To address this opportunity, Confederation of Indian Industry (CII) has organized a two day summit starting August 19. The theme of the Summit is "Marketing to the bottom of the pyramid-How relevant and in what measure achievable in the Indian context. Key speakers include Mr Thomas Puliyel, President IMRB International, Mr Arvind K Singhal, Chairman Technopak, Mr Rohtash Mal, Head, Brand and & Marketing Communications, Tata Teleservices Ltd and Pandey, Executive Chairman & National Creative Director, Ogilvy & Mather India. The two-day session will also feature a special session with noted management consultant and author, Dr CK Prahalad.
Delivering the keynote address at the inaugural session of the Summit, Mr KV Kamath, President, Confederation of Indian Industry and Managing Director and CEO, ICICI Bank Ltd. said that "while the opportunity exists for tapping the country's vast rural markets, the challenge is to invent a business model that is cost-effective. One needs to be able to conceptualise how to deliver value cost effectively. That's where the challenge is, as well as the opportunity and the excitement." "Accessibility and affordability are the two most important factors that corporate India has to keep in mind if it is to successfully market to the bottom of the pyramid," said Mr Kamath.
Detailing the path followed by ICICI Bank in creating its own brand identity and market, Mr Kamath said "it was the bank's foray into the consumer credit segment that shaped its growth. Similarly, businesses today have to come out with innovative but value-based pricing strategies to tap the country's largely unreached marketplace."
Mr. Abdul Khan, Head, Brand & Marketing Communications, Tata Teleservices Ltd, said that "the need of the hour is to adapt to the needs of the segment that one is seeking to target." He said that very often it was the top management that failed to recognize the emerging opportunities or chose to follow traditional marketing plans while tapping new markets. Here, he pointed out how Tata Teleservices had successfully incorporated consumer feedback and come out with mobile telephony plans that later became industry standards.
On his part, Mr. Aditya Nath Jha, Vice-President & Head- Global Branding, Infosys Technologies, pointed how finding the right talent was crucial for his company's operations. Conceding that there was a shortage of skilled personnel, he said that it was because of this that Infosys had introduced certain schemes that reach out to those at the bottom of the pyramid. "It was because of such schemes that nearly 20 per cent of all new hires in Infosys have parents who are not graduates."
The market segment at the bottom of the pyramid provides a huge opportunity for business, said Hindustan Unilever Ltd Vice-President (Home Care) Sudhanshu Vats.
Mr Vats offered insights into the stressful economic challenges posed by the bottom of the pyramid segment by first dividing the segment into two broad sections, urban and rural. He defined the urban bottom of pyramid consumer as one " who lives mostly in slums in one-room houses." He said that this urban consumer is "efficient, thrifty and smart as also optimistic and balanced in his approach." Educating his children is an important consideration for him, Mr Vats added.
"The rural consumer has little more space than his urban counterpart," he said, "but has less amenities." The rural consumer too has education for his children high on his priority, Mr Vats pointed out saying that there is a visible change in opportunities for him in the last two decades.
Mr Vats then enumerated what he called three As and an R to reach the segment at the bottom of the pyramid - Awareness about products; Access to the products; Affordability of the product; and lastly, Relevance of the product. He stressed on looking at the segment from the consumer's perspective: "We must think as they do and not as we do."
"The way at looking at pricing for products targeted to this segment needs to be different," he said. "Here pricing means," Mr Vats said, "target price minus margins is equal to costs." He said that there is no room for slackness while reaching out to this market segment. "The product has to be efficient as well as affordable at the same time," Mr Vats pointed out. He said superior technology is needed to reach the bottom of the pyramid, more so than the other segments of the market. For this, he said, even the market leader needs to have a challenger's mindset.
Mr. Vats said that the way of moving to the market is important with regards to keeping a check on pricing. "The same goes for distribution networks," he said adding that geographical and specific needs of the consumer have to be kept in mind for this. "As this is a high volume-low margin market, it is necessary to have marketing innovations," Mr Vats stressed.
