The Bumpy Road to the BoP- Addressing the Challenges of Distribution to the Base of the Pyramid- A Ghanaian study
The Base of the Pyramid (BoP) represents 4 billion individuals living on less than $2 a day. As growth in mature markets stagnate, businesses are now turning to fast-growing BoP markets as a source of untapped growth. Innovations now exist that can help meet the needs of the BoP, from solar-powered lighting and stoves, to water purification systems and nutritionally-enriched foods. Distribution of these products can also help create thousands of opportunities for employment and entrepreneurship. However, BoP customers are often located in remote areas with poor infrastructure, face low levels of affordability and lack access to finance. As a result, finding ways to distribute to these customers in a low-cost, efficient, scalable and sustainable fashion is a major challenge. This paper, “The Bumpy Road to the BoP”, seeks to address that challenge. Based on a review of BoP literature, the paper identifies the key BoP distribution challenges and solutions and categorises these according to the 4As of BoP distribution – Availability, Affordability, Awareness and Acceptability. These challenges and solutions are then further analysed in five BoP ventures in Ghana that distribute lighting products, fast-moving consumer goods, cook stoves, health products and financial services to the poor. Based on this, the author proposes a BoP Distribution Framework, incorporating a set of principles and alternatives for addressing the challenge of distribution. The author’s hope is that this research contributes to improving the effectiveness of BoP distribution around the world by making the road to the BoP a little less bumpy.
MSc in International Business and Trade