This is the ninth in a series of posts discussing themes raised in The Fortune at the Bottom of the Pyramid by C K Prahalad. In chapter 1 the author discusses the opportunity to design and create new goods and services to meet the needs and wants of the poor. Low cost is obviously an important design parameter, but so too might be such things as the use of local languages and catering for illiterate consumers.
One example given is that of the Indian dairy co-operative Amul, which supplies good quality ice-cream at a cost of around 5 cents per serving, providing a source of nutrition as well as enjoyment. The same company has been experimenting with a range of other affordably-priced food products. Another example is Prodem FFP, a Bolivian financial service company which uses automated teller machines with fingerprint recognition, making financial services accessible to the illiterate.
The demanding nature of experimentation for the bottom-of-the-pyramid market, requiring very low costs and highly efficient distribution arrangements, can result in significant cost-saving innovations which are transferrable to a multi-national company’s other markets, making the company more profitable in other countries even if the profit margins are very small in poorer countries.