Integrated approach to understanding consumer behavior at bottom of pyramid

It is estimated that the poorest of the world, termed as being economically at the bottom of the pyramid (BoP), have a purchasing power of $5 trillion. This paper aims to study what and why they consume, and how firms can best address those needs, an area that is relatively new.

The authors categorize the products and services people at the bottom of the pyramid consume with specific examples of both products and companies in Asia, Africa, and Latin America, and look at the theoretical frameworks that could explain those consumption patterns.

The authors find that despite income and resource constraints, BoP consumers are sophisticated and creative. They are motivated not just by survival and physiological needs but seek to fulfill higher order needs either to build social capital, for cultural reasons or as a compensatory mechanism. They also find that when firms offer products that also fulfill these higher order needs, especially through linkages to education and job offerings, there is a greater chance of their success.

The evidence is based on inference from examples in literature and related research on developmental economics. Empirical research to uncover motivations and their linkages to product success in different BoP markets would help to better understand sustainable approaches to BoP marketing.

BoP markets offer profitable opportunities. A lot can be learnt from both local and multinational companies successfully operating there. Firms should go beyond the mentality of merely removing features or services to make them cheaper. The lesson here is relevance, adaptability and tailoring products to suit specific BOP needs in an efficient manner. Also, enabling BoP education and providing marketplace services make for more sustainable approaches.

The study adds to BoP literature by examining consumption of this segment in an integrated manner: across various categories and linking it to motivation theories. This broad perspective would be useful not only for potential BoP marketers, but also for government and aid agencies.