Bottom of Pyramid - Erradicanting Poverty and Making Profit -- World Resources Institute International Conference

1. Seven Golden Rules to deconstruct misconcepts and clichés aiming to create win-win business models oriented to BOP in emergent markets Lessons that I learned working with development organizations and also as a marketing and strategy consultant to corporations Or... Brazil Half-Full Half-Empty

3. Don’t be misguided by income indicators 1

4. Don’t be misguided by income indicators and about the number of people living below poverty line MDOs and governments overestimate the size of poverty MDOs use secondary data sources (national governments), which are inconsistent and use inadequate methodologies

9. “ 60 million below the poverty line” 15 de abril de 2004

10. Income per capita? How much is your monthly income? National census and surveys ask the head of the household: Formal economy ==> not very reliable data Informal economy ==> no consistent income

11. Don’t pay attention to the researches avaliable about number of people living below the Poverty Line Methods to estimate the income per capita are extremely inconsistent specially in markets where the informality is high

13. MDB and other development organizations and governments overestimate the size of poverty

14. Use consumption indicators as a starting point to solve the puzzle 2

15. Appliances: market penetration per strata 2000

18. Development organizations Indicator: INCOME per capita Objetive: Determine the needs of society

19. Corporations Indicators: MARKET PENETRATION of goods and services per household Objetive: Figuring out what consumers want and their behavior

20. Income per capita? How much is your monthly income? Census and Surveys ask the head of the household Formal economy ==> not very reliable data informal economy ==> no consistent income THE BIG TROUBLE WITH INCOME DATA

21. When you focus on Income you get a very poor picture about the reality, especially when informal economy becomes more significant...

22. Consumption? Do you have a TV set, car, what apparels, your level of education etc.? Marketing research Very tangible questions

23. On the other hand, when you focus on consuption we get a more accurate picture not only about the purchasing power but also about people’s lifestyle

24. Bear in mind that there is a very dynamic process of mass market formation and at same time market mass market fragmentation 3

26. Brazil 2004 182 million inhabitants 47,5 million household Critical mass of an emergent middle class

27. The New Brazilian Middle Class Former Middle Class The New Middle Class Emergent Middle Class

29. Don’t underestimate the vitality of low income emergent markets 4

30. 1963-1990

32. Avoid the macro-economics myopia and invest in gaining in-depth knowledge about the fabric of society 5

34. Strive to understand people’s desires not only needs 6

35. Don’t get fooled by the label “low-income”, that doesn’t mean the customer have low quality standard expectations 7

36. Source: David Meyers, The American Paradox O paradoxo do progresso e da felicidade na sociedade contemporânea

38. Wealth and poverty are both a moving target

39. Fast food casual restaurant oriented for low income segment

40. 28 deparment megastore chain in Rio 2 million active clients only in the RJ state (13,8 million inhabitants)

41. Health insurance for low income strata in the states of RJ and SP increased the number of clients from 250 thousand to 400 thousand over the last 3 years

42. Government, Society and Business Players should revise and integrate the concepts of: Poverty, Social Vulnerability, Low Income and Informality

43. Thank you! Brazil Half-Full Half-Empty