BOP MBA Research
Building an experimentation process model for financial institutions developing personal
finance products for the bottom of the pyramid by Janine Geldenhuys
2008
Traditional financial institutions in South Africa have experienced difficulty in trying to bring the
benefits of the formal, first world economy to the unbanked and underbanked markets that constitute
the bottom of the pyramid for the country. South African formal financial institutions - as a result of
governmental pressure and recognising business opportunities at the bottom of the pyramid – have
through innovation been exploring and expanding their personal finance product and service ranges
to meet the requirements of the unbanked and underbanked markets. Innovative products and
services developed through a process of experimentation can help financial institutions meet the
needs of this lower end of the pyramid.
Research conducted through ethnographic interviews was directed towards furthering understanding
of the process, forms and strategic context of experimentation that South African financial institutions
(both large and niche) undertake and operate within, when developing and implementing products for
the bottom of the pyramid and the impact it has on the organisation. A model was developed, which is
an enhancement of Stefan Thomke‟s four step experimentation process, outlining an experimentation
process that can be used by institutions innovating and experimenting within a developing economy
and market such as South Africa‟s.
http://upetd.up.ac.za/thesis/available/etd-03122010-144026/
An empirical test of the service-profit chain at the bottom of the pyramid by Bongani Mageba
2007
The research project investigated the applicability of the Service-Profit Chain model in the context
where there are bottom of the pyramid customers who service bottom of the pyramid consumers in a
middle income country.
All businesses are concerned about creating value for themselves. In the past a lot of initiatives have
focused on internal restructuring measures as well driving one of the most valuable assets they have
their brands. However, there is now a growing realisation by businesses driven by a number of factors
that a the management of customer relations is one of the most effective tools to manage and
increase profitability.
In view of the increasing emphasis that is being placed on the role of customers in creating value for
businesses the service-profit chain is an appropriate response to how businesses can go about
managing customer profitability.
The research project was done using a quantitative research method with customers of one of the
leading softdrinks beverage companies in the country. Prior to this a thorough literature review was
conducted which showed the relevance of the service-profit chain model in managing customer
profitability.
The main finding from the research is that the service-profit chain does not apply to the context
described above and in the study. This is mainly because there was no relationship found between
customer loyalty and customer profitability. However, the last chapter proposes a model to help with
establishing this relationship.
http://upetd.up.ac.za/thesis/available/etd-03232010-151144/
Factors influencing the adoption of mobile banking services at the Bottom of the Pyramid in
South Africa by Khumbula Masinge
2010
With the convergence of banking services and mobile technologies, users are able to conduct
banking services at any place and at any time through mobile banking (Gu, Lee & Suh, 2009). This
research examines the factors influencing the adoption of mobile banking by the Bottom of the
Pyramid (BOP) in South Africa, with a special focus on trust, perceived cost and perceived risk
including the facets of perceived risks: performance risk, security/privacy risk, time risk, social risk and
financial risk. The research model includes the original variables of extended technology acceptance
model (TAM2) (Venkatesh & Davis, 2000).
Data from this study was collected through a physical hardcopy survey in townships around Gauteng.
The research has found that customers in the BOP will consider adopting mobile banking as long as it
is perceived to be useful and perceived to be easy to use. But the most critical factor for the customer
is cost; the service should be affordable. Furthermore, the mobile banking service providers, both the
banks and mobile network providers, should be trusted. Trust was found to be significantly negatively
correlated to perceived risk. Thus, trust plays a role in risk mitigation and in enhancing customer
loyalty.
http://upetd.up.ac.za/thesis/available/etd-05152011-103542/
The impact of hubs on the adoption of products among a South African Bottom of the Pyramid
(BOP) network by Motheo Matsau
2010
The original study on which this study was based on was conducted by Jacob Goldenberg, Sangman
Han, Donald R.Lehmann, and Jae Weon Hong and published in 2009. In a slight contrast to
Goldenberg et al (2009), this study was conducted among a bottom of the pyramid (BOP) network in
South Africa using one non discretionary product whilst the original study was conducted on multiple
high tech products in Korea
This study explores the role of hubs (people with an outstanding number of social ties) in diffusion and
adoption of products. The study was conducted using data on a large network and its adoption of a
product (electricity) to identify two types of hubs – innovative and follower hubs and their role in
influencing adoption ala Goldenberg et al (2009). Even though hubs are not necessarily opinion
leaders nor are they necessarily innovators (as described by Rogers, (1962)) they tend to adopt
earlier in the diffusion process. Innovator hubs have a greater impact on speed of adoption whilst
Follower hubs have greater impact on the size of the market or total number of adoptions.
Interestingly and crucially this early adoption behaviour of hubs can be a useful predictor of future
product success.
Among BOP network nodes, relationships and trust are important in determining the amount or
degree of influence one can exert on a fellow network member. Homogeneity increases trust which in
turn impacts the role of a hub as a force of influence. The centrality of hubs to networks is also a
factor behind their role as information to the rest of the network passes through them, to a degree
giving them control over the dissemination of information.
http://upetd.up.ac.za/thesis/available/etd-05152011-105235/
The use of mobile phone advertising as an effective medium to reach the South African urban
bottom of the pyramid by Victor Mesquita
2011
This research study investigates the requirements or factors that will influence the acceptance and
impact of mobile phone advertising to the urban Bottom of Pyramid (BoP). The framework
incorporated awareness, availability, acceptability and convenience as factors for effective mobile
phone advertising.
Mobile phones have received unprecedented penetration rates across all markets, including LSM 1-4.
This presents companies targeting this market with an excellent advertising medium with which to
communicate to consumers.
Companies have begun advertising via mobile phone and this research investigates the impact of this
advertising, in relation to other more established mediums, as well as the most optimal mobile phone
service to be used in delivery of the advertising message. The type of advertising being sent to BoP
via mobile phone advertising is analysed, along with the type of advertising the urban BoP market
would like to receive and possible differences identified.
The research examines the recall of advertising message across various advertising media and
comparisons are drawn.
The research found that all aspects of the framework were applicable. Convenience and acceptability
were seen as the highest drivers for effective mobile phone advertising to the South African urban
BoP.
http://upetd.up.ac.za/thesis/available/etd-07212012-180045/
Corporate social investment as a driver of customer loyalty at the bottom of the pyramid by
Kamantha Naidoo
2009
The research found that CSI has no direct impact on loyalty and that consumers value the quality of
service received more highly than CSI activities by companies. Even in instances where CSI
awareness was low, consumers were still willing to reco1mend the company to others. Some of the
research espoused the view that this may be because consumers experienced no direct benefit from
the CSI activity. The findings also suggested that at the bottom of the pyramid consumers place a
substantial emphasis on building relationships of trust and just because companies invest in CSI
activities, this does not on its own lead to consumers trusting the organisation more.
The implications of these findings are that when companies try to develop a competitive advantage
through CSI, they need to re-examine their CSI spend as well as re-evaluate whether individuals or
communities benefit as this has implications for individuals‟ loyalty to the company.
http://upetd.up.ac.za/thesis/available/etd-05062010-154027/
Managers’ less favourable attitude towards bottom of the pyramid (BOP) customers by Daniel
Nel
2011
Investment in low income markets is increasing so too is a sense of controversy regarding poor
markets. With BOP investment becoming many a firms‟ strategy towards achieving growth, it is not
clear to what extent managers‟ attitudes to poor customers differ towards their attitudes towards
middle-class customers. It is, however, well described that attitudes to poor people in a social context
is negative and in some cases less favourable.
It is postulated that business' mindset may be a barrier towards engaging with BOP markets despite
the incentives and benefits that literature puts forward for marketing to the poor. Whether this attitude
is negative, neutral, less favourable or similar is not well understood. The findings of this research
project, can with a high level of confidence, report that the attitudes of a sample of managers do
display a less favourable attitude towards a poor customer than is the case with a similar sample that
is exposed to a wealthier customer.
http://upetd.up.ac.za/thesis/available/etd-07292012-140023/
Discretionary thrift at the bottom of the pyramid by John Nkosi
2011
The purpose of this research is to investigate the concept of discretionary thrift amongst low income
consumers. Flatters and Willmott (2009) identified discretionary thrift as an advancing trend amongst
affluent developed nation consumers. These consumers temper their spending habits depending on
product or occasion; there are certain products for which consumers are willing to pay a premium
(behaviour associated with materialism) and there are others that consumers are looking to save
money on (behaviour associated with frugality). Thrift for low income consumers, especially in
emerging market settings, is not considered discretionary; rather, it is portrayed as „necessary‟ to
ensure survival.
This study followed a descriptive, quantitative design and surveyed 154 individuals considered to be
at the bottom of South Africa‟s income pyramid. There is sufficient evidence from this research to
support the proposition of discretionary thrift amongst low income consumers. Low income consumers
were found to save money by paying as little as possible (behaviour associated with frugality) for fast
moving consumer goods with low functional and status risk and were found to willingly pay the
required premium (behaviour associated with materialism) for socially visible aspirational brands of
clothing and fast moving consumer goods. The level of frugality and materialism expressed with
respect to these products was not influenced by age or level of education. However, the level of
frugality expressed with respect to these products was affected by an individual‟s gross and
disposable income.
http://upetd.up.ac.za/thesis/available/etd-07292012-142426/
The financial implications of firms business model focus within the bottom of the pyramid
market segment in South Africa by Lebogang Poonyane
2010
The participation of businesses and major corporate companies in poverty stricken lower income
markets has been met with opposing, and at times controversial views. The Bottom of the Pyramid
proposition is one such idea that encourages business people to get involved in the market. However,
the commercial viability of the BOP proposition has yet to be proven.
The literature review from this study focuses on the ideas surrounding the appropriate business
models that have been put forward through academic literature in order for companies to operate
successfully in the lower income market segment. Consequently, the literature also focuses on the
developments of the BOP proposition as it relates to the business proposed models. Specific attention
is paid to the areas of innovation and replication as strategic focus areas within the BOP business
models.
The research seeks to highlight the fact that the BOP market segment is a commercially viable market
for companies to pursue, and that the business model focus for companies should be centred around
the dual application of innovation and replication principles as part of the company‟s business model.
The research study made use of interviews with expert executives and supporting documentary
evidence from two case study organisations from within the FMCG industry in South Africa. The
results of the research were documented and used to address the primary and secondary research
objectives. The research findings ultimately enabled the author to construct a model, which
companies interested in pursuing the BOP market could implement in order to operate profitably
within the BOP market segment.
http://upetd.up.ac.za/thesis/available/etd-06182011-193723/
The effect of CSR initiatives on creating share of heart in BOP markets by Michelle
Breytenbach
2011
This study is concerned with investigating whether corporate social responsibility (CSR) initiatives
provide a means to build brand equity, specifically emotional connections known as share of heart, in
bottom of the pyramid (BOP) markets. Research has found that brand experiences, positive product
outcomes and nostalgia are antecedents to share of heart; however, this presupposes developed
markets in which categories have already achieved primary demand.
In underdeveloped BOP markets, market expansion is challenging and necessitates investments into
social initiatives to increase the welfare of the community. The study proposes the use of CSR
initiatives to encourage brand building as consumers were found to form an emotional attachment
with brands, which brings about loyalty and intentions to purchase.
A correlation study was carried out to determine whether a relationship existed between CSR and
emotional attachment and whether this predicts greater intentions to purchase. The research
confirmed that CSR is an antecedent to EA; however, the results revealed that certain conditions
have to be met before consumers can connect with brands emotionally. The findings also indicated
that CSR awareness fosters positive CSR beliefs, whereas consumers‟ emotional attachment
towards the brand explains their intention to purchase the brand.
http://upetd.up.ac.za/thesis/available/etd-06102012-122840/
Adaptation of the m-commerce value proposition for low-income markets by Mohamed
Mahomed
2010
This research project investigates the requirements or factors that will influence mcommerce adoption
in low-income markets. The framework incorporated awareness, availability, convenience,
affordability and acceptability as variables for m-commerce adoption in low-income markets.
Mobile commerce is the next step in the evolution of networked computing and is the utilisation of
mobile communication for financial gain. In South Africa, the fast rate of mobile technology adoption
has created an access footprint for mcommerce across the country. Businesses are adopting mcommerce into their business strategies to tap into these new markets. Recently the potential
commercial benefit in low-income markets is being explored by business. In South Africa the lowincome market has been characterised by the foundation tier of the economic pyramid. Although this
market is seen as extremely price sensitive and has little to no disposable income, the collective
potential of it is considerable.
The research found that certain aspects of the framework were applicable. Awareness, knowledge
and acceptability were seen to have the highest association with m-commerce adoption in the lowincome market.
http://upetd.up.ac.za/thesis/available/etd-05122012-175020/
Can the base of the pyramid twin goals of profit and improved welfare be achieved? By Marcel
Mitchelson
2011
Do companies that are involved in ventures at the bottom of the pyramid (BOP) achieve both profit
and an increase in the welfare of the poor as proposed by Prahalad and Hart (2002), or is there is a
trade-off between profit and welfare as argued by critics of this proposition such as Karnani (2005).
Research is lacking in the field, something that this investigation seeks to fill through qualitative
research thereon.
A central finding of this research was that the paradigms that the companies followed, impacted their
views on welfare, profit and the trade-off. The findings reflect that companies have poor indicators of
welfare and that there is very little evidence of companies measuring welfare. The findings in respect
of a trade-off between profit and welfare is inconclusive, indicating that for some companies there is a
trade-off but for others not. The trade-off may be explained by the view that capital should be patient
and that the required profit will be achieved in the future. An alternative model of social
entrepreneurship is suggested as a bridge between profit and welfare.
http://upetd.up.ac.za/thesis/available/etd-07212012-182227/
Mobile banking and the financial services needs of the poor : an adoption framework by Mbali
Tshitenge
2011
banking is one such technological development that has a potential to increase economic participation
by low-income consumers. This research examines the factors influencing the adoption of mobile
banking by low-income consumers in South Africa, with a special focus on the banking needs of the
poor. The research framework was adapted from Tan and Teo (2000) and assessed the impact of
these nine variables on the intention to adopt m-banking: relative advantage, compatibility with
values, compatibility with banking needs, compatibility with cell phone use experience, complexity,
“trialibility”, risk, self-efficacy and support. Data for this study was collected through a physical
hardcopy survey in Soweto, in Gauteng.
The research found that low-income consumers will consider adopting m-banking as long as it is
offers them an improved way over the current mechanisms of managing their money, it is compatible
with their financial services needs and they consider themselves as having the necessary skills to use
it.
http://upetd.up.ac.za/thesis/available/etd-08112012-165906/
Microfinance models for microenterprises at the base of the pyramid by Lesego Chauke
2011
The purpose of the research was to investigate the proposition that current Microfinance solutions are
not adequate for Microenterprises operating at the Base of the Pyramid. The research proposes
Microfinance solutions for Microenterprises should provide all-inclusive solutions; encompassing both
financial and business development services.
While the government can lead the debate and deliver on some of the enabling requirements, the
limited government resources cannot deliver fully on development requirements at the Base of the
Pyramid. There is an increasing need for the private sector to participate in sustainable development
initiatives. A key limiting factor is a lack of in-depth understanding of the needs of Microenterprises
operating at the Base of the Pyramid.
Quantitative research was conducted, using a survey-based method. The results show there is
appetite amongst Microenterprise owners at the BOP for holistic Microfinance solutions that can
deliver financial and business development services. The study also found business development
services, focusing on developing business knowledge and business management skills, were rated
the highest. BOP markets for Microenterprises are complex and require dedicated initiatives to
understand them and deliver solutions tailored to their needs accordingly.
http://upetd.up.ac.za/thesis/available/etd-06242012-134002
Redefining BOP : in pursuit of sustainable opportunity at the base of the economic pyramid by
Andre Louw
2008
The 2002 publication of “The Fortune at the Bottom of the Pyramid” by Prahalad and Hart posed a
proposition to multinational companies (MNCs) stating that huge profits can be made whilst
simultaneously eradicating poverty by selling to the poor at the base of the economic pyramid (BOP)
which is an untapped market consisting of more than four billion potential customers that earn less
than $2 per day.
Although very few researchers and authors actually dispute the reality of the opportunity presented by
the BOP proposition, most are quick to point out discrepancies in some of the arguments,
discussions, assumptions and conclusions made from the early publications. Most of these
differences of opinion can be clarified by refining the definition of the BOP proposition.
This study reviews previous literature to identify key attributes of BOP before utilising a meta-analysis
of 43 cited BOP case studies to identify and describe two distinctly different market segments within
BOP. BOP1 was defined as the bottom part of the BOP with a total population 2.8 billion customers
earning less than $2 per day while BOP2 would be the reminder of the BOP market segment.
Finally the BOP1 and the BOP2 segments of BOP are compared and contrasted with a South African
case to draw conclusions on BOP in SA and Africa.
http://upetd.up.ac.za/thesis/available/etd-03122010-162623/
Innovation in distribution models at the base of the pyramid by David Osborn
2011
This study investigates how innovation in distribution models at the base of the pyramid overcomes
the impact of institutional and infrastructural voids in the base of the pyramid (BOP) markets. The
research was based on the qualitative assessment of successful companies currently operating in the
healthcare, pharmaceuticals, fast moving consumables, beverages and financial, consulting and
telecoms services space in BOP market in Africa and India. The research establishes that successful
distribution is not possible without consideration of the needs and values of the lower income
consumer in terms of understanding where they live, what they purchase and how they behave.
Offerings to this market require the application of frugal engineering principles to address product
specification, production cost and cost to access.
Companies were then researched and the findings interpolated to create a distribution model that
describes how companies‟ route to market can take the form of either an active or passive mode of
distribution. A case for best practise was then developed to describe the most innovative, successful
approaches applied to the unique distribution problems in the BOP.
http://upetd.up.ac.za/thesis/available/etd-07292012-144042/
An analysis of internal organisational factors that support intrapreneurship in BoP business
units by Rajesh Ramsundhar
2009
The Base of the Pyramid (BoP), the world‟s four billion poorest people, represents an opportunity for
large companies to grow their revenue. However, the challenges in the BoP require organisations to
adopt an entrepreneurial orientation in order to be successful. Entrepreneurship within an existing
organisation, known as intrapreneurship, requires the prevalence of certain internal organisational
factors.
This study sought to establish if the internal organisation factors that support intrapreneurship were
prevalent in BoP business units; to establish the limitations/ shortcomings in this regard and to
establish the changes required to further support intrapreneurship. A review of the intrapreneurship
literature highlighted three prominent internal organisational factors that support intrapreneurship,
management support, autonomy/work discretion and reward/reinforcement, which formed the scope
of the study.
A list of characteristics describing the three internal organisational factors was developed from
literature. Expert interviews were conducted to obtain perspective on how the three internal
organisation factors exhibit themselves in BoP business units. The results of the study confirmed the
prevalence of the three internal organisational factors in BoP business units, highlighted the
limitations/ shortcomings in terms of supporting intrapreneurship and the changes required to the
internal organisational factors to further support intrapreneurship.
http://upetd.up.ac.za/thesis/available/etd-05072010-131747/
Buying behaviour and decision-making criteria of Base of the Pyramid consumers : the
influence of packaging on fast moving consumer goods customers’ brand experience by
Ebrahim Variawa
2010
Marketers increasingly face challenges in trying to understand the decision-making processes and
behaviours of those consumers located at the Bottom of the Pyramid (BOP). It has been proven that
73% of fast-moving consumer goods (FMCG) purchases are made at the point-of sale, and product
packaging has been found to play a strategic role in seven of the ten in-store purchase decision
criteria. Packaging is, therefore, an important basis through which companies can differentiate
products from the plethora of competing brands. On average, big retailers carry 50 000 items and the
typical shopper passes 300 items per minute. The packaging must, therefore, perform many of the
sales tasks, making an overall favourable brand impression and experience. The research has
attempted to understand the constructs of packaging and brand experience as purchasing decision
criteria for FMCG products. The researcher administered 250 surveys with low-income consumers in
the Star Hyper supermarket in the mining town of Carltonville. The findings demonstrated how lowincome consumers have an appreciation of all product packaging as they often re-use it once the
product is consumed. Furthermore, lower income consumers enjoy a greater brand experience with
'premium' product brands when compared to their brand experience levels with what they perceive to
be 'cheaper' brand products. Even though a statistical weak relationship between product packaging
and brand experience was found, the qualitative findings support the notion of a strong relationship as
lower income consumers gain more value/greater brand experience not just out of consuming
'premium' brand products, but also from the use of the packaging for other needs afterwards.
http://upetd.up.ac.za/thesis/available/etd-07232011-131708/