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Since the beginning of the 21st. century, and due to the interest aroused by the publications of people like CK Prahalad and Stuart Hart, the world of business has paid more attention to the consumer market of lower socioeconomic status. These markets, especially in emerging countries, are also known as the Base of the Pyramids.

As outlined below, to reach out lower-income consumers effectively, we need to change our old beliefs and prejudices. Companies often approach the base of the pyramid market with products and solutions designed for developed countries or for markets with a medium or high purchasing power. It is not unusual for these approaches to fail, as they maintain a non-active stance but reactive to a reality that demand to be addressed differently.

This study defines the key activities of the value chain that should be managed and the key operational issues to meet the needs of the following dimensions: Attractiveness, Affordability, Accessibility and Acceptability

Attractiveness: "There is awareness while it is associated with an aspirational function"

Consumers in the emerging sector are quite different from those in the upper classes. They differ in their needs and how they are attracted to products. Brand awareness is even higher since they hope for a better quality of life and desire status, which acquire a greater force in this sector. This makes for those consumers to look for opportunities to buy products and brands that are usually acquired by higher socioeconomic levels and is often referred to as "aspirational" products or brands. The attractiveness of the product is linked to three aspects: functionality, a sense of security and the aspirational value.

Affordability: "The poor can pay for what is necessary and efficient"

Consumers in the emerging sector typically characterize for having a limited individual purchasing power and also for their limited borrowing power. This means that among other things, they are very sensitive to price or if preferred to the value or price-performance.

The pressure to provide affordable prices to low-income sectors require for companies to reconsider two key activities of the value chain. On one hand the product design, which should be capable to ensure for the product or service to include only what the client considers attractive and eliminates what is superfluous. Furthermore, this design is linked to a review of the processes in the chain of operations that aim a greater efficiency and flexibility.

Accessibility: "The access channels are viable through leveraging in what is local"

One of the realities that strongly distinguish the sector is the barriers to quickly and easily access to basic goods and services offered by society.

To ease the access to the client also implies a reformulation of the traditional marketing channels. A great part of the management at the point of sale can increase the perceived value to the client and learn about their consumption habits.

Acceptability: "Loyalty has a minimum scope and is expensive if no social partnership is searched."

Acceptance refers to the ability of companies to convince clients that they have purchased something of value and are not being deceived. This means to overcome the component of uncertainty and insecurity in every purchase and to earn the client loyalty on the long term.

Perhaps one of the most efficient and solid practices to create a strong effective and enduring loyalty, in an industry with so many limitations and barriers to accessibility, is the development of close relations of cooperation with clients or other stakeholders of the value chain and the community. This allows the offering companies to achieve a greater understanding of the needs and realities of the sector, as well as a greater involvement of consumers with the products and brands of these companies.

The key to success: in order to generate value proposals to overcome prejudices and traditional distrusts of the sector. It is required to rethink and recreate new business models that seek the involvement of the community and of key players in the chain. As well as to help reduce cultural and consumption barriers that are deeply rooted in the consumers habits and lifestyles.

J. Anderson and Markides, C. (2007). "Strategic Innovation at the Base of the Economic Pyramid", MIT Sloan Management Review, Vol 49

   
   

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