E-commerce : The Bottom of Pyramid Approach
For centuries and most of the decades in the 20th century (i.e when computer was invented) access and communication was the tool of rich and ultra rich people, prohibitively expansive to 'not so rich' and 'not at all rich' people. All marketing research and development was focused on the 20% of the market based on the management principle 80:20, ignoring the vast 4 billion people who are at the bottom of the pyramid( read Fortune at the Bottom of Pyramid by C.K. Prahalad, Wharton Publishing).
In 1990s, Internet came along and change the paradigm of whole global market. Because here we have a great tool "Internet" a very efficient, very potent to penetrate the earlier thought impregnable market sec. For most if the time it is the exposure to the outer world and information is necessary to make any decision and growth of any section of society or part of world. Internet is playing that role very efficiently.
Internet is a Mass product. Here power lies in the hand of individuals, rich or not so rich(This terminology is taken from Fortune at the Bottom of Pyramid by C.K. Prahalad, Wharton Publishing). General theory of market states (i) Top end market is value driven. (ii) Bottom end market is volume driven.
Through these two anomaly, we can clearly recognize that Internet companies are focusing on the second approach and that is what CK Prahalad call Bottom of Pyramid(BOP) approach in his path breaking book Fortune at the Bottom of Pyramid.
I can give a big list of such companies, but for instance take some shining stars of today Internet economy. (i) ebay.com (ii) aol.com (iii) clickbank.com (iv) Google.com
We will study the Mother of all search engine Google and its approach to BOP.
Lets compare the Google strategy and its behemoth competitors( well not today, but in formative days of Google when it matter most.) Google is a search engine based on Pay per click(PPC) approach to the internet economy. In formative days, Google done exactly what others thought and well recognized by the Gurus that the model is not viable and Google will be doomed to graveyard.
Most of Dot Coms or brick and mortar companies on internet were making money for advertising. They charge for the advertising space they provide to the advertiser and charge them for a fixed duration and also all these prepaid only. This approach was already imminently followed in TV advertising and to some extent very successful. Advertisers did not had any options. For them it was dark space to jump into. They did not had any control even after paying handsome sum for space on Net.
See the other side of the coin. The consumer( technically visitor) were not part of revolution. Even if they were, they were used to be only exploited for generating huge profit for firms operating on the Net.
Google came to foray with a refreshing style and a very uncommon approach to the market. 1. No Images on its main page. ( there is option available in other pages but not very popular.) 2. Tool and services for the common people. 3. Free for all( even sometime for advertisers also)
See where is the money? I guess 90% would not see any or many.
Google spread its wings on net through word-of-mouth marketing and keeping a intense focus on the common people using internet. In the process Google developed it owns marketing and revenue generation model with empowering the common people, who worship Google( I can be counted one of them).Google invented many new model which was never thought before.
(i) Google adsense
(ii) Google Adwords
(iii) Froogle ( similar to ebay.com but free for all.)
(iv) Google Search
Seeing deep into Google strategy and approach to net economy we can define two things.
(1) Focus on common people in big volume in terms of purchasing power
(2) In the process give more control in their hands, empower them to generate more purchasing power and habit to help yourself as well as the industry.
See two very bottom level examples.
(1) Jon Gales, the owner of the www.mobiletracker.net makes close to $5000 per month just by using Google adsense. Take notice, he is merely a happy go lucky child of 19 years.
(2) For small time people who want more sales to be generated for their small time business uses Google adwords and Froogle. Even if they do not any business product, they can sale someone else product and have a handsome money in exchange for working for someone else at their own home.
Does it make a company commercially viable? Do not ask me. Watch it.
Seth Gobin a well known online advertising consultant and former Yahoo employee, used to be dubious about Google's prospect. Not anymore " They have created the first new and effective Ad medium in last 50 years. It's brilliant" He says.
Napolean hill, author of Law of success state in his book," No man can rise to fame and fortune without carrying others along with him. It is simply can not be done."
It takes continuous hard work with great series of innovation in product designe, process innovation and marketing and a long period to reach ( in mature economy or market) where Google is today.
Google 6 year $321mn
EBay 9 year $322mn
Yahoo 10 year $260mn
Amazon 9 year $114mn
In his book " The fortune at the Bottom of Pyramid" C.K. Prahalad state,"?..what is needed is a better approach to help poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged and at the same time, the companies providing product and services to them are profitable."
I accept common people on net are not poor. But see into deep meaning of C.K. Prahalad statement,"- ??where the poor are actively engaged and at the same time???..". That's what e-commerce model I am talking all about. They are not poor but they are active ready to change their buying behavior. Buying behavior change is the most awesome milestone still to reach in the e-commerce to really blast off the internet economy. According to Napolean Hill, you need to help the common internet folk to see what internet can do for them.
Gil Penchina, vice-president, eBay International state," It's all about getting more people on the system(eBay). People on net follow very simple system. They get online almost always because they want email, then they start reading news, then they shop. Once they value in shopping, they shop repeatedly. That's when they realize they can sell too."
By actively involving common folk they will get more trust into e-commerce. To achieve this amazing rate of growth, e-commerce community has to accept the "inclusive Capitalism" approach. Common Internet people need to be given a big opportunity to tap into the awesome big time opportunity on internet. According to CK Prahalad, to tap into BOP segment " Trust is prerequisite". Big corporate or small one need to build this bridge of trust to tap into this big volume market segment.
In case of Google, it is famous for it unconventional approach and infamously trusted for unorthodox management approach of its founders Lary Page and Sergey Brin. Google just do not comprise on integrity for profit in its search results. Its user can always trust Google for its integrity to receive full support from Google for their small or big business.
Am I seems too madly in love with Google? Believe m, I am not alone.
--------------------------------------------------------------------
You can access the same article at Nuttymarketer.com website at : http://www.nuttymarketer.com/green/gorilla_marketing_ecommerce1.htm
This research work for this report is done by Mr. Arvind Kumar, founder, www.Nuttymarketer.com You may reach him at arvind@nuttymarketer.com .
About the Author: Arvind Kumar is an Electrical Engineer from a premier Institute, Indian Institute of Technology, Delhi, India. He has 3 years experince in marketing business consulting services and marketing services. He is founder and CEO of nuttymarketer.com
 Google News Updated : Tue, 07 Oct 2008 20:50:00 GMT AIG's ex-CEOs blamed for crisis - CNNMoney.com
CNNMoney.com - House panel chairman says executives got undeserved riches, while ex-CEOs blame accounting rules and market conditions for leading to $85B bailout. Joe Cassano: The Man Who Brought Down AIG? AIG CEOs Blame Each Other, Accounting for Insurer's Downfall Publ.Date : Tue, 07 Oct 2008 19:11:18 GMT Sleuth's Presidential Debate Watch Game - Washington Post Washington Post - Tonight's debate watch games probably won't be as much fun as last week's Palin Bingo. But don't fret, there are still games to be played during this second presidential debate between John McCain and Barack Obama. 'Aggressive' debate expected between McCain, Obama * McCain looks for way to stop Obama's momentum Publ.Date : Tue, 07 Oct 2008 20:08:21 GMT Thai Army Sends Troops to Help Police Keep Peace - Washington Post
Washington Post - Thailand's military agreed Tuesday to deploy hundreds of unarmed soldiers to the streets of Bangkok to help police restore order after violent clashes between police and protesters that left at least 1 person dead. Video: Raw Video: Tear Gas Fired at Thai Protestors Troops deployed as one dead, hundreds hurt in Thai protests Publ.Date : Tue, 07 Oct 2008 16:12:03 GMT Cough, Cold Drugs Not for Kids Under 4 - WebMD
WebMD - By Miranda Hitti Oct. 7, 2008 -- Don't use over-the-counter pediatric cough and cold drugs in kids younger than 4. Leading makers of over-the-counter pediatric cough and cold drugs are putting that message on the products' labels, according to the ... Cold, Cough Medicines for Children Get Added Warnings (Update3) Drug Companies Say No Cold Meds for Kids Under 4 Publ.Date : Tue, 07 Oct 2008 18:48:20 GMT Wells Fargo may get lion's share of Wachovia deposits: report - MarketWatch
MarketWatch - By John Spence, MarketWatch BOSTON (MarketWatch) -- Wells Fargo & Co. may get as much as 80% of Wachovia Corp.'s deposits, with the remainder likely going to Citigroup Inc., according to a published report Tuesday. Citi, Wachovia, Wells temporarily halt litigation Wachovia shares waver as Citi, Wells Fargo wrangle Publ.Date : Tue, 07 Oct 2008 20:17:51 GMT Bernanke hints at possible interest rate cut - MarketWatch
MarketWatch - By Greg Robb, MarketWatch WASHINGTON (MarketWatch) - Federal Reserve Chairman Ben Bernanke opened the door on Tuesday for a possible interest rate cut to help rescue the economy from a severe downturn, admitting that the global panic in the financial ... Video: Bernanke signals possible rate cut Bernanke: Economic outlook weaker Publ.Date : Tue, 07 Oct 2008 20:18:10 GMT Qantas Involved in Another Air Incident - New York Times
New York Times - By Liz Robbins It has been 20 years since Dustin Hoffman’s character Raymond Babbitt in “Rain Man” made Qantas synonymous with air safety, claiming he would only fly the Australian airline because it had never crashed. Qantas passengers arrive in Perth after mid-air ordeal Fifteen badly hurt as Qantas jet drops Publ.Date : Tue, 07 Oct 2008 20:24:06 GMT Get Paid for Surveys |
PARLOT::Ebooks, Scripts,
Websites, and more... What if you've done a variety of marketing activities over... Read More Most businesses realize that they are simply a click away... Read More If you don't get this right, you can just forget... Read More With the continued proliferation of the Internet, the meaning of... Read More No doubt you started this year with some big ideas... Read More Sales are down, and I need more customers now! Sound... Read More 12/20/04According to a recent article by ComScore Networks, about three-quarters... Read More How Colors Effect Our Emotions?One of the most interesting things... Read More Exhibiting overseas is one of the fastest and most cost... Read More Online Communities are all over the Internet and attract lots... Read More What is enthusiasm?Well, consulting good ol' Mr. Webster, you could... Read More How do you personally define success? High income? Substantial net... Read More Same old same old just doesn't sell anymore. To... Read More Qualitative research, whether individual interviews, in-homes, focus groups, ethnographies and... Read More So you just dropped a tidy sum to attend a... Read More Recently, I stopped by a new car wash in my... Read More You may not realize it, but you already have a... Read More Why give freebies?We have all seen freebies at trade shows... Read More Small companies that rely on business-to-business sales often find it... Read More With all the shuffling that's been seen in the search... Read More If you want to double your business, then you need... Read More The difference between a successful business and one that just... Read More Market research is a critical component of any marketing strategy.... Read More Triple your response from expos by avoiding the top ten... Read More The marketing decisions you make for your new business are... Read More
Adsense
websites
Determining Marketing Effectiveness Even If You Didnt Track
Translation and Your International E-Commerce Strategy
Have Something Good To Say
Todays Definition of Marketing. Has It Changed?
5 Steps to Success: A Surefire Way to Achieve Your Goals
5 Ways to Market for Immediate Results
Consumer Thinking And Search Marketing
Make More Sells With Colors
The A-Z of Exhibiting Overseas
Online Communities - A Marketers Wildest Dream and Worst Nightmare!
Why Your Sales Copy Should Be Written As If It Will Never Be Read At All!
Marketing Success Defined
Five Tips to Make Your Marketing More Creative
How To Choose a Qualitative Research Market
12 Lessons I Picked Up from Attending Seminars
The Added Effectiveness of Promotional Products in Your Marketing Plan
The Secret to Adding Credibility to Your Business ? Testimonials!
FREE Means MORE Business
Building Credibility for Your Business
Are Keywords Destroying the Flow of Your SEO Copy?
Provacative Research Works
Increase Your Sales By Following-Up
Collecting Customer Data The Easy Way
Top Ten Blunders Exhibitors Make in Expos/Tradeshows
Top 7 Tips for New Businesses
Affordable and Reliable Web Hosting Starting at $4.49/Month
Marketing Is A Long-Term Investment
"Dig your well before you're thirsty" is the title of... Read More
Does Your Marketing Pass This 10-Point Test?
Good marketing, whatever form it takes, always meets certain criteria.... Read More
Pamphlets and the Money They?ll Put in Your Pocket
People are making a fortune on pamphlets. If you go... Read More
Like Brushing Your Teeth
What do the following things have in common: brushing your... Read More
Whats Your Selling Sentence?
What's your Selling Sentence? If you have a business, you... Read More
Marketing Hat for Graphic Designers or Wannabe?s
Many people think that the quality of any graphic design... Read More
Use Events to Market on the Internet
Having difficulty knowing what to offer people online? Worried that... Read More
6 Simple Ways to Determine Which Marketing Ideas Are Best for Your Business
Did something catch your eye in a direct mailing this... Read More
Direct Mail Formats: How to Choose the Right One for Your Next Mailing
Which pulls the best response, a postcard, a self-mailer or... Read More
Marketing For Profit - 6 Critical Traits
Develop These Six Critical Marketing Traits...And Success Will Surely Follow.If... Read More
Marketing Strategies to Put Yourself Out of Business
Want to learn how to lose a billion dollars?Just follow... Read More
Unique Selling Proposition - Your Competitive Advantage!
To capture a larger market share and be viable, sustainable... Read More
How to Win a Price War
Any economics student can tell you that price is a... Read More
Laws of Marketing ? The 10 Immutable
Most marketers believe that anything is achievable if you are... Read More
Provacative Research Works
If you want to double your business, then you need... Read More
Stay in Touch with Leads and Get More Closes
How many leads have come into your business since the... Read More
Corporate Cleavage
I enjoy cleavage as much or even more than the... Read More
One-A-Day Marketing Vitamins
Is your business growing, or are you on a plateau... Read More
Where Should I Network?
Building business relationships through networking is a great way to... Read More
The Biggest Problem With Your Marketing Is...?
What is the biggest problem most marketers have? Who knows.... Read More
Are You Playing Checkers or Chess?
When you think about how to attract more clients for... Read More
Testing Your Way To Prosperity
I have always enjoyed talking to a Realtor friend of... Read More
Beyond Repair: The Fixed-price Model
Don't get me wrong. I certainly don't think the majority... Read More
How To Be A First Class Marketer?
Did you now how to follow up a new customer... Read More
New Years Planning Critical Success Factors
New Year's is a good time for strategic planning or... Read More
Marketing |