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Pyramid Is The Largest, But Poorest: Socio-Economic Group

The document discusses the bottom of the wealth pyramid (BOP), which refers to the largest but poorest socio-economic group comprising 2.7 billion people living on less than $2.50 per day. It explores how businesses can profitably target this emerging market through innovative products, services, and business models tailored to the needs and capabilities of low-income consumers. The wealth pyramid is used as a graphical representation showing that as wealth increases, fewer people control larger proportions of total wealth.

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41 views2 pages

Pyramid Is The Largest, But Poorest: Socio-Economic Group

The document discusses the bottom of the wealth pyramid (BOP), which refers to the largest but poorest socio-economic group comprising 2.7 billion people living on less than $2.50 per day. It explores how businesses can profitably target this emerging market through innovative products, services, and business models tailored to the needs and capabilities of low-income consumers. The wealth pyramid is used as a graphical representation showing that as wealth increases, fewer people control larger proportions of total wealth.

Uploaded by

hansdeep479
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The bottom of the pyramid, bottom of the wealth pyramid or the bottom of the income

pyramid is the largest, but poorest socio-economic group. In global terms, this is the 2.7 billion
people who live on less than $2.50 a day.

The phrase Bottom of the Pyramid (BOP) was used first by the president of United States
(US), Franklin D. Roosevelt, on seven April 1932 in his radio address, ‘The Forgotten
Man

The wealth pyramid. As we move higher and higher up in


wealth we find fewer and fewer people having that wealth and vice versa.

The BOP is a concept of dividing the world into an economic pyramid by keeping the privileged
on the top and unprivileged poor at the bottom. Businesses need to adopt innovative ways of
doing businesses in a market consisting of billions of underprivileged poor consumers. However,
the main question is, does this huge segment have the capability of becoming profitable for
companies? This research analyzes the viewpoints of various theorists and organizations about
the agreed income level of a typical BOP and in doing so attempts to arrive at an ideal definition
of the BOP market for businesses. Further, the research is critical of including only income as a
major determinant of the BOP and incorporates broader (social and educational) dimensions
while establishing the boundaries of an ideal BOP market assuming that income cannot solely
measure poverty.

The BOP is an unexploited emerging market worth trillions of dollars to be taken advantage
of by companies that are striving hard to tap into an already maturing market. To tap a huge
segment of the BOP, companies need to reconfigure their business assumptions, models,
and practices (Nicole, 2003). Any company, irrespective of size, seeking profitable
business in the emerging market of the BOP requires new products or services or a new
way of doing business and hence needs to innovate
The pyramid is a graphical depiction of inverse relationship between two variables as one increases
the other decreases. We find that the percent of world wealth and the percent of world population
controlling it are related with each other in an inverse relation. If we plot the world wealth in percent
terms along the vertical axis of a graph and the corresponding percent population having control on
it on the horizontal axis of a graph and add the mirror image of this graph on the left side of the
vertical axis we get a wealth pyramid and can see that as we move to higher and higher wealth
brackets we find that fewer and fewer people have access to it, thus the figure has a wide bottom
and a lean top similar to the pyramids of Egypt.

Approximate visualisation of the wealth pyramid


when 1% population controls 50% of the wealth

It has been reported that the gap between the ToP and BoP is widening over time in such a way that
only 1% of the world population controls 50% of the wealth today, and the other 99% is having
access to the remaining 50% only. [13][14] On the basis of this report the wealth pyramid would look like
the one shown in the illustration.

One of many examples of products that are designed with needs of the very poor in mind is
that of a shampoo that works best with cold water and is sold in small packets to reduce
barriers of upfront costs for the poor. Such a product is marketed by Hindustan Unilever.

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