The Bottom of the Pyramid

What it does:
Presents a blueprint for companies to accomplish goals in two ways. First, to generate profits by marketing to poor people around the globe. Second, to help lift those people from poverty by assuming a positive role in their lives.

Its other names:
C.K. Prahalad's Bottom of the Pyramid.

Where it comes from:
The 2004 book The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits by C.K. Prahalad (Wharton School Publishing).

Summary:
The world's four billion poor people can become a viable market for a company's products, as well as the driving force behind a new round of world economic prosperity. To quote from the Introduction to Prahalad's book, "If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up." Economic development and social transformation go hand in hand.

As part of this philosophy, C. K. Prahalad, a management professor at the University of Michigan, pinpoints these building blocks that will help organizations benefit from the new relationship with underprivileged people in "pyramid" markets:

- Assess and understand the new "bottom of the pyramid" consumers internationally.
- Rethink the functionality of products to be certain they translate into other cultures.
- Educate consumers on how to use the products.
- Focus on the price performance of products and services in target markets.
- Create solutions that are scalable and transportable across countries, cultures and languages.

What else you need to know:
Prahalad's ideas are very hot today. Review his book or his article "Serve the World's Poor" (Harvard Business Review, September 2002) so you can discuss his ideas in an informed way.