Gurgaon: The Base of the Pyramid (BOP) segment in India is estimated to be a USD 1.2 trillion market, out of a global USD 5 trillion BOP market excluding China. In purchasing power parity terms, the Indian BOP market contributes to about 85% of the total national household market. While the opportunity is huge, the challenges of an informal economy have not let businesses utilize this potential to the full. Managing and overcoming the typical characteristics of Emerging Markets, such as market heterogeneity, sociopolitical governance, unbranded competition, chronic resource shortages, and inadequate infrastructure, requires deep market insights. These insights can be developed through research specific to the Indian BOP market and cannot rely on findings obtained from research on the developed economies.
In order to understand the constantly changing and challenging market scenarios, India’s premier B-school MDI Gurgaon organized a Roundtable Discussion on ‘Driving growth in India by serving the BOP segment’ on 04 July 2018. The roundtable was mentored by renowned marketing Guru, Prof. Jagdish Sheth, Charles H. Kellstadt Chair in Marketing, Goizueta Business School, Emory University, Atlanta, USA.
The seminar witnessed participation of Industry stalwarts from Tata Communications, Google India, Maruti Suzuki India Limited, Max Healthcare, Jabong, Future Brands Limited, Businessworld Media Group and exchange4Media Group, Bata India, HP, Magicbricks.com, SRF Foundation, CBRE, The MargDarshak Inc., IL&FS, Global Team Blue (Ford), Excel4apps, Arvind Fashions Limited, Smartron, HarVa XPO and Lava International Limited.
The discussion majorly evolved around on how low income consumer market worldwide is growing faster than the economic growth. India’s market is at least $1 trillion which is highly unorganized and unbranded. The discretionary income is greater among the low income consumers because they pay no rent, no taxes, and gets subsidies from the government. Access of serving this low income consumer group is a challenge as they live in rural markets, which are unorganized and fragmented. The big Indian industries should have a separate segment to take care of the rural market, from product designing to supply chain management.
The market opportunities at the Base of the pyramid are open for technological innovation with a challenge to recognise the potential and uniqueness of these markets. It is important to understand the unbranded competition.
Prof. Jagdish Sheth while sharing his valuable insights highlighted the significant role which recent government initiatives like Make in India and Digital India will play in organizing lower income consumer market through scale and efficiency.
The industry players present at the roundtable brainstormed on how the unexplored rural market and low income consumer group can be tapped through innovative marketing strategies like converting unbranded to branded consumption, non users to users, developing used market, inventing new ways to distribute products, developing aspirational brands, repackaging the products to make it affordable.
Speaking on the occasion Dr. Himadri Das, Director MDI Gurgaon said “We are considering setting up a centre for base of the pyramid marketing, to be mentored by Prof. Jagdish Sheth, basically industry consortium centre which will provide a platform for industry based research”.
The seminar was also attended by MDI Faculty members and research scholars. Prof. Sheth emphasised on time management and stress management as key factors in balancing multiple demands in life. Teachers should commit to news worthy research, memorable teaching and transformational service.