Questions about Out of Poverty Book by Paul Polak - Assignment Example

Response to the book “Out of Poverty" by Paul Polak Question Paul Polak spent most of his time with the poor; he carried out effective research among the people and understood their reasoning and their abilities. With such knowledge, the Psychiatrist designed products that befitted the demands of the market with the view of alleviating their condition and for his own profitability. 90% of the world population is a great number, which is capable of offering permanent market to any product that any entrepreneur may choose to introduce in the market. However, in doing this, one must design the products effectively considering the unique features of the group. According to Polak the group is a massive consumer but lack the financial ability to purchase the products. Additionally, he discovers that the group comprises of viable entrepreneurs. When designing products for the group, Polak advises that an entrepreneur consider the consumption pattern of the group. Firstly, the poor have minimal finances they therefore attach more importance on the price of the commodes they purchase often at the expense of the quality of the products. An entrepreneur must therefore devise cost effective means of production to ensure the manufacture of cheap products that will fit the budgets of the group. Additionally, the group is huge. At 90% of the world population, it is therefore the greatest market and after designing products that appeal to the group, the next big feature of such a business becomes the mass production and determination of effective retail services. Question 2 Of all the ideas Polak fosters in his book, among the most surprising findings is his claim that the 90% of the world’s population is poor. Additionally,, the scholar claims that the 90% drive the world economy. However, he breaks down his points to validate his claim by explaining the financial movement in the market economies thus validating his claims. According to his explanation, it becomes factual that a larger percentage of the world’s population is poor but still controls the global economy. Question 3 I agree with most of his ideas. I like the idea that products that target the poor often sell faster and better than those targeting the wealthy in the market do. Just as he explains it, the poor are the majority this widens the base of the market for any product or service that targets the population. An entrepreneur must therefore determine the best way of producing such products at cheap costs but in bulk. As a marketing strategy, by targeting the poor, an entrepreneur earns smaller profit margins per product but sell many products thus earning a lot of cumulative profits unlike the products that target the rich. Such products do not sell as fast as those targeting the poor. Such entrepreneurs therefore make huge profit margins per product but sell fewer products and may therefore make smaller cumulative profits. Question 4 However, I disagree with Polak’s idea that the economy is entirely currency oriented. Several transactions cancel out without the parties using any currencies; Polak ignores such as he focuses only on the monetary economy. The batter economy is active among the poor and offers such an efficient mechanism of changing their services and products, which they may need most. The batter market is retrogressive but inhibits several advantages and may address such social vices as drunkenness that foster the poverty. Question 5 The most fundamental concept that Polak teaches the poor is the power that lies in their unity. Through unions and corporations, the poor can combine their meagre earnings thus formulating loan systems to help them alleviate each other. Unions are systematically organized groups of entrepreneurs operating in the same business. Money is important in sustaining life in the contemporary market economies. This implies that the poor must also earn their living regardless of their poor state. Furthermore, the poor the poor can earn the stronger the economy becomes. For this reason, through the unions the merger their resources thus increasing their earnings, the unions make it possible for the poor to access loans from financial institutions thus revamping their productions. With an improved earnings, the poor will not only better their living standards but also revamp the economy (Paul 04). Question 6 As an entrepreneurship student, of all Polak’s ideas I would wish to remember the nature of the market economy. His explanation of the market and the difference between the poor and the rich is essential to any aspiring entrepreneur. Marketers spend millions of dollars in market research with the view of determining the most effective means of producing cost effective goods that appeal to their specific market. With the knowledge of the poor and the consumption pattern, it thus becomes easier to develop products that appeal to the market and to marinating a good relationship with the very market. Most organizations carry out expansive social responsive investing as a means of marinating a good rapport with the local community but most of such fail to address the most important issues that affect the community thus failing to better their relationship with the locals. Question 7 Polak’s design may help solve the following problems in society: Poverty Poverty eradication is Polak’s basic concern. He therefore develops patterns that may help identify the underlying potential with the society. Agriculture for example employs most of the global population; Polak introduces concepts of making the poor farmers better their production thus improving their harvest. Such include the need for the farmers just as any other small and medium size entrepreneur to form unions. Consumption patterns The consumption pattern is a social problem that fosters poverty. The poor as outright consumers rarely save, this is possibly attributable to their meagre earnings but is also a factor that affects their potential to grow and improve their financial status. Polak encourages the poor to save and the idea of unions is among the best for instilling the saving attitude among the population since in such they motivate and challenge each other to sacrifice their little income thus pooling their resources and in the processing changing the poor consumption patterns among the poor. Ethnicity Most of the places Polak visited during his survey in Asia and Africa are multi ethnic and the differences among the people affect their unity thus impairing their ability to form unions. Differences among the poor are a contributor to the widening gap between the rich and the poor. Polak seeks to address such thus uniting the local community and motivating them to settle their differences and form common markets for their products as a means of ensuring that they are increasing both their productivity and revenue within the shortest time. Work cited Paul Polak, Out of Poverty: What Works When Traditional Methods Fail, San Francisco: Berrett Koehler Publishers, Inc., 2008. Print. Read More