Mirage at the Bottom of the Pyramid

29 Pages Posted: 17 Aug 2006

See all articles by Aneel G. Karnani

Aneel G. Karnani

University of Michigan, Stephen M. Ross School of Business

Date Written: August 2006

Abstract

Poor people - at the bottom of the pyramid (BOP) - represent a very attractive market opportunity. The "BOP proposition" argues that selling to the poor can simultaneously be profitable and help eradicate poverty. This is at best a harmless illusion and potentially a dangerous delusion. This paper shows that the BOP argument is riddled with fallacies, and proposes an alternative perspective on how the private sector can help alleviate poverty. Rather than focusing on the poor as consumers, we need to view the poor as producers. The only way to alleviate poverty is to raise the real income of the poor.

Keywords: Poverty, Bottom of the pyramid, Selling to the poor, social responsibility

JEL Classification: I30, M10

Suggested Citation

Karnani, Aneel G., Mirage at the Bottom of the Pyramid (August 2006). William Davidson Institute Working Paper No. 835. Available at SSRN: https://ssrn.com/abstract=924616 or http://dx.doi.org/10.2139/ssrn.924616

Aneel G. Karnani (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

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