Ethical issue of bottom of pyramid
ETHICAL ISSUES AT BOTTOM OF PYRAMID
ETHICAL CONCERNS:-
There are two over-riding questions to keep in mind in this exploration of specific ethical concerns. Is the
fundamental relationship between buyers and sellers cooperative or is it adversarial? And to what extent
must global corporations adjust their tactics and strategies, perfected in developed economies, to the
special circumstances and conditions of developing countries? Nowhere are these questions more apparent
or more important than in the search for a “fortune at the bottom of the pyramid.”
Appropriate Products
All products are not created equal in ethical terms, especially when they are marketed to the BOP. Consider
again Procter & Gamble’s pursuit of growth and revenue by selling detergent in single-serve packages to
low-income Mexican women. The utility of this product raises no ethical concerns. But what if P& G were
to choose another of its diverse product categories, say Cover Girl cosmetics? Would we approve if the
firm were to devote its efforts to marketing eye-liner, or lipstick, or blush to these same women,
remembering that the BOP, by definition, have less than $2 a day to spend on all their needs?
What about tobacco products, or alcoholic beverages? There are reasons galore to criticize the
marketing of these problematic products in developed countries to middle- and upper-income consumers.
But the ethical questions are multiplied and magnified when the target market is the BOP, and whatever
amounts are spent by the poor on these products must necessarily reduce the funds available for essential
goods: adequate food, clothing, and shelter.
On this matter the economist and the ethicist will be at odds. The former will argue that each
consumer must determine for himself or herself how much utility is derived from each purchase and allot
the limited funds accordingly. However, Karnani (2006), citing Efroymson and Ahmed (2001) tells the
story of a rickshaw puller who spent twenty cents a day on tobacco, but when asked if his children ever eat
eggs, responded with the question, “Where will the money come from?” In that economy the twenty cents
could have been spent on an egg a day for each of his three undernourished children. Under these
circumstances the ethicist will argue that while we must grant Hasan, the rickshaw puller, his free choice, it
would be wrong for tobacco producers and marketers to encourage and promote such sales.
Karnani goes on to offer another example of a questionable product, Fair & Lovely, a skin cream
marketed by Unilever for lightening the color of dark-skinned Indian women. The television commercials
promoting the product were deemed “racist, discriminatory, and an affront to women’s dignity,” and were
subsequently withdrawn by Unilever. The company clearly has a right to sell the product, according to
Karnani, but to claim that this is helping to eradicate world poverty is “morally problematic.”
Casas Bahia, the Brazilian appliance retailer, is often cited as a good example of a success story in
marketing to the BOP. The firm expanded its business dramatically by selling its products on credit to
millions of Brazil’s poor who had no access to credit elsewhere. An argument can be made that it is a good
thing for these BOP consumers to have the opportunity to purchase such utilitarian items as washing
machines. To be liberated from the time-consuming and energy-draining drudgery of the traditional
washboard is a readily acknowledged benefit. Do we feel the same, however, about saddling the poor with
high interest debt so they can purchase consumer electronics from Sony and Toshiba – video game players,
DVDs, boomboxes, and the like – which Casas Bahia also sells? All products are not created equal in
ethical terms.
2
Fair Pricing
In theory, every transaction involves a negotiation between buyer and seller over the price of the product or
service offered. The buyer enters the negotiation with a maximum price he or she is willing to pay, and the
seller enters the negotiation with a minimum price he or she is willing to accept. Consider the way we buy
real estate or automobiles or almost anything through online or off-line auctions as examples of this model.
True enough, most of our purchases through traditional retail outlets do not involve outright negotiating
over price, but the theory is still valid. The buyer can and often does refuse to buy a product if he or she
feels the price is too high. This theory holds in developing economies with consumer/buyers at the BOP as
well. The poor presumably have a maximum price they are willing or able to pay for an item, but it is the
seller’s – and more specifically the producer’s – pricing decision that is in question here. Clearly, Procter &
Gamble’s sachet of detergent must be priced at or below what the BOP is willing to pay or there will be no
3
transaction and, in fact, no market for that product.
An ethical question arises, however, when P & G makes its pricing decision: giving proper account
for the necessary retailer and other intermediary markups, should the company price its detergent at the
maximum price to create and maintain a market or should it price the product a few pennies less? Here
the economist and the ethicist cross swords once again, and we also have another skirmish in the unending
battle between the followers of Milton Friedman and the proponents of CSR. The economist, as well as the
Friedman followers, would argue for setting the price at the maximum to capture every last penny of the
buyer’s “surplus.” But the ethicist and the CSR proponents would remind us that this is supposed to be a
win-win situation and that eradicating poverty is as much a goal as making a profit. Is there an acceptable
compromise under which the producer makes a satisfactory, if not maximal, profit and the BOP consumer
has a few desperately needed pennies left from the transaction? On the other hand, if Procter & Gamble,
Unilever, or any other multinational consumer goods company, in doing business with the BOP, wrung
every possible cent out of each transaction, how would this be perceived by the host country and, indeed,
by the entire global society?
Consider also the microfinance business. In emphasizing the viability of this “industry” Chu (2007)
tells us enthusiastically that the return on equity (ROE) for banks making these loans to the poor often
exceeds the ROE of banks with more traditional loan portfolios. Indeed, Financiera Compartamos in
Mexico and BancoSol in Bolivia, two of the largest Latin American banks in the microfinance business,
achieved average ROEs of 52.2% and 26.3% over the three-year period 2002-04. One might well ask if the
price of these loans to the poor, the interest rate that the borrower paid, could not have been reduced since
they were so extraordinarily profitable to the lenders.
Advertising and Promotion
Under this category there are at least three ethical concerns to be noted. 1) Honesty in advertising: To
misrepresent products and services is wrong regardless of the setting or target market: developed or
developing markets, rich or poor consumers. The critical question is not whether the advertising in
question contains falsehoods but how much of the truth it tells. How explicit does the producer and/or
seller need to be about the characteristics or potential dangers associated with the product?
This concern takes on special importance when advertising to the BOP. Those who make up this
population are not only poor in income; most are poor in terms of education as well, and they lack
experience in evaluating advertising claims that are so much a part of the developed commercial world.
Under these circumstances, the puffery that is acceptable in developed markets may well be unethical if
used in advertising to the BOP.
2) Sales promotion tactics: The use of contests, coupons, rebates, sweepstakes, prizes, and the like are
common in the marketing of consumer goods in developed markets, and marketing textbooks assure us that
such tactics add value to the product and offer an extra incentive to the buyer. Of course, they add a cost to
the product as well that must be recouped by the seller at some point. One of the enduring criticisms of
marketing in general – advertising, selling, and all other forms of promotion – is that all of these marketing
costs are wasteful and that in spite of the textbook authors, they add little or no value to the products
offered. Generally, the rightness or wrongness of these additional costs is overlooked in marketing to the
upper levels of the income pyramid, but the question cannot be ignored with the BOP.
4
3) Marketing creates demand: Another enduring criticism of marketing is that it stimulates demand by
creating unnecessary wants and needs. There is a well-developed debate on this point by psychologists and
other social scientists: can marketers really “create” demand or are they just bringing to the surface a latent
demand that already exists? This criticism and debate is important but perhaps not critical in developed
markets. In developing countries, however, if marketers use advertising and other promotional tactics to
influence BOP consumers to shift their expenditures from essential to non-essential products, the
consequences would be dire indeed and without question be damaging to the poor. Such tactics might
fatten the firms’ economic bottom lines and undoubtedly would pass legal scrutiny. They would not,
however, pass ethical scrutiny and would ultimately lead to charges of exploitation.
Distribution Concerns
As multinational firms ratchet up their efforts to reach the BOP, they sometimes create new channels of
distribution in the process. Sometimes this will lead to unquestioned benefits for the poor. Project Shakti,
the name given to Hindustan Lever’s innovative channel of distribution, in which poor, rural Indian women
are trained to distribute and sell consumer goods products to hard to reach villages, an adaptation of the
age-old traveling salesman, allows villagers to have access to needed products that would otherwise be
totally unavailable. Sometimes, however, the changes can have mixed results, helping one segment of the
poor while hurting others. Procter & Gamble’s tienditas may indeed bring products to the poor at lower
prices, but they displace the previously existing small retail outlets, the street vendors, and the multiple
intermediary levels so common in developing countries (Byron, 2007). This does indeed raise questions of
fairness.
Branding
Prahalad and others tell us that the BOP often express a preference for branded goods. At first blush, this
seems counter-intuitive; branded items are usually more expensive than their generic competitors, and we
might expect those consumers forced to live on less than $2 a day to always choose the least expensive
alternative. The explanation given is that the BOP are the least able to afford a mistake in their purchasing
decisions and, therefore, will often choose a branded item whose reputation and quality are known.
This poses an ethical issue for consumer goods producers. Brands become widely recognized and
preferred only through the expensive process of advertising and other forms of promotion, and this expense,
of course, is passed along to the consumer in the higher price of the item. We also know that branded items
are often identical, in functional terms, to their unbranded, generic counterparts. Then the critical question
is: does the brand impart real value to its buyer? In developed countries and economies we assure
ourselves that the psychological value imparted by the brand name justifies the higher price, even if there
is no additional functional value. This explanation is less persuasive when applied to the BOP.
Packaging
It is now commonly understood that the BOP, with such limited resources, cannot afford to have an
“inventory” of anything; they buy only what they need to use or consume immediately and then buy more
when they need more. Thus, many of the success stories we have from Procter & Gamble or Unilever are
based on packaging the goods in single-serve quantities, often referred to as sachets. Karnani (2006) tells
us that the paanwallas, the small kiosks of India often sell cigarettes individually, rather than in packs, to
5
increase consumption, and that in Malaysia cheap liquor is sold in bottles not much bigger than a quarter of
a pint. No large, economy-size packages for this market. However, according to Byron (2007), the singleserve packages of Procter & Gamble’s detergent may cost twice as much on a per-ounce basis as larger
packages of the same item. To what extent, then, are we eradicating poverty around the globe if the truly
poor must pay this premium? Are the poor misled into thinking that the smaller packages, while more
affordable, are really cheaper, when in fact they are paying more on a per unit basis? In developing
countries there are not the same requirements to display per-unit pricing on the kiosk shelves as is required
in U.S. supermarkets. Prahalad also recognizes that single-serve packaging creates significantly greater
environmental problems in the accumulation of non-biodegradable waste.
Repatriation of the “Fortune”
When Procter & Gamble sells a sachet of detergent or an individual disposable diaper to a BOP consumer
in Mexico or India, what happens to the profit P & G derives from the sale? If it is immediately
repatriated to Cincinnati, little has been done to raise the income level of the BOP and “eradicate world
poverty.” The poor consumer has simply substituted buying the detergent or the diaper for rice or beans
or some other essential product. To what extent is the seller willing to reinvest those profits in the BOP
community?
Leonard (2007, pp. 370-72) provides a checklist of the kinds of products that are most beneficial to
the BOP and where the net effect of the transaction will be the greatest. He points out that a multinational
firm’s product (e.g., the detergent or the diaper) quite likely will have been made outside of the community
and perhaps even outside of the country. In this instance, the net effect of the transaction may well be
negative on the BOP since it substitutes a “foreign” made product for a locally made one. Products offering
the most hope for raising the income level of the community are those which include some local element in
the production or distribution, those which in some way expand business opportunities and improve the
wage-earning opportunities of local workers.
Leonard cites Hindustan Lever’s Project Shakti as an example. Although the products sold are
consumer goods made elsewhere (a slight negative effect on the income level of the community), Lever
created and trained women entrepreneurs to serve as small-scale distributors who could reach the
heretofore unserved markets throughout much of India. The income derived from the distribution services
provided by the women, the skills that they learned, and the accompanying psychological benefits all
served to create a net benefit for the communities.
The BOP as a “Vulnerable” Market
The vulnerability of the BOP consumers is the most difficult issue of all the ethical concerns and has
already been suggested in many of the preceding paragraphs. Traditionally, children have been recognized
as a vulnerable market because of their limited capacity to make rational buying decisions, but in certain
situations senior citizens, women, and minorities have been viewed as vulnerable. Do consumers at the
bottom of the pyramid constitute a vulnerable market because of their (usually) limited education and lack
of experience in evaluating marketing claims? If so, do producers and marketers have some special
obligations in choosing their marketing tactics? How should firms strike a balance between respecting the
dignity and rights of the dreadfully poor to make their own decisions as consumers while at the same time
acknowledging their limitations?
6
Who should make these consumer purchasing decisions? For example: Tobacco products vs. eggs or other
nourishing food for children, a boom-box vs. a month’s education for a child, washing machines vs. video
game players, and skin-whitening cream vs. shoes. Surely, it would be patronizing, demeaning, and just
plain wrong to suppose that the BOP consumers cannot or should not make these decisions for themselves.
Yet it is equally wrong for producers and marketers to exploit the BOP, to take advantage of their lack of
education and sophistication. Karnani (2006) tells us, “…the poor lack self-control, yield to temptation,
and spend to keep up with their neighbors. In this they are no different than people with more money, but
the consequences of bad choices are more severe for the poor.” The blandishments, the hype, the marketing
tactics that are acceptable in wealthier, developed markets are not appropriate in marketing to the BOP. The
exercise of some restraint on the part of marketers in their transactions with the BOP is essential, but
restraint is not a common characteristic of the marketing profession.
ETHICAL CONCERNS:-
There are two over-riding questions to keep in mind in this exploration of specific ethical concerns. Is the
fundamental relationship between buyers and sellers cooperative or is it adversarial? And to what extent
must global corporations adjust their tactics and strategies, perfected in developed economies, to the
special circumstances and conditions of developing countries? Nowhere are these questions more apparent
or more important than in the search for a “fortune at the bottom of the pyramid.”
Appropriate Products
All products are not created equal in ethical terms, especially when they are marketed to the BOP. Consider
again Procter & Gamble’s pursuit of growth and revenue by selling detergent in single-serve packages to
low-income Mexican women. The utility of this product raises no ethical concerns. But what if P& G were
to choose another of its diverse product categories, say Cover Girl cosmetics? Would we approve if the
firm were to devote its efforts to marketing eye-liner, or lipstick, or blush to these same women,
remembering that the BOP, by definition, have less than $2 a day to spend on all their needs?
What about tobacco products, or alcoholic beverages? There are reasons galore to criticize the
marketing of these problematic products in developed countries to middle- and upper-income consumers.
But the ethical questions are multiplied and magnified when the target market is the BOP, and whatever
amounts are spent by the poor on these products must necessarily reduce the funds available for essential
goods: adequate food, clothing, and shelter.
On this matter the economist and the ethicist will be at odds. The former will argue that each
consumer must determine for himself or herself how much utility is derived from each purchase and allot
the limited funds accordingly. However, Karnani (2006), citing Efroymson and Ahmed (2001) tells the
story of a rickshaw puller who spent twenty cents a day on tobacco, but when asked if his children ever eat
eggs, responded with the question, “Where will the money come from?” In that economy the twenty cents
could have been spent on an egg a day for each of his three undernourished children. Under these
circumstances the ethicist will argue that while we must grant Hasan, the rickshaw puller, his free choice, it
would be wrong for tobacco producers and marketers to encourage and promote such sales.
Karnani goes on to offer another example of a questionable product, Fair & Lovely, a skin cream
marketed by Unilever for lightening the color of dark-skinned Indian women. The television commercials
promoting the product were deemed “racist, discriminatory, and an affront to women’s dignity,” and were
subsequently withdrawn by Unilever. The company clearly has a right to sell the product, according to
Karnani, but to claim that this is helping to eradicate world poverty is “morally problematic.”
Casas Bahia, the Brazilian appliance retailer, is often cited as a good example of a success story in
marketing to the BOP. The firm expanded its business dramatically by selling its products on credit to
millions of Brazil’s poor who had no access to credit elsewhere. An argument can be made that it is a good
thing for these BOP consumers to have the opportunity to purchase such utilitarian items as washing
machines. To be liberated from the time-consuming and energy-draining drudgery of the traditional
washboard is a readily acknowledged benefit. Do we feel the same, however, about saddling the poor with
high interest debt so they can purchase consumer electronics from Sony and Toshiba – video game players,
DVDs, boomboxes, and the like – which Casas Bahia also sells? All products are not created equal in
ethical terms.
2
Fair Pricing
In theory, every transaction involves a negotiation between buyer and seller over the price of the product or
service offered. The buyer enters the negotiation with a maximum price he or she is willing to pay, and the
seller enters the negotiation with a minimum price he or she is willing to accept. Consider the way we buy
real estate or automobiles or almost anything through online or off-line auctions as examples of this model.
True enough, most of our purchases through traditional retail outlets do not involve outright negotiating
over price, but the theory is still valid. The buyer can and often does refuse to buy a product if he or she
feels the price is too high. This theory holds in developing economies with consumer/buyers at the BOP as
well. The poor presumably have a maximum price they are willing or able to pay for an item, but it is the
seller’s – and more specifically the producer’s – pricing decision that is in question here. Clearly, Procter &
Gamble’s sachet of detergent must be priced at or below what the BOP is willing to pay or there will be no
3
transaction and, in fact, no market for that product.
An ethical question arises, however, when P & G makes its pricing decision: giving proper account
for the necessary retailer and other intermediary markups, should the company price its detergent at the
maximum price to create and maintain a market or should it price the product a few pennies less? Here
the economist and the ethicist cross swords once again, and we also have another skirmish in the unending
battle between the followers of Milton Friedman and the proponents of CSR. The economist, as well as the
Friedman followers, would argue for setting the price at the maximum to capture every last penny of the
buyer’s “surplus.” But the ethicist and the CSR proponents would remind us that this is supposed to be a
win-win situation and that eradicating poverty is as much a goal as making a profit. Is there an acceptable
compromise under which the producer makes a satisfactory, if not maximal, profit and the BOP consumer
has a few desperately needed pennies left from the transaction? On the other hand, if Procter & Gamble,
Unilever, or any other multinational consumer goods company, in doing business with the BOP, wrung
every possible cent out of each transaction, how would this be perceived by the host country and, indeed,
by the entire global society?
Consider also the microfinance business. In emphasizing the viability of this “industry” Chu (2007)
tells us enthusiastically that the return on equity (ROE) for banks making these loans to the poor often
exceeds the ROE of banks with more traditional loan portfolios. Indeed, Financiera Compartamos in
Mexico and BancoSol in Bolivia, two of the largest Latin American banks in the microfinance business,
achieved average ROEs of 52.2% and 26.3% over the three-year period 2002-04. One might well ask if the
price of these loans to the poor, the interest rate that the borrower paid, could not have been reduced since
they were so extraordinarily profitable to the lenders.
Advertising and Promotion
Under this category there are at least three ethical concerns to be noted. 1) Honesty in advertising: To
misrepresent products and services is wrong regardless of the setting or target market: developed or
developing markets, rich or poor consumers. The critical question is not whether the advertising in
question contains falsehoods but how much of the truth it tells. How explicit does the producer and/or
seller need to be about the characteristics or potential dangers associated with the product?
This concern takes on special importance when advertising to the BOP. Those who make up this
population are not only poor in income; most are poor in terms of education as well, and they lack
experience in evaluating advertising claims that are so much a part of the developed commercial world.
Under these circumstances, the puffery that is acceptable in developed markets may well be unethical if
used in advertising to the BOP.
2) Sales promotion tactics: The use of contests, coupons, rebates, sweepstakes, prizes, and the like are
common in the marketing of consumer goods in developed markets, and marketing textbooks assure us that
such tactics add value to the product and offer an extra incentive to the buyer. Of course, they add a cost to
the product as well that must be recouped by the seller at some point. One of the enduring criticisms of
marketing in general – advertising, selling, and all other forms of promotion – is that all of these marketing
costs are wasteful and that in spite of the textbook authors, they add little or no value to the products
offered. Generally, the rightness or wrongness of these additional costs is overlooked in marketing to the
upper levels of the income pyramid, but the question cannot be ignored with the BOP.
4
3) Marketing creates demand: Another enduring criticism of marketing is that it stimulates demand by
creating unnecessary wants and needs. There is a well-developed debate on this point by psychologists and
other social scientists: can marketers really “create” demand or are they just bringing to the surface a latent
demand that already exists? This criticism and debate is important but perhaps not critical in developed
markets. In developing countries, however, if marketers use advertising and other promotional tactics to
influence BOP consumers to shift their expenditures from essential to non-essential products, the
consequences would be dire indeed and without question be damaging to the poor. Such tactics might
fatten the firms’ economic bottom lines and undoubtedly would pass legal scrutiny. They would not,
however, pass ethical scrutiny and would ultimately lead to charges of exploitation.
Distribution Concerns
As multinational firms ratchet up their efforts to reach the BOP, they sometimes create new channels of
distribution in the process. Sometimes this will lead to unquestioned benefits for the poor. Project Shakti,
the name given to Hindustan Lever’s innovative channel of distribution, in which poor, rural Indian women
are trained to distribute and sell consumer goods products to hard to reach villages, an adaptation of the
age-old traveling salesman, allows villagers to have access to needed products that would otherwise be
totally unavailable. Sometimes, however, the changes can have mixed results, helping one segment of the
poor while hurting others. Procter & Gamble’s tienditas may indeed bring products to the poor at lower
prices, but they displace the previously existing small retail outlets, the street vendors, and the multiple
intermediary levels so common in developing countries (Byron, 2007). This does indeed raise questions of
fairness.
Branding
Prahalad and others tell us that the BOP often express a preference for branded goods. At first blush, this
seems counter-intuitive; branded items are usually more expensive than their generic competitors, and we
might expect those consumers forced to live on less than $2 a day to always choose the least expensive
alternative. The explanation given is that the BOP are the least able to afford a mistake in their purchasing
decisions and, therefore, will often choose a branded item whose reputation and quality are known.
This poses an ethical issue for consumer goods producers. Brands become widely recognized and
preferred only through the expensive process of advertising and other forms of promotion, and this expense,
of course, is passed along to the consumer in the higher price of the item. We also know that branded items
are often identical, in functional terms, to their unbranded, generic counterparts. Then the critical question
is: does the brand impart real value to its buyer? In developed countries and economies we assure
ourselves that the psychological value imparted by the brand name justifies the higher price, even if there
is no additional functional value. This explanation is less persuasive when applied to the BOP.
Packaging
It is now commonly understood that the BOP, with such limited resources, cannot afford to have an
“inventory” of anything; they buy only what they need to use or consume immediately and then buy more
when they need more. Thus, many of the success stories we have from Procter & Gamble or Unilever are
based on packaging the goods in single-serve quantities, often referred to as sachets. Karnani (2006) tells
us that the paanwallas, the small kiosks of India often sell cigarettes individually, rather than in packs, to
5
increase consumption, and that in Malaysia cheap liquor is sold in bottles not much bigger than a quarter of
a pint. No large, economy-size packages for this market. However, according to Byron (2007), the singleserve packages of Procter & Gamble’s detergent may cost twice as much on a per-ounce basis as larger
packages of the same item. To what extent, then, are we eradicating poverty around the globe if the truly
poor must pay this premium? Are the poor misled into thinking that the smaller packages, while more
affordable, are really cheaper, when in fact they are paying more on a per unit basis? In developing
countries there are not the same requirements to display per-unit pricing on the kiosk shelves as is required
in U.S. supermarkets. Prahalad also recognizes that single-serve packaging creates significantly greater
environmental problems in the accumulation of non-biodegradable waste.
Repatriation of the “Fortune”
When Procter & Gamble sells a sachet of detergent or an individual disposable diaper to a BOP consumer
in Mexico or India, what happens to the profit P & G derives from the sale? If it is immediately
repatriated to Cincinnati, little has been done to raise the income level of the BOP and “eradicate world
poverty.” The poor consumer has simply substituted buying the detergent or the diaper for rice or beans
or some other essential product. To what extent is the seller willing to reinvest those profits in the BOP
community?
Leonard (2007, pp. 370-72) provides a checklist of the kinds of products that are most beneficial to
the BOP and where the net effect of the transaction will be the greatest. He points out that a multinational
firm’s product (e.g., the detergent or the diaper) quite likely will have been made outside of the community
and perhaps even outside of the country. In this instance, the net effect of the transaction may well be
negative on the BOP since it substitutes a “foreign” made product for a locally made one. Products offering
the most hope for raising the income level of the community are those which include some local element in
the production or distribution, those which in some way expand business opportunities and improve the
wage-earning opportunities of local workers.
Leonard cites Hindustan Lever’s Project Shakti as an example. Although the products sold are
consumer goods made elsewhere (a slight negative effect on the income level of the community), Lever
created and trained women entrepreneurs to serve as small-scale distributors who could reach the
heretofore unserved markets throughout much of India. The income derived from the distribution services
provided by the women, the skills that they learned, and the accompanying psychological benefits all
served to create a net benefit for the communities.
The BOP as a “Vulnerable” Market
The vulnerability of the BOP consumers is the most difficult issue of all the ethical concerns and has
already been suggested in many of the preceding paragraphs. Traditionally, children have been recognized
as a vulnerable market because of their limited capacity to make rational buying decisions, but in certain
situations senior citizens, women, and minorities have been viewed as vulnerable. Do consumers at the
bottom of the pyramid constitute a vulnerable market because of their (usually) limited education and lack
of experience in evaluating marketing claims? If so, do producers and marketers have some special
obligations in choosing their marketing tactics? How should firms strike a balance between respecting the
dignity and rights of the dreadfully poor to make their own decisions as consumers while at the same time
acknowledging their limitations?
6
Who should make these consumer purchasing decisions? For example: Tobacco products vs. eggs or other
nourishing food for children, a boom-box vs. a month’s education for a child, washing machines vs. video
game players, and skin-whitening cream vs. shoes. Surely, it would be patronizing, demeaning, and just
plain wrong to suppose that the BOP consumers cannot or should not make these decisions for themselves.
Yet it is equally wrong for producers and marketers to exploit the BOP, to take advantage of their lack of
education and sophistication. Karnani (2006) tells us, “…the poor lack self-control, yield to temptation,
and spend to keep up with their neighbors. In this they are no different than people with more money, but
the consequences of bad choices are more severe for the poor.” The blandishments, the hype, the marketing
tactics that are acceptable in wealthier, developed markets are not appropriate in marketing to the BOP. The
exercise of some restraint on the part of marketers in their transactions with the BOP is essential, but
restraint is not a common characteristic of the marketing profession.
Comments
Post a Comment