The Market at the Bottom of the Pyramid

I finally got down to jotting down some notes from C.K. Prahalad's recent book The Fortune at the Bottom of the Pyramid, I thought I will put them here.

The book starts off on a very ambitious note, and he surely doesn't disappoint the reader throughout the book. Here is an excerpt from the first chapter:

Turn on your television and you will see calls for money to help the world's 4 billion poor - people who live on far less than $2 a day. In fact, the cry is so constant and the need so chronic that the tendency for many people is to tune out these images as well as the message. Even those who hear and heed the cry are limited in what they can accomplish. For more than 50 years, the World Bank, donor nations, aid agencies, governments, and civil society organizations have all fought the good fight, but have not eradicated poverty. The adoption of Millenium Development Goals (MDG) by the United Nations only underscores that reality; as we enter the 21st century, poverty - and the disenfranchisement that accompanies it - remains one of the world's most daunting problems.

The purpose of this book is to change that familiar image on TV. What we need is a better approach to help the 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 products and services to them are profitable.

Now, for some observations that I thought were interesting:

1. There is money at the BOP (Bottom of Pyramid): The dominant assumption has been that the poor have no purchasing power and therefore do not represent a viable market. Prahalad shows that we should take aggregate purchasing power into consideration. To do this, we convert GDP-based purchasing power (for example China with a population of 1.2 billion and $1000 GDP represents a $1.2 trillion economy) into its dollar purchasing power parity (PPP). I think this means that you take into account the local currency and not just the dollar units. Nine countries - India, China, Brazil, Mexico, Russia, Indonesia, Turkey, South Africa & Thailand - collectively home to about 3 billion people, represent about 70% of the developing world population. In PPP terms, this group's GDP/aggregate Purchasing power is $12.5 trillion. This is not a market to be ignored.
2. BOP consumers accept advanced technology readily: This has been clearly shown by the ready acceptables of wireless devices, PC kiosks, etc. in different parts of the world. For example, ITC, the Indian conglomerate, decided to connect Indian farmers with PCs in their villages. This has allowed them to check prices not only in the local aution houses, but also prices of soybean futures at the Chicago Board of Trade! This has helped improved their profit margins, because they now how when to sell, how much to sell, and at what price they have to sell their produce. I thought this was really amazing.

I have to rush out now. I promise a post later in the day covering the other parts of the book.

The joys of Podcasting

I recently got a new iPod (and a cool FM transmitter that beams it to my car radio), and I have been having a great time downloading some great Podcasts - NPR's Science Friday, BBC's In Our Time, and here are some more: NPR's Health & Science, Canada's Quirks & Quarks, Australia's The Science Show, Boston Musuem of Science's Current Science and Technology Show, UC Berkeley's GROKS Science Show, Science cast, Nature's Science Podcast.

Now I can listen to Ira Flatow's Talk of the Nation: Science Friday here in Bangalore. Super cool...

If folks have any other interesting podcast sites, especially on science & technology, please let me know.

Ranga Shankara

We went to watch a play yesterday at Ranga Shankara. For those of you who don't know, Ranga Shankara is one of Bangalore's firsts that aims to keep the theatre alive, much like what the Prithvi Theatre has done in Mumbai. It is a performing arts space which frequently hosts plays by India's best theatre personalities and groups. In addition to the plays, which are hosted regularly, a cafe plays host to reading sessions, meet-the-people sessions, where one can meet with theatre stalwarts like Girish Karnad, Arundhati Nag, T.S Nagabharana, Girish Kasarvalli, etc. Yesterday I saw Alyque Padamsee and Arundhati Nag there, chatting over a cup of coffee after an open forum.

Ranga Shankara is named after Shankar Nag, one of Karnataka's most brilliant film & theatre personalities in the recent past. By the time of his early demise in 1990 in a tragic road accident (he was 35 then), he had won multiple awards including the Best Actor Award at the International Film Festival of India for his first film "Ondanondu Kaaladalli" (Once upon a time), directed by Girish Karnad. He had acted in over 100 films, acted/directed numerous plays. He also directed Malgudi Days, one of Indian Television's best known serials. His wife Arundhati Nag has spearheaded his dream of a theatre for Bangalore; she is herself an acclaimed theater and film personality. Among her other affiliations, she is also a big patron of Nritya Gram, the residential dance school at Hesarghatta on the outskirts of Bangalore, established by the late Protima Bedi.

Yesterday was a nice light hearted Kannada comedy play by the group Benaka, which is one of the oldest theatre groups in Karnataka. I am looking forward to more plays this week and meet-the-people sessions (hoping to catch Girish Karnad on Sat morning!).

BTW, if ever a TV channel called Times NOW goes on air, I might get lucky to go on air - my friend & I did a small interview with them about why theatre festivals like this, and places like Ranga Shankara are important to us Bangaloreans :-)