Base Of The Pyramid Consumers Research Articles

Impact of perceived value on the online purchase intention of base of the pyramid consumers

AbstractDespite the voluminous purchasing power of the consumers at the base of the pyramid (BOP), substantial research has not been carried out on their online buying behaviour. This study investigates the factors that trigger the online shopping intention of BOP consumers. We conducted semi‐structured in‐depth interviews with 52 BOP respondents from India. Our thematic analysis indicates four perceived benefits and five sacrifices influencing BOP consumers' perceived value for online purchases, subsequently determining their adoption behaviour. As a novel contribution to the literature, this study unfolds several unknown factors that motivate/demotivate BOP consumers to buy online using the Value‐based Adoption Model (VAM). The findings of this study will help e‐commerce marketers enhance BOP consumers' usage intention toward online purchases.

Which Food Outlets Are Important for Nutrient-Dense-Porridge-Flour Access by the Base-of-the-Pyramid Consumers? Evidence from the Informal Kenyan Settlements

Many Kenyan base-of-the-pyramid (BoP) consumers—defined as the poorest two-thirds of the economic human pyramid—remain food insecure, despite the availability of nutrient-dense foods in the market. This study reveals how effective marketing strategies can strengthen food security among BoP consumers through increased access to nutritious foods such as nutrient-dense porridge flour. Nutrient-dense porridge flour refers to a multi-composite porridge flour composed of diverse nutritious ingredients that are necessary to achieve a healthy diet. The main objective of the study was to determine the most effective channel for making nutrient-dense porridge flour available to BoP consumers. Data were collected through a cross-sectional survey in Kawangware, Nairobi County, using a multistage sampling design and a sample size of 603, via structured questionnaires. A multivariate Probit (MV-Probit) model was used to analyze the most effective channel for providing nutrient-dense flour to BoP consumers. The study results show that the most common outlets used to access this flour were supermarkets (51.08%), followed by cereal stores (25.54%). According to previous studies, using appropriate marketing strategies leads to increases in the uptake and consumption of nutritious products in informal urban settlements among developing countries. Consequently, policies and interventions targeting BoP consumption of nutritious products toward reducing food and nutrition insecurity in informal urban settlements should be based on appropriate marketing strategies that consider the institutional factors and significant household characteristics of the BoP communities.

Impact of political marketing strategies on the BOP voters in India

PurposeThis article aims to examine political marketing strategies adopted by the politicians operating in base of the pyramid (BOP) areas and their impact on the BOP voters using the tenets of the social influence theory.Design/methodology/approachThe authors resorted to a qualitative phenomenological inquiry for this study. The responses obtained from two qualitative studies were subjected to thematic analysis. Two thematic maps were integrated into a conceptual model.FindingsStudy 1 indicates that the politicians operating at the BOP resort to vote-bank segmentation, clientelism, mobilizing opinion leaders, short guerilla war against opposition and communication bombarding. Study 2 has elaborated on how poor voters perceive these strategies and form their opinions towards the party/candidate.Social implicationsThe findings of this study highlight the need for essential policy formulation to protect BOP consumers from deceptive political tactics.Originality/valueThis study develops a model of the effectiveness of voting strategies at the BOP. It also contributes to the literature on social influence theory by indicating how the three social influence processes (compliance, identification and internalization) result in different ways of accepting political influence.

Improving base-of-the-pyramid consumer welfare through mobile technology services

PurposeRecent development and democratization of digital technologies call for studying base-of-the-pyramid (BOP) consumers’ interactions with these technologies. This study aims to explore how BOP consumers interact with mobile information and communication technology (mICT) and improve their welfare.Design/methodology/approachFollowing an extensive literature review, content analysis of the reviewed articles and reports was conducted to build this article’s conceptual foundation.FindingsThis study has conceptualized five mechanisms in which mICT improves the lives of BOP customers through enhanced access and control of resources. In particular, the authors characterize a converging nature of mICT and related applications (social media, internet of things, artificial intelligence and sharing economy) as resources for social change. The authors find a striking contrast between BOP and affluent consumers regarding their motivations and barriers to adopting mICT-based applications. Implications to research, technology design and policymaking are discussed.Originality/valueThe intersection of mICT and BOP is under-researched. With this paper, we tried to address this research gap. Further, this study has brought out several important research questions in each application, serving as a springboard for future researchers.

Fintech, base of the pyramid entrepreneurs and social value creation

PurposeFintech is having a profound impact in Sub-Saharan Africa (SSA) because it offers more financial inclusion. In this paper, the authors examine the interrelationship of Fintech, base of the pyramid (BOP) entrepreneurs and social value creation, particularly in the SSA context.Design/methodology/approachThe current paper uses a qualitative research design with open-ended, in-depth interviews as the main data sources. The authors interviewed respondents from the Sierra Leone Fintech Association and four BOP entrepreneurs operating in different sectors.FindingsThe authors find that Fintech services, specifically mobile money, play a significant role in reducing uncertainty surrounding business operations. FinTech also offers growth possibilities for BOP entrepreneurs and creates social value by providing transactional security, convenience and reducing physical cash robberies. At the same time, Fintech contributes to social value by enhancing BOP entrepreneurs as well as consumers' skills development.Research limitations/implicationsThis study highlights the importance of context-specific theorization when analyzing the interlinkage between BOP entrepreneurship, social value creation and Fintech. For example, the possibility of safety from a street robbery may not appear to be part of social value creation by a technological development like Fintech. However, in a country like Sierra Leone, which has experienced both a civil war and Ebola outbreak, insecurity has been one of the biggest concerns expressed by BOP inhabitants. Hence, scholars need to incorporate contextual elements of risk, uncertainty and volatility while theorizing on Fintech's application in BOP contexts.Practical implicationsA key managerial implication relates to micro-firm entrepreneurs and information specific benefits. Fintech offers entrepreneurs the possibility to be in regular contact with customers and evaluate their purchasing patterns as well as emergent needs. Fintech offers BOP entrepreneurs a possibility to further develop their technological skills as learning to use such apps can be used as a basis for further skills development. From a policy perspective, our study highlights the importance of regulating Fintech charges so that the affordability is increased, which is expected to result in significantly more BOP entrepreneurs using these services.Social implicationsThe authors find that at the same time, Fintech contributes to social value by enhancing skills development of BOP consumers who interact with case firms.Originality/valueThis paper is one of the first studies that specifically focuses on BOP entrepreneurship and social value creation by Fintech services in an SSA context. It is also one of the few studies that incorporates views from both entrepreneurs and the country's Fintech association, rather than focusing solely on either entrepreneurs or Fintech firms. Finally, there is a specific focus on BOP entrepreneurs engaging in micro-entrepreneurship.

The phenomenon of purchasing second-hand products by the BOP consumers

This study explores the motivations and consequences of purchasing second-hand (SH) products by the rural and sub-urban (RSU) base of the pyramid (BOP) consumers using a qualitative phenomenological approach. This study has also examined the preferred purchase points for buying SH products by the RSU BOP consumers. Findings revealed that the RSU BOP consumers preferred their personal sources over offline and online retails while buying a SH product. The economic motivations, need for fulfilling aspirations, apathy towards cheap brands, need for social recognition, and pester power of school/college going children were found as the motivations behind the purchase of SH products by the RSU BOP consumers. This study has also identified that increasing consumption of branded SH products results in compensatory consumption, increased consumerism, and overwhelming recurring cost at the RSU BOP. This study has put forth a conceptual model leading to a comprehensive understanding of the purchase points, motivations, and consequences of SH purchase by the RSU BOP consumers. It has advanced the social comparison theory and the theory of compensatory consumption in the context of SH buying by BOP consumers. This study would fill the gap in the literature on consumer behaviour and BOP by examining such a novel issue. The practical and social implications of the study have been discussed.

A Demand-Side Perspective on Value Creation for the BoP: A Study of Consumption and Well-Being

We use a demand-side logic to analyze firm engagements with Base of the Pyramid (BoP) consumers. We ask: what kind of value do firms create with such engagements? How do BoP consumers experience this value? We use longitudinal surveys from consumers in rural India to explore economic and non-economic well-being returns from purchasing corrective eyeglasses. We discover gains across multiple dimensions of well-being (economic, capability, relationship)—even when income benefits do not offset acquisition costs. Second, we test for the Matthew Effect. Surprisingly, we find the more resourced do not always fare better—demonstrating the importance of attending to BoP heterogeneity. Findings unpack how firms capture value with BoP engagements, by illuminating how such engagements create value and how value creation varies by segment.

Are consumers at the base of the pyramid willing to pay for nutritious foods?

Base of the Pyramid (BoP) consumers living in the urban informal settlements of developing countries spend over 60% of their income on food, yet malnutrition and micronutrient deficiency remain widespread among these populations, pointing to the inadequacy of the foods they consume in terms of quality and quantity. In this paper we examine BoP consumers’ willingness to pay (WTP) for nutritious multi-composite porridge flour (improved flour) in the informal settlements of East Africa. The analysis is based on experimental data collected from 600 households in the informal settlements of Kampala, Uganda and Nairobi, Kenya (300 in each country) in 2016. We use Tobit regression models to analyse determinants of WTP for the improved porridge flour. Results show that both Kenyan and Ugandan BoP consumers are willing to pay a premium for the improved porridge flour. In addition, providing nutrition information about the flour, characteristics of household head, economic status of the household, and presence of young children between six and 59 months in the household, influence WTP for the safe and nutritious porridge flour. The paper concludes by providing recommendations for enhancing nutrition among poor consumers in the informal settlements of developing countries.

Base-of-the-Pyramid (BOP) orientation and firm performance: A strategy tripod view and evidence from China

The Bottom of Pyramid (BOP) market in developing countries represents an enormous market opportunity. Serving the BOP segment, however, incurs significant risks and costs because BOP consumers are deprived of income and literacy. It remains unclear whether or not serving this market segment would benefit firm performance. Based on related literature, we propose a new construct – BOP orientation, and examine its impact on firm performance and an operating mechanism of such effect – the mediating role of bricolage innovation strategy that emphasizes recombination of existing resources to solve the unique problems faced by BOP consumers. Drawing on the strategy tripod view, we also investigate the contingency effects of both institutional and industry environments in an emerging economy. We collected survey data to test the conceptual framework from 238 firms in China, the world’s second largest BOP market. The results support a positive relationship between BOP orientation and firm performance and confirm that the performance impact of BOP orientation is channeled through bricolage innovation strategy. Further, we find that the effect of BOP orientation is contingent on both the institutional factors and the industry conditions. Specifically, government support strengthens while legal inefficiency weakens this effect; competitive intensity strengthens the effect, while technological uncertainty has no moderating role on this relationship. Contributions to extant literature and useful guidelines for firms of our research are discussed.

Constrained purchase decision-making process at the base of the pyramid

PurposeThe purpose of this paper is to examine the factors affecting decision-making at the BoP and propose a framework of the consumer decision-making process at the base of the pyramid (BoP).Design/methodology/approachThe qualitative research design was adopted to collect primary data. Data collected through the in-depth semi-structured interviews of the 48 BoP consumers in Kolkata and Kharagpur (India) were subjected to grounded theory analysis for theory development.FindingsThis study reveals that consumer vulnerability affects the decision-making process and the transaction cost at BoP level. It was observed that the consumers at the BoP make constrained choices due to their vulnerability and try to minimise transaction cost while selecting the retails. The constrained retail choice leads to a limited selection of products and brands.Originality/valueThis study, for the first time, has investigated the decision-making process for BoP consumers in detail. As a pioneering attempt, it sheds light on some new factors including consumer vulnerability and transaction cost that have an impact on the consumer decision-making process.

Value chain integration of base of the pyramid consumers: An empirical study of drivers and performance outcomes

The seminal works on Base of the Pyramid (BOP) markets encourage companies to explore untapped low-income markets and to alleviate poverty by providing affordable products and services. The transition to second generation BOP strategies has centred on the integration of local consumers across value chain activities. This integration presents challenges both for firms and for low-income consumers due to the nature of informal BOP markets, severe institutional voids and lack of local knowledge of firms. In this context, little is known about the motivational drivers of firms to integrate BOP consumers in value creation activities and the impact on different performance dimensions, namely economic, social and ecological. This study adopts the perspective of micro-, small- and medium-sized enterprises (MSMEs) and investigates drivers and performance outcomes of BOP consumer integration. For this purpose, we develop a theoretical framework and test it empirically by employing a unique dataset of 142 enterprises which provide basic products and services to low-income markets. Our findings provide empirical support for the claim that BOP consumer integration enhances economic, social and ecological performance. MSMEs in our sample engage consumers mainly due to a strong intrinsic motivation to drive social impact rather than a pragmatic motivation to overcome information asymmetries. While studies of multinationals entering BOP markets almost exclusively report the need for cross-sector partner collaboration, our findings suggest that this may not be the case for MSMEs.

Access-Based Services for the Base of the Pyramid

One key challenge for consumers at the base of the pyramid (BoP) is access to products that could transform their livelihood, leading to nonconsumption as the dominant pattern. Previous studies have claimed that nonconsumption could be addressed with services offering access to goods without ownership. Drawing on expected utility theory, we conduct two experimental studies in rural India that provide the first empirical support for the idea that the availability of access-based services reduces nonconsumption at the BoP. Additionally, we show that this effect is explained by BoP consumers’ expected utility assessment as reflected in their perception of access being more affordable and entailing less financial risk than ownership. We also demonstrate that access temporality, an important configurational variable for access-based service providers, affects the degree to which nonconsumption can be decreased. Compared to short-term access, BoP consumers perceive long-term access to be too similar to ownership in terms of affordability and financial risk, which causes them to refrain from purchasing. Overall, the results suggest that access-based services represent a viable alternative for addressing nonconsumption at the BoP. However, service providers should be aware that short-term access is required to gain acceptance among BoP consumers.

A protection motivation explanation of base-of-pyramid consumers' environmental sustainability

The purpose of this research is to use the protection motivation theory to examine base-of-the pyramid (BoP) consumers' environmentally friendly behaviors. BoP consumers suffer from the threat of environmental degradation and resource scarcity, particularly in emerging economies. They have not benefited from worldwide economic development as much as their counterparts in the middle and affluent classes. Based on the protection motivation theory, we investigate how threat appraisal and coping appraisal affect BoP consumers' intentions to engage in pro-environmental household behaviors. The proposed relationships are tested using self-reported data of Chinese BoP consumers. The results indicate that these threat and coping appraisal variables are related to BoP consumers' low-cost and/or high-cost household green behaviors. Theoretical and managerial implications are discussed.

Services for the underserved: unintended well-being

There is a lack of research on service consumption practices of Base of the Pyramid consumers. This study contributes to the Transformative Service Research agenda by understanding stigmatized service consumption practices and their effect on the well-being of these consumers; this has not been fully addressed until now. Additionally, it is shown that understanding the relations among consumers, communities, and informal service offerings results in the design of services with unintentional positive effects on well-being at individual, collective, and relational levels. Findings show that informal service offerings are non-discriminatory, hassle-free, jargon-free, and reputation-based. These findings pave the way to further explore such complex contexts to better understand the impact of service design on the well-being of such consumers. Positive practices can be adopted by any service industry that intends to serve that segment through the intentional redesign of offerings that are engaging, inclusive, and simple and acknowledge social standing.

Intensidade e Adoção da Inovação no Mercado da Base da Pirâmide: um estudo com produtos eletrodomésticos

O artigo analisa as características da intensidade e da adoção da inovação no mercado da base da pirâmide. A intensidade da inovação se configura como radical e incremental, enquanto que a adoção da inovação se configura como inicial e tardia. Como recorte empírico foi realizada uma pesquisa do tipo survey. A análise dos dados se fundamenta na estatística não paramétrica. Os resultados apontam que os consumidores da base da pirâmide se caracterizam por adotarem inovações incrementais de forma tardia, conforme aponta a literatura. Ademais, foi possível concluir também que as mulheres possuem maior poder de decisão nas famílias deste segmento.

Intensidade e Adoção da Inovação no Mercado da Base da Pirâmide: um estudo com produtos eletrodomésticos

The paper analyzes the innovation intensity and adoption characteristics at the base of the pyramid market. The innovation intensity is configured as radical and incremental, while the innovation adoption is configured as early and tardy. As an empirical approach it was conducted a study type survey. Data analysis is based on non-parametric statistics. The results indicate that the base of the pyramid consumers is characterized by adopting incremental innovations tardily, as pointed out by the literature. Furthermore, it was also observed that women have greater decision-making power in the families of this segment.

High-Growth Entrepreneurship in Mexico

ABSTRACTResearch from the United States finds a small percentage of firms are responsible for the great majority of net new job creation. We now have a fairly precise set of stylized facts regarding the characteristics of these high-growth firms (HGFs). However, we have little understanding of HGFs in Latin America. To address this gap, we explore the characteristics of HGFs in Mexico selected by Endeavor, a global business accelerator. We find Mexican HGFs are present in a wide range of industries, including information technology and consumer segments. Several are pursuing strategies targeting base of the pyramid consumers and/or expanding internationally. We conclude with suggestions for future research and policy implications.

Modelling the diffusion of manual irrigation pumps in lower income countries with the Bass model

The Bass model is a popular tool for modelling the diffusion of a new product targeted for consumers in economies above the poverty line. In this paper, the authors show that the Bass model is also appropriately used to model sales of products to consumers at the base of the economic pyramid. Specifically, the authors consider data from the sales of manual irrigation pumps (MIPs) to lower income consumers in Bangladesh, Tanzania, and Kenya. Fitting the cumulative sales data for MIPs in these economies with the Bass model provides insight about the market potential of MIPs as well as effective marketing strategies in these economies and supports the use of the Bass model to describe product sales to base of the pyramid consumers.

Analysis of Shared and Sustainable Value Creation of Companies Providing Energy Solutions at the Base of the Pyramid (BoP)

AbstractThis study was conducted to analyze the shared and sustainable value creation (SSVC) of 33 energy companies selling energy solutions at the base of the pyramid (BoP) markets. SSVC by selling energy technology solutions directed to address the cooking and lighting needs of BoP consumers were the main focus of analysis. Result showed that achieving profitability and affordability is affected by the kind of energy solution that is offered as well as the investment and level of commitment required. However, companies that fulfilled the profitable and affordable solutions were also able to deliver social and environmental sustainability benefits. Social sustainability benefits point to the ability of alleviating poverty by improving productivity or offering cost‐savings. Environmental sustainability benefits point to the energy savings. The findings show that inclusive business strategy is not necessarily required to reach the poor people profitably but a suitable business strategy depends on the type of energy solution. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment

The “Integrative Justice Model” as Transformative Justice for Base-of-the-Pyramid Marketing

Writing in the Business and Politics, Santos and Laczniak (Business and Politics 14(1) 2012) formulated a normative, ethical approach to be followed when marketers e ngage impoverished market segments. It is labeled the integrative justice model (IJM). As noted below, that approach called for authentic engagement, co-creation, and customer interest representation, among other elements, when transacting with vulnerable market segments. Basically, the IJM derived certain operational virtues, implied by moral philosophy, to be used when marketing to the poor. But this well-intentioned approach raises a significant “So what?” question. Are such sentiments anything but lofty aspirations for idealists or are there steps to be taken by society and business managers of goodwill to make the adaptation of the IJM by corporations more likely and pragmatic? This paper begins to layout a roadmap that shows “how and why” the IJM might more likely be vitalized. The crux, as described below, is found in the transformational justice dimensions that are embedded in institutions (and supporting institutional arrangements); such external institutions provide a “power” impetus to assure the ethical rights claims that impoverished consumers have owed to them. In this way, the ideal exchange characteristics for bottom (or base) of the pyramid (BoP) markets argued for in the IJM can become actively transformational. The main contribution of this paper is that it begins to chart out the institutional system elements that need to exercise power in order to deliver a “fairer” marketplace for BoP consumers.