{"id":25462,"date":"2013-11-17T16:11:40","date_gmt":"2013-11-17T14:11:40","guid":{"rendered":"http:\/\/www.myza.co.za\/2013\/11\/old-markets-and-new-mindsets-at-the-bop\/"},"modified":"2013-11-17T16:11:40","modified_gmt":"2013-11-17T14:11:40","slug":"old-markets-and-new-mindsets-at-the-bop","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/old-markets-and-new-mindsets-at-the-bop\/","title":{"rendered":"Old Markets and New Mindsets at the BoP"},"content":{"rendered":"

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Ludwe Sityoshwana \u2013 the EH Walton Packaging<\/a> marketing director and a Rhodes MBA student studying the Bottom of the Pyramid (BoP) and business into Africa piqued our interest at a recent Institute of Packaging South Africa (IPSA) breakfast. Sityoshwana postulated that, as Motherwell is the 3rd largest township in South Africa, it is an ideal case study for business to hone their skills for future delivery of product to the 877 million people estimated to make up Africa\u2019s BoP.<\/p>\n

\u201cIf you understand the route to the market, especially into places like rural Transkei, then you can do business anywhere in Africa,\u201d he said.<\/p>\n

In economics, the bottom of the pyramid is the largest, but poorest socio-economic group. In global terms, this is the 4 billion people (out of 6 billion on the planet) who live on less than US$2.50 per day. The phrase \u201cbottom of the pyramid\u201d is used in particular by people developing new models of doing business that deliberately target that demographic, often using new technology. This field is also often referred to as the \u201cBase of the Pyramid\u201d or just the \u201cBoP\u201d.<\/p>\n

The phrase \u201cbottom of the pyramid\u201d was first used by U.S. president Franklin D. Roosevelt in his April 7, 1932 radio address, The Forgotten Man, in which he said; \u201cThese unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power\u2026that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid.\u201d<\/p>\n

877 million African BoP households (out of 1 billion Africans) fall within the LSM 1-4 grouping. These households are the most materially poor and under-serviced households. LSM (the Living Standards Measure) has become the most widely used marketing research tool in South Africa by measuring the material affluence of households (rather than individuals) and dividing the population into 10 groups, 10 (highest) to 1 (lowest).<\/p>\n

Various estimates are made about the LSM 1-4 segment:<\/strong><\/p>\n