How come? Why has the focus shifted from the obvious target customers spewing good revenues? Will the less privileged common man be able to compete with them? Have the marketers lost it?
No, they haven’t. They have just realised the purchase power of the historically neglected segment. If we talk about the Indian scenario, the wealth that exists in the rural population is enough to keep you awake at nights. In the district Sholapur of Maharashtra, coming across an international super-brand of luxury cars like Mercedes or BMW is an everyday phenomenon. A brand as powerful as ITC, has tapped the rural markets through its e-chaupal market program. The RBI has now mandated the presence of banks in the rural area through its focus on the financial inclusion of the villages.
The term used for this is targeting the “bottom of the pyramid” consumers. The phrase “bottom of the pyramid” was used by U.S. president Franklin D. Roosevelt in his April 7, 1932 radio address, The Forgotten Man, in which he said “These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power…that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid”. This concept has been very well articulated by famous marketer and ad-man CK Prahlad in his article “Fortune At The Bottom Of The Pyramid”. Given the enormous attention the concept has attracted, it has the potential to impact the world’s billions of poor people—as well as the managerial practices of multinational corporations.
These MNCs now are starting to rethink their strategy and execution. The biggest challenge is being able to serve these customers while maintaining their profitability. This is fuelled by the fact that in global terms, this is the four billion people who live on less than $2 per day, typically in developing countries. The World Bank estimates the number of people under this criterion to be 2.7 billion as per its 2001 estimates. The huge potential proposed by this segment can be ignored no longer. The bottom isn’t bottom any more- it represents the most challenging and ultimate target