With a ready market of 4 billion people in lowest tier of the economic pyramid, multinationals have a huge opportunity to improve their bottom line. However, to serve that market, they need to adopt a different approach.
With
growth stabilizing in the developed countries,
multinationals have to look for growth in the emerging
markets of China, India, South-East Asia and Latin
America. China is now Eastman Kodak's second biggest
film market after the US and sales in China are growing.
In India, Gillette has made a strategic shift from its
high-end disposable blades and other high-end products
to focus on the high-volume mass, double-edge segment.
However, these emerging markets have unique
dissimilarity from the developed countries, the aspiring
poor. According to Prof. C K Prahalad and Prof. Stuart L
Hart in the article The Fortune at the Bottom of the
Pyramid, "the real source of market promise in
these emerging markets is not the wealthy few or the
emerging middle-income consumers. It is the billions of
aspiring poor who are joining the market economy for the
first time."
The
size of this huge Tier 4 market is 4 billion and is
increasing. Prof. Andrea Hershatter, Assistant Dean and
Director of the BBA Program, Senior Lecturer in
Organization and Management, Goizueta Business School,
Emory University says, "the question is whether the
current portfolio of goods and services available on a
worldwide basis can be delivered to the market that
desires and can afford them at a reasonable
profit." |
