Paper 68

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ArthPrabandh:A JournalofEconomicsandManagement
Vol.1Issue9,December2012,ISSN22780629
BOP IN AGRICULTURAL SECTOR:

SIGNIFICANCE OF MARKETING STRATEGIES IN INDIA
DR. UMAKANTA TRIPATHY*; PRAGNYA LAXMI PADHI**
*Assistant Professor,
Department of Basic Science & Humanities,
Silicon Institute of Technology,
Sambalpur.
**Guest Lecturer,
Gangadhar Meher College,
Sambalpur.
PinnacleResearchJournals28
http://www.pinnaclejournals.com
ABSTRACT
Agriculture is the backbone of the livelihood security system in India. It is the most priority
occupation in rural India. It contributes more than 20 % of the countrys gross domestic product
(GDP) and generates 60% of employment. This sector is categorized into marginal & small
farmers, Medium farmers & big farmers. Though marginal and small farmer household account
for more than 80 per cent of the total farmer households, their share in total operated area is only
a little more than 43 per cent. On the other hand, medium and large farmers who account for less
than 6 per cent of the farmer households, operate more than one-third of the total operated area.
These sectors are underprivileged because these people are always depending on monsoon, lack
of finance facilities, low operational holdings for their cultivation. In almost every year either
they face unprecedented flood or drought. Due to their low income they are comes under bottom
of pyramid. It is one of the most lucrative markets in terms of large potential market opportunity.
Some of the MNC are succeeded to get profit and also increases their market share. Some of the
organizations like NGOs, Microfinance institutions, Public-private partnership (ppp), SHGs and
Banking & Financial institutions have done their tremendous job for the development of this
sector. They have made their own strategies and got success.
KEYWORDS: GDP Marginal & Small Farmers, MNC, NGOs, Micro-finance, PPP, SHGs,
Banking & Finance.
____________________________________________________________________________
1. INTRODUCTION
The unprecedented economic growth and technological advancement that the world witnessed in
the past two centuries saw a billion plus people in the developed countries accumulate enormous
wealth and millions of others lifted out of poverty. Half of the world population of 6.1 billion is
still poor, with 1.1 billion people living extremely in poverty(less than $1 a day) and 1.6 billion
is moderately poverty(between $1 and $2 a day).These 2.7 billion people are thus the Bottomof-the-pyramid(BOP),with regard to economic development. Now, faced with saturating growth
in developed markets and increased competition, companies across the globe are beginning to
explore this ignored market that presents huge demand for goods and services. The opportunities
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are huge at the BOP. For example India with a population of 1 billion plus people is another
trillion dollar market ($3tn).With an estimated 4 billion BOP members has across the globe,
which is expected to grow to 6 billion in the next 40 years, the BOP is according to Prahlad,the
biggest potential market opportunity in the history of commerce.
A marketer trying to market his product or service in the rural areas is faced by many challenges;
the first is posed by the geographic spread and low population density in the villages in the
country. The second challenge is from the low purchasing power and limited disposable incomes
in these parts of the country. But this has been changing in the last few decades with agricultural
growth rate faster in the 1990s and 80s than the 1970s (CMIE 1996). Green revolution through
the introduction of hybrid seeds, fertilizers and systematic irrigation had a major impact on
agricultural productivity, and combined with it was a price policy which ensured minimum
support price, and in turn insulated the farmers from market risk, cheap input policy and a stable
demand (Vyas 2002). These all lead to a quantum jump in the incomes of farmers in the country.
Initially the impact of green revolution could be seen only in the prosperous agricultural states of
the country but now slowly its influence has spread across the country with the increase in
irrigation (Bhalla & Singh 2001). Though the income levels overall are still very low there are
many pockets of prosperity which have come up in the rural areas in the country.
2. INDIAN AGRICULTURAL SCENARIO
India lives in villages, close to 72 percent of Indian population lives in rural areas. In the country
we have 6.36 lakh villages out of which only 13 percent have population above 2000. The rural
economy contributes nearly half of the countrys GDP which is mainly agriculture driven and
monsoon dependant. More than 50 percent of the sales FMCG and Durable companies come
from the rural areas
TABLE 1: DISTRIBUTION OF LAND IN TERMS OF % OF HOUSEHOLDS AND

LANDHOLDS
Land Holding
% Of households
% Of land hold
Marginal
holdings
[0.01-2.49 acres
Small
holdings
[2.504.99 acres
Medium
holdings
[5-14.99 acres
Large holdings [15
acre +above
Total
71.87
16.93
13.42
18.59
12.09
37.81
2.62
26.67
100.0
100.0
Source: NSSO report 1991-92.
Marginal & Small Farmers are defined as those who are farming yet hungry. These are people
for whom farming is a major livelihood activity, yet who have insufficient assets to produce a
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surplus from their agricultural activities and whose non-farm activities are insufficiently reliable
or remunerative for them to rely on market purchases for adequate food intake. Furthermore
development aid to agriculture has declined over the past 30 years. Around half of the worlds
hungry are identified as food-poor small farmers. The majority of marginal and small farmers
are likely to be women and farmers.
According to The National commission for enterprises in the unorganized sector (NCEUS) has
extended the enterprise definition to agriculture. Among agricultural Workers, while 89 million
(35.2 per cent) were agricultural laborers, 74.6 million (29 per cent) were marginal farmers, 39.9
million (5.8 per cent) were small farmers, the rest being medium or large farmers. Thus marginal
and small farmers constitute 114 m (34.8 percent) workers. In agricultural sectors these people
are facing a lot of problems for subsistence. They are not getting a square mill and fall in
poverty. In economically they are very backward. In terms of numbers they are more as
compared to other groups of people.
3. OBJECTIVES
The present study has the following objectives.
To analyse about the marginal and small farmer and the reason of bottom of pyramid
To study about the challenges faced by bottom of pyramid in agricultural sector in India
To examine the various indicators of bottom of pyramid scenario in India
4: DATABASE AND METHODOLOGY

The study is mainly based on secondary data collected from various published sources during
1991-92 to 2004-05. The main data sources are agricultural census of India, NSSO report,
NCAER report for different years according to study period. This is purely a theoretical study to
know about the challenges faced by marginal and small farmers in India and to know about the
marketing strategies adopted by different companies to attract the customers and increase the
market shares.
5. CHALLENGES FACED
AGRICULTURAL SECTOR
BY
MARGINAL
&
SMALL
FARMERS
IN
SMALL SIZE HOLDINGS: As a result of small farm size (0.01-2.49Acres) and limited
financial and human resources, most marginal and small farmers rely on rain-fed agriculture, do
not use productivity enhancing farm inputs, and use hand hoes for tilling the land.
HAND-HOE TECHNOLOGY: In many areas, there is no tradition of using animal power and
the use of mechanical power power tillers, tractors and the accompanying equipment is
restricted by limited availability and the inability of most farmers to afford the high cost of such
equipment.
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LABOUR: Labour constraints are particularly acute for unmarried and widowed women with
children, and families affected by HIV and AIDS, where older or grandparents take care of
younger orphans.
LIVESTOCK: Families with no livestock are relatively more marginalized as they are more
exposed to livelihood shocks than those with some livestock. Livestock is an important source of
power for cultivation and transportation of goods to and from markets and are important means
of generating additional family income to meet unexpected social and economic obligations.
FARM INPUTS: The use of improved seeds, fertilizers, herbicides and pesticides is constrained
by their limited availability and high cost.
ACCESSING CREDIT: Access to credit is one of the most common ways of improving
farmers access to inputs.
EXTENSION SERVICES: Most farmers increases the cost of farm inputs and agricultural
equipment while at the same time lowering prices of farm have very limited access to extension
advice.
GENDER DISCRIMINATION: women generally, but particularly those who are vulnerable on
account of being lone parents, are probably the most marginalized of farmer in the districts
studied.
REMOTENESS AND POOR PHYSICAL INFRASTRUCTURE: The absence, or extremely
poor state, of feeder and access roads was one of the most serious constraints to agricultural
development.
6. BOTTOM OF PYRAMID
The concept of BOP was first introduced by Stuart L. Hart and C. K. Prahalad in 2002 in their
widely acclaimed article, The Fortune at the Bottom of the Pyramid. The idea behind BOP
suggests that the best way to meet the needs of the poor is through a profit driven market-based
approach. There are tremendous benefits for companies if they choose to serve the highly
underserved and less competitive markets at the BOP. At the same time there are significant
benefits for the poor in terms of poverty reduction, increased productivity, and empowerment.
Companies interested in exploring the opportunities at the BOP should look for solutions
in the form of new products and new business models that can provide products and
services at affordable prices. The sustainability of the approach lies in this inherent win-win
situation. The Bottom of the Pyramid (BOP) constitutes the market made up by the worlds
poorest people, i.e. people living on less than $ 2 per day mainly in Africa, Eastern Europe, Latin
America, and Asia.
CHARACTERISTICS OF THE BOP
CULTURAL DIFFERENCES: The BOP customers are more localized with local practices,
rituals, tastes, preferences and choices.
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DIFFERENCES IN BUYING HABITS: The BOP customers will not opt for buying items in a
bulk but will rather buy items for their immediate use i.e. these items are in small packs.
LOW ECONOMIC POSITION: Most economically consumers are economically weak and
hence companies should make attempts to either reduce the prices of goods they sell or try to
create purchasing capacities among the BOP customers.
MOSTLY NEED DRIVEN: It is a common notion that the BOP customers buy goods only
when the need arises. But they are now striving hard to get out of the clutches of poverty through
increased spending. They want to lead better life style. Hence marketers should aim at satisfying
the wants more than the needs of the BOP customers.
7. THE INDIAN BOP SCENARIO
According to a report of National Council of Applied Economic Research (NCAER), there are
almost 400 million people in India who belong to the BOP. Another research agency KSA
Technopak in its report states that 26.5% of the income of the rural consumer is spent on
purchasing groceries. It means almost 73.5% of their total disposable income is spent on items
that are not required for their subsistence needs, which is a big opportunity for the market.
TABLE-2: ANATOMY OF RURAL MARKET
Class
The Very Rich
The Consuming class
The Climbers
The Aspirants
The Destitute
Annual Income (Rs.)

Above 2,15,000
45,000-2,15,000
22,000-45,000
16,000-22,000
Less than 16,000
Number of People (mn.)

4
115
331
170
124
Source: NCAER Report 2001
There was a time when the poor Indian consumers fulfilled most of their daily requirements from
nearby towns and only few selected households consumed branded goods. Thanks to the ICT
revolution, today a consumer in a rural area is not only increasingly becoming literate but also
aware of the various products that are on offer in the marketplace. Today the markets for the
BOP are as critical for the marketers as the urban markets. The BOP market is emerging as a
large market for a number of goods or services- be it a consumer good or a financial or telecom
service. According to KSA Technopak, rural India accounts for 55% of total private spending in
the country which is more than the total private spending of the urban India which stands at
45%.This potential market has been largely ignored till recent past, but when the potential of the
bottom of the Pyramid is understood and assimilated by them, every company of the world is
eying a share in the pie.
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8. MARKETING CHALLENGES AT THE BOTTOM OF PYRAMID (4AS&4 PS

STRATEGY)
The following is a brief overview of the issues that pose a major challenge for companies trying
to the tap the BOP segment.
AVAILABILITY: Indias 627,000 villages are spread over 3.2 million sq. km. approximately
110 million Indians live in rural areas, and reaching them is not easy, especially given the poor
road infrastructure. Hence, operations costs increase and sometimes it is even higher than that in
urban markets. Therefore, companies are finding it increasingly difficult to protect their margins
in the BOP market.
AFFORDABILITY: Given the low disposable income of BOP consumers, pricing is key to
higher product penetration among rural consumers. Further, people in rural areas are not only
price sensitive, but also quality conscious. Therefore, producing quality products at lower price
points has posed a challenge for companies trying to protect their margins in the backdrop of
monumental cost pressure.
ACCEPTABILITY: In the BOP market, product functionality is a key success parameter.
Therefore, a product form that has worked well in traditional markets may not be acceptable to
BOP consumers if the product functionality is not in line with their unmet needs.
AWARENESS: India is home to people speaking several languages, dialects, cultural
heterogeneity, low literacy rates and limited reach of the electronic media. It has been identified
that the best places to promote products or services are local haats and melas or promotional
campaigns during local festivals. It is difficult to organize because of the high costs involved.
MODES OF INNOVATION IN THE 4PS FOR THE BOTTOM OF THE PYRAMID

PRODUCT
New product forms convenient for the BOP consumers keeping in mind their habits and
environment.
Packaging forms like sachets, dab-on-packs, reusable boxes etc which can give them
value for money and at times some value even after the consumption of the product (e.g.
reusable boxes, containers etc.).
Those products can be developed which can help the BOP people in their day to day
needs specially related with agriculture. These can be rain water harvesting methods,
flood warning devices, credit facilities for seeds and fertilizers,
PRICE
Offering products at an attractive and affordable price, slight premium can be charged for
very famous brands to satisfy the self-esteem needs of the youth.
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Providing micro-credit facilities wherever possible
PROMOTION
modes of communication like community radio can be used which is becoming very
popular these days as it gives an opportunity to raise the voice of a community which
makes the members feel important
Kiosk marketing is also a good means to club products, distribution (of information)
along with promotion.
For every new product, project or scheme, the village elders, prominent people like
village headman, Principal of the local primary / secondary school, doctors, postman
should be included from the very outset.
PLACE
During product promotions at the Haats, Mandis or local fairs, companies can make a
group of aspirants as a reference group for its products which will easily become popular
within the community and later on they can become companys distribution agents. It will
serve two purposes for a company viz., distribution of products and promotion of its
products.
9. NEED OF MARKETING STRATEGIES FOR BOP SECTOR
The following organizations have made popularized strategies for solving problems of BOP in
agricultural sector as well as rural areas. Several companies have taken various initiatives to
target the BOP segment.
(I) ITC E-CHOUPALS
Indian Tobacco Company (ITC) is one of the fastest growing FMCG companies of India which
launched an initiative called e-choupal or Electronic Choupal as part of its social responsibility
concerns. The e-choupal through its operators called Sanchalaks and Samyojaks broadly
offer the following facilities to the farmers
Information on weather forecasts, market prices for grains etc., all news affecting agriculture.
Best practices on farming, equipments, and risk management.
Information regarding sources of agri-input supplies and also about consumer goods.
Information about where to sell the agricultural produce.
In this way E-Choupal provides real-time information and customized knowledge by enhancing
the ability of farmers to take decisions and align their farm output with market demand and
secure quality & productivity. The aggregation of the demand for farm inputs from individual
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farmers gives them access to high quality inputs from established and reputed manufacturers at
fair prices. As a direct marketing channel, virtually linked to the mandi system for price
discovery, e-Choupal eliminates wasteful intermediation and multiple handling. Thereby it
significantly reduces transaction costs. Launched in June 2000, 'e-Choupal', has become the
largest initiative among all Internet-based interventions in rural India. 'e-Choupal' services today
reach out to more than 3.5 million farmers growing a range of crops - soyabean, coffee, wheat,
rice, pulses, shrimp - in over 31,000 villages through 5372 kiosks across seven states (Madhya
Pradesh, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra, Rajasthan and Kerala).Each of
these kiosks are supposed to achieve a break-even in an year, which they generally do and after
that the operation is profitable on a standalone basis.
(II) HLL- RURAL MARKET INITIATIVES
HLL has undertaken a number of projects in order to improve the might of the rural consumers
hence creating a large customer base of itself. Some of these initiatives are:
PROJECT SHAKTI: Aimed at empowering the rural women by providing a sustainable micro
enterprise opportunity to them in order to improve rural living standards through health and
hygiene awareness. Under this scheme a typical Shakti entrepreneur conducts a steady business
by selling products of HLL, which gives her an income in excess of Rs. 1,000 per month.
PROJECT BHARAT: It was launched in the year 1998-99. Under this project HLL vans
visited villages and sold small packs consisting of a low unit price pack consisting each of its
detergent, toothpaste, face cream and talcum powder for Rs. 15. The customers were shown the
videos regarding how to use the products and how the use of companys products is beneficial
for them as compared to their current habits.
PROJECT MILLENNIUM: It is targeted to tap the tea-vendors (chai-ki-dukan) in order to sell

them the branded tea at a small price and packet size in order to improve the sale.
(III)CAVINKARE: SACHETIZATION
It is the company behind the highly successful concept of sachets which is reckoned in the
personal skin and healthcare segments. Starting from sachetization of its Chik shampoo to the
ever-popular Fairever cream that took the FMCG granddaddy HLL, with its entrenched
fairness brand, Fair & Lovely head-on, CavinKare is making successful inroads into the rural as
well as urban households. CavinKare embraces the classic long-term approach to marketing, i.e.
maintaining exclusivity of the distributor and customizing product, communication and
packaging and communication to suit those specific markets. Even the advertising agencies are
from those countries so as to tailor their communication according to the local tastes. All this has
helped them evolve with brand like Chik, Nyle herbal Range of products, Indica hair dye,
Fairever fairness cream etc.
INNOVATIVE SPIRIT OF CAVINKARE
The first brand to introduce floral fragrances in shampoos.
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The first brand to break the price barrier and offer shampoos at 50 paisa
The first to offer perfumes in a unique dab-on pack at Rs. 10.
The first to introduce a single-use perfume at Rs. 2.
The first company who introduced pickles in Sachets.
(IV) AMUL DISK PROJECT
The Amul model of co-operative farming represents a system that is collectively owned,
operated and controlled by the farmers. It is an integrated 3-tier organized structure that procures
processes and markets the produce. The 3-tiers involved in the model of dairy farming include
village societies, district milk unions and the milk federations. This model removes the
irrationalities of the traditional model where the processing and marketing was done by the
middlemen, leading to major diversion of profit of the hard-earned labour of the farmer. Amul is
able to do all this with the support of an ongoing project named the DISK project which
comprises of computerization of more than 70,000 village societies and automation of the milk
collection process. The salient features of this project are described below.
DAIRY INFORMATION SYSTEM KIOSK (DISK) PROJECT
The DISK project as conceived by Amul has two components:
i) An application running at the society level that could be provided with internet connectivity
and,
ii) A dairy portal at the district level serving transactional and informational needs of all
members and staff in the district co-operative structure
The software developed for the society is able to provide
a) Data analysis and decision support to help a rural milk collection society in improving its
performance, i.e. increasing milk collection.
b) Data analysis to improve productivity and yield of milch cattle.
c) Farmers with facilities to place orders for goods and services offered by different agencies in
the co-operative sector and seek information on subjects of interest.
(V) RURAL TELECOM
Core sectors of the economy which includes telecom are said to have a direct bearing on
transforming consumers into producer and promote economic development. A number of studies
have documented the positive impact of mobile phone adoption on rural development (Bhatnagar
2000, Waverman et.al, 2005). The successful examples of telecom in rural areas also points to
the same direction, the Grameen Phone which has been successful has tapped the Microfinance
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network, and various ICT initiatives have taken the help of either successful cooperatives or have
tied-up with a local NGO.
Experiences like the Grameen Phone have shown that provision of phone connectivity to a
village serves two purposes, first leads to the economic development by helping individuals and
business gain economic efficiency through communications, and promoting social and economic
development for individuals who own and operate the telephone enterprises (World Resource
Institute, 2001).
TELECOM SECTOR AND EDUCATION
Nokia and Motorola Nokia launched Nokia 1100 and 2600 models, while Motorola introduced
MOTOFLIP and C139 models to target BOP consumers.
TARAHAAT
TARAhaat is a social enterprise operating in a profitable set-up. It delivers education,
information and services to rural areas through the Internet. It is an initiative of Development
Alternatives Group, a New Delhi-based non-profit organization. TARAhaat uses a franchise
model wherein services are delivered to rural consumers at TARAkendras through the
TARAhaat.com portal. TARAhaat mostly utilizes India's existing telecom infrastructure, such as
telephone lines. TARAgyan products offer customized computer education to rural areas;
information is also offered in a few local languages. The revenues come from fees and support
charges, advertisement and sponsorships, fees to suppliers/vendors of enterprises set-up,
consultancy fees to TARA guru (entrepreneur mentor), user charges for Web-based support
services, and revenue share from entrepreneurs product/service marketed through the network of
TARAhaats kiosks.
ERICSSON INDIA
Ericsson India, which connects 18 villages and 15 small towns in Tamil Nadu through the
Gramjyoti Rural Broadband Project, has entered into tie-ups with various domain experts to offer
services and information relevant to its target audience. Ericsson has tied up with Apollo
Hospitals to offer telemedicine and mobile healthcare services. It has also tied up with
Bangalore-based Erudite Technologies to offer E-learning services, while Egovernance will be
offered to Gramjyoti villages and towns through a tie-up with the local government. Ericsson is
also collaborating with Turner Broadcasting Systems (a division of Time Warner which includes
CNN and Cartoon Network) to provide infotainment services. New Delhi-based One97
Communications provides the technology infrastructure for this project. Further, Ericsson has
collaborated with Hand in Hand; an NGO that runs citizen centres across Tamil Nadu, to use the
NGOs centres for providing Gramjyoti services.
(VI) MICRO FINANCE
The microfinance institution will provide a loan to registered group farmers who grow a variety
of different crops. The farmers will have the freedom to choose their groups and each group will
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contain roughly 12-15 farmers with an average land holding of two acres per farmer. The MFI
will provide advice and education on efficient ways of financing and allocating funds. Though a
mutual agreement with farmers, the MFI establishes its role as a sole buyer for the product. By
promising to buy the product at the MSP the MFI provides a steady stream of cash flow to the
farmers. In turn the MFI sell the product in open market for a profit. The farmers benefit as they
are waived of the principal borrowed and are only charged a monthly interest that is payable
once enough income is earned. The interest rate charged by the MFI will be lower than the
existing informal interest rates.
ICICI BANK
ICICI Bank has partnered with many institutions to set up ATMs and Internet kiosks. The bank
rolled out Smartcard technology to provide secure, low-cost transactions and loan management.
ICICI Bank has created a network of 8,000 Self Help Groups (SHGs) to support micro-financing.
MUTHOOT GROUP
Muthoot Group, a leading non-banking finance group in South India, launched 1 gm gold,
targeting low-income consumers. Banks such as Axis Bank, Syndicate Bank and ICICI Bank
have also entered this market.
(VII) SELF HELP GROUPS (SHG)
It is defined as a small and informal association of poor having preferably similar socioeconomic background and who have come together to realize some common goals based on the
principle of self help and social responsibility. It helps the poor especially women, to establish
their creditworthiness. They have utilized their loans in conventional activities like agriculture,
animal husbandries etc.
(VIII) KISHAN CREDIT CARDS (KCC)
It is a key product for enhancing growth in agricultural system. This model scheme was started
in 1998-99 by NABARD.It facilitates short term credit to farmers. The scheme has been
implemented by 27 commercial banks, 378 cooperative banks and 196 regional rural banks
throughout the country.
1. To provide insurance coverage and financial support to the farmers in the event of failure of
crops as a result of natural calamities, pests and diseases.
2. To encourage farmers to adopt progressive farming practices, high value inputs and higher
technology in agriculture
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(IX) HEALTH CARE

ARAVIND EYE CARE SYSTEM
Aravind Eye Care System is the worlds largest provider of cataract surgery. The hospital treats
more than 60 percent of patients free and is still operating profitably. It performed 240,000
surgeries in 2004 and treated 1.6 million outpatients. The return on capital employed for Aravind
Eye Care was 16.2 percent and gross margin was 54 percent in 200405.
FORTIS HEALTH WORLDS
Fortis Health World, in collaboration with Hariyali Kisaan Bazaar, provides quality pharmacy
and allied services to the BOP segment through its 70 outlets across the country. The group plans
to expand its reach by opening 200 more outlets. Fortis has a referral model in place, which
involves low infrastructure cost and helps them generate profit.
LIFEBUOY SWASTHYA CHETANA
HLL launched the Swasthya Chetna campaign to educate rural customers in 15,000 villages
about basic health and hygiene issues. The Swasthya Chetna teams visited villages and schools
to teach children about the harmful effects of germs and how those germs can be eliminated by
washing hands with Lifebuoy soap. The company launched the 18-gram bar of Lifebuoy soap to
make it affordable to target customers. The campaign was successful and Lifebuoy sales
increased by 20 percent in 200304.
HLLSALT STORY
Iodine deficiency disorder has impeded growth and mental development of 70 million people in
India. As almost 50 percent of iodine in iodized salt is lost during cooking, storage and
transportation, HLL developed stable iodine for salt, which is available even in remote areas and
at affordable price.
JAIPUR FOOT
Jaipur Foot, a non-profit organization, has created a low-cost prosthesis with its innovative
designs and use of materials. It helps 16,000 patients annually return to their professions without
loss of income or productivity.
(X) AGRICULTURE
EID PARRY (INDIA) LTD
EID Parry has created a web portal for farmers and local entrepreneurs. The portal provides
access to crop disease diagnosis, fertilizers and tools, education and a direct market for rice and
sugarcane crops.
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10. CONCLUSION
More than 80% of the total rural farmer households belong to marginal and small farmers and
they are known as bottom of pyramid. Rural India is one of the most lucrative markets in terms
of large potential market opportunity. As developed markets are highly saturated, companies
across globe are beginning to explore this ignored market for increasing market share and
growth. The BOP people are facing many challenges in terms of technology, labour, livestock,
credit facilities and infrastructure etc. There is a difference in culture, buying habits, low
economic positions and mostly need driven. According to C.P Prahalad, the BOP as a viable and
profitable growth market. We have also understood that treating the BOP as a market can lead to
poverty reduction, particularly if NGOs and community groups can join with MNCs and local
companies as business partners. The development of markets and effective business models at
the BOP can transform the poverty alleviation task from one of constant struggle with subsidies
and aid to entrepreneurship and generation of wealth. When the poor at the BOP are treated as
consumers, they can reap the benefits of respect, choice, and self-esteem and have an opportunity
to climb out of poverty trap. MNCs can do profitable business with the 4 billion customers at
the bottom of the economic pyramid and that doing so will help lift the poor out of poverty.
The major challenges faced by the companies for tapping the BOP segments is 4 As and 4 Ps.
There are several companies like ITC E-Chou pal, HLL, AMUL, Telecom, Micro finance, ICICI
Bank; SHGs etc have adopted different competitive strategies for increasing the market share
and growth for succeeding in the rural market. With the help of the MNCs, Self-help Groups,
NGOs and governments initiatives like the Common Minimum Program and PURA (Providing
Urban Amenities in Rural Areas) initiatives, the BOP consumer can be the new growth driver for
the globalize economy of India. With the adoption multi agency approach the basic motto is to
change the status of marginal and small farmers. All of this is possible through the innovative
initiatives of the above parties which can together change the face of the Bottom of the Pyramid.
With the entry of MNC, Public-private partnership, NGOs, Microfinance institutions the people
those are come under BOP in agricultural sector particular to marginal and small farmers will be
benefited.
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BOP IN AGRICULTURAL SECTOR:

TABLE 1: DISTRIBUTION OF LAND IN TERMS OF % OF HOUSEHOLDS AND

Source: NSSO report 1991-92.

To examine the various indicators of bottom of pyramid scenario in India

4: DATABASE AND METHODOLOGY

Annual Income (Rs.)

Number of People (mn.)

Source: NCAER Report 2001

8. MARKETING CHALLENGES AT THE BOTTOM OF PYRAMID (4AS&4 PS

MODES OF INNOVATION IN THE 4PS FOR THE BOTTOM OF THE PYRAMID

Providing micro-credit facilities wherever possible

9. NEED OF MARKETING STRATEGIES FOR BOP SECTOR

PROJECT MILLENNIUM: It is targeted to tap the tea-vendors (chai-ki-dukan) in order to sell

(IX) HEALTH CARE

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