BOP Consumers Research Articles

Influence of Needs and Lifestyles on the Bop Consumer:

The study is conducted in families of a rural population of the Republic of Ecuador, classified based on their social, cultural, and economic characteristics in the BOP market. Fifty groups were selected from these populations. Two hundred eighteen participants underwent detailed interviews and natural observation. The findings indicated a strong preference for national and traditional products, although also a preference for regional and global developments, showing differences in lifestyle and a combination of consumer needs. It is found that these consumers can be loyal to brands representing different social statuses. Therefore, companies should design more effective marketing strategies to target this market, whose growth is attractive for the development and increase of their sales volume.

Innovative New Product Adoption of Renewable Energy Mobility Products at the Bottom of the Pyramid The Case of Hamba, an Integrated Community-Driven Solution

Current decision-making models do not cover the processes bottom of the pyramid consumers go through when selecting mobility solutions to address access challenges they face. We investigate the process these consumers go through in their complex context in adopting a community-based renewable energy mobility solution and developing a decision-making framework. Findings indicate the positive social, environmental, and economic impact of the mobility initiative on the livelihoods of the BOP consumers. The findings offer critical theoretical contributions specifically for decision making for the adoption of renewable energy-based mobility solutions for marginalized BOP consumers and social connectedness literature.

Triggers of aspirational consumption at the base of the Pyramid: a qualitative inquiry from Indian context

ABSTRACT This study explores the factors driving aspirational consumption of the Indianbase of the pyramid (BOP) consumers, using the underpinnings of the social comparison theory and trickle-down effect theory. A qualitative phenomenological approach was adopted for this study. Thematic analysis on 35 in-depth interviews of the BOP consumers of Kharagpur, India, showed that BOP people’s tendency to engage in within-group and across-group social comparison, and their need for security, comfort, advancement and wellbeing, as well as astuteness trigger aspirational consumption at the BOP. This study contributes to the BOP market literature by developing a theoretical framework showing the triggers of aspirational consumption at the BOP. This study advances both social comparison theory and trickle-down effect theory. This study also demonstrates the positive side of aspirational consumption, which is an addition to the literature. Additionally, the study provides practical and social implications.

A CONFIGURATIONAL PERSPECTIVE ON BoP INNOVATION CAPABILITY

Marketing capabilities are a major driver of competitive advantage across different business contexts. One of these capabilities is the ability to sense consumer needs and to develop innovations to meet these needs, referred to as innovation capability. Innovation holds the potential to improve the living conditions of resource-constrained consumers at the bottom of the world’s economic pyramid (BoP) in emerging markets. Surprisingly, research has failed to develop a comprehensive understanding of how firms can innovate successfully in BoP markets. Applying a configurational perspective, this study explores the organisational configurations that characterise firms that successfully develop innovations for the BoP market. Analysing data from an online survey with senior-level managers ([Formula: see text] = 245) in 10 emerging markets, the authors offer important insights for firms seeking to develop innovations for BoP consumers in terms of the specific organisational configurations that lead to BoP innovation success.

Income Inequality and Consumption Pattern Among BOP Consumers in India

Marketing discipline has evolved through the context of the industrialized or developed world. However, the largest groups of consumers are also the poorest (Bottom of the Pyramid category) and economic inequality is still persisting among BOP consumers. Using the Gini co-efficient, economic inequality was measured with the help of World Bank report. The main aim of this paper is to know about the trends that took place in income inequality and consumption pattern among BOP consumers based on household surveys (from NSSO and World Bank). It shows that income inequality among BOP consumers has been increasing simultaneously with increase in consumption pattern among BOP consumers because income growth would leads to truly middle-class led one with growing of consumer spending from $1.5 trillion to $6 trillion by 2030. Further, income growth lifts 25 million households from poverty and in 2030 among that fewer than 5 per cent of households will be in below poverty.

LokSuvidha, Converting Non-customers to Customers: The Saga of Organizational Growth Through Technology

Emerging economies like India has been characterized with a substantial ‘bottom of the pyramid’ (BOP) population. BOP has also been one of the most promising market segments for business growth. Firms serving specifically the BOP customer segment was thus engaged in serving a social cause as well because BOP consumers (a weaker segment of society) got benefited because of their consumption of products or services offered by the business firm. In India, a large section of BOP customers who were economically progressing and becoming the new middle class used two-wheeler automobile to commute for personal as well as business needs. Two-wheeler automobile was lifeline for millions of rural and urban Indians. Two-wheelers were used for both consumptions as well as asset building purposes by Indian consumers. Affordability of two-wheeler had been a big challenge for this section of society. Borrowing from Indian credit institutions has been a very potent method towards owning two-wheelers for this segment. There was a section of BOP customers who were beyond the umbrella of the traditional Indian banking and financial sector. Since the decade of mid-2010s, the Government of India had been working hard to include this part of society into the banking system and had floated multiple social schemes to achieve banking inclusion. LokSuvidha, an Indian financial services start-up was founded by Mr Nimish Laddhad and Mr Kamlesh Laddhad. LokSuvidha developed an unique business model for providing credit to this part of society. LokSuvidha had also deployed cutting-edge technology solutions to build a scalable, profitable working model. However, the founders of LokSuvidha were in a dilemma regarding whether to expand LokSuvidha further in scale or scope or to concentrate only in the extant market base of its operations. This decision was paramount for the founders to be answered to shape the future of LokSuvidha in terms of both market reach and organizational span.

Rethinking share-of-wallet at the bottom of the pyramid: using financial diaries to observe monthly category trade-offs

PurposeThis study provides empirical evidence for the impact that income and expenditure fluctuations have on understanding the fundamentals of BoP household share-of-wallet in South Africa.Design/methodology/approachThe study used a longitudinal financial diary methodology to record household income in 80 households (in four different geographic areas) over four monthly waves.FindingsThe study showed the lack of reliability of aggregated population income and expenditure surveys when understanding the specific behaviour of BoP households. The study concludes that major category trade-offs occur on a monthly basis, and that these trade-offs directly impact our fundamental understanding BoP SoW.Originality/valueWhile the BoP consumer theory is developing (especially in the last decade), most of the theory is focused on development and business strategy. Empirically based consumer theory is noticeably lacking, given that the BoP is the largest population segment on earth. In addition, research is largely absent of highly rigourous and in-depth quantification of consumer SoW behaviour. This study contributes to the BoP theory by examining monthly fluctuations in income and expenditure, a line of analysis not done before to this extent. In doing so, the study proposes a new metric for the measurement of category expenditure as an index of the total spend.

Socio-Cultural Sustainability of Private Healthcare Providers in an Indian Slum Setting: A Bottom-of-the-Pyramid Perspective

Delivery of affordable healthcare services to communities is a necessary precondition to poverty alleviation. Co-creation approaches to the development of business models in the healthcare industry proved particularly suitable for improving the health-seeking behavior of BOP patients. However, scant research was conducted to understand BOP consumers’ decision-making process leading to specific healthcare choices in slum settings, and the relative balance of socio-cultural and socio-economic factors underpinning patients’ preferences. This article adopts a mixed-method approach to investigate the determinants of BOP patients’ choice between private and public hospitals. Quantitative analysis of a database, composed of 436 patients from five hospitals in Ahmedabad, India, indicates that BOP patients visit a public hospital significantly more than top-of-the-pyramid (TOP) patients. However, no significant difference emerges between BOP and TOP patients for inpatient or outpatient treatments. Qualitative findings based on 21 interviews with BOP consumers from selected slum areas led to the development of a grounded theory model, which highlights the role of aspirational demand of BOP patients toward private healthcare providers. Overall, healthcare provider choice emerges as the outcome of a collective socio-cultural decision-making process, which often assigns preference for private healthcare services because of the higher perceived quality of private providers, while downplaying affordability concerns. Implications for healthcare providers, social entrepreneurs, and policy-makers are discussed.

Applicability of the Cockroach Theory - a Case Study of the Healthcare Industry in India

Healthcare is a major area of concern especially in developing nations at the base of thepyramid segments. In a country such as India, which is blessed as of this date with ademographic dividend needs to address healthcare as an area of priority. Healthy people areable to work harder and smarter hence they will be in a position to not only create betterliving standards for themselves thereby uplift their and the nation’s economic status andcontributing to societal growth and development. A major portion of the population of Indiaresides in rural and semi urban segments and there is an explicit dearth of quality healthcarein these areas. Incidentally, for our discussion of the base of the pyramid segments, it hasbeen evidenced that BOP consumers are seen to have limited or lack of access to healthcaredue to various issues ranging from affordability, literacy, awareness, prejudices and so on.The cockroach theory of organizational sustainability and scalability proposed the variouspostulates governing the theory and the pillars those very preconditions for the success oforganizations in creating sustained and scalable businesses in the BOP sectors. This paper is acase study approach to companies in the healthcare sector and the outlines the practices andbusinesses strategies of these companies that have made them successful or have failed atcreating a profitable business opportunity and growth.

Cockroach Theory of Organizational Sustainability and Scalability - Detailed Study on Evidence Based on BOP Approach

<p>The question of survival and sustenance are at the very foundation of every individual or organization. There are various factors that are essential for growth and sustenance of companies. There has been many research studies undertaken to gauge the success factors or to breakdown the components and study success in detail. Especially so, it gains even more importance when companies are serving the markets where consumers have very low incomes and have several unmet needs. Companies serving the base of the pyramid markets need relatively unique strategies and value propositions for success. The base of pyramid came into forefront when management thinkers C K Prahalad and Staurt L. Hart, formulated the “Bottom of the Pyramid” theory in a 2002 article about how businesses can help the poor while still able to make a profit. They noted that there was little competition among the millions of the poor, who essentially live in a world of non consumption. Through low prices, new business models and innovative products, and inclusive value creation corporations along with the help of nongovernmental organizations (NGOs) and local governments, could make money and do good for the larger cause by tapping this underserved market. It has been the belief of many that BOP consumers are typically characterized by several unmet needs, it could range from food, sanitation, transport, communication, and connectivity. It is also interesting to note that in several BOP markets where are overlapping needs not necessarily following the need hierarchy. Information and communication technology businesses have been able to occupy a larger share of the BOP consumer’s wallet than even basic needs such as sanitation or electricity. What then prompts these consumers and how can businesses reach out to these segments in a phased successful manner. This paper develops the concept, postulates, explanations, theoretical model, and business case based proof on Cockroach Theory of Organizational sustainability and scalability by considering BOP business companies performance evidence. The study also discusses the applicability of this theory and its frameworks on companies and their business models focusing on BOP sectors along with the limitations.</p>

Impact of Consumer-Centric Marketing-Mix on Purchase Behavior of Non-Core Food Items: An Empirical Study of Urban Subsistence Marketplace

The objective of this study is to identify bundle of food items which are non-essential in context of poor consumers and analyze the consumption spending on these non- core food items. This study yields an impact of consumer centric marketing-mix for these non-essential or non-core food items on food purchase decision for urban bottom of the pyramid (bop) consumers.Based on the a survey of six hundred respondents this study was conducted in six selected slum areas of delhi. Thereby, based on the exploratory factor analysis existing scales of marketing-mix was refined for the non-essential food items leading to a regression model for determining the impact of marketing-mix on food purchase behavior at urban subsistence marketplace.Non-core food category includes the Beverages, Refreshment and Packaged processed food. Key finding emerged as redefined marketing-mix, comprised of four factors namely Expected Product, Convenience, Price Insensitive and Non-Social Sources, and had significant and positive influence on BOP purchase behavior of non-core food items.For managers, this research suggests a set of guidelines for designing marketing-mix for non-core food items in consumer sensitive manner.This study will lead to increased understanding about consumption behavior of subsistence marketplace thereby allowing various marketers to efficiently engage consumers which may lead to inculcating a long forgotten market into the mainstream economy and improving the standard of their living by providing significant choices.This paper makes an original contribution in direction of revival of existing western marketing-mix based on the BOP consumer survey. Given the absence of empirical and quantitative studies in BOP segment, this study marks a stepping stone towards obtaining generalized marketing-mix model.The food items consumed by BOP market is further pronged into two categories- Core and Non-core Food items. This study is limited to redefining the marketing-mix elements for core or essential food items. This study was conducted in densely populated urban slum areas of Delhi.

Business models at the bottom of the pyramid

Social enterprises serve distributed electricity to the bottom of the world’s economic pyramid (BoP), where 4 billion people live on less than US$2 per day and 1.6 billion lack access to electricity. Current mainstream theories of business models do not fully explain the logic by which these ventures create and capture value. Through interviews with 30 practicing entrepreneurs selling distributed electricity directly to rural BoP consumers, we employ grounded theory to derive a new framework of business models for the BoP that embeds the venture’s offering into the context of the marketplace, including the consumer’s social network, daily habits, mental models, and product constellations. This framework also incorporates affordability and the influences of government regulation. With further research, several of the concepts proposed in this framework might also apply to business models in other BoP sectors and in developed, mature, competitive markets.

The BOP consumer's ethical evaluation of target marketing

This paper investigates the ethical evaluation of targeted marketing of fast-moving consumer goods (FMCGs) to BOP consumers, from BOP consumers' viewpoint. The goal was to discover whether these consumers perceive themselves as vulnerable, whether they believe that marketers are acting ethically or unethically in targeting their segment and whether they are willing to take action based on their ethical assessments of the company's marketing practices. BOP consumers surveyed do not view themselves as vulnerable consumers. Respondents also did not believe that companies marketing FMCGs were unethically targeting their segment. BOP consumers did not see a difference between marketing basic or discretionary products to their segment; they wanted access to all types of goods. These consumers want access to the same products that other consumers with more resources have, and make no distinction between basic and discretionary FMCGs. FMCGs were viewed as necessities that make life easier. Marketers of FMCGs should therefore freely market these products to this segment, provided their products meet basic quality standards, and can be offered in small, lower-priced quantities.

Business Models at the Bottom of the Pyramid: Leveraging Context in Undeveloped Markets

Current mainstream theories of business models neither explain nor propel social enterprises serving the bottom of the world’s economic pyramid (BoP), where 4 billion people live on less than US$2 per day and 1.6 billion lack access to electricity. Through interviews with 30 practicing entrepreneurs selling distributed electricity directly to BoP consumers, we derive a new framework of business models for the BoP that emphasizes 1) a market linkage between the customer and the economic activity generated from use of the product; 2) embeddedness of the venture’s offering into the consumer’s social network, daily habits, mental models, and product constellations; 3) pricing based on affordability; 4) growth through replication, typically via franchise; 5) distribution with key partners, social networks, or venture-constructed dedicated avenues; 6) and integration of the influences of government regulation. This framework recognizes the venture’s context to leverage existing systems into its business model, with implications for normative, activity system, and choice perspectives on business model theories. BoP markets are undeveloped, with little competition or infrastructure. With further research, several of the concepts proposed in this framework might also apply to business models in other BoP sectors and in developed, mature, competitive markets.

Developing Blue Ocean Strategy of Sustainable Product Design and Development for Business Opportunities of BOP Groups in Taiwan

This study expands the definition of the poor group and attempts to delve into and make known the phenomenon of poverty in Taiwan and aims to explore the goals and possibilities of the BOP consumer market. Through a questionnaire survey and expert interviews, this research adopts the concept of sustainability to discuss the lifestyle and consumption characteristics of the BOP group and establishes a design strategic norm of the sustainable products. The findings show that the BOP group in Taiwan is new poverty or working poor and high quality and common prices are the main requirements; these should be introduced into the development model of sustainable design.

Consumer Innovation in the Poor Versus Rich World Some Differences and Similarities

Innovative, distinct products and no “cheaper” copies of the “rich” world are essential in order to succeed at the “Base of the Pyramid” (BoP). However, this type of innovation requires more, in-depth information on the BoP and solution spaces, which are both difficult to access. Literature proposes to generate innovations bottom up through user involvement but remains silent on how to identify and integrate BoP consumers into the innovation process. One obvious solution is to connect up with and cooperate with innovating consumers of the BoP. However, this raises the questions whether 1) user innovation exists at the BoP at what levels of quality and 2) how firms can support the innovators to implement them into real world solutions. In this paper we specifically address the first question and analyze patterns and characteristics of a large sample of innovations developed by people living at the Indian BoP collected by the Indian National Innovation Foundation (NIF). We compare these innovations to consumer innovations in the developed world and examine effects of demographic, knowledge and context factors on innovation activity and the outcome. We find similarities with consumer innovation in the developed world and at the same time adaptations to the BoP context, e.g. fulfillment of rather basic necessities than hobby-related needs. Innovation quality is mostly driven by the innovator’s knowledge and market recognition is highest for creative innovations developed for others. The paper further shows that consumer innovations are a good starting point for firms seeking solutions for BoP markets. Product needs can be systematically deducted and provide insights on how to identify promising consumer innovators at the BoP. Finally, this research contributes to better understand user innovation behavior in a specific context and by that enriches innovation research.

Which businesses actually help the global poor?

Purpose – This paper suggests that BoP producer businesses provide greater potential positive impact on poverty alleviation than BoP consumer businesses. With this purpose, the authors explore the positive short‐term and long‐term economic effects of BoP producer businesses on the poor and compare these effects with those from BoP consumer businesses.

Bridging Access to Electricity Through BOP Markets: Between Economic Equations and Political Configurations

AbstractThe development of markets for the poorest populations (Base of the Pyramid [BOP]) has become important for multinational companies (MNCs), nongovernmental organizations, and public policies. Assuming that there is demand for very low price consumer products and that the main problem is one of access to those products, the challenge for MNCs is to reconfigure the whole of the corporate process accordingly. The article follows BOP theory and companies' actual innovation. It looks at the definitions of the BOP market, the representation of BOP consumers, and local heterogeneous configurations of actors. Based on fieldwork with an MNC (specializing in electrical equipment) investigating a BOP business, it investigates the work undertaken by managers to build this market innovation. It explores the paradoxical frontiers of consumption and aid to the poorest populations and feeds the reflexion of BOP policies by opening it up toward a diversity of alternatives and possible configurations.

Doing ethnography in informal sector: Study of BOP consumers in Brazil, India, Russia and Tanzania

Poverty is one of the major challenges facing the contemporary society, and most of the world’s poor live in the informal sector. Suggestions for market-based solutions to poverty have proliferated...

Analyzing Consumer Churn in the Rural Indian Bop: Can the Price Sensitive Customer Be Turned Loyal?

Indian telecommunication companies have traditionally looked to retain the urban customers, which contribute significantly to the revenues and help improve the company‟s top-line. India still has a relatively untapped rural market. Companies are looking at rolling out services and applications specific to the rural segment to increase their bottom-line, but not enough effort is towards retaining these users. Despite the development of specific content in the VAS arena for the BoP, there are still no signs for an alternative service delivery framework for the BoP consumer, known to keep multiple SIM cards, changing them at will or discarding a number for a newer tariff plan or offer.Companies are steadily looking at implementing systems for improving consumer experience and control churn for urban consumers but information about a similar mechanism for the rural BoP users is not widely available. As usage in the BoP increases, coupled with the potential of this segment to move upwards in the pyramid, the retention of consumers in the BoP can prove to be a winning strategy in the long term for the telecommunication companies.This research focuses on determining the major reasons why BoP users leave a particular service provider. This research tries to study the rural BoP users to better understand their buying influences, their tenure on the service provider‟s network and their voice and VAS usage. This research also aims to highlight key issues that may help in better recommendations to telecommunication service providers and policy formulations for rural areas in India. This research aims to mark key indicators for the companies to see business sense in this opportunity to serve the rural BoP, which in turn would increase the overall economic scenario of the country as rise of 10 mobile phones per 100 people in a typical developing country like India, could boost GDP growth by 0.6 percentage points.