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Marketing to Bottom-of-the-Pyramid Consumers in an Emerging Market: The Responses of Mainstream Consumers

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Abstract

Many companies are now targeting the sizeable segment of consumers in Bottom-of-the-pyramid (BoP) markets with new products to specifically address their needs. As mainstream consumers become aware of these initiatives, their views on what products may be construed as appropriate for BoP marketplaces, may influence their attitudes towards the companies engaging in BoP activities. We propose that when the mainstream consumers are culturally distant from the BoP consumers, they have less favourable attitudes towards a company marketing a hedonic product to BoP consumers, compared to a utilitarian one. However, when the mainstream consumers are culturally closer to the BoP consumers, they are less likely to react negatively to a company’s marketing of a hedonic product compared to a utilitarian one. We theorize that these differences in evaluation are based on the mainstream consumers’ expectations regarding the products a company would/should target towards BoP consumers. We also examine two company characteristics (country-of-origin and profit orientation) as contingency factors affecting the attitudes of culturally close mainstream consumers towards companies engaging in BoP practices. Across two studies, we find support for our hypotheses. This research adds to a new stream of scholarship that theorizes about the permissible consumption mindset of mainstream consumers. The research also provides guidance to marketing managers and communication experts to help build favourable company attitudes and minimize any mainstream negativity towards a company’s marketing initiatives in the BoP domain.

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Notes

  1. Utilitarian products are considered to be effective, helpful, functional, necessary, and practical, the purchase of which is motivated by the more basic instrumental needs (Dhar & Wertenbroch 2000). Hedonic products, on the other hand are perceived as being fun, exciting, delightful, thrilling, and enjoyable, providing sensory, aesthetic, experiential and/or social (e.g. status) benefits (Dhar & Wertenbroch 2000; Voss et al., 2003).

  2. To get sense of the ecological validity of our research question, which hinges on consumers actually caring about what companies they consume from do in the BoP space, we also examined whether the US respondents cared about these kinds of initiatives and considered them to be important, through the items “I care about companies' social innovation efforts”, and “It is important that companies launch products targeted towards meeting the needs of low-income consumers”, wherein a one-sample t-test against the mid-point of the scale revealed positive attitudes (Mcare = 4.85, t = 6.67, p < .0001; Mimportant = 5.38, t = 11.87, p < .0001).

  3. There was no significant variation in the sample in terms of product experience in study 2. Participants were equally experienced with both utilitarian and hedonic product categories (MUtilitarian = 6.42, MHedonic = 6.55, F(1, 166) = .89, p = .35). For the sake of completeness, we ran analogously as in study 1, ANCOVA with product experience as a covariate finding that two of the three contrasts were not significant (product type: p = .16; country of origin: p = .06; profit motive: p = .18).

  4. We note that our research addresses the use of hedonic products, not banal products (e.g. sugary drinks, cigarettes) that might negatively affect the health and well-being of BoP consumers.

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Acknowledgements

The authors are very grateful to the Institute on Asian Consumer Insight (Nanyang Technological University, Singapore) and ESSEC Research Center for their financial support.

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Authors and Affiliations

  1. ESSEC Business School, Singapore, Singapore

    Reetika Gupta

  2. University of Texas at San Antonio, San Antonio, TX, USA

    Deepa Chandrasekaran

  3. Baruch College, City University of New York, New York, NY, USA

    Sankar Sen

  4. Indian Institute of Management Udaipur, Udaipur, Rajasthan, India

    Tanvi Gupta

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  1. Reetika Gupta
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Correspondence to Reetika Gupta.

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Reetika Gupta, Deepa Chandrasekaran, Sankar Sen, and Tanvi Gupta declare that they have no conflict of interest.

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Appendices

Appendix

Stimulus: Study 1

Condition: Utilitarian

The following is an excerpt from a recent Business Today article on GVZ’s launch of a new line of yoghurt targeted at consumers in low socio-economic groups in India. Please read the excerpt carefully.

GVZ Brings New Fortified Yoghurt to Low-Income Consumers in India

GVZ is set to introduce “Swaasth”, a new line of yoghurt, fortified with nutrients and vitamins that are essential to health, to cater to low-income consumers in India. Keeping in mind affordability, the company is evaluating low price points.

GVZ’s new venture is the latest in a growing number of ‘social innovation’ initiatives by companies. By launching products that are targeted at and made affordable to very low socio-economic groups, it is believed that companies can “do well by doing good”, that is, earn additional revenues while serving a common good.

GVZ’s established history and successes as a pioneer of marketing innovations in the food industry has led it to launch the new initiative of bringing a high quality yet affordable yoghurt product line. The new fortified yoghurt is the result of intensive market and scientific research by GVZ to develop a customized offering targeted to low-income consumers in the Indian market that will be the healthiest for them.

Condition: Hedonic

The following is an excerpt from a recent Business Today article on GVZ’s launch of a new line of ice-cream targeted at consumers in low socio-economic groups in India. Please read the excerpt carefully.

GVZ Brings New Natural Ice-Cream to Low-income Consumers in India

GVZ is set to introduce “Swaadisht” a new line of ice-cream, using popular local fruit flavours and a rich, creamy taste, to cater to low-income consumers in India. Keeping in mind affordability, the company is evaluating low price points.

GVZ’s new venture is the latest in a growing number of ‘social innovation’ initiatives by companies. By launching products that are targeted at and made affordable to very low socio-economic groups, it is believed that companies can “do well by doing good”, that is, earn additional revenues while serving a common good.

GVZ’s established history and successes as a pioneer of marketing innovations in the food industry has led it to launch this initiative of bringing a high quality yet affordable ice-cream product line. The new tasty ice-cream is the result of intensive market and scientific research by GVZ to develop a customized offering targeted to low-income consumers that they will enjoy the most.

Stimulus: Study 2

Condition 1: Hedonic, Indian, For-Profit

On the next page, you will be shown a recent Business Today article on Indian company GVZ India Limited’s launch of a new line of ice-cream targeted at poor consumers in India.

GVZ India Limited is headquartered in New Delhi, India and its portfolio ranges from packaged foods to everyday household care products. It operates only in India, and has reported a 16% growth in annual profit this year.

GVZ India Limited Brings New Ice-Cream to Poor Consumers in India

GVZ India Limited is set to introduce Dairy Dip, a new line of delicious ice-cream with a rich, creamy taste, to cater to poor consumers in India. Keeping in mind affordability, the company is evaluating low price points.

GVZ India’s new venture is the latest in a growing number of ‘social innovation’ initiatives by companies. By launching products that are targeted at and made affordable to very low socio-economic groups, it is believed that companies can earn additional revenues while serving a common good.

GVZ India’s established history and successes as a pioneer of marketing innovations in the food industry has led it to launch this high quality yet affordable ice-cream. The new rich and tasty Dairy Dip ice-cream is the result of intensive market and scientific research by GVZ India to develop a customized offering targeted to poor consumers that they will enjoy the most.

GVZ India Limited will begin selling Dairy Dip ice-cream in January 2023.

Condition 2: Utilitarian, Indian, For-Profit

On the next page, you will be shown a recent Business Today article on Indian company GVZ India Limited’s launch of a new line of nutritious curd (dahi) targeted at poor consumers in India.

GVZ India Limited is headquartered in New Delhi, India and its portfolio ranges from packaged foods to everyday household care products. It operates only in India, and has reported a 16% growth in annual profit this year.

GVZ India Limited Brings New Nutritious Curd (Dahi) to Poor Consumers in India

GVZ India Limited is set to introduce Dairy Dip, a new line of nutritious curd (dahi) fortified with vitamins, protein and probiotics, to cater to poor consumers in India. Keeping in mind affordability, the company is evaluating low price points.

GVZ India’s new venture is the latest in a growing number of ‘social innovation’ initiatives by companies. By launching products that are targeted at and made affordable to very low socio-economic groups, it is believed that companies can earn additional revenues while serving a common good.

GVZ India’s established history and successes as a pioneer of marketing innovations in the food industry has led it to launch this high quality yet affordable curd (dahi). The new healthy and nutritious Dairy Dip curd (dahi) is the result of intensive market and scientific research by GVZ India to develop a customized offering targeted to poor consumers that will meet their nourishment needs.

GVZ India Limited will begin selling Dairy Dip curd in January 2023.

Condition 3: Hedonic, Foreign, For-Profit

On the next page, you will be shown a recent Business Today article on US based company GVZ International Limited’s launch of a new line of ice-cream targeted at poor consumers in India.

GVZ International Limited is headquartered in New York, USA and its portfolio ranges from packaged foods to everyday household care products. It operates across the world, and has reported a 16% growth in annual profit this year.

GVZ International Limited Brings New Ice-cream to Poor Consumers in India

GVZ International Limited is set to introduce Dairy Dip, a new line of delicious ice-cream with a rich, creamy taste, to cater to poor consumers in India. Keeping in mind affordability, the company is evaluating low price points.

GVZ International’s new venture is the latest in a growing number of ‘social innovation’ initiatives by companies. By launching products that are targeted at and made affordable to very low socio-economic groups, it is believed that companies can earn additional revenues while serving a common good.

GVZ International’s established history and successes as a pioneer of marketing innovations in the food industry has led it to launch this high quality yet affordable ice-cream. The new rich and tasty Dairy Dip ice-cream is the result of intensive market and scientific research by GVZ International to develop a customized offering targeted to poor consumers that they will enjoy the most.

GVZ International Limited will begin selling Dairy Dip ice-cream in January 2023.

Condition 4: Hedonic, Indian, Non-profit

On the next page, you will be shown a recent Business Today article on Indian non-profit organization GVZ India Trust’s launch of a new line of ice-cream targeted at poor consumers in India.

GVZ India Trust is headquartered in New Delhi, India and its philanthropic initiatives range from supplying packaged foods to everyday household care products. It operates only in India, and has reported a 16% growth in the number of families supported this year.

GVZ India Trust Brings New Ice-Cream to Poor Consumers in India

GVZ India Trust is set to introduce Dairy Dip, a new line of delicious ice-cream with a rich, creamy taste, to cater to poor consumers in India. Keeping in mind affordability, the company is evaluating low price points.

GVZ India Trust’s non-profit venture is the latest in a growing number of ‘social innovation’ initiatives by companies. By launching products that are targeted at and made affordable to very low socio-economic groups, it is believed that non-profit organizations can cater to their mission of serving a common good.

GVZ India Trust’s established history and successes in philanthropic initiatives in the food sector has led it to launch this high quality yet affordable ice-cream. The new rich and tasty Dairy Dip ice-cream is the result of intensive market and scientific research by GVZ India Trust to develop a customized offering targeted to poor consumers that they will enjoy the most.

GVZ India Trust will begin selling Dairy Dip ice-cream in January 2023.

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Gupta, R., Chandrasekaran, D., Sen, S. et al. Marketing to Bottom-of-the-Pyramid Consumers in an Emerging Market: The Responses of Mainstream Consumers. J Bus Ethics (2024). https://doi.org/10.1007/s10551-024-05664-5

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