CII Marketing Summit: Democratise commerce, says C K Prahalad

New Delhi: "If the 20th century was all about gaining political freedom, 21st century is about democratising commerce, about how to reach and enable access to all to the global economy,'' says Dr C K Prahalad.

Addressing a special session via video conferencing at the ninth CII Marketing Summit at New Delhi, Dr Prahalad said that reaching the bottom of the pyramid meant providing world-class products at an affordable price to each and every human being.

"Globalisation is a reality today and cannot be wished away," he said, adding that "there are 4 billion underserved persons in the world and there's a need to provide this emerging market the benefits of globalisation."

Dr Prahalad stressed the need to "create micro-consumers and micro-producers along with micro-investors and micro-innovators if we are to achieve this goal." He said there is no single business model to cater to the bottom of the pyramid, as it is not one homogenous segment. Spending models differ from country to country, region to region and district to district.

"The underlying aim is to provide products with global standards and locally responsive solutions," Dr Prahalad pointed out.

Dr Prahalad cited the example of Indian mobile phone industry, which he said exemplifies that it is possible to successfully cater to market segments straddling the pyramid. "If we can do this in the field of connectivity, why should not we able to be successful in other core fields like health, energy, education, water and micro-finance?" he questioned.

According to Dr Prahalad, the biggest impediment in achieving this is the "managerial mindset".

"We always think of going into a market where money is, not where we can create a market and this has to change," Dr Prahalad said.

A new way of thinking
Stressing that there could be no alternative to providing hi-tech hybrid solutions if the bottom of the pyramid has to be reached, Dr Prahalad said, "If people cannot afford, we have to reduce costs. We have to think away from the traditional business strategy of cost plus profit is equal to price.''

Dr Prahalad said the new way to reach out is to think in terms of target price minus target profit is equal to cost.

"This is economically justified as the scales are huge and important,'' he said.

Co-creation just as important
"We must also learn to co-create," Dr Prahalad said.

"The public, private and NGO sectors have to work together to achieve this goal," he said while pointing out that this was important in order to create inclusion and take the benefits of globalisation to humanity at large.

Concluding his address, Dr Prahalad said that all this would be possible "only if we have the imagination and deep belief that every Indian has the right to quality services at affordable prices."