Future of businesses lies in understanding and executing businesses models at the base-of-pyramid. Thats the message from noted marketing thinker Prof V. Kasturi Rangan, the Malcolm P. McNair Professor of Marketing at the Harvard Business School (HBS) who was the chairman of the Marketing Department (1998-2002), and is now the co-chairman of HBSs Social Enterprise Initiative. Prof Rangan was delivering a lecture titled Business models at the base-of-pyramid at New Delhi based Fostiima Business School on July 27.
Said Prof Rangan, The traditional focus of all management thinking and corporate world has been the top 2.5 billion consumers in the world. But what about the rest 4 billion consumers! If companies can create business models that create genuine value for the lower base-of-pyramid, they can be very successful. Infact, this is wave of future.
During his lecture, Prof Rangan offered several case studies from countries like China, Philipines, Mexico and India where companies have created successful business models by understand the base-of-pyramid consumers.
Introducing the business model of a Mexican appliance retailing company Electra, Prof Rangan said, Electra offered household appliances like refrigerator to poor urban slum dwellers who couldnt access credit from banks because they didnt have a credit history. Electras salesman visited the potential buyer at his home and did an informal credit check by looking at his house and speaking to the local grocery store. If approved by the salesman, the slum dweller could get the appliance from the store next day. The model worked very well and Electra expanded to 1000 stores. Importantly,the salesmen were careful in their assessment of consumers since their entire salary depended on the debt payments of their customers. Notably, Prof Rangan said, inspite of serving the low income customers, Electras bad debts were just 2.7% compared with 15% bad debts that general banks had.
Other examples that Prof Rangan offered included Unilevers Project Shakti in India, Nestle Milk District in China, Manila Water Company in Philippines, Appro TEC NGO in Africa and Arvind Eyecare Hospital in south India.
Summing up his address, Prof Rangan said, Indian B-schools and students need to understand that base of the pyramid markets will drive the future of firms. They need focus on this market to lead the future.
Happy with the active participation from the students, Prof Rangan said, I am impressed with the students of Fostiima. They are asking the right questions and their participation levels are high.
Earlier Mr Anil Somani and Mr Kamal Sharma from Fostiima Business School welcomed Prof Rangan. Dr Rakesh Khurana, Former Pro Vice Chancellor of IGNOU, presided over the function.
Prof Ragan has taught in a wide variety of MBA courses, including the core First-Year Marketing course (was its head across multiple sections from 1993-1996), and the second-year electives, Business Marketing and Channels-to-Market at Harvard Business School. Currently he teaches the elective courses, Customers, Commerce and Society: Business Value and the Private Creation of Social Value, and Business at the Base of the Pyramid.
Professor Rangans business marketing and channels research has appeared in management journals such as Journal of Marketing, Harvard Business Review, California Management Review and several others. Rangan has authored several books, which include: Going to Market, which deals with distribution systems for industrial products, and Business Marketing Strategy, which presents approaches for managing industrial products and markets over their life cycle.
In addition to his interest in business marketing, Professor Rangan is actively involved in studying the role of marketing in nonprofit organizations, and specifically how it influences the adoption of social products and ideas. He has written a number of case studies and articles on the topic. He served as one of the founding co-chairs of the Social Enterprise Initiative at Harvard, whose faculty study and teach the challenges of nonprofit management.
Prof Rangan has a Bachelor of Technology from I.I.T. (Madras), 1971; an MBA from I.I.M. (Ahmedabad), 1973; and a Ph.D. in marketing from Northwestern University, 1983. From 1973 to 1979, Rangan held several sales and marketing positions for a large multinational company in India. Rangan has been on the faculty of the Harvard Business School since 1983.
Prof Rangan also authored a case on Unilever in India: Hindustan Levers Project Shakti--Marketing FMCG to the Rural Consumer.
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Future of businesses lies in understanding and executing businesses models at the base-of-pyramid. Thats the message from noted marketing thinker Prof V. Kasturi Rangan, the Malcolm P. McNair Professor of Marketing at the Harvard Business School (HBS) who was the chairman of the Marketing Department (1998-2002), and is now the co-chairman of HBSs Social Enterprise Initiative. Prof Rangan was delivering a lecture titled Business models at the base-of-pyramid at New Delhi based Fostiima Business School on July 27.
Said Prof Rangan, The traditional focus of all management thinking and corporate world has been the top 2.5 billion consumers in the world. But what about the rest 4 billion consumers! If companies can create business models that create genuine value for the lower base-of-pyramid, they can be very successful. Infact, this is wave of future.
During his lecture, Prof Rangan offered several case studies from countries like China, Philipines, Mexico and India where companies have created successful business models by understand the base-of-pyramid consumers.
Introducing the business model of a Mexican appliance retailing company Electra, Prof Rangan said, Electra offered household appliances like refrigerator to poor urban slum dwellers who couldnt access credit from banks because they didnt have a credit history. Electras salesman visited the potential buyer at his home and did an informal credit check by looking at his house and speaking to the local grocery store. If approved by the salesman, the slum dweller could get the appliance from the store next day. The model worked very well and Electra expanded to 1000 stores. Importantly,the salesmen were careful in their assessment of consumers since their entire salary depended on the debt payments of their customers. Notably, Prof Rangan said, inspite of serving the low income customers, Electras bad debts were just 2.7% compared with 15% bad debts that general banks had.
Other examples that Prof Rangan offered included Unilevers Project Shakti in India, Nestle Milk District in China, Manila Water Company in Philippines, Appro TEC NGO in Africa and Arvind Eyecare Hospital in south India.
Summing up his address, Prof Rangan said, Indian B-schools and students need to understand that base of the pyramid markets will drive the future of firms. They need focus on this market to lead the future.
Happy with the active participation from the students, Prof Rangan said, I am impressed with the students of Fostiima. They are asking the right questions and their participation levels are high.
Earlier Mr Anil Somani and Mr Kamal Sharma from Fostiima Business School welcomed Prof Rangan. Dr Rakesh Khurana, Former Pro Vice Chancellor of IGNOU, presided over the function.
Prof Ragan has taught in a wide variety of MBA courses, including the core First-Year Marketing course (was its head across multiple sections from 1993-1996), and the second-year electives, Business Marketing and Channels-to-Market at Harvard Business School. Currently he teaches the elective courses, Customers, Commerce and Society: Business Value and the Private Creation of Social Value, and Business at the Base of the Pyramid.
Professor Rangans business marketing and channels research has appeared in management journals such as Journal of Marketing, Harvard Business Review, California Management Review and several others. Rangan has authored several books, which include: Going to Market, which deals with distribution systems for industrial products, and Business Marketing Strategy, which presents approaches for managing industrial products and markets over their life cycle.
In addition to his interest in business marketing, Professor Rangan is actively involved in studying the role of marketing in nonprofit organizations, and specifically how it influences the adoption of social products and ideas. He has written a number of case studies and articles on the topic. He served as one of the founding co-chairs of the Social Enterprise Initiative at Harvard, whose faculty study and teach the challenges of nonprofit management.
Prof Rangan has a Bachelor of Technology from I.I.T. (Madras), 1971; an MBA from I.I.M. (Ahmedabad), 1973; and a Ph.D. in marketing from Northwestern University, 1983. From 1973 to 1979, Rangan held several sales and marketing positions for a large multinational company in India. Rangan has been on the faculty of the Harvard Business School since 1983.
Prof Rangan also authored a case on Unilever in India: Hindustan Levers Project Shakti--Marketing FMCG to the Rural Consumer.
| Check Top MBA Colleges in India by Cities | | |
| Also Read Important Articles on MBA Admission | ||
| Top MBA Colleges in India | MBA Admission | MBA Entrance Exam |
| MBA Placements | MBA Ranking In India | GD Topics |
Western markets are saturating and so are the urban markets of BRIC countries. This is forcing companies around the world to understand the lower income consumers living in urban slums and villages.