Business with the base of the pyramid

CADAL organized at it headquarters the seminar ''Business with the base of the Pyramid''.

On Thursday, October 26, CADAL organized at it headquarters the seminar "Business with the base of the Pyramid" which was in charge of the journalist Raúl Ferro, Director of Contents Development of Business News Americas.

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Raúl Ferro is Contents Development Manager of Business News Americas.

Alter almost two decades of economic reforms in Latin America, companies, specially those focused in consumer products, are beginning to suffer the exhaustion of their traditional business models. Consuming capacity of the ABC1 segment, an absolute minority in demographic terms in our region, is already skimmed. Something similar can be said about segments C2 and C3. Organic growth doesn’t seem to be an option any more to keep vigorous growth of sales rates in Latin America.

CK Prahalat, professor at the University of Michigan, brought to light the opportunities that arise from including the base of the population and its majority to the companies focus. It is not only a new business strategy. It is about a vision that, seeking a profitable expansion of businesses, builds a virtuous cycle that, among other benefits, helps generate wealth among the poorest sectors of society. This seminar is intended to analyze this phenomena in Latin America and the opportunities it opens.

Those who are called the base of the pyramid – people living with an annual income lower than US$1500- constitute a huge percentage of Latin American population. The opportunity to do business with the base of the pyramid is not simply limited to sell more. As it is well known, this people have not only needs but special needs, and mainly seek to have a normal life with dignity. They are not urging to be helped but to find what they are looking for in the market at a price they can pay for. This seminar intends to see both sides of the story, not only the business part of it but also the social side, in the sense that companies can find a profitable solution to special needs and requirements from the poor.

Program

09:00. Welcoming.

09:15. First Part.

1- What do we mean when we say “doing business with the base of the pyramid”?: A great number of citizens receive products and services that not adapt to their needs. Cruel paradox: the most poor people usually pay more for the same product than the richest. Why doesn’t most companies see this market?

2- Opportunities of doing business with the base of the pyramid: virtuous cycles, the innovation stimulus, wealth creation.

10:45. Coffee.

11:00. Second Part.

3- The cases (I): The idea of doing profitable business with the base of the pyramid is not a chimaeric dream of academics isolated in their crystal towers or of old recycled leftists. In Latin America the best example is the boom of microcredits.

4- The cases (II): Ignoring the poor markets is a strategic mistake for traditional firms. The best example is how Ajegroup, a family business from Peru, took from Coca-Cola an important share of the Peruvian market and then exported the model to other countries, including Mexico, one of the biggest refreshments markets in the world.

5- The cases (III): Paying attention to the market of the more poor is not only a good business. It can also be an excellent way to combine the activities of the company with the growing need of a socially responsible behavior. The cases of Grupo Nueva, Cemex and Holcim show this with absolute clarity.

6- Debate

12:30. Closure.