BOP stands for Bottom of the Pyramid, or Base of the Pyramid in economics, while in accounting and finance it means Balance of Payments. It accrues from the imports and exports records of all monetary transactions between the country and the rest of the world. In this case, we shall take a critical look at the interpretation of economics’ BOP. Bottom of Pyramid refers to the largest and the poorest socio-economic group in the society (Ajami & Goddiard 2006, p.92).
It represents the forgotten quantity of people, as well as the indispensable units of economic power. Those people may be resilient and creative entrepreneurs, as well as value-demanding consumers. This means, that it is an absurd to ignore them, when considering the economic plans of the nation, or strategizing the marketing plans of the company. They form the largest market for multinational companies that are the major player in the economy. Globally, this refers to the four billion of people, who survive on less than US $ 2.50 per day. Therefore, to alleviate poverty, governments and companies should focus on the poor as producers rather than consumers. Several approaches for BOP group were designed to alleviate poverty implications and provide sustainable economic development through uplifting the living standard of these poor folks by means of introducing the microcredit services to the low-income earners in Bangladesh and South Asia. Others measures include designing market-specific products with the poor in mind, venture capital for SMEs and private enterprises for the poor people, as well as business and community collaboration, especially with the youth and women, who are a pillar in the economy, which holding BOP conferences, where they discuss the effects of BOP and strategize measures that may help to overcome the difficulties (Hennessey, Jeannel & Gillespice 2010, p.141).
There are five major ways of enabling the poor become financially independent. The independence will enable them to play their roles in the economic development of the country. There are five D’s of BOP marketing, which focus on the touch points for the holistic and human-centered strategy. They are development, design, demand, distribution, and dignity (Kacou 2010, p.231). Development entails allowing the poor to increase their incomes by providing them opportunities such as education and employment. Design focuses on the design industry of products that specifically targets the other 90% of the world’s population, i.e. the poor. The design of the products focuses on the bottom of the pyramid so that they can be able to afford them, e.g. Martin Fisher's Kick Start Moneymaker Pump or the Oorja stove designed by BP.
Distribution focuses on how the bottom of the pyramid has access to the products and services they need to satisfy their demands and make their lives comfortable. A great invention cannot bring any change to the world if it does not undergo manufacturing and distribution processes. Distribution deals with the infrastructural constraints and conditions in the world developing that may hamper the poor from getting the necessary goods and services, e.g. lack of road network, poor internet connectivity etc. Demand for products exists in BOP. However, it is not enough only to create awareness of the product and promote its existence in the market. Advertising campaigns for the bottom of the pyramid should also clearly outline the benefits of value and relevance of the said products or services, e.g. strategy that uses Unilever company, which is common among the poor. Finally, dignity is the key for the bottom of the poorest in marketing products. Dignity is far more than the brand name. Even though these people are poor and have shallow pockets compared to their rich counterparts, they are no fools. Therefore, dumping goods of the poor quality on them, only because they are cheap fails.
Nonetheless, squeezing profits from people with little disposable income is not a capitalist exploitation, but rather stimulates economic growth. This is because they form the base of the economy within the greatest demand for products and services. Through their purchases for goods and services, they pay for taxes and profits. This amount is not very big, however, it multiplies tremendously because of their numerous numbers of this category of inhabitants. The large base, with which traders have to deal, is the large customer clientele that industries and companies have to satisfy, and the large market share, which producers of goods and services have to cover. All these make this an economic growth strategy. Economy deals with numbers; the more the numbers the more the profits, and, eventually, the greater is the economic development of the country. This is why squeezing profits out of the poorest knowing that they do not have much to eat, is not a capitalist’s exploitation. This reason stimulates economic growth by means of the growth of industries and companies, which provide goods and services for the bottom of the pyramid (Kreham 2010, p.1010).
Ajami, R. & Goddiard, J., 2006, International Business: Theory and Practice, M.E. Sharpe, Armonk, New York.
Hennessey, H., Jeannel, J. & Gillespice, K., 2010, Global Marketing, Cengage Learning, Stamford, Connecticut.
Kacou, E., 2010, Entrepreneurial Solutions for Prosperity in BOP Markets, Pearson Prentice Hall, New Jersey.
Kreham, W., 2010, Meltdown: Money, Debt and Wealth of Nations, Volume 4, COMER Publications, Ontario, Canada.