Write one paragraph comment on both articles.
FOR EXAMPLE: When reading your response, I feel as though you made some very valid points in order to support your ideas. When reading the article, It was interesting to read some of the many obstacles that are faced by companies who are looking to enter new markets, especially those markets with low income consumers.
It is unfortunate the barriers to entry are so critical that companies choose to avoid these markets due the major changes that are needed in order to effectively adapt to the environment and meet the needs of the consumers. I agree with you when you mentioned the importance of adaptation. I believe this is the most important and effective strategy when entering a new market.
The example you gave about SC Johnson was a good representation of the importance of knowing what the consumer needs. Although products can be sold at a lower price, it is important to market products that serve a purpose to consumers, especially when they have limited spending power
Article 1
The article does a good job explaining why multinational firms struggle to compete in bottom of the pyramid markets such as parts of India, China and others. They explain the difficulties on targeting products to people who only make a few dollars a day. The way to overcome this is to adapt their business models for those types of environments.
These models are drastically different from core markets. So, basically, multinational companies are doing a combination of innovating and adapting their products for the bottom of the pyramid markets.
The article talks about Kenyan farmers. They don't buy fertilizer, even though they are aware of its benefits, because they can't afford the 50-kilogram bags it comes in. If the company modified the bags to a smaller size, it would be one way to overcome the cash-flow barriers and getting less wealthy people to purchase their products. Even though it's in smaller amounts, more people would be able to afford it.
One of the examples that comes to mind after reading this article comes from I think last week's discussion. It talked about how food companies such as Kikkoman would package their soy sauce into smaller packages because their consumers in China and other parts of Asia who couldn't afford "normal" size bottles could afford it.
The smaller packages would be around the size of the to-go packets that you would typically find in fast food restaurants such as McDonalds, Burger king, Wendy's, etc. Obviously the cost of this package size is much less than the standard and the company wouldn't be making as much, but it fills the gap and keeps them competitive in the bottom of the pyramid market.
Article 2
After reading this article, I believe that adapting your product is the best way to get the product to the consumers at the bottom of the pyramid. I did one of my article assignments on Coke and Pepsi in the beginning of the semester. They tried to sell there products as is when they entered the Indian market, but it wasn't working. They ended up changing the packaging and making smaller packaging and and a more easily affordable product. This helped them to capture the part of the market that they were after.
Many companies try to sell 'their' product instead of selling the product that the consumer wants. They also place a lot of emphasis on what they feel the customer needs. I personally am on a very strict budget. I don't want to spend any extra money on things that i need. There is a certain feeling you get when you can buy something that you really want. I recently purchased a no name big screen television a t an extremely low price. The feeling I got from the purchase made me so happy.
The company that I bought it from is relying on me, the consumer to be on the lower end of the purchasing pyramid. They knew what I wanted and since they are not a large company that relies on marketing and advertising, they made a product similar to the brand names that I could afford.
Many companies that create generic products are adapting their product for the bottom of the pyramid. They are gaining profits from the people who need these product and cant afford brand name, but they are also gaining profits from the people who have the money, but want a good deal. I believe that companies should try to sell customers what they want first and then extend their product base once they have customer loyalty behind them.