Inferencing from Marketing to the Bottom of the Pyramid

Abstract

The bottom of the pyramid is referred to the portion of the pyramid which falls in the lower tiers of society based primarily on their income levels or low standards of living. These people show tendencies of shrewd shopping and a desire to join the upper tiers but since they lack the financial support to do so, they often satisfy their needs by buying products that are either master imitations or made by competitor brands which are aimed at providing a similar experience but at a lower cost. Analyzing this segment of society is beneficial because, during the current recessionary period, people lying in the upper socio-economic classes often have a change in their shopping attitude and show similar tendencies. Marketers can benefit from this study as there is little to no research material available regarding this field and they will be better able to apply the different factors of Marketing (such as Product attributes, Distribution networks, the Price of product and the promotional activities) which are directed towards marketing to the Bottom of the pyramid.

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Background

The world is experiencing a recessionary period, and this is nothing new for us today as we have experienced previous recessionary periods time and again in the past 50 years. We have witnessed the technology meltdown in Asia and in the United States alone recessions have been observed in 1982, 1990, 2001 and 2007 (which is still in progress) (Isidore, 2008). So we can establish that recessions occur in a cyclical pattern and that every half-decade a recessionary period may come into action.

The bottom of the pyramid refers to that social group of our society that is pressed for money and has to make do with limited budgets and tight spending. These are people who constantly strive to meet the higher social groups and gel in with them based on their material possessions. This is as much a need to fit into a social group as it is to achieve the highest stage of Maslow’s Hierarchy. The hierarchy establishes that people all strive for one ultimate goal. This is the need to achieve self-actualization, which refers to a person’s desire to attain personal satisfaction related to himself (such as the desire to have self-confidence and self-fulfillment).

During recessionary periods people tend to show similar traits as becoming more conscious of the money that they spend and beginning to bargain shop. These people are doing so not because they have any need fulfillment but because the times of the era push them to. Marketers have a lot to learn from studying the Bottom of the pyramid as during recessionary periods people are motivated by the same things such as cheaper prices, better quality, more appealing packaging and other characteristics.

I have selected this topic to conduct research as there is an acute shortage of information pertaining to this segment of society. If we were to analyze the change in importance in the different factors of the marketing mix in times of affluence with the times of recessionary periods, we would have a better chance of saving wastages in organization’s spending and would be able to direct our resources in the correct direction.

This topic has the benefit of also being utilized across borders and can benefit developing countries that have a large population of people who fall in the bottom of the pyramid category. This study can benefit marketers who work in those markets and would be able to provide them with accurate research methods by which they could also conduct research in their own markets and better understand their consumers.

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This research would identify the changing attitudes towards the marketing mix components (product, place, promotion, and price) during times of recession and times when the economy has stabilized. This will cover a span of 3-4 years as we would be better able to create a comparison as it is believed the economy will have returned back to its prosperous self within the next couple of years.

The hypothesis for this research would be that during times of recession, marketers must invest more heavily in decreasing prices while investment in products, promotions and placement is curtailed.

The reason I have selected those variables is that the general attitude of marketers is to cut down prices and compete with their opponents by price-cutting strategies. Through the course of this research, I will find out the authenticity of those claims as well as find out other useful observations.

Theoretical Framework

Going through the article by C. K. Prahalad titled “Bottom of the Pyramid” one can see the potential which lies in understanding how the bottom of the pyramid thinks and acts. Unlike the common misconception that the bottom of the pyramid would buy anything to become part of their socially desirable group, even they reflect on the qualities and overall merits and demerits of the products (Prahalad).

There is very little research, however, done regarding marketing to the bottom of the pyramid as marketers are major concern more on products that offer greater returns per single unit. This leaves an open field for research that can be undertaken.

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What most marketers fail to consider is that there is money to be made at the Bottom of the pyramid as well. The effort is perhaps more than high-end products but due to the sheer number of them, people can make greater returns if marketed right. Walmart has destroyed nearly all of its competition in the retail and grocery side by concentrating on the bottom of the pyramid cues and responding to them in a timely manner.

Similarly, the potential opens for international marketing as we know that the biggest populations currently in the world are China and India. Both of these markets are however concentrated with people lying at the bottom of the pyramid. So marketers in America and Europe should know what triggers their emotional responses into making purchases so that they would also have the opportunity to enter these huge markets and make some earnings (University of Western Sydney, 2005).

Research Methodology

The research will concentrate mainly on a mixture of qualitative and quantitative questions which will be directed towards consumers. A screening cap will be placed which will be determined based on the income range of the people who lie in the bottom of the pyramid category. This would take into account the current inflation period and their savings.

The major reliance on information would be on surveys conducted either online or in-person in communities with low incomes. This would require extensive traveling to localities where people of lower incomes live.

The benefit of this approach would be that people can easily be divided based on their incomes due to their residential addresses. This means that people who earn pretty much the same often tend to live in societies where people of the same earning potential. For example, people living on Malibu Beach could all be believed to be earning in high figures, while those living in the Bronx area would be earning relatively less. This would make highlighting the targeted audience for research easier and survey questionnaires would be filled by people living close by to each other.

The research would aim at identifying the different components of the marketing mix and which play a greater role in influencing consumers buying decisions. The research would use the responses by the consumers to actually

Research Design and Methods

Before the surveys are sent and the questionnaires are made, 3-4 focus group sessions would be conducted which would have approximately 10 participants from different social backgrounds. The members of the focus group would hail from different industries while it would be ensured that 2-3 marketers be present in the group as well. These people would be asked questions regarding their perception of the bottom of the pyramid member’s likes and dislikes, what they believe triggers them to make a purchase and how they would market to this social group.

After the focus group data has been compiled, similar responses would be compiled while outliers (or extreme statements) would be scrutinized as sometimes one opinion, extreme as it may be, might hold some truth. These statements would be extracted from the transcripts and a dummy questionnaire would be created.

This dummy questionnaire would be distributed to a sample of people who lie at the bottom of the pyramid and their responses would be gathered. If there are deviances then the questionnaire would be fixed as a certain degree of deviances can be permitted but if there is more than a certain percentage then it means that the questionnaire is incorrect.

After a final questionnaire has been created it would be distributed to approximately 400 people. Their selection would be based on their geographical residence as it would be easier to distribute and easy to collect as they would be asked to keep the survey with them till someone picks it up from them.

Without the consumer feedback, this research would be futile as understanding what goes on in the mind of a person is very different than what textbooks state.

Analysis and Discussion

The data gathered from this survey would be entered into statistical software and the trends would be observed. The variances in the answers would be seen and the concentration of responses would also be observed as to where the majority of the responses lie.

The data would be given numerical values and put on a nominal scale so that it would be easier to derive mathematical responses from the findings. Since our research is not aimed at qualitative responses general descriptions would not suffice. The results must be given in statistical values so that the findings can reflect not just the overall concentration of responses but provide a concrete measure of the deviance and the margin of error also being accounted for:

Format

The format would include, the title page, followed by the Table of Contents, then the Abstract which would pretty much be the same but with the addition of the research findings included, then the introduction would start which would have the literature review, the overall background of the topic which would include the description of a bottom of the pyramid market, what the research aims to study and the benefits which could be derived from the research. After the introduction stage, the body of the research would begin which would detail the sample size of the final survey and the observations and which studies were applied. The Conclusion would be there which would provide a summary of the research findings and what the researcher learned from the effort. The closing of the research would be with Recommendations and the bibliography.

In short, the headings would be Title Page, Abstract, Table of Contents, Introduction, Research Findings, Conclusion, Recommendations. The MLA format would be used in preparing the paper.

Timeline

The overall time which would be required for this research would span over 3 years approximately and could either go longer or fall shorter. This depends on the factors which include the survey response rate and how easily the initial stages of the focus groups and literature review are conducted.

The first couple of months would be used in scouring through libraries and databases to find any similar research work which may have been conducted. This would take around 3-4 months. After I have gathered a significant amount of material, local or international papers, I would pore through them to find any useful linkages and material which I could use for the purpose of my research. This would be grueling as I would be going through a lot of papers critically analyzing them for useful material. I expect another 4-6 months for this task.

After that, I would conduct a focus group and this would not be so time-consuming but the findings from this would. The focus group transcripts would be made and the relevant points and discussion loci would be read and re-read. This I believe would take around 1-2 months.

The dummy survey would be taken and administered in a small sample size. This survey would be conducted personally and its responses would be analyzed within one month to check for validity. If it is found lacking it would be debugged and re-administered on small sample size. If it passes the test then the survey would be administered to a larger population. This I believe would be more time-consuming and would take approximately a better part of a year to do.

Another 6 months would be required for the compilation of data and analysis portion of the work to be conducted. Consultations with other seniors would be taken to improve the resulting quality during this period.

Finally, the last part of the research would be noting down all the work done and preparing the final paper. This would take around 3-4 months if done carefully and with due deliberation. This makes the period of research total to a maximum of 2 years and ten months. But this can end sooner if all things go smoothly.

Budget and Resources

The major costs would be basically related to the printing and distribution of the surveys, the compensation or meal provided to the members in the focus group and the overall upkeep of the researcher.

The extra costs would be in purchasing a computer system and the relevant software with which to analyze the findings and the cost of disbursing and gathering the questionnaires. There would be savings in the manner that the majority of questionnaires would be distributed in each location and no far-reaching destinations would be needed to be accessed. The candidates for the survey live close to each other so it would make it easier to distribute the questionnaires and the cost would decrease due to that.

Other costs would include stationery, telephone calls (for calling up people for focus groups or other reasons) and the overall upkeep of the researcher as this research would be their utmost priority.

References

Isidore, C. (2008). It’s official: Web.

Prahalad, C. K. (n.d.). Bottom of the Pyramid. 2009. Web.

University of Western Sydney. (2005). International Marketing at the Bottom of the Pyramid. 2009. Web.

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