Case 3-3 Marketing to the Bottom of the Pyramid

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intermediaries were bypassed, and ITC gained a direct contact with the farmers, thus improving the efficiency of ITC’s soybean acquisition. To achieve this goal, it had to do much more than just distribute PCs. It had to provide equipment for managing power outages, solar panels for extra electricity, and a satellite-based telephone hookup, and it had to train farmers to use the PCs. Without these steps, the PCs would never have worked. The complex solution serves ITC very well. Now more than 10,000 villages and more than 1 million farmers are covered by its system. ITC is able to pay more to farmers and at the same time cut its costs because it has dramatically reduced the inefficiencies in logistics. The vast market for cell phones among those at the BOP is not for phones costing $200 or even $100 but for phones costing less than $50. Such a phone cannot simply be a cut-down version of an existing handset. It must be very reliable and have lots of battery capacity, as it will be used by people who do not have reliable access to electricity. Motorola went thorough four redesigns to develop a low-cost cell phone with battery life as long as 500 hours for villagers without regular electricity and an extra-loud volume for use in noisy markets. Motorola’s lowcost phone, a no-frills cell phone priced at $40, has a standby time of two weeks and conforms to local languages and customs.
The cell-phone manufacturer says it expects to sell 6 million cell phones in six months in markets including China, India, and
Turkey.
BOP MARKETING REQUIRES
CREATIVE FINANCING There is also demand for personal computers but again, at very low prices. To meet the needs of this market, Advanced Micro Devices markets a $185 Personal Internet communicator—a basic computer for developing countries—and a Taiwan Company offers a similar device costing just $100.…...

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