February 12, 2013

Timely and relevant or obsolete? Kotler's BoP in India

Syamant just sent me this Business Standard article on Philip Kotler's Centre of Excellence to open near New Delhi to focus on the BoP specifically. That is, the Bottom of the Pyramid which was the title of CK Prahalad's seminal book on high volume, low cost markets in the informal economies of the developing world.

Just because formal methods do not take the informal, mostly cash based, hyper localized economies into consideration in their frames of reference does not mean they do not exist. But Prahalad never meant for his descriptive phrase to become synonymous with an assumed demographic.

The BoP, as I have discovered over the past 5 or 6 years of work, are not actually a target segment of any sort nor can they be considered as such.  One can say that there are critical differences in buyer behaviour and purchasing patterns demonstrated by consumers in the lower income demographic earning irregular flows of cash with few facilities for consumer credit and the mainstream consumer culture that Kotler has played a part in authoring.

Without this critical understanding, and the why of the difference (a natural outcome of the patterns of cash flow, which is seasonal over the course of the natural year) what can one hope from the outcomes of attempting to apply first world marketing frameworks to third world poor?

A huge assumption is that the mindset and value systems are the same and what might be relevant and appropriate to an audience conditioned by at least 3 generations of loud noisy advertising and marketing communications may simply fly past the awareness of the BoP, having only been noticed by marketers as a potential market in their own right.

The label "Bottom of the Pyramid" or more particularly, "the BoP" tends to presume the same kinds of demographical tidbits available for "the Boomers" or "the LOHAS" because this is one thing that I fear "the BoP"cannot have possible.

That's like saying "the Mainstream Culture Consumer" with no nuance to the segments that are diverse and varied across the global consumer culture in mainstream media and the interwebs.

Professor Kotler, are you sure about doing this?


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