Lessons for successful BOP marketing from Caracas' slums

John Ireland

94 citations0/0 files storedJournal of Consumer Marketing

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Innovation and Socioeconomic Development Consumer Market Behavior and Pricing Microfinance and Financial Inclusion

Abstract

Abstract Purpose – The purpose of this paper is to explain how leading firms can profitably serve poor consumers by targeting the urban bottom of the pyramid (BOP) with appropriate marketing practices. Design/methodology/approach – The approach taken is an integrative analysis of existing literature and new cases. Findings – The urban BOP market is more profitable for large firms than the rural BOP due to its density of wealth, proximity, homogeneity and modernity. While recommended tactics for BOP marketing like rock bottom pricing, innovative products and sachets never produced market leaders, multilevel channels and inclusive pricing led to dramatic BOP sales growth for respected middle‐class products. Research limitations/implications – Theoretically, this research demonstrates that the urban‐rural divide is a good starting point for the development of context‐contingent strategies because successful urban BOP marketing practices were very different to those recommended for the rural BOP. It also makes a useful contribution to the question, "Do the poor pay more?" by demonstrating that the answer varies both with the category and the shopping occasion. Moreover, transaction cost theory prevailed: the key success factor for firms with leading products and brands was to find or develop appropriate intermediaries. Practical implications – Firms with successful middle‐class products and brands should target the urban BOP. Others need not apply. Inclusive pricing and appropriate channels, especially multilevel marketing, can multiply sales and margins. Originality/value – Recent criticism of the BOP proposition leads managers to believe that they must either serve the rural BOP at a loss or abandon the BOP altogether. This research demonstrates that firms can serve the very poor very profitably by targeting the urban BOP.

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References

1968The Discovery of Grounded Theory: Strategies for Qualitative Research.2017The Discovery of Grounded Theory 2004Case Study Research 2006Fortune at the bottom of the pyramid, the: eradicating poverty through profits 2007The Mirage of Marketing to the Bottom of the Pyramid: How the Private Sector Can Help Alleviate Poverty 2002Rethinking Marketing Programs for Emerging Markets 1958Marketing and Economic Development 2007Business Solutions for the Global Poor: Creating Social and Economic Value

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2011Market entry of multinational companies in markets at the bottom of the pyramid: A learning perspective 2021Creating Social Value for the ‘Base of the Pyramid’: An Integrative Review and Research Agenda 2011Business Strategy at the Base of the Pyramid 2022Assessing the attractiveness & Feasibility of doing business in the BoP Market – A Mixed Method Approach using ABCD Analysis Technique 2013Benefits of Cross‐sector Partnerships in Markets at the Base of the Pyramid

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