Women at BoP: Needs, aspirations and role of brands; An investigation

Abstract

For many years, the common belief of many MNCs has been that the poor people represent an unprofitable and risky market to target. All this changed with C K Prahlad’s “The Fortune at the Bottom of the Pyramid” which kicked off a wave of activity and research for tapping into the estimated $13 trillion market potential present across the globe, at the bottom of pyramid (BoP) level. “Bottom of pyramid” or “base of pyramid” consumers are characterized by severe constraints on income, lack of employment opportunities, high illiteracy rates, limited market access and poor living conditions. They lack the wealth and resources to participate in normal product and market interactions which are faced by the middle class customers. Nowadays, an increasing number of multi-national corporations (MNCs) have shown an interest in the low-income segment and have been trying to tap into this market. In the Indian context, close to 70 percent of the population resides in villages and rural areas. According to the Human Development Index (HDI) - 2010 Rankings, percentage of population living below $1.25 PPP per day in India is close to 42%. Statistics show that 40 million Indian families are moving from outright poverty to BoP every year. Though the share of the poor in the population reduced by 27.4 percentage points from 54.9 in 1973 to 27.5 in 2004, over a quarter of our population still remains poor. Thus we can see that combined purchasing power of this population is huge, representing vast potential to be tapped at the Indian BoP market. The main objective of this study is to understand the purchase behaviour of low income and subsistence women consumers living in urban cities such as Bangalore. Through this study, we attempt to understand the needs and aspirations of the typical low income woman consumer. The purpose of this study is to do a need gap analysis and possibly come up with recommendations on how MNCs can better market to the low income consumer segment. Methodology: We carried out a literature review of previous work done on assessing the low income consumer behaviour. After careful review of the methods followed in previous research, we adopted a qualitative research methodology wherein we conducted a field study of 20 women subsistence consumers to find out their purchase and consumption patterns of FMCG goods.