The Wall Street Journal/MIT Sloan Management Review published a disturbing paper on why Western companies are failing to transform the Bottom of the Pyramid into a booming consumer market. The author argues that the base of the world’s economic pyramid – where people live on $2 a day or less – isn’t panning out as a market because potential consumers “haven’t been conditioned to think that the products being offered are something one would even buy.”
To support his argument, he cites the case of PUR, a low-cost water purification system developed by Procter & Gamble. The product provides the obvious benefit of affordable clean water where the risks of drinking contaminated water are high. But curiously, PUR* achieved low market penetration rates in test markets.
Why would consumers reject a product as salient as PUR? The author contends that Western companies simply haven’t created demand among low income consumers. “Companies must create markets—new lifestyles—among poor consumers,” he insists. His prescription is that Western businesses need to do a better job “conditioning” low-income people to be better consumers. Really?
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