Review: Fortune at the bottom of the pyramid : CKP

I bought the book Fortune at the bottom of the pyramid on Nov ’03. I went to Crossword at inorbit to buy “crossing the chasm” by Jeffery Moore. The helper could not find the book CC, so I bought the book BOP with the intention of reading it in longer flight to Vancouver and coming back flight from SFO to Mumbai.

I did not even finish half of the book in the journey, but finally I’m done reading main book. I’m yet to read the case studies though and watch videos accompanied in the CD.

Fortune at the bottom of the pyramid by CKP is a fantastic collection of success stories of companies working with masses in developing and under developed countries. The companies are few MNEs, Large national companies, family owned business and small regional players.

The book explores the commonalities of their success through case studies conducted by CKP’s students. These commonalities are not something path breaking, they are common sense often ignored by companies wanting to do business with masses (largely poor) in the under developed countries.

CKP rightfully argues that any company wanting to do business in India and Brazil will have to change the approaches it has been taking to reach out to mass customers who are at the bottom of the pyramid.

CKP sights examples of Reliance, ITC, Arvind eye hospital, HLL, ICICI, Casa Bahia, CEMEX to show the diversities of the companies, target masses and yet commonalities that has allowed them to be successful, innovators, leaders and growth seekers not to forget the path-breakers with first mover advantage.

Some of the important readings from Fortune at BOP

1. there is money to be made at BOP
2. Access to BOP is tough
3. BOP consumers accept advanced technology readily
4. Creating capacity ( or I would call it seeing capacity) – the onus is on the seller, the capacity is unrealized
5. The services and goods needed are not the same as traditional markets
6. dignity and choice along with trust needs to be built and offered by the seller

CKP also speaks about 12 principles of reaching out to market; most of these principles are truly relevant at least to Indian market. I cannot speak about Brazil, Mexico and other part of world, as I have not been there.

1. price performance is very important – BOP customers demand more
2. innovations (may) requires hybrid solutions – advance technologies + rapidly evolving infrastructure
3. the markets are large they need to be scalable to masses
4. resource conservation is a way of life in developing countries
5. deep understanding of functionality is must not just form
6. process innovations are just as critical as product innovations
7. self deskilling by seller is also must to design for unskilled markets
8. educating the customer on product usage may be required, be prepared for it
9. products must work in hostile environments (eg: changing voltages)
10. deep knowledge of diversity (language, skills, experiential level etc) is must to design a robust product
11. innovation of distribution method may also be required if one does not exist
12. Extensible feature and function would give a competitive advantage

I can go on and write about each case and learning from each of those cases. The book contains detailed case studies of each and some more companies I mentioned that I am yet to read.

Reading the short book my impression: it is a must read for anyone who wants to cater to the masses market. Each of the rules I mentioned is key to designing good and services for masses. It is not a strategy book but the knowledge and experience adds to strategy.