Glob Bus Org Exc - 2013 - Payaud - Marketing Strategies at The Bottom of The Pyramid Examples From Nestl Danone and

Marketing Strategies at the Bottom
of the Pyramid: Examples From Nestlé,

Danone, and Procter & Gamble M A R I E L L E A . P AYA U D
The bottom of the pyramid (BoP) refers to markets BoP strategies. The diffusion of the BoP concept
that serve some of the poorest individuals on the among business executives also encourages compa-
planet. Many multinational corporations contend nies to better understand and respond to subsistence
that they are implementing BoP marketing strate- marketplaces and to focus on the 4 billion poor-
gies while selling products targeted to the very poor est individuals of the planet, now considered po-
in developing countries. There are significant dif- tential consumers. The basic idea is very simple. If
ferences across marketing strategies directed at BoP a company offers products at extremely low prices
consumers, from merely adapting an existing prod- and manages very low costs, margins may be low
uct to the development of an innovative product but adequate, and selling enormous quantities of the
strategy integrating explicit fair and inclusive growth products will generate decent profits. Unilever suc-
at the local community level. It is possible to distin- cessfully applied this model by selling Wheel brand
guish mere international marketing strategies from detergent to low-income consumers in India. Sima-
genuine BoP strategies, as an analysis of three case nis (2012) argues, however, that because of the high
studies shows: Nestlé operations in the Central and penetration rate that it requires, this strategy far
West African region, and Danone and Procter & from guarantees success, and cites failures expe-
Gamble operations in Egypt. Studying the charac- rienced by large multinational companies such as
teristics of the diverse marketing strategies that these Procter & Gamble and DuPont.
firms target to BoP consumers leads to a classifica-
tion of five types of BoP marketing strategies. The BoP markets are attractive, given the size of the
tool presented here will help management under- population in developing countries (for example,
stand what a genuine BoP marketing strategy should 163 million inhabitants in Bangladesh and more
be and how to improve current marketing practices than 75 million in the Democratic Republic of
to include BoP corporate social responsibility prin- Congo) and the high percentage of this population
ciples. ©C 2014 Wiley Periodicals, Inc. living below the poverty line (about 30 to 70 per-
cent). Moreover, real growth rates in these countries
The concept of bottom of the pyramid (BoP) first are mostly between 5 percent and 10 percent per
introduced by Prahalad (2004) led to an impor- year, contrasting with growth rates close to zero
tant stream of research in business circles (Rosa & in developed countries (see Exhibit 1 on page
Viswanathan, 2007) giving rise to academic litera- 52). From a managerial perspective, companies—
ture in areas such as strategy, organizational theory, multinational companies in particular—contend
entrepreneurship, microfinance, and marketing. that they are developing and implementing BoP
Within each of these areas, BoP research essentially strategies. For example, Procter & Gamble,
attempts to identify conditions for success, limi- Unilever, Nestlé, and Cemex implement BoP pro-
tations, and motivations of companies (including grams including the development of specific prod-
multinational corporations, or MNCs) to engage in ucts targeted at BoP consumers around the world.
© 2014 Wiley Periodicals, Inc.

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Global Business and Organizational Excellence • DOI: 10.1002/joe.21533 • January/February 2014 51
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Exhibit 1. Size and Growth of BoP markets card named Zairin in Mali at a very low price (20
Population Population 2012 GDP cents). Product strategies range from this basic adap-
(in billions, below the growth tation of packaging and quantities to very innovative
2013) poverty line (%) rate (%) product strategies. The latter include design, devel-
BoP markets opment, and launch of innovations aimed at answer-
Bangladesh 163 31.5 (2010) 6.1 ing specific needs of BoP consumers (such as adding
Bolivia 10.5 49.6 (2010) 5.2 specific nutrients in food items) while adapting to
Burkina Faso 18 46.7 (2009) 8.0
the very limited purchasing power of the target con-
Congo (D.R.C.) 75.5 71 (2006) 7.1
Ivory Coast 22.4 42 (2006) 9.8
sumers and to specific distribution channels and in-
Mexico 116 51.3 (2010) 3.9 termediaries. Unilever in Thailand, Vietnam, and In-
Developed markets donesia implements such a marketing strategy with
Canada 34.5 9.4 (2008) 1.8 its Comfort One Rinse, a product that helps save up
France 66 7.8 (2010) 0 to 20 liters of water each time a person does laundry.
Germany 81 15.5 (2010) 0.8
United States 316 15.1 (2010) 2.2
Source: CIA, 2013.
Genuine BoP strategies imply the development of
genuinely new products and services with the for-
mal and planned participation of local communities
in their design, production, and distribution. These
The examples given in Exhibit 2 illustrate both the
products are designed to dramatically cut consumer
recent development and the diversity of BoP mar-
price (by a factor of ten and up to a factor of a hun-
keting strategies implemented by major companies
dred), compared to comparable items sold in devel-
around the world. Product strategies directed at BoP
oped countries. Innovations in product design, dis-
consumers vary a great deal, and include products
tribution methods, employee training, production,
marketed in developed countries that are repack-
distribution, and delivery create a totally new sys-
aged to adapt to local conditions. For example,
tem, which is the basis of a corporate social re-
single-serve packages account for a significant por-
sponsibility (CSR) initiative and which also becomes
tion of sales for such everyday products as sham-
profitable even in the context of low purchasing
poo, cookies, coffee, spices, toothpaste, and cream
power, lack of infrastructures, lack of organization,
in BoP markets, in line with the limited and fluctu-
and often corruption. For example, Nestlé devel-
ating revenues of the target population. This is the
oped in Indonesia its Ideal Dancow milk with iron,
case of the Ariel detergent sold by Procter & Gam-
calcium, and proteins. The product is manufactured
ble in Egypt. Company Orange markets a telephone
locally in East Java and as part of Nestlé’s policy of
Exhibit 2. Products Targeted to BoP Consumers

Company Product Category Product Name Markets Date of Launch
Cemex Construction/housing Patrimonio Hoy Mexico 2003
Danone Dairy products Danimal South Africa 2005
Nestlé Food PPP (Popularly Positioned Product) CWAR* 2006
Procter & Gamble Detergent, soap Ariel, Camay Egypt 1990
Azuri Technologies Energy Indigo Kenya 2011
Unilever Detergent Comfort One Rinse Vietnam, Indonesia, Brazil 2009
Tata BP Solar Energy Solar panels India 1992
Orange Telecommunications Zairin Mali 2009
∗ CWAR: Central and West African regions.
52 January/February 2014 DOI: 10.1002/joe Global Business and Organizational Excellence

sharing value, Nestlé Indonesia helps more than BoP Marketing Strategies: Defining the Concept
30,000 milk farmers who supply the factory with Although all BoP products and services target BoP
milk. consumers, there are multiple definitions and mea-
surements of poverty leading to studies focusing
on very different target populations (Kolk, Rivera-
Various initiatives directed at BoP consumers are Santos, & Rufı́n, in press). Banerjee and Duflo
generally named BoP strategies for the mere reason (2007) refer to a poverty threshold of $1 to $2
that they target the same poor consumer group. per person, per day. This population is estimated to
be about 2.6 billion individuals worldwide (World
Although many examples are available both in the Bank, 2011). With such a low income and with a
academic and managerial literature and BoP strate- lack of regularity in the flow of this income, many
gies are presented on the websites of many compa- consumers can purchase only what they need for the
nies, there is a lack of definition and an absence coming day. In this context, price is obviously an im-
of a general framework enabling the clear under- portant dimension of BoP marketing strategies.
standing of the concept and dimensions of a BoP
marketing strategy. Various initiatives directed at Low price implies low margins and, therefore, high
BoP consumers are generally named BoP strategies volumes to ensure profitability. In such markets, sell-
for the mere reason that they target the same poor ers are located in close proximity to consumers with
consumer group. Confusion also emerges from the thousands of retail outlets in the form of corner
fact that the term BoP is used to designate mul- stores and with very large numbers of street ven-
tiple concepts, such as a country, a population, a dors. High volumes can be reached only if the prod-
target market, products, strategies, and CSR initia- ucts are made available to consumers with very low
tives. Obviously, all products and associated strate- transaction costs. Therefore, obstacles to reaching
gies that target BoP consumers do not correspond to the consumer and to delivering the goods, even in
what Prahalad (2004) designates as a BoP strategy. remote areas with very limited transportation and
There are significant differences in the marketing distribution infrastructures, need to be understood
strategies directed at BoP consumers, from merely and circumvented.
adapting an existing product to the development of
an innovative product strategy that integrates ex- In sum, products targeted to the very poor need to be
plicit fair and inclusive growth at the community affordable and to be made easily available to all. Al-
level. though these two dimensions (affordability and ac-
cessibility) define a product strategy directed at poor
The objective of this study is to analyze BoP mar- populations, they are insufficient to define and de-
keting strategies implemented by companies in de- scribe a genuine BoP marketing strategy.
veloping countries and to propose a clear descrip-
tion and classification of BoP marketing strategies. If affordability is a necessary feature, a BoP market-
The different types identified are contrasted on such ing strategy also implies quality and performance.
dimensions as their adaptation to the specific needs Prahalad (2004) calls for products and services that
of the targeted population, the intensity of the use formally take into account the needs, education, and
of local resources (raw material, staff, and subcon- skills of BoP consumers. A clear identification of
tractors), and the integration of the product and BoP consumers’ needs, as well as a detailed under-
marketing strategies within a comprehensive CSR standing of their usage situations and constraints, is
initiative. essential to a successful BoP product strategy.
Global Business and Organizational Excellence DOI: 10.1002/joe January/February 2014 53

London and Hart (2010, p. 154) suggest, “The fun- gets BoP populations not only as customers, but
damental challenge is to envision life circumstances also as employees, suppliers, subcontractors, en-
and, more specifically, flexible product-usage situa- trepreneurs, retailers, or spokespersons. Therefore,
tions. . . . The effective ‘BoP design’ allows for the a genuine BoP marketing strategy (see Exhibit 3)
many different and unanticipated ways in which the comprises:
product will be used, depending on situation and
needs.” Products need to be adapted to the fulfill- • A marketing strategy directed to the very poor
ment of the needs of BoP consumers, to their living (with features of affordability and availability),
conditions (such as an absence of refrigeration), to • Consumer orientation (with features of adaptabil-
their skills and level of education (for example, read- ity and consumer education), and
ing ability) and to their culture (habits, values). BoP • Fair and inclusive growth.
consumers also need to be educated to understand
how to use these new products properly. These two Some examples of implementation of marketing
dimensions (adaptation to consumers’ needs and ed- strategies on the different dimensions are described
ucation) correspond to a BoP consumer orientation. below.
Finally, beyond market orientation and consumer

orientation, a BoP marketing strategy is also con- Fighting against extreme poverty, BoP strategies
cerned with local development and quality-of-life is- share similarities with humanitarian aid, since both
sues. Along these lines, Payaud and Martinet (2010) target very poor populations and aim at improving
define BoP strategies as being advanced CSR strate-
well-being and quality of life.
gies developed by business corporations targeting
very poor segments of populations (earning two dol-
lars a day or less). These corporations develop novel
products and services aiming at the satisfaction of Affordability
basic needs while preserving the organization of lo- Low prices are a necessary condition for reach-
cal communities and caring for their eco-systems. ing consumers at the BoP. In Cameroon, Nestlé’s
Therefore, a genuine BoP marketing strategy is a single-serve dry milk sachets (26 grams) are sold for
form of advanced CSR strategy adapted to and im- 30 cents, and the Maggi Tomatoes Bouillon sachet is
plemented in a BoP context. Fighting against ex- sold for 5 cents. In Vietnam, Unilever’s single-serve
treme poverty, BoP strategies share similarities with Sunsilk shampoo costs 3 cents. Low-cost products
humanitarian aid, since both target very poor pop- are designed, such as the Pepsodent Triple Clean
ulations and aim at improving well-being and qual- toothbrush, which was launched in 2012 in India
ity of life. BoP strategies, however, have a long-term and priced at 20 cents. The absence of bank accounts
orientation and include the concept of fair and in- and loans and the absence of savings favor “pay as
clusive growth. Inclusive growth—widely acknowl- you go” solutions, like the prepaid SIM cards sold
edged as a goal of public and business policies— by street vendors or scratch cards used to purchase
“provides significant resources toward programmes electricity.
that [reduce] poverty and [create] employment op-
portunities, access to essential services especially Availability
for the poor, equality of opportunity, and empow- Physical accessibility to products is a key challenge
erment through education and skill development” for both consumers and firms at the BoP. For exam-
(George, McGahan, & Prabhu, 2012, p. 661). In- ple, 84 percent and 89 percent of roads in Ghana
clusive growth implies social innovation that tar- and Gabon, respectively, are unpaved (CIA, 2013)

Exhibit 3. The Dimensions of a BoP Marketing Strategy
and distances are better evaluated in time than in product (for example, dehydration), in the recipe
miles or kilometers. Physical distribution is a key (e.g., added iron and iodine) and in the packaging
to availability of the products for both retailers and (single-serve).
consumers. In Bangladesh, Nestlé helps small shop-
keepers in remote areas affected by flooding to keep
their businesses. The group uses a boat to deliver its
products to about 200 small outlets located in river- Consumer Education
side communities to ensure that their shelves are reg- Literacy among BoP consumers is low—72 percent
ularly stocked. in Egypt and 39 percent in Senegal, for example
(CIA, 2013)—and may lead to an inappropriate use
of products. This implies a requirement to inform
Adaptability consumers about the benefits of the products and
BoP strategies are essentially directed at basic needs to educate them on how to use them. In Africa,
(food, housing, transportation, education, energy, Maggi brand “cooking caravans” travel through
and health care), and products need to adapt to lo- Cameroon, the Ivory Coast, and Nigeria, educat-
cal constraints. Local conditions such as health de- ing people about balanced diets, micronutrient de-
ficiencies (such as anemia), household utilities (e.g., ficiency, and the importance of culinary hygiene.
the absence of electricity and refrigeration), and dis- The program includes interactive cooking demon-
tribution channels (open market, street hawkers, strations, women’s forums, group discussions, and
and kiosks) imply adaptation in the form of the presentations on micronutrient fortification.

Fair and Inclusive Growth sitioned Products (PPPs) for low-income consumers
Beyond the satisfaction of BoP consumer needs, around the world (Nestlé Report, 2012).
the design, development, manufacturing, and distri-
bution of goods should contribute to building an
ecosystem ensuring sustainable development. One Local communities should participate in all stages
of the objectives of a BoP marketing strategy should of the value chain—from identifying BoP consumer
be to support local economic development, favor en-
needs to educating consumers how to use the
trepreneurship, create jobs, train local employees,
and distribute revenues locally. Local communities
products.
should participate in all stages of the value chain—
from identifying BoP consumer needs to educating
consumers how to use the products. For example, PPPs developed in 2009 are high-quality food prod-
Unilever works with the Vietnam Women’s Union ucts that provide nutritional value to low-income
to provide poor women in rural areas with credit, consumers. These products are sold at an afford-
training, and bicycles so they can sell Unilever prod- able price and in appropriate formats to address
ucts. Unilever Vietnam generates 8,000 indirect jobs the needs of some 3 billion lower-income consumers
through its value chain, and about 60 percent of worldwide. PPPs include culinary products, bever-
the company’s raw materials and 100 percent of ages, and dairy and confectionery products sold un-
its packaging are sourced locally (Unilever Report, der a number of major global brands, including
2012). Maggi, Nido, and Nescafé. PPPs may be fortified
with micronutrients that help to address the deficien-
cies (iron, zinc, iodine, and vitamin A) that are most
BoP Marketing Strategies: Three Case Studies prevalent among lower-income consumers. For ex-
Three case studies of marketing strategies imple- ample, to help address iodine deficiency, Nestlé de-
mented in BoP countries by multinational corpo- veloped iodine-enriched Maggi products (bouillons,
rations (Nestlé in West Africa, Danone in Egypt, seasonings, and noodles) using iodized salt. In Cen-
and Procter & Gamble in Egypt) explore how var- tral and West Africa, several million Maggi cubes
ious products are sold to BoP consumers. Data on were sold in 2011 and more than 90 percent of the
the marketing of more than 60 brands was col- Maggi product range now carries added iodine.
lected from secondary sources (CSR reports, internal
company reports) and from interviews conducted A study of Nestlé’s PPP products in CWAR and
with local marketing executives, salespersons, re- information obtained from the company and its
tailers, and consumers. The analyses are detailed wholesalers, retailers, and consumers showed that
below. all the PPPs satisfy four of the five criteria for
BoP products (affordability, availability, adaptabil-
Nestlé in Central and West African Regions (CWAR) ity, and consumer education), and that the fifth
In 2006, Nestlé developed a holistic and sustainable dimension (fair and inclusive growth) is actively
approach to business, which addresses the needs of sought yet not always fully implemented.
society while meeting the needs of shareholders. This
approach is named Creating Shared Value (CSV) and All PPPs are manufactured in single-serve packs.
encourages businesses to simultaneously create eco- Sizing and packaging designed around single usage
nomic and social value by focusing on the social meets the need of consumers both for affordabil-
issues they can address successfully. Following this ity and for convenience. Single-serves are adapted
line, Nestlé developed a wide range of Popularly Po- to on-the-go consumption, which is very popular in

Africa. In Cameroon, consumers prefer buying the tives to fulfill this mission at the BoP. Bottom of the
Nido powdered milk in 26-gram single-serves be- Pyramid is the name of a new business model de-
cause the quantity corresponds exactly to what is veloped by Danone in 2010 and first implemented
needed for a glass of milk, which avoids overcon- in India with a production plant for dairy products.
sumption and waste. Single-serves are also conve- Products were developed to meet local tastes and
nient because they avoid problems linked to con- nutritional needs and to reach a price suitable to
servation (humidity, pests, lack of refrigeration). the population’s buying power. Designed to reach as
Single-serves are also adapted to local distribution, many people as possible, the distribution model was
open markets, kiosks, and neighborhood grocery based on consumers’ habits. Danone developed orig-
stores. For example, 71 percent of Nestlé’s revenues inal governance systems to manage BoP markets,
in Cameroon in stock cubes and bouillons (Maggi such as the Danone Ecosystem Fund, which is in-
brand) come from the open market, 23 percent from tended to develop the activities of the value chain
small stores, 5 percent from kiosks, and only 1 per- partners that make up Danone’s ecosystem: farm-
cent from supermarkets. ers, suppliers, subcontractors, transporters, and dis-
tributors, as well as territories and local authori-
Most Nestlé PPPs in CWAR are imported—for ex- ties. Danone also founded “Danone.Communities,”
ample, Cérélac 26-gram powdered milk and Nestlé a mutual fund designed to encourage social business
78-gram sweetened condensed milk. Some PPPs, initiatives and to fight against poverty and malnutri-
however, are produced locally and benefit from tion through innovation (Danone Report, 2012).
a genuine BoP marketing strategy. For example,
Maggi seasoning cubes are enriched to improve the
health of the population (adaptability) and are sold Milk consumption in Egypt remains low and under
at 2 cents per serving, guaranteeing affordability. the consumption level recommended by the World
Distribution fully covers all channels and particu- Health Organization.
larly open markets, kiosks, and small stores, ensur-
ing availability and proximity to the local popula-
tion. In Libreville (the capital of Gabon), 1,000 out In Egypt, the Dan Farm project is a pilot farm cre-
of the 3,000 women selling items on the open mar- ated by Danone Egypt and the nongovernmental or-
ket carry the Maggi brand, and selling the brand en- ganization (NGO) Care International and supported
ables them to generate a margin of one dollar for ev- by “Danone.Communities.” The project is aimed
ery 100 cubes sold. Consumers are informed about at improving the dairy production industry by en-
the benefits of the product and are educated how to hancing productivity and milk quality and increas-
use them through the organization of cooking cara- ing farmers’ profits.
vans traveling in villages. Finally, products are man-
ufactured locally (e.g., in Douala, Cameroon, or in Milk consumption in Egypt remains low and under
Ogun, Nigeria) using local perishable agricultural the consumption level recommended by the World
raw materials and cooperating with local subcon- Health Organization. Local production is underde-
tractors trained by Nestlé (an example of a fair and veloped because the main producers of milk in Egypt
inclusive growth). are subsistence and small farmers who own between
one and two heads of cattle and account for 85 per-
Danone in Egypt cent of total production. They are not inclined to
Danone’s mission is “to bring health through food to develop their production because of decreasing milk
as many people as possible” (Danone Report, 2012), prices and the monopolization of the dairy trade and
and the company developed many powerful initia- profits by local traders.

To address these problems, Danone and Care In- ucts, spread better nutritional information, and train
ternational decided to collaborate and worked with community members in healthful lifestyle skills. This
local agricultural cooperatives to learn how to im- involves local distributors, sales representatives, lo-
prove the situation of local producers. The project cal retailers, and local “health champions,” mainly
focused on small farmers and milk cattle breeders women, who are trained and employed to create a
in the Nubareya and Beni Suef regions. The idea is health promotion team, with the support of selected
to improve their income by applying better milk pro- local retailers.
duction practices to improve milk quantity and qual-
ity, while strengthening their position in the milk These projects involving many local partners enable
value chain. Special focus is paid to women who are Danone to change both its supply chain and its dis-
primarily responsible for the care and management tribution system in rural areas of the country. They
of livestock at the household level. ensure the quality of dairy products, distribution of
products, brand awareness, and brand image. Be-
Specifically, the objectives of this project are to im- yond these immediate economic achievements, these
prove small farmers’ incomes through increasing projects also illustrate how the company involves
milk production and quality, provide them with a range of local actors, such as NGOs, coopera-
feed services, train them in hygienic practices to im- tives, transporters, veterinarians, wholesalers, retail-
prove animal health, ensure fairer profit distribution ers, salespeople, and spokespersons, thus creating
among the milk value chain, and strengthen the ca- local ecosystems, which will be the basis of eco-
pacity of local institutions to sustain improvement nomic development and serve to fight poverty within
of milk production and farmers’ livelihoods. local communities. This strategy is aimed more at
integrating impoverished populations into Danone’s
The cornerstone of the project is the Milk Collection value chain and at educating producers, retailers,
Center (MCC), where farmers living close by deliver and consumers, rather than at developing new prod-
the milk themselves twice a day. For those who live ucts targeted to BoP consumers. The projects de-
further away, collectors gather the milk and deliver it scribed are in line with the writings of Prahalad
to the MCC. The MCC checks the milk quality and (2004) and Gupta (2005), who recommend fight-
gives access to such services as feed, milk quality, ing poverty and developing genuine BoP strategies
and health management programs. through the integration of impoverished popula-
tions within the procurement, production, and dis-
Two MCCs have already been opened and were col- tribution systems.
lecting five tons of milk per day in 2012. The 2013
objectives are to secure a production of 3,500 tons
and to improve farmers’ revenues by 25 percent. For These projects involving many local partners enable
Danone, this project provides access to quality milk Danone to change both its supply chain and its dis-
that enables the manufacture of quality dairy prod-
tribution system in rural areas of the country.
ucts. It also ensures a healthy and sustainable ecosys-
tem around the supply chain (Down to Earth, 2013).
Danone developed a second similar Egyptian project Procter & Gamble in Egypt
called Omda-Sahteen. It was put together by Procter & Gamble’s sustainability report states very
Danone Egypt and Ashoka and was endorsed by the clear goals and describes various operations aimed
Danone Ecosystem Fund in July 2011. The idea here at improved sustainability. Len Sauers, the com-
is to ensure a larger distribution of Danone prod- pany’s vice president of global sustainability, said,

“Our social responsibility efforts continue to grow. tributed in more than 65 countries have prevented
We surpassed our goal of reaching 300 million chil- an estimated 200 million days of diarrheal illness
dren in need by 100 million, for over 400 million and helped save more than 25,000 lives. P&G an-
children. We have also exceeded our goal of deliver- nounced that it would provide 2 billion liters of
ing four billion liters of clean water, due to the rapid clean drinking water every year by distributing 200
expansion of partners and countries where P&G million P&G water purification packets every year
purification packets can be distributed” (Procter & in the developing world (Procter & Gamble Report,
Gamble Report, 2012), 2012).
In Egypt, P&G markets all its major brands, such

One billion people in BoP countries do not have as Ariel and Tide (detergents), Camay (soap), Head
access to clean drinking water, and the CSDW & Shoulders (Shampoo), Crest (toothpaste), Gillette
(razors), Always (feminine hygiene), and Pampers
program provides these people with a water pu-
(diapers). These products are often sold in different
rifying technology developed by P&G and the US
pack sizes, including single serves and small packs to
Centers for Disease Control and Prevention. adapt to local purchasing power. Single serves, how-
ever, imply a price penalty. For example, Pampers
P&G and its brands develop large-scale operations, in ten-unit packs are sold for nine Egyptian pounds
such as Pampers working to end neonatal tetanus. In (0.9 EGP per unit) and the single-serve pack is sold
partnership with UNICEF, the Pampers “One Pack for 1.25 EGP. Whereas the Ariel, Tide, Camay, and
= One Vaccine” program provides vaccines against Always brands are manufactured locally, the other
maternal and newborn (neonatal) tetanus (MNT) brands are imported.
and in six African countries has been validated by
the World Health Organization as having eliminated P&G’s overall marketing strategy is to propose in-
MNT. Through its Point of Market Entry (POME) ternational brands and products to the BoP mar-
programs, Pampers gives free health advice at immu- kets with packaging sizes adapted to local purchas-
nization clinics and hospitals across Nigeria. In In- ing power and implying a price penalty for BoP
dia, through a multibrand cause-related marketing consumers. The product categories concerned im-
program, P&G has built and supported more than ply that the problem of adaptation to local tastes,
200 primary schools, and delivers menstrual hygiene consumption habits, and local culture is not as se-
education to girls, helping to keep them from miss- vere as when dealing with food items. Considera-
ing school because of inadequate feminine protec- tion of the environment and inclusion of the com-
tion. munities in local procurement, production, or dis-
tribution processes seems less of a priority than in
A massive operation directed at BoP markets is the case of Danone. Nevertheless, CSR operations
the P&G Children’s Safe Drinking Water Program directed at BoP consumers or populations are vivid,
(CSDW). One billion people in BoP countries do but managed more at the corporate, international,
not have access to clean drinking water, and the or national levels rather than at the community level.
CSDW program provides these people with a wa-
ter purifying technology developed by P&G and the
US Centers for Disease Control and Prevention. This A Classification of BoP Marketing Strategies
program provides water purification packets (P&G The case studies reveal that the companies’ BoP
Purifier of Water) on a not-for-profit basis. More marketing strategies vary a great deal according
than 5 billion liters of purified drinking water dis- to the five dimensions of affordability, accessibility,

Exhibit 4. Examples of Product Strategies Identified in the Case Studies
Consumer Fair and BoP Marketing
Case Brands Affordability Accessibility Adaptability Education Inclusive Growth Strategy
Nestlé in CWAR Nescafé X X X No
Condensed milk X X No
Maggi cubes X X X X X Yes
Danone in Egypt Dairy products X X X X Yes
P&G in Egypt Ariel, Tide, Camay X X No
adaptability, consumer education, and fair and in- The analysis of current marketing strategies iden-
clusive growth. As Exhibit 4 shows, some market- tified through the case studies and additional ob-
ing strategies fulfill only the dimensions of afford- servations of BoP markets leads to the proposal
ability and accessibility (condensed milk in CWAR; of classifying BoP marketing strategies in five cat-
Ariel, Tide, and Camay in Egypt), while one fulfills egories. This classification enables standard interna-
all the dimensions of a genuine BoP marketing strat- tional marketing strategies applied to BoP markets
egy (Maggi cubes in CWAR). to be contrasted with genuine BoP marketing strate-
gies (see Exhibit 5).
Products commercialized on BoP markets may be
global products (Camay), adapted to the local mar-
ket conditions (fortified or enriched food), or en-
tirely new products designed to meet local basic International Marketing Strategies
needs (P&G Purifier of Water). Distribution may be International marketing strategies applied to BoP
directed at modern and organized channels (such as markets target, at least partially, BoP consumers, but
supermarkets and convenience stores within cities) do not include fair and inclusive growth that enables
or seek to reach the major part of the popula- well-being and fosters quality of life in local commu-
tion, including town neighborhoods and rural areas, nities. These strategies are of two types:
through traditional distribution channels (kiosks
and open markets for Orange phone cards). Pack- 1. A global marketing strategy where an interna-
aging may follow established international formats tional standardized product is manufactured in
or may be adapted to local market conditions as a BoP country essentially to profit from low pro-
with single-serves. Consumers may be educated on duction costs, with a standardized product tar-
how to use the product. For example, for its Maggi geted both to BoP and non-BoP consumers.
Masala-ae-Magic spice sachets enriched with iron, 2. A glocal marketing strategy where the interna-
vitamin A, zinc, and iodine, Nestlé ads ran dur- tional product is adapted to BoP consumers to
ing Indian street dramas and TV programs, and meet criteria of affordability and accessibility.
educational campaigns targeted families and also It may be a single-serve product with standard
sent nutritionists into Dharavi, the world’s largest ingredients or components. The product is im-
slum in Mumbai, India. Finally, the company’s strat- ported or is locally packaged or assembled, but
egy may include fair and inclusive growth for local without adaptation to local needs and without
stakeholders and populations. For example, Nestlé searching to develop fair and inclusive growth.
is helping farmers who grow maize in Ghana and The BoP population is essentially seen as BoP
Nigeria through a Grains Quality Improvement consumers (and possibly as employees for the
Project. manufacturing and distribution processes).

Exhibit 5. International and BoP Marketing Strategies
Marketing Consumer Fair and Marketing
Strategies Affordability Accessibility Adaptability Education Inclusive Growth Strategy Type
Global No No No No No International
Glocal Yes Yes No No No International
Local BoP Yes Yes Yes No No BoP
Consumer- Yes Yes Yes Yes No BoP
Oriented
BoP
Genuine BoP Yes Yes Yes Yes/No* Yes BoP
∗ Depending on the product category.
BoP Marketing Strategies 3. A genuine BoP marketing strategy adds the di-
BoP marketing strategies target BoP consumers with mension of fair and inclusive growth to the char-
affordable and accessible products or services specif- acteristics above. This concerns an adapted or
ically adapted to their needs. There are three cases, completely new product, affordable and avail-
depending on the level of local integration in terms able for BoP targeted consumers. Consumers
of consumer education and of developing fair and are educated on its use (if necessary), and a se-
inclusive growth: ries of stakeholders are integrated into the value
chain. These may include raw material produc-
1. A local BoP marketing strategy implemented ers (such as farmers), subcontractors, packers,
with a product adapted to the needs of the lo- wholesalers, retailers, informants, and a vari-
cal population, offering formats that are afford- ety of employees—from production to sales and
able and convenient to BoP consumers and dis- after-sales personnel. The strategy may also in-
tributed via modern and traditional distribution volve NGOs, governmental agencies, and local
channels in towns and rural areas for maximum authorities.
availability and proximity to consumers.
2. A consumer-oriented BoP marketing strategy
with the same characteristics as above, but with Identifying Genuine BoP Marketing Strategies
the addition of a strong consumer focus. BoP Both in the management literature and in cor-
consumers often do not know how to use new porate communications, there is much confusion
products or have difficulties understanding their about what constitutes a BoP marketing strategy.
consumer benefits. Consumer information and This study enables international and BoP market-
consumer education is then necessary. This con- ing strategies to be compared and contrasted in or-
sumer education can be considered as having two der to better understand of the differences among
roles. Embedded in the marketing strategy, one them.
goal is to develop brand awareness, brand im-
age, and consumer purchases through trial and International marketing strategies directed at BoP
repeat. However, from a CSR perspective, the consumers imply that products are affordable and
company contributes to the education of the lo- available and that prices, serving sizes, packaging,
cal population (for example, in terms of nutrition and distribution methods are adapted to the target
or health care) and to the efficient use of a prod- consumers. In this case, products are not adapted
uct, enabling consumers to profit from its benefits to the specific needs of the consumers, and corpo-
and to avoid waste or misuse. rate marketing goals may be little more than sales

and profits. Considering that BoP populations live in Genuine BoP marketing strategies integrate local
a cycle of poverty and deprivation that causes cog- communities into the value chain and build an in-
nitive and social vulnerabilities, it may be easy for clusive business model. The product being adapted
some brands to reach BoP consumers with products to BoP consumer needs will have inherent consumer
that not only provide little benefit but are detrimen- benefits in health, nutrition, shelter, water, energy,
tal to their income or to their well-being. In some or communications. Some benefits may not be un-
cases, products sold by multinational corporations derstood because of cultural factors and ancestral
claiming to develop BoP marketing strategies might habits. In this case, consumer education is a respon-
be harmful. For example, BoP consumers in China’s sibility beyond a means of achieving sales. Immer-
rural areas may spend as much as 46 percent of their sion into BoP social networks, one-to-one interac-
income on tobacco, and 41.8 million Chinese fall tions, and strong word-of-mouth effects will lead
into poverty because of excessive cigarette spend- to the development of consumer skills and will re-
ing each year (Liu, Rao, Hu, Sun, & Mao, 2006). sult in an emphasis on the human dimension in ex-
In addition, merely increasing consumer choice with changes (Viswanathan, Seth, Gau, & Chaturvedi,
international products may not improve the well- 2009). Fair and inclusive growth implies sharing
being of a BoP population. Even if MNCs develop value and revenues along all the value chain and is
CSR programs targeted to BoP populations, the util- a result of the jobs provided, the raw material uti-
ity of some products (such as carbonated, sugary lized, the kind of products developed, the way they
drinks) and their contribution to well-being is ques- are manufactured and distributed, and the ways in
tionable. BoP consumers may have to make trade- which resources are used. Within this scope, CSR
offs to consume these products that will divert in- has to be understood as being unequivocally benefi-
come from more basic needs (Arnold & Valentin, cial to the BoP communities in which the company
2013). operates.
With no orientation of a marketing strategy toward

satisfying basic BoP consumer needs, without con- With no orientation of a marketing strategy toward
sumer education directed at their wellness, and in satisfying basic BoP consumer needs, without con-
the absence of fair and inclusive growth programs,
sumer education directed at their wellness, and in
CSR may be viewed as a corporate marketing tool
the absence of fair and inclusive growth programs,
connected with issues of organizational image and
identity. As such, CSR might be a means to achieve CSR may be viewed as a corporate marketing tool
corporate goals rather than social goals directed at connected with issues of organizational image and
improving the quality of life of BoP populations. In identity.
the words of Prasad & Holzinger (2013, p. 1920):
“Corporations may market CSR to further their A genuine BoP marketing strategy is a novel ap-
own interests in ways that only offer the appearance proach, which is not necessarily integrated into the
of being responsive to the social and environmental DNA of MNCs and of business leaders in general.
concerns of the communities in which they are sit- It implies a new mind-set that may be profitable to
uated. Thus, CSR may become—if it is not already the company through direct operations in the BoP
there—a public relations invention with little, if any, markets and through the ability to learn from these
positive effect on social justice.” unique markets.

References Prahalad, C. K. (2004). Fortune at the bottom of the pyramid:
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141–167. Procter & Gamble Report. (2012). Retrieved September 2013
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cia.gov/library/publications/the-world-factbook/ Rosa, J., & Viswanathan, M. (2007). Product and market de-
Danone Report. (2012). Retrieved September 2013 from velopment for subsistence marketplaces. In J. Cheng & M.
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ries. Amsterdam, Netherlands: Elsevier.
Down to Earth. (2013). Retrieved September 2013 from
http://downtoearth.danone.com/2013/01/08/egypt-a-lab-for- Simanis, E. (2012). Reality check at the bottom of the pyra-
new-ways-to-work-in-emerging-markets/ mid. Harvard Business Review, June, 120–125.
George, G., McGahan, A. M., & Prabhu, J. (2012). Inno- Unilever Report. (2012). Retrieved September 2013 from
vation for inclusive growth: Towards a theoretical frame- http://www.unilever.com/images/USLP-Progress-Report-
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49(4), 661–683. Viswanathan, M., Seth, A., Gau, R., & Chaturvedi, A.
Gupta, A. K. (2005). Autonomous business unit. In M. Hitt & (2009). Ingraining product-relevant social good into business
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Kolk, A., Rivera-Santos, M., & Rufı́n, C. (in press). World Bank. (2011). The World Bank annual report 2011,
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Marielle A. Payaud, PhD, is an associate professor at the
London, T., & Hart, S. (2010). Next generation business University of Lyon III (France), within the Lyon Graduate
strategies for the base of the pyramid: New approaches School of Business (IAE Lyon), and a researcher at the Mag-
for building mutual value. Upper Saddle River, NJ: FT ellan Research Center, where she focuses on management sci-
Press/Pearson Educational. ences. Her work has been published in Journal of Business
Ethics, European Journal of Marketing, Management Inter-
Nestlé Report. (2012). Retrieved September 2013 from http:// national, Revue Française de Gestion, and International Jour-
www.nestle.com/asset-library/documents/library/documents/ nal of Bank Marketing. She has written several books, includ-
corporate social responsibility/nestle-csv-full-report-2012- ing one dealing with BoP strategies, and her research centers
en.pdf on management and marketing strategies at the bottom of the
Payaud, M. A., & Martinet, A. C. (2010). Stratégies RSE- pyramid (BoP), sustainable development, and corporate so-
BOP et soin des communautés humaines. Concepts et cial responsibility (CSR). She earned her doctoral degree in
Propositions Génériques, Management International, 14(2), management from University of Lyon III in France. She can
be reached at marielle.payaud@univ-lyon3.fr.
31–51.

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Marketing Strategies at the Bottom

of the Pyramid: Examples From Nestlé,

© 2014 Wiley Periodicals, Inc.

Exhibit 2. Products Targeted to BoP Consumers

52 January/February 2014 DOI: 10.1002/joe Global Business and Organizational Excellence

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Finally, beyond market orientation and consumer

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58 January/February 2014 DOI: 10.1002/joe Global Business and Organizational Excellence

In Egypt, P&G markets all its major brands, such

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Global Business and Organizational Excellence DOI: 10.1002/joe January/February 2014 61

With no orientation of a marketing strategy toward

62 January/February 2014 DOI: 10.1002/joe Global Business and Organizational Excellence

Global Business and Organizational Excellence DOI: 10.1002/joe January/February 2014 63

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