Working with the bottom of the pyramid: the case of Vietnam
Abstract
Research Objective: With increasing globalisation of the world‟s economy, emerging
markets have become important to multinational corporations. The objective of this study is
to understand how the companies win potential customers in emerging markets and identify
the key success criteria for innovations by enterprises targeting the bottom of the pyramid in
Vietnam market
Research Methodology: This study is based on an exploratory case study methodology
undertaken with multinational corporation subsidiaries and local companies operating in
Vietnam.
Research Findings: The findings of this study demonstrate that in order to achieve social
and economic success, an innovation or social venture at the bottom of the pyramid must
consist of at least two among three factors – “beyond selling to the poor”, “BoP as producers”
and “BoP engagement”. The most important criterion has been “BoP engagement”, which has
been present to some extent in all the successes all the case studies considerd. Moreover, the
needs of the rural poor can be served profitably if the product and its deliver is right. Besides,
Partnering is an efficient way to overcome many of the challenges associated with a BoP
business model. Additionally, branding is as important in BoP markets as in high-income
markets, if not more so. Furthermore, sales to humanitarian organizations and/or government
agencies may be a good way to generate volume in sales.
Implications and Conclusions: doing business at the base of the pyramid is fraught with
challenges. Since consumers who have limited income are naturally very selective,
companies have to create and sell potentially higher quality products but certainly at lower
cost in order to meet a real social and commercial need. They have to do this throughix
radically different business models and distribution channels. Most often, the key to success
is local partnership and co-reation of products and ventures that allow them to gain deep
consumer insight and to tap local resource.