Academic journal article Journal of Management and Public Policy

A Critical Approach in Understanding Bottom of the Pyramid Propositions

Academic journal article Journal of Management and Public Policy

A Critical Approach in Understanding Bottom of the Pyramid Propositions

Article excerpt

The Philosophy of Marketing Theory: An Introduction

The underlying philosophy of theory arises due to its nature of compiling aspects of law, law-like generalizations which are systemically placed. Theory has a formal set of process which has components of formal language systems that are different from natural language in terms of elements, rules, definitions. The interpretation of theory takes place when the formalized system has complete set of appropriate rules for interpretation in formal language. The inclusion of social science, in creation of theory results out of organizing phenomena into different classes and groups. The procedures take place through classification into logical partitioning, that is classifying on the basis of properties and phenomena on which classification schema is to be based on. And further by grouping which accommodates large number of properties than in logical partitioning or in specific set of data. Discussing on merger of theories into other discipline, Shaw and Brian Jones (2005, p.273) provides a looming picture by arguing that due to uncertainty of business environment and product failures the legacy of marketing theory is questioned as there seems to be a distinct difference in application and theoretical footings. In such case marketing as a field can reconsider merging into other disciplines but to focus on its own conventional domain of business.

Bottom of the Pyramid Theory1: Features and Characteristics

The Bottom of the Pyramid (BOP) theory is one of the widely acclaimed theories of marketing proposed by C. K. Prahalad (2005) through his book The Fortune at the Bottom of the Pyramid. It has gained ample attention due to its proposition of transformation of world's poor people through involvement of multinational corporations. BOP puts forward two broader capabilities in its theoretical understanding, as one tries to deconstruct the notion of poverty in relation to the market and secondly it highlights the role of corporations in serving the poor.

The multinationals corporations, prior to BOP theory formulation were concerned about the higher end of the market of the economic pyramid2. Corporations have been ignoring consumers at other levels of the pyramid considering that customers at this level as inaccessible and do not contribute to the bottom line (Prahalad & Hart, 2002). Markets at the lower end of the pyramid are yet to be explored and MNCs need to proactively pursue in engaging with low- income buyers to satisfy their needs for products and services. The crucial espionage of the theory is its analysis of the huge market potential at the lower end of the pyramid. Corporation's engagements with lower end of the market consumers will serve as a social imperative and in the process corporations can eradicate poverty by improving the living conditions of the poor people across the globe. MNCs must develop and package their products and services which directly charters to the lower income group, where the fortune lies and that remains mostly untapped. The framework of BOP takes a holistic lens through inclusion of a people's (consumers) model in determining the marketing strategy and product development for corporations.

Prahalad (2005) is confident, in stating that engagement with BOP level consumers requires innovative directions and developments. MNCs must be ready to challenge the status quo by constantly initiating innovative approaches to meet the dynamic nature of the market. Poor people are seen as a market but there must not be any conventional marketing patterns followed in reaching to the grassroots. For instance, all marketing communication models can be applicable but universal concepts must be applied with distinctive feature depending on the nature of the buyers. He (C. K. Prahalad) portrays the case of slum dwellers in Dharavi, who do not own property but they do spend on purchasing luxury items3. The process of product development can be more affordable to the lower income group which can provide them a valued return on their expenditure. …

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