Pertanyaan: I have been following closely your interesting articles on the concept of “Bottom of the pyramid” marketing or markets for poor, which seems relatively unknown in Nigeria, despite the glaring huge opportunities in the country for it to strive. What do you suggest could be done to make it gain grounds in Nigeria? – David Jatto
Sebagai markets for poor or Bottom of the pyramid (BoP) marketing is gaining so much grounds, in terms of adaptation to various business models and successful applications in benefiting communities, I am quite convinced about its success in Nigeria. This is more so when there is a clarion call for all hands to be on deck towards poverty alleviation in the country.
With more than 50 percent of Nigeria’s citizens living under $1.5 per day (the globally accepted poverty line), in spite of being the 7th largest exporter of crude oil in the world; and over 80 million Nigerians known to be living in the rural areas (with an obvious majority classified as poor); then the urban poor forming a significant part of the 13.41 percent of the country’s urban population; these are pointers for us all to have cause to look in the direction of imbibing whatever it takes to adopt BoP in Nigeria.
For the benefit of ‘new’ readers, I am a strong advocate of adopting a market approach to development, hinged on the “bottom of the pyramid” marketing concept – The creation of a market for products which are useful to the poor and allow them to get out of the poverty trap. This is hinged on a new appreciation of the importance of the role of the market system in reducing poverty for economic growth (a very vital aspect in efforts to reduce poverty).
To make marketing system work for both the rural and urban poor in Nigeria, governments (both at the federal and state levels) and development organisations should collaborate to evolve various initiatives to facilitate this. These ‘new’ readers could get a clearer definition of the concept, markets for poor or Bottom of the pyramid marketing, by requested for online casino earlier articles entitled, Marketing to the poor(Parts 1 and 2); and Markets for poor and research institutes. They can achieve same outcome by visiting the business section of “laporan” (Nigerian online news/other purposes portal).
As private sector concerns mainly in the Americas (US, Canada especially) and Europe have become awakened to the realization that businesses can also benefit from alleviating poverty through innovative business models that could bring ‘goodies’ to the poor, the private sector in Nigeria should go a step further (from typical corporate social responsibility efforts, and selling cheap goods to the poor) to deriving excess production capacities and seeking growth opportunities which abound in these markets where the poor constitute essential parts of the value chain.
I urge Nigerian entrepreneurs to refrain from that mentality of finding the fortune at the bottom of the pyramid (through selling inferior and cheap goods to the poor, perceived as Mumu), to creating the fortune with these at the bottom of the pyramid, who comprise a very large market. To make BoP marketing work successfully in this country, the entrepreneur must realise that as a market creation approach to development, it embodies a strategy which combines these aims: (sebuah) Supplying poor people useful and affordable products with a high poverty alleviation impact, and (b) Creating a viable business as a private delivery channel, preferably to be run by poor people.
The emphasis in this regard must be a market creation approach highlighting products which have high poverty alleviation impact. It should be noted that business models that are inclusive of small-scale producers can be made beyond efforts to promote corporate social responsibility (CSR), based primarily on securing supply and reducing costs.
Even where I realize that business models adopted for BoP, which works in one environment may have negative outcome in another (bearing in mind intricacies of human reaction to initiatives), this concept which may seem ‘scary’ to the private sector in Nigeria should be introduced with the involvement of both the government and development organisations, for effectiveness.
To achieve success, the private sector here should always realize these three key elements in market creation approach to development:
1) Need-based product development – For products with a high impact on poverty alleviation (with affordability and high returns on investment being essentials); (2) The promotion and marketing of these products for the poor to learn about their existence; and (3) Creating a market for these products (To the extent of being viable for the private sector to deliver them as a business).
To make BoP marketing work in Nigeria, a combination of the three parties stated above (yaitu. private sector, government, and development organisations) must ensure the adoption of “inclusive business models”. This depicts the direct participation of the poor in related ventures. Dengan kata lain, these businesses should not leave behind the rural farmer, which makes for the voices and needs of those actors in rural areas in Nigeria to be recognized.
This can be exemplified by a situation where retail buyers and processors bypass markets where large traders have a stranglehold, to deal directly with the rural milk sellers (mis. a milk and yoghurt processor, in Niger state, working around milk traders who are middlemen, and securing a small-farmer supply base).
While more details of workable business models applicable to the BoP concept, and help in changing the lives of the poor in Nigeria will be highlighted later in this piece, it must be emphasized that efforts to help the rural and urban poor in Nigeria through BoP marketing, can be successful across different industries, ranging from health care and finance, to fast-moving consumer goods and energy. What remains essential is the arousal of interests of essential players to take up the gauntlet towards ventures aimed at lifting many out of poverty, and making profits too.
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