Monday, October 22, 2012

Cheap cars and tablets : What if those at the bottom of pyramid don’t want to be cheap?

Sometime ago, the late business guru, Prof. CK Prahlad caught the imagination of marketers by coining the term bottom of the pyramid with his seminal article in Harvard Business review, followed by the book. The idea caught on and scores of case studies were published on the topic. The technologist in me, watching the innovations in marketplace, finds it fascinating that few have cracked the holy grail of technology-BOP. A few recent examples:
  • Just last week, Ratan Tata who had captured global imagination with a two-thousand dollar (one lakh rupee) car reflected on how it was time to look beyond that vision (ref:  Ratan Tata admits to making mistakes with Nano)
  • And now the $40 tablet tries to compete in the crowded tech marketplace.
One can logically argue how marketing "cheaper" products to those who can’t afford pricier brand makes sense. However, the logic doesn’t seem to fly in the marketplace where end consumers – folks who can’t afford anything more than cheapest brands – still aspire for products perceived to be branded.

Bottomline: What if those at the bottom of pyramid don’t want to be "cheap"? I guess there is a niche for cheaper cars and tablets in developing (read “third world”) markets, but the consumers there are as savvy as those in the developed markets. It will be interesting to see how Tata’s Nano and Datawind’s Ubislate 7Ci continue to innovate in the marketplace.