Marketing to the Bottom of the Pyramid
2. Marketing to the BOP raises a number of issues revolving around the social responsibility of marketing efforts. Write a position paper either pro or con on one of the following:
It is not exploitation for a company to profit from selling soaps, shampoo, personal computers, and ice cream, etc., to people with little disposable income. In the corporate world, there is little or no attention of the multinational companies on marketing the products and services to poor people because they cannot afford the products, which are sold to middle and higher income customer segments. Due to more attention of the firms on these middle high class ...view middle of the document...
Due to applying high interest rate, the people from this segment will not be able to purchase these goods due to their incapability to reimburse the loan. The people from this market segment possess the need to purchase these products, but they do not have desire because they will not be able to access the required money because of high interest rate (Agnihotri, 2013). Interest rates of 20 percent can reduce the spending power of these people with less income that can prevent them to buy these products.
The availability of loan at lower interest can be appropriate for the people earning less than $100 monthly to buy these goods and other consumer durables efficiently and conventionally. For most products, demand is contingent on the customer having sufficient purchasing power that can be possible only on the availability of required money. Therefore, it is crucial for the companies to develop creative ways to assist these people at the BOP to finance for purchasing these goods at low interest rates (Schuster & Holtbrügge, 2012). In the absence of this, there would be any worth to make these products available for the people from this segment due to their inability to purchase these products in market.
Squeezing profits from people with little disposable income and often not enough to eat isn’t capitalist exploitation, but rather that it stimulates economic growth. This argument can be said appropriate because tapping the spending power of the poor by the firms by squeezing...