BOP

FMCG giants looking at the bottom of the pyramid, the prominent term
coined by Prof CK Prahlad, tend to have an interesting problem. The
costs of selling goods at the BOP are some 5-10% more expensive than
selling in the urban areas. The masses spread across the country only
add to the transportation costs. ITC's echoupal initiative was
estimated to break even after 7 years. With all this, what can be done
in order to penetrate these markets? And is it really worth?

The answer is yes. Urban markets being already saturated with FMCG
companies with squeezing margins selling their products. They are in
the dogs stage of the BCG matrix. So growth can only come from the low
income areas.
Operational efficiency apart, in what ways can be ensure proper
growth? Concepts of echoupal are being replicated and competition is
killing margins. We need to look at opportunities to sell products at
low cost.