BoP

TEMPUS NEMINEM MANET

The "Bottom of the Pyramid (BoP)" theory highlights the opportunities that Companies may have in serving the needs of the "poor", this occurs through a type of offer that is able to satisfy them and consequently contribute to reducing the degree of poverty existing precisely thanks to the ability to know how to create innovative methods.

The real power of these studies lies in the concept of the perception of needs that the poor may have.

In this vision, the poor become a source of income, meaning they are not only people to help, but also to serve.

Under this scenario all those who live in poverty can be seen as that part of the market that has been forgotten, but towards which it is advisable to be able to address with specific products and services.

Although this criterion has traditionally been applied to developing countries, even advanced economies are facing significant rates of poverty which over time become increasingly worrying.

The objective of the analysis is to focus on the Company target which by tradition and core business addresses the BoP markets and which are located within developed countries and which follow a marketing strategy following this policy, perhaps with a specific focus on BoP-as-consumer initiatives in the food industry.

The second aspect is to grasp in the analysis all the experiences already processed by the market and how these have been covered with respect to the principles on which the BoP approach is based.

What emerges in all cases is the strong unlikelihood for firms to align with the principles of the BoP in advanced markets.

Bottom-of-the-pyramid (BoP) markets are often characterized by institutional voids, although clear reasons have never emerged as to why institutional voids always manage to have an influence on business risk and performance, and on the supply chain.

These risks (Supply Chain) then tend to become widespread in the BoP, especially when the BoP markets are characterized by the aforementioned institutional voids.

Frequency component analysis suggests that the main supply chain risks discussed in the literature affecting the balance of payments include: social risk, credit risk, product market and operational uncertainties, knowledge biases and abilities and risks of the decision maker due to bounded rationality.

The analysis of randomness derives an observation that leads it to associate institutional voids with the risks of the so-called supply chain that affect performance.

Being able to place the analysis in a theoretical framework, in order to place the research flows within the BoP theme at the same level, it is easy to assume that further study and other analysis will certainly be required in order to be able to better capture the instrument that guarantees greater security and understand how effectively the causality of the results, highlighted, can be considered significantly associated and assimilable on this scenario.

The analysis is currently limited to the constructs considered on the basis of specific conceptual frameworks.

It emerges that the current study is able to offer a framework where it is possible to manage supply risks to Companies, those that are essentially linked to the balance of payments, to allow them to improve business performance.

Managers can use key dimensions of supply chain risk, such as product market, input market, and operational uncertainties, to assess performance in the context of the balance of payments.

The most significant benefit, the result of this in-depth research, was that of having strengthened the investigation into the risks of the supply chain precisely when institutional gaps capable of impacting Company performance emerged in this segment.

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From the analysis of the various marketing experiences applied to BoP contexts, it appears that the most frequent Marketing Strategies are those that could be defined as "lower price, lower value", or rather "selling to the poor".

In these specific cases we are talking about proposals where the inclusive dimension is minimal and which immediately leads to a reconsideration of that theory of the BoP if it were to be applied within an economy belonging to an advanced country.

In what is defined as the "BoP" Strategy, the perspective of the poor must be conceived not so much as a separate new consumer segment to which to address a specific company offer, but rather as a real Partner to be involved and "included" in the value chain: only in this way, in fact, will it be possible to

to see and create shared benefits for the individual, the Company and for the Community in which everyone is involved.

The food distribution sector moves on this terrain with a distinctive note, which represents an international environment where there is the ability to propose innovative social solutions and in particular if configured within advanced economies.

Among the commercial intermediation models that identify particular attention to low-income consumer segments, the following stand out:

a) food banks;

b) social supermarkets;

c) traditional discount stores.

In Food Banks, it has been possible to have this offer for over thirty years and all over the world, they are mainly identifiable by charitable organizations - mostly present among non-profit organizations - which "solicit, receive, store and distribute food products received from donations to other charitable agencies that directly serve people in need".

Everyone can access there is no policy for anyone to prohibit entry, however the bond that unites these organizations with their suppliers or employee-volunteers is mostly philanthropic in nature and typically about 70% of the funds or products collected is intended for the management of the cause.

A second category of intermediation that is quite significant due to its high degree of inclusiveness is that of shopping centers defined as social, but scarcely present in Europe while there are some in Austria and the United Kingdom.

In these Supermarkets, food and other basic necessities are received free of charge from Partner Organizations (for example producers, other supermarkets, etc.), and sold, at symbolic prices, to people who live in serious poverty risks .

A common factor of recognition is represented by some peculiarities in the offer and an access that is monitored so as to allow it to people actually in a state of economic difficulty and finally the convenience of the price which is around a price up to 70% lower than at the traditional Supermarket.

The most significant circular aspect is the inclusive one, but which unfortunately occurs only in certain more evolved contexts, in these situations there are combined services aimed at the (re)integration of the poor into society, refresher courses and training, psycho-social assistance, financial literacy, microcredit, etc.

The third and final category is represented by traditional discount stores

which, however, are generally aimed without distinction at the population interested in low-priced products and therefore not specifically at low-income people.

This last grouping also includes all those traditional shops that occasionally offer special offers and promotions for marginalized customers (such as the poor) or who live in so-called "food deserts" where economic and social degradation is above average.

The connection between markets refers to the possibility of connecting the local market with the global one, and vice versa; innovation highlights the long-term orientation of Companies and the prospects for the replicability of initiatives (scaling up) and finally the ability to self-finance and grow, refers to the economic-financial sustainability of the Company.

The analysis of the cases shows that the connection between the so-called local ecosystem with the non-local one represents the most respected principle while external participation is the least implemented one.

The analysis from a general point of view has let us read how these business models ultimately do not fully adhere to the basic principles of the approach followed by the BoP theory and one might think that this could depend on the objective difficulty of adapting an approach to the business designed for developing countries to the most advanced economies.

A final thought could be to question the very definition of the BoP principles which should be reviewed and adapted when one wants to measure the promontory of this Bottom of the Pyramid (BOP), also called the base of the pyramid, a term which in economics refers to the poorest two-thirds of the human economic pyramid, a group of more than four billion people living in extreme poverty in advanced markets.

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