Bottom of the Pyramid Marketing

Ramendra Singh

• Publisher: Emerald Publishing Limited
• Year: 2018
• ISBN:
  9781787149748
• Topic: Business
• Subtopic: Marketing
• Index: Business

Scholars have only recently begun to pay attention to Bottom of the Pyramid (BOP) marketing, and interest is growing on the subject amongst both marketing academics and practitioners. Organizations including HUL, P&G, Godrej, Nestlé and Cavin Kare, amongst many others, have started to seriously market their products and services to poor consumers. However, as both academic and practitioner focus on BOP evolves, it is clear that marketing practitioners lag behind the research output in this area.
Bottom of the Pyramid Marketing: Making, Shaping and Developing BOP Markets is written to provide much needed attention to this new and growing research area. It will fulfill a gap in the market by expanding the current avenues of academic research, as well as providing a key insight into the area which is sure to be the next growth engine for organizations as they begin to think about marketing to poor consumers.
Aimed primarily at marketing practitioners and scholars, this book will prove useful to organizations looking for deeper insights on how they can successfully position their products and services to poor consumers, as well as how they can purchase or source products and services from poor producers.

Part I

Markets and Marketing at BOP: Where We are and What We Know

Chapter 1

Evolving and Expanding Marketing to Address Challenges and Opportunities in BoP Markets: Looking Back and Forward

Madhu Viswanathan, Arun Sreekumar and Roland Gau

Abstract

The authors look back and forward in terms of challenges and opportunities for marketing, viewed from the vantage point of the subsistence marketplaces stream. The authors discuss how marketing can evolve and expand to address the scale and scope of challenges that lie ahead. By way of challenges, the authors discuss the confluence of uncertainties, such as inherent in the Base of the Pyramid (BoP) contexts, in environmental issues, and in the arena of technological solutions, as well as the confluence of unfamiliarities among managers, students, and researchers. The authors discuss opportunities for marketing through a bottom-up approach and argue for evolving marketing with rapidly changing reality in BoP markets, a harbinger and an innovation laboratory for all contexts.

Keywords: Subsistence marketplaces; Base of the Pyramid; marketing; low income; poverty; sustainability

We gain perspective as we look back and forward from the vantage point of the subsistence marketplaces stream, in light of the challenges we face in the arena of poverty. Indeed, with the successes of poverty alleviation efforts, people are coming out of extreme poverty in historical proportions in the last decades. Yet, poverty remains intractable in many parts of the world. Indeed, poverty is more than absolute wealth that is simply making less than a certain income level, or even relative wealth, but is characterized by deprivation and the capability of individuals to achieve their goals (Sen, 1981a, 1981b, 1983, 1993). In our view with an emphasis on the marketplace, poverty further breaks into domains of subsistence – like water, sanitation, shelter, energy, food, and so on. The problems in some of these domains are stark and immediate, such as with drinking water or sanitation. And in some domains, the problems may represent situations beyond individual life circumstances but also encompass regional and international policies, such as with issues regarding energy and food supply.

We use this chapter to both look back and think about the future in terms of challenges and opportunities for marketing. Though humbled by our learning and slow progress in various endeavors, the challenges are truly daunting, even sometimes seeming insurmountable. We articulate our thoughts at a number of different levels, grateful for the opportunity for this platform to reflect candidly. In doing so, we touch on a variety of rich insights developed by others; however, this chapter is not intended to be a methodical review, but rather a broader reflection. Looking back provides some degree of satisfaction with the road traveled but pales into insignificance when placed in the context of the scale and scope of challenges that lie ahead. It is in this light that we consider Marketing in BoP markets. Thus, we attempt to think in broader terms rather than the phenomenon of marketing or the discipline of marketing in terms of these challenges and the opportunities they afford.

Looking Back – Our Journey into Subsistence Marketplaces

This part on looking back will be brief, as it is well chronicled elsewhere (Venugopal & Viswanathan, 2017). We provide an illustrated journey in the Appendix and refer to it through this section. The subsistence marketplaces stream originated independently from the BoP stream, and evolved in parallel with it, benefiting from mutual cross-fertilization of insights. It began with the study of low-literate, low-income consumers in the United States, with the initial research presented at a special session at the ACR conference in 1998.¹ The stream evolved, as the research extended internationally, first to India and then to other locations including Tanzania, Mexico, and Argentina.

The term “subsistence marketplaces” was coined deliberately to emphasize a bottom-up approach beginning at the micro-level (Viswanathan & Rosa, 2007). Subsistence refers to barely making ends meet and covers the gamut from extreme poverty to the boundary between low and lower-middle income levels. This is a qualitative definition of life circumstances that complements commonly used dollars-a-day quantitative definitions, such as “under $2 a day.” Marketplaces denote the need to view these contexts as preexisting marketplaces to learn from (i.e., marketplaces as arenas for exchange), rather than as new markets for existing products (i.e., markets as demand or customers for products). This inside-out mindset or bottom-up approach is a critical distinction. These settings where much of humanity does business and marketing deserved to be studied in their own right, beyond being new markets or arenas for policy setting from an outside-in perspective.

We do not claim superiority for the bottom-up when compared to the top-down – rather, we note the difficulties in being bottom-up and particularly so in contexts of poverty. Similarly, we do not claim superiority of the micro-level when compared to meso- (BoP)² or macro (economic)-levels of analysis – rather we note how each level as a starting point is needed and complementary. We elaborate below about what, how, and why, with respect to this stream.

What – Subsistence Marketplaces

Our efforts in research have generated many publications, and we³ have edited roughly 60 refereed publications through special issues and organized seven biennial conferences and one immersion conference bringing together scholars and practitioners.⁴ Direct educational experiences, derived from our experiences on this topic, reach almost a thousand students on-campuses and many more online. Educational materials are disseminated worldwide through a web portal.⁵ This work has led to a unique marketplace literacy educational program that tens of thousands of individuals have received in seven countries – India, USA, Tanzania, Uganda, Argentina, Mexico, and Honduras – through the Marketplace Literacy Project, a non-profit organization founded in concert with this initiative and other partners.⁶

Our biennial series of conferences serve as forums for researchers, students, and practitioners, alike, each accompanied by special issues/sections/edited volumes. These conferences and edited volumes have led to insights about a variety of arenas in subsistence marketplaces, always with a bottom-up focus. The themes for conferences ranged from understanding consumers and entrepreneurs across literacy and resource barriers, to moving from micro-level to macro-level insights. More recently, we conducted the first immersion conference, on the idea that being bottom-up, we should be privileging field interactions over traditional conferences. The research and marketplace literacy outreach went hand-in-hand as a third element was added – education for students and practitioners about subsistence marketplaces through on-campus and online means, with material disseminated worldwide to educators and students through a web portal. Of particular relevance, is one cross-campus yearlong interdisciplinary course sequence with international immersion that has led to over 50 projects for a variety of entities that employ our bottom-up immersion, emersion, design, and innovation processes. Thus, these synergies created across research, education, and outreach enabled us to be bottom-up. Whereas we began with understanding consumers and entrepreneurs (Viswanathan, Sridharan, & Ritchie, 2010), we moved on to develop insights about designing solutions and ecosystems (product design and development) (Viswanathan, Seth, Gau, & Chaturvedi, 2009), and implementing them (business models) (Viswanathan, Shultz, & Sridharan, 2014), as well as through implications for public policy (Viswanathan, Sridharan, Ritchie, Venugopal, & Jung, 2012).⁷

How – Bottom-Up

Our approach has provided us with a unique vantage point, as we have worked at the intersection of research, education, and practice. We have developed a bottom-up approach to understanding these contexts and designing and implementing solutions – or more precisely, pathways forward – solutions can be a strong word here. In doing so, we have detailed out the micro-level in terms of life circumstances – unpacking poverty not only in terms of what we take for granted materially, but cognitively, emotionally, and behaviorally. Our emphasis on literacy brings out new insights on cognitive predilections, emotional elements, and coping in the marketplace (Viswanathan, Rosa, & Harris, 2005).

If there is a key lesson from our orientation, it is the emphasis of the bottom-up approach in everything we do. Our stream is bottom-up, beginning at the micro-level. We are bottom-up in educating students on-campus and online, using poverty simulations, virtual interviews, and actual immersion to enable them to learn from people living in BoP markets. We are bottom-up in how we conduct our research, run conferences (including the first immersion conference), and design and deliver marketplace literacy education, allowing participants’ lived experiences to guide the learning environment.

Why – Envisioning Sustainable Marketplaces

The why of our journey evolved along with the how and the what. One fundamental reason underlying our work is a vision of enabling those whom business research and education leaves out, a large proportion of humanity in the BoP that also does business and engages in marketing. This is worth studying in its own right, even if not new markets or new arenas for policy. And this was the foundation of the subsistence marketplaces stream and its label.

Over time, the why evolved as we gained insights about subsistence marketplaces, education for subsistence marketplaces, and education about subsistence marketplaces, as well as about how subsistence marketplaces can become sustainable marketplaces. Fundamentally, we suggest a marketplace orientation, rather than a market orientation, to first understand preexisting marketplaces, before figuring out where we, as new entrants into the system, fit. This requires a mutual learning mindset, where we learn from people on the ground who, at the least, are experts at survival. In turn, we have an important role to play, provided we have spent the time and effort in immersing and understanding. We continue to evolve the why, such as in understanding such contexts as a way to design pathways forward for all contexts and showing synergies between research, teaching, and education.

Relevant Aspects of Our Journey

At its core, our journey in retrospective coherence has been about unpacking poverty as it intersects with the marketplace, starting at a micro-level, and in terms of not only the material aspects but the cognitive, emotional, and behavioral. Our approach began with examining low literacy, a key correlate of poverty. We identified cognitive predilections such as concrete and pictographic thinking due to difficulties with abstract thinking, emotional elements such as self-esteem maintenance and trading off economic value for the affective, and coping beha...

Table of contents

• Cover
• Title
• Part I: Markets and Marketing at BOP: Where We are and What We Know
• Part II: Future of Research on BoP Markets
• Part III: Lessons for Marketers
• Index