E-commerce The BOP Approach by: Arvind Kumar This research work for this report is done by Mr. Arvind Kumar, founder, www.Nuttymarketer.com You may reach him at arvind@nuttymarketer.com .For centuries and most of
decades in 20th century (i.e when computer was invented) access and communication was tool of rich and ultra rich people, prohibitively expansive to ‘not so rich’ and ‘not at all rich’ people. All marketing research and development was focused on 20% of market based on management principle 80:20, ignoring vast 4 billion people who are at bottom of pyramid( read Fortune at Bottom of Pyramid by C.K. Prahalad, Wharton Publishing).
In 1990s, Internet came along and change paradigm of whole global market. Because here we have a great tool “Internet” a very efficient, very potent to penetrate earlier thought impregnable market sec. For most if time it is exposure to outer world and information is necessary to make any decision and growth of any section of society or part of world. Internet is playing that role very efficiently.
Internet is a Mass product. Here power lies in hand of individuals, rich or not so rich(This terminology is taken from Fortune at Bottom of Pyramid by C.K. Prahalad, Wharton Publishing). General theory of market states (i) Top end market is value driven. (ii) Bottom end market is volume driven.
Through these two anomaly, we can clearly recognize that Internet companies are focusing on second approach and that is what CK Prahalad call Bottom of Pyramid(BOP) approach in his path breaking book Fortune at Bottom of Pyramid.
I can give a big list of such companies, but for instance take some shining stars of today Internet economy. (i) ebay.com (ii) aol.com (iii) clickbank.com (iv) Google.com
We will study Mother of all search engine Google and its approach to BOP.
Lets compare Google strategy and its behemoth competitors( well not today, but in formative days of Google when it matter most.) Google is a search engine based on Pay per click(PPC) approach to internet economy. In formative days, Google done exactly what others thought and well recognized by Gurus that model is not viable and Google will be doomed to graveyard.
Most of Dot Coms or brick and mortar companies on internet were making money for advertising. They charge for advertising space they provide to advertiser and charge them for a fixed duration and also all these prepaid only. This approach was already imminently followed in TV advertising and to some extent very successful. Advertisers did not had any options. For them it was dark space to jump into. They did not had any control even after paying handsome sum for space on Net.
See other side of coin. The consumer( technically visitor) were not part of revolution. Even if they were, they were used to be only exploited for generating huge profit for firms operating on Net.
Google came to foray with a refreshing style and a very uncommon approach to market. 1. No Images on its main page. ( there is option available in other pages but not very popular.) 2. Tool and services for common people. 3. Free for all( even sometime for advertisers also)
See where is money? I guess 90% would not see any or many.
Google spread its wings on net through word-of-mouth marketing and keeping a intense focus on common people using internet. In process Google developed it owns marketing and revenue generation model with empowering common people, who worship Google( I can be counted one of them).Google invented many new model which was never thought before. (i) Google adsense (ii) Google Adwords (iii) Froogle ( similar to ebay.com but free for all.) (iv) Google Search
Seeing deep into Google strategy and approach to net economy we can define two things. (1) Focus on common people in big volume in terms of purchasing power (2) In process give more control in their hands, empower them to generate more purchasing power and habit to help yourself as well as industry.
