1. Do you think the base of the pyramid represents an attractive and appropriate market for multinational...
Question:
1. Do you think the base of the pyramid represents an attractive and appropriate market for multinational corporations? Why or why not? For which products or services might this market be most appropriate?
2. If customers at the base of the pyramid could be convinced to allocate some of their meager income to products such as cigarettes, alcoholic beverages, or cosmetics, would it be socially responsible for multinationals to pursue such opportunities? Why or why not?
Professor C.K. Prahalad popularized the term “Bottom of the Pyramid” to refer to the approximately 3 billion people who survive on less than $2 per day, where basic survival needs are just barely met. Prahalad suggested that this large mass of humanity should be viewed as having tremendous market potential with untapped purchasing power, if only appropriate ways were found to service them. In addition to being a large market for multinationals, serving these consumers could benefit them and help alleviate poverty. However, although the absolute number of such consumers might be large, critics questioned whether the economics associated with serving these consumers would prove to be sufficiently compelling, and whether a profit-oriented focus on the world’s most impoverished people was appropriate from an ethical perspective, especially when marketing products that might be viewed as lower priority for health and development, for example.
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International Business
ISBN: 978-1259317224
1st edition
Authors: Michael Geringer, Jeanne M. McNett, Michael S Minor, Donald A Ball