4 billion people, entering the consumer economy present an opportunity for brands that strive to ‘do well by doing good’. http://www.tnsglobal.com

1. Finding Leader
Opinionfaster growth: new customers
A shifting base: the BoP in context
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2. A shifting base: the BoP in context
The Base of the Pyramid (BoP) is on the
move – and the hope and optimism
of those living there is creating an
unprecedented opportunity for growth
in emerging markets.
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3. A shifting base: the BoP in context
A shifting base: the BoP in context and challenges of doing well by doing good. In many
Few people have transformed attitudes to the global cases this requires questioning developed world
4 billion
poor to the extent that the late C.K. Prahalad did in his thinking when it comes to making a profit. Innovative
path-breaking 2004 work, The Fortune at the Bottom thinking on business models can be as essential for
of the Pyramid. Only a few years earlier, those living doing business with the BoP as innovative product
in poverty were still considered the rich man’s burden, development and branding. The BoP’s population numbers 4 billion
their economic role restricted to needy recipients
40%
of charity. Prahalad helped us to see them as the Size matters – and so does distribution
future: dynamic individuals who together form a vast, Its sheer scale puts the BoP centre-stage in any
untapped potential market. discussion of emerging market opportunities. The BoP’s
population numbers 4 billion, its combined purchasing
In a sense though, Prahalad’s book is only the beginning power of $5 trillion is more than 2.5 times the GDP of Live in India
of the work that needs to be done in understanding the UK, and its geographical distribution is concentrated
75%
the Base of the Pyramid (BoP). This work is constant, on those regions promising to drive global growth
because the BoP itself is ever-changing. Companies over the next decade. Of those inhabiting the BoP
that want to do business in this area must invest in worldwide, 40 percent live in India with a further 23
understanding the BoP’s great variety of potential percent in China, 16 percent in Africa and 10 percent in
of India’s population are members of the BoP
innovators, entrepreneurs, producers and consumers Latin America. In India, 75 percent of the population are
– and they must be prepared to face the setbacks members of the BoP.
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4. A shifting base: the BoP in context
Seeing the BoP as individuals TNS segments the BoP into three categories of
It remains a tragedy that 4 billion of the world’s potential consumer: ‘Strugglers’ surviving on less
1995
population survives on less than $8 per day. However, than $1 per day, ‘Fighters’ living on between $1
it is important to recognise that this definition of the and $2 per day and ‘Strivers’ with purchasing power
BoP covers a large range of very different scenarios, of between $2 and $8 per day. Encouragingly,
73%
aspirations and opportunities. An understanding of ‘Fighters’ and ‘Strivers’ together represent more
the BoP population’s varied situations is essential for than 70 percent of the BoP according to World
companies looking to target its growth opportunities Bank statistics. This is an emerging consumer class,
effectively. ready to join the market economy, and its ranks
2007
are swelling.
Striver $2 - 8 per day 11%
In 1995, consumers earning less
Fighter $1 - 2 per day
than $2 per day represented
73 percent of the population
Struggler Less than $1 per day
of rural China; by 2007, they
represented only 11 percent.
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5. A shifting base: the BoP in context
Hustlers or entrepreneurs? must have the dedication to help their consumers disposable income that any brand purchase represents.
Those waiting to emerge from the BoP have the overcome the daily challenges and barriers that A successful proposition for the BoP must combine
characteristics of a middle-class-in-waiting: educated, they face. affordability with robust functionality, delivery against
earning a semi-regular income and starting to own priority needs and credible perceptions of quality.
consumer goods. They look forward to the future Reinventing the brand wheel Increasingly, trusted brands are also asked to provide
with hope and optimism. They can see their own BoP consumers show a strong preference for buying guidance and emotional affirmation in the midst of
potential and they are confident in their ability to fulfil brands over commodities – but they demand a great the tensions arising from social and economic change.
it. And they have great motivation and self-respect. deal from those brands in return. This isn’t surprising The brands that embrace this multi-dimensional role
Many would describe themselves as hustlers – but we when you consider the significant proportion of will be the ones to succeed.
recognise their ‘hustling’ for what it is – energetic and
dedicated entrepreneurialism.
These top tiers of the BoP represent an immense
concentration of ‘unmet needs’, the type of Brand credibility and strategy
cannot be imported from
opportunities that companies in developed markets
invest significant time and money to uncover. In this
respect the BoP can appear like a gold mine for global
other markets.
brands. But prospectors beware.
They must be prepared to overcome initial setbacks –
and they must be ready to relearn how to do business,
and build brands. To meet BoP needs effectively they
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6. A shifting base: the BoP in context
International brands have far less resonance amongst of joining the market economy have clear aspirations to realising the promise of growth and success in
the BoP than they do amongst the existing middle-class. and great confidence in their ability to achieve them. emerging markets – and the importance that they
Developed world notions of rebelliousness, ego and And although meeting their needs is challenging, the attach to brand relationships gives first movers a major,
counter-culturalism (the mainstay of many brands across rewards for doing so are immense. The BoP is essential long-term advantage in tapping their potential.
different categories) have no place in an environment
where a sense of isolation and exclusion is something
to be feared. And brands accustomed to targeting
individual desires must adapt strategies to collective
decision-making, in which husbands and fathers often
wield a veto over their family’s purchases.
Crafting a successful proposition may require a
company to reinvent more than its brand identity.
Successful BoP strategies often embody a shift in
business model as well: from focusing on margin to
focusing on volume. Such changes can play a vital
role in delivering the affordability that the BoP requires
without undermining the credibility that it demands.
Doing well by doing good
For those prepared to embrace the challenges of
building brand propositions from the ground up, the
BoP today represents a greater opportunity than at
any point in history. Although it remains financially
impoverished, its population is not emotionally or
imaginatively so. Those BoP consumers on the point
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7. A shifting base: the BoP in context
About Opinion Leaders
Opinion Leaders is part of a regular series of articles from TNS consultants, based on their expertise gathered
through working on client assignments in over 80 markets globally, with additional insights gained through
TNS proprietary studies such as Digital Life, Mobile Life and the Commitment Economy.
About TNS
About the author
Poonam Kumar is Regional Director in TNS’s Brand &
TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and
Communication practice bringing more than 20 years
stakeholder management, based on long-established expertise and market-leading solutions. With a presence experience in brand development, brand strategy
in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands planning, ethnography and consumer insight to her
individual human behaviours and attitudes across every cultural, economic and political region of the world. role. Poonam has specific expertise on marketing to
TNS is part of Kantar, one of the world’s largest insight, information and consultancy groups. the Base of the Pyramid, and on motivational research
and market segmentation and is a regular presenter on
BoP consumers at ESOMAR and other industry events.
Please visit www.tnsglobal.com for more information. Poonam holds a degree in Electrical Engineering from
a premier Institute (IIT Chennai) and a post graduate
Get in touch degree in Management from a top management school
If you would like to talk to us about anything you have read in this report, please get in touch via in India (IIM Calcutta).
enquiries@tnsglobal.com or via Twitter @tns_global
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