Micro Marketing - Marketing people at the bottom of the pyramid

The bottom of the (economic) pyramid consists of the 4 billion people living on less than $2 per day. Mr. C.K. Prahlad in his famous book “the Fortune at the Bottom of the Pyramid” emphasizes that these people can turn as resilient and creative entrepreneurs and value conscious consumers and would lead to a new world of opportunity.

Marketing of Microcredit to the people in the bottom of the pyramid has helped in building up new entrepreneurs in the society. The banks were able to tap into this large market to extend their reach. They were able to keep their transactions costs low and also ensured a higher repayment rate. The Micro Finance Institution (MFI) was in their turn able to scale up their operations with more financing owing to their access of more credit products. This has turned out to be a win-win situation for both.

Such success of Microcredit business should not be only attributed to the banks and other financial organizations for their willingness to lend these people but to the successful development of Self Help Groups (SHGs) who help in bridging the gap between the financiers and the consumers. The SHGs and their Bank linkage have provided these SHGs, with the capacity to increase their capital base to fund more members and bigger projects. It is estimated that there are at least over 2 million SHGs in India. Some SHGs are networking among themselves into federations to achieve institutional and financial sustainability. According to APMAS, 1.6 million SHGs have been bank-linked with cumulative loans of Rs. 69 billion.

These SHGs have become a back bone in marketing the credit products of the MFIs and Banks in India. The reach of these SHGs could be leveraged to market other products to the people living at this level of the pyramid. Owning to the lesser income of these people certain products would surely need customization to get accepted. Companies engaged in segments like Consumer durables, Automobiles, FMCG, Healthcare and other Financial Services can take advantage of these network to market their products. This could help tap a greater untapped market giving them advantage in revenue and growth terms as well.