Many entrepreneurs running global companies have pioneered a new market. They have discovered customers in a market largely ignored. Amadeo Giannini, the Italian-American founder of Bank of America, achieved success by targeting working families, and Mary Kay created new demand by claiming working women can have fair skin like a Hollywood actress. Pioneering a new market is a major innovation just like technological development. Economist Joseph Schumpeter said entrepreneurs who implement innovation receive the fruit of success.
In the past, banks only dealt with the rich for fear of losing money. Working families were forced to go to loan sharks but began gaining access to banks from the 20th century, when modern-day banks were created. Giannini, the son of Italian immigrants, set up a bank for small business owners and housewives to use. Muhammad Yunus of Bangladesh received the Nobel Peace Prize for setting up Grameen Bank, which offers loans to the poor. His achievement has granted bank credit and given new hope to the poor.
Even manufacturers in India are marketing cheap products for the poor, who live on less than two dollars a day. The items include a 70-dollar mini fridge, 23-dollar home stove, 43-dollar portable water purifier, and a 20-dollar cell phone. Indias Tata Motors has produced the 2,200-dollar subcompact Nano. The Wall Street Journal said Indian engineers have turned their eyes to the purchasing power of their countrys 1.1 billion people.
Some say three fourths of the world population, or four billion people, live in poverty. Professor C. K. Prahalad of the University of Michigan, dubbed the prophet of business management, estimates that the market of the poor is 13 trillion dollars per year. Though Indian companies make smaller profits due to low prices, they target the market of the poor because of its size and potential. What more could the world ask for if marketing to the poor raises their living standards and welfare while growing businesses and the economy?
Editorial Writer Park Yeong-kyun (email@example.com)