BOP and Corruption

Bottom of pyramid approach to marketing is fairly well established now. It’s a simple premise really. If you break the economic and physical bottlenecks of distribution you can reach a huge previously neglected market. Millions of small sales can add up to big profits. This means that corporate should focus on ways to lower the cost of providing goods and services so that you can offer them at lower price and still maintain margins. The bottom of pyramid thus is made up of mass market made even more mass comprising of underserved consumers.

Now this is a completely contrarian thinking economically. The focus is not on those who have the resources, the focus is not on the high value customers, and the focus is not on the possible most potential customers. This contrarian thinking is powering the consumers across the world

Focus on BOP has strong economic potential and the power to alter markets; can the same theory have similar impact on economics of corruption?

More importantly how do you define the BOP of corruption?

This is where it gets very interesting. All the figures available on the web with so called watchdogs (and most of it being unverified) are about large grafts. And as a country we are pretty low down. In 2010 we were ranked 87th out of 178 countries globally. And even more astounding is a 2005 stat that says 45% Indians have had a firsthand experience of paying bribes, by the same organization. The amount may well be just unestimateable.

Now this is a good indicator of what BOP of corruption may be. Clearly the apex of this pyramid are the politicians and large corporate. At least that is how it looks logically as they control the portals of economy. The bottom end of this pyramid is made up of the ordinary middle class Indians. If45% have paid a bribe then it has to be the great Indian middle class.

Like the conventional BOP theory, even this is made up of mass market made even more mass which collectively is a huge market. If we have to make a positive impact on corruption then this mass of masses need to be impacted.

It’s a tragedy of our times where we don’t think twice before bribing our way through a traffic offence or pay a small tip to the cop who comes for passport verification. It is considered a way of life and the right thing to do. I know I will hear that if we don’t than work will never happen.

Now consider this. What will happen if this mass of audience stops paying to get work done? After all corruption like any financial deed is a transaction. It happens when one party pays and other accepts. Remove the payee, and the tree will collapse.

Suppose this we decide  to never skip a red light, to never pay for passport and driving license, always wear seat belt, never talk on phone while driving, never drink and drive, never jump lanes, the truckers don’t overload trucks, the scooterists wear helmets, even the pillion riders do so. Simply put we follow rules.

This will mean that the whole BOP of corruption comes crashing down. And this will also mean that we will not need discovered again social workers who espouse the great Mahatma again. This will force the government and the business to live by law. This will impact the apex of pyramid.

I know this sounds very simplistic, but then if 45% of Indians decide, we wont, then it will not happen. The true tragedy is that this 45% of India also does not believe in power of franchise and never votes

The bottom line still is that BOP impacts business and can impact corruption. Think about it

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