Frugal engineering.” “Indovation.” “Reverse innovation.” These are some of the terms that marketers at GE, Procter & Gamble, Siemens, and Unilever are using to describe efforts to penetrate more deeply into emerging markets. As growth in mature markets slows, executives and managers at many global companies are realizing that the ability to serve the needs of the world’s poorest consumers will be a critical source of competitive advantage in the decades to come.
Procter & Gamble CEO Robert McDonald set a strategic goal of introducing 800 million new consumers to the company’s brands by 2015.
Achieving this goal would require a better understanding of what daily life is like in, say, hundreds of thousands of rural villages in Africa, Latin America, and China.
Consider, for example, that two-thirds of the world’s population— more than 4 billion people—live on less than $2 per day. This segment is sometimes referred to as the “bottom of the pyramid” and includes an estimated 1.5 billion people who live “off the grid.” Such individuals have no access to electricity to provide light or to charge their cell phones. Often, a villager must walk several miles to hire a taxi for the trip to the nearest city with electricity—a trip that is costly in terms of both time and money.
This situation has provided an opportunity for companies to create innovative sources of renewable energy. Solutions include a small-scale,roof-mounted, Chinese-made solar power system that costs $80, underground biogas chambers that generate electricity from cow manure, and scaled-down hydroelectric dams that can power a village from a local stream or river.

Questions
1. Why are companies such as Siemens, GE, Nestlé, and Procter & Gamble targeting the “bottom of the pyramid”?
2. Review the Chapter 4 discussion of diffusion theory. How might an understanding of the characteristics of innovations help marketers succeed in emerging markets?
3. Which types of marketing communications may be necessary to launch an innovative product such as Procter & Gamble’s PUR in emerging markets? Which changes in consumer attitudes and behavior are required for successfully launching a product such as PUR? 

4. Which key concepts discussed in Chapter 1 apply to Nestlé’s experience in Latin America?