Now who doesn’t go to retails? Yes, Bottom of Pyramid Market is widely open. And everybody goes there. In Jakarta there’s several practices: Mie Sedaap started entering Warung Makan, Nescafe has spreaded their banners into several “Warung Kopi” and so does Kapal Api. Celullar Provider also attacks non-cellulars retailer to provide “Warung Banner”, and the funny thing is one store may have more than 2-3 store banners from esia, indosat, xl, etc. Do they really enter the rural market? Is it correct if we name it strategy to enter the bottom of pyramid? In fact, these producers have already set their price strategy to touch “that market”. So, it does enter the bottom of pyramid. The Question is, when everybody goes there, i mean in exact same market, then perhaps the next challange is how to win the retailers heart at the most convinient way. All you need is simply innovation.

Let get started, now you’ve already had the right product, the right price, and also the right benefits. Then you want to enter this red ocean, what do you need? Your competitors have the same target, market, and probably better sales army. Well, the battle of the red ocean can’t be avoided. You must offer the better benefits for the retailers and of course your end-customers. Better here means “SIGNIFICANT and ATTRACTIVE”. Because you can’t keep your “always-lower” strategy, it’s not significant and attractive enough. Just look at Celullars silly promotion, there’s always “lower” statement.

There’s “Low / Free-Price” Trap in the bottom of pyramid, since lots of player now. Although these market is still widely open, you must prepare for the next strategy. Indeed, the market itself is still attractive. It can be shown by total industy coverage compare to total market. So, there’s a lot of opportunity to gain share from new developed market.

Here are some of my analysis to face the competition.

  1. You must realize that it is difficult to switch the loyalty of your customer. So, you must set your target to “the new users”. The fact is, market still large enough and it is growing as well as the population rate.
  2. Use “SIGNIFICANT & ATTRACTIVE” positioning, so your product really differs from others. Try using “Reverse Assumption”. For example, instead of being the cheapest you can provide as the MOST healthiest/fashionable/high-end and also Affordable product. Yamaha encounters HONDA fuel efficiency with their “non-significant fuel efficiency to Speed Performance” Positioning.
  3. Pay little bit HIGHER is okay, but provide it with THE BEST BENEFITS from its class.
  4. Create Events that involve the “new users”. In time they start deciding what product/service they will use, then your product already on their top of mind.
  5. Aggressively enter the new market that is currently hasn’t been touched by the competitors. Build the relationship, and focus to develop your market there.
  6. Localized theme often brings more advantage. Because your regional market want to be recognized on their local pride.
  7. Build new channel, which is the non-retailers. You may enter the pesantren, private school, local community, politic party, local sports club, etc.

If you still stuck on the red ocean battle, you must put more energy to THINK new INNOVATION than trying to PUSH your product.

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