IDEAS home Printed from https://ideas.repec.org/a/spr/amsrev/v7y2017i3d10.1007_s13162-017-0100-0.html
   My bibliography  Save this article

Marketing to the poor: an institutional model of exchange in emerging markets

Author

Listed:
  • Jaideep Prabhu

    (University of Cambridge)

  • Paul Tracey

    (University of Cambridge)

  • Magda Hassan

    (University of Warwick)

Abstract

In this paper we argue that formal exchanges with poor consumers in emerging markets are hard to create and maintain, resulting in widespread market failure. More specifically, in emerging markets the institutions required for exchange either function poorly or are entirely absent, making it difficult for sellers to deliver affordable and accessible offerings to poor buyers in a financially sustainable manner. The marketing challenge thus becomes (1) developing a viable business model to facilitate market-based exchanges and (2) shaping the institutions needed to implement this business model. Drawing on institutional theory and extending it with insights from the marketing and business model innovation literatures, we develop a model of exchange in emerging markets. At the heart of our model is the idea that sellers often need to act as institutional entrepreneurs in order to create and deliver value when marketing to the poor in emerging markets. We discuss the implications of our model for future research on marketing, exchange and emerging economies, as well as the implications for managers seeking to market to the poor in emerging economies.

Suggested Citation

  • Jaideep Prabhu & Paul Tracey & Magda Hassan, 2017. "Marketing to the poor: an institutional model of exchange in emerging markets," AMS Review, Springer;Academy of Marketing Science, vol. 7(3), pages 101-122, December.
    • Handle: RePEc:spr:amsrev:v:7:y:2017:i:3:d:10.1007_s13162-017-0100-0
    DOI: 10.1007/s13162-017-0100-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13162-017-0100-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13162-017-0100-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Joshua D. Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 69-85, Fall.
    2. Bertrand Moingeon & Muhammad Yunus & Laurence Lehmann-Ortega, 2010. "Building Social Business Models: Lessons from the Grameen Experience," Post-Print hal-00528385, HAL.
    3. Wu, Jie, 2013. "Marketing capabilities, institutional development, and the performance of emerging market firms: A multinational study," International Journal of Research in Marketing, Elsevier, vol. 30(1), pages 36-45.
    4. Allen L. Hammond & William J. Kramer & Robert S. Katz & Julia T. Tran & Courtland Walker, 2007. "The Next 4 Billion," Innovations: Technology, Governance, Globalization, MIT Press, vol. 2(1-2), pages 147-158, April.
    5. Levitt, Steven D. & List, John A., 2009. "Field experiments in economics: The past, the present, and the future," European Economic Review, Elsevier, vol. 53(1), pages 1-18, January.
    6. Fournier, Susan, 1998. "Consumers and Their Brands: Developing Relationship Theory in Consumer Research," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(4), pages 343-373, March.
    7. Tarun Khanna & Krishna Palepu, 2000. "Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups," Journal of Finance, American Finance Association, vol. 55(2), pages 867-891, April.
    8. William Jack & Tavneet Suri, 2014. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution," American Economic Review, American Economic Association, vol. 104(1), pages 183-223, January.
    9. Poole, Marshall Scott & Van de Ven, Andrew H. & Dooley, Kevin & Holmes, Michael E., 2000. "Organizational Change and Innovation Processes: Theory and Methods for Research," OUP Catalogue, Oxford University Press, number 9780195131987.
    10. Holt, Douglas B, 2002. "Why Do Brands Cause Trouble? A Dialectical Theory of Consumer Culture and Branding," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(1), pages 70-90, June.
    11. Joshua Angrist & Alan Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Working Papers 834, Princeton University, Department of Economics, Industrial Relations Section..
    12. Christoph Zott & Raphael Amit, 2008. "The fit between product market strategy and business model: implications for firm performance," Strategic Management Journal, Wiley Blackwell, vol. 29(1), pages 1-26, January.
    13. Paul Tracey & Nelson Phillips, 2011. "Entrepreneurship in Emerging Markets," Management International Review, Springer, vol. 51(1), pages 23-39, February.
    14. repec:fth:prinin:455 is not listed on IDEAS
    15. Pauwels, Koen & Erguncu, Selin & Yildirim, Gokhan, 2013. "Winning hearts, minds and sales: How marketing communication enters the purchase process in emerging and mature markets," International Journal of Research in Marketing, Elsevier, vol. 30(1), pages 57-68.
    16. Boyd D. Cohen & Thomas J. Dean, 2005. "Information asymmetry and investor valuation of IPOs: top management team legitimacy as a capital market signal," Strategic Management Journal, Wiley Blackwell, vol. 26(7), pages 683-690, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. S. Arunachalam & S. Cem Bahadir & Sundar G. Bharadwaj & Rodrigo Guesalaga, 2020. "New product introductions for low-income consumers in emerging markets," Journal of the Academy of Marketing Science, Springer, vol. 48(5), pages 914-940, September.
    2. Tiwari, Rajnish & Prabhu, Jaideep, 2018. "Soft power of frugal innovation and its potential role in India's emergence as a global lead market for affordable excellence," Working Papers 104, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    3. Magda Hassan & Jaideep Prabhu & Rajesh Chandy & Om Narasimhan, 2023. "When Bulldozers Loom: Informal Property Rights and Marketing Practice Innovation Among Emerging Market Microentrepreneurs," Marketing Science, INFORMS, vol. 42(1), pages 137-165, January.
    4. Salman Ali & Guihua Li & Yousaf Latif, 2020. "Unleashing the importance of creativity, experience and intellectual capital in the adaptation of export marketing strategy and competitive position," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-26, November.
    5. Priyanka Jayashankar & Samantha Cross, 2020. "Expanding exchange: how institutional actors shape food-sharing exchange systems," AMS Review, Springer;Academy of Marketing Science, vol. 10(1), pages 116-134, June.
    6. Hubert Gatignon & Xavier Lecocq & Koen Pauwels & Alina Sorescu, 2017. "A marketing perspective on business models," AMS Review, Springer;Academy of Marketing Science, vol. 7(3), pages 85-89, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mikel Bedayo, 2016. "Creating associations to substitute banks’direct credit. Evidence from Belgium," Working Paper Research 315, National Bank of Belgium.
    2. Du, Julan & Lu, Yi & Tao, Zhigang, 2012. "Contracting institutions and vertical integration: Evidence from China’s manufacturing firms," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 89-107.
    3. Mark Carlson & Kris James Mitchener, 2009. "Branch Banking as a Device for Discipline: Competition and Bank Survivorship during the Great Depression," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 165-210, April.
    4. Ilona Babenko & Benjamin Bennett & John M Bizjak & Jeffrey L Coles & Jason J Sandvik, 2023. "Clawback Provisions and Firm Risk," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(2), pages 191-239.
    5. Henrekson, Magnus & Johansson, Dan, 2010. "Firm Growth, Institutions and Structural Transformation," Ratio Working Papers 150, The Ratio Institute.
    6. Ma, Lingjie & Koenker, Roger, 2006. "Quantile regression methods for recursive structural equation models," Journal of Econometrics, Elsevier, vol. 134(2), pages 471-506, October.
    7. KAMKOUM, Arnaud Cedric, 2023. "The Federal Reserve’s Response to the Global Financial Crisis and its Effects: An Interrupted Time-Series Analysis of the Impact of its Quantitative Easing Programs," Thesis Commons d7pvg, Center for Open Science.
    8. Wang, Xu & Zhang, Xiaobo & Xie, Zhuan & Huang, Yiping, 2016. "Roads to innovation: Firm-level evidence from China:," IFPRI discussion papers 1542, International Food Policy Research Institute (IFPRI).
    9. Olivier Bargain & Victor Stephane & Jérôme Valette, 2022. "Another brick in the wall. Immigration and electoral preferences: Direct evidence from state ballots," Review of International Economics, Wiley Blackwell, vol. 30(5), pages 1452-1477, November.
    10. Messer, Dolores & Wolter, Stefan C., 2005. "Are Student Exchange Programs Worth It?," IZA Discussion Papers 1656, Institute of Labor Economics (IZA).
    11. Aaron Jackson & William Miles, 2008. "Fixed Exchange Rates and Disinflation in Emerging Markets: How Large Is the Effect?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(3), pages 538-557, October.
    12. Berthélemy Michel & Bonev Petyo & Dussaux Damien & Söderberg Magnus, 2019. "Methods for strengthening a weak instrument in the case of a persistent treatment," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 23(1), pages 1-30, February.
    13. Fali Huang & Myoung-Jae Lee, 2010. "Dynamic treatment effect analysis of TV effects on child cognitive development," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(3), pages 392-419.
    14. Asadul Islam & Dietrich K. Fausten, 2008. "Skilled Immigration and Wages in Australia," The Economic Record, The Economic Society of Australia, vol. 84(s1), pages 66-82, September.
    15. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Centre for Economic Performance, LSE.
    16. Tesfaye, Wondimagegn & Tirivayi, Nyasha, 2020. "Crop diversity, household welfare and consumption smoothing under risk: Evidence from rural Uganda," World Development, Elsevier, vol. 125(C).
    17. Hope Corman & Dhaval Dave & Nancy E. Reichman, 2018. "Evolution of the Infant Health Production Function," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 6-47, July.
    18. Steven A. Boutcher & Jason N. Houle & Anna Raup‐Kounovksy & Carroll Seron, 2023. "A Faustian bargain? Rethinking the role of debt in law students' career choices," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 20(1), pages 166-195, March.
    19. Markus Brückner & Antonio Ciccone, 2011. "Rain and the Democratic Window of Opportunity," Econometrica, Econometric Society, vol. 79(3), pages 923-947, May.
    20. Wu, Fang & Cao, June & Zhang, Xiaosan, 2023. "Do non-executive employees matter in curbing corporate financial fraud?," Journal of Business Research, Elsevier, vol. 163(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:amsrev:v:7:y:2017:i:3:d:10.1007_s13162-017-0100-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.