Marketing at the bottom of pyramid: market attractiveness and strategic requirements

Marketing at the bottom ofpyramid: market attractiveness

and strategic requirementsTendai Chikweche

School of Marketing, University of Western Sydney, Sydney, Australia

Abstract

Purpose – The purpose of this paper is to examine the reasons for firms’ continued presence ina difficult bottom of pyramid (BOP) environment, outlining the challenges of establishing a marketorientation and required key strategic marketing requirements for effective engagement of this segment.Design/methodology/approach – A mixed research method approach comprising, qualitativeresearch methods approach consisting of case studies and ethnographic observations was used tocollect data from two local firms and two MNC subsidiaries that manufacture food and personalhygiene products in Zimbabwe.Findings – Key findings include identification of presence of new and previously cited diverse macro-environmental challenges cited by BOP researchers, confirmation of attraction and viability of theBOP, identification of multiple motivators for continued presence and a strategic framework foreffectively serving the market is then proposed.Research limitations/implications – The sample used is small but representative of a majority ofthe sales of food and personal hygiene products in a developing country and confining the focus to thefood and personal hygiene sector may limit generalisation of findings to a broader population.Practical implications – The paper provides managers with insights on identifying key strategicmarketing requirements that enhance their engagement of the BOP.Originality/value – Research into the BOP is a relatively new area of study in internationalbusiness. The majority of studies have focused on Latin America and Asia ignoring the 800 millionBOP consumers in Africa. The paper expands knowledge in the area thereby providing new insightson marketing to the BOP. The paper extends the discussion on potential marketing strategies for theBOP beyond the marketing mix discussion, which has been the focal point of previous studies.

Keywords Marketing strategy, Africa, Market planning

Paper type Research paper

Background and purposeTo date the majority of marketing literature is anchored in studies undertaken in advancedeconomies and considerably affluent markets. In so doing, researchers have ignoredpotential insights from an emerging important market comprised of approximately half totwo-thirds of the world’s population (Nakata and Weidner, 2012; Prahalad, 2012). Thismarket is referred to as the bottom of pyramid (BOP) or base of pyramid or subsistencemarketplaces. No consensus exists on the definition and classification of consumers whoare at the BOP, but a widely used measure categorises this market based on consumerswho live on less than US$2 a day (Ansari et al., 2012; Rangan et al., 2007). This level takesinto consideration changing global income patterns since the original World DevelopmentReport figure of US$1 (World Bank, 2011). Large BOP markets can be found in sub-SaharanAfrica, South Asia, East Asia and non-resource rich countries in Latin America and theCaribbean (World Bank, 2010). The majority of consumers within Africa fall into the BOPclassification (Hammond et al., 2007). Increasingly, global businesses are recognising theopportunities for viable business and potential contribution to the improvement of BOPconsumers’ livelihoods although there are contrasting views on this notion.

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/0263-4503.htm

Received 16 December 2012Revised 5 February 201329 May 20131 July 2013Accepted 2 July 2013

Marketing Intelligence & PlanningVol. 31 No. 7, 2013pp. 764-787r Emerald Group Publishing Limited0263-4503DOI 10.1108/MIP-12-2012-0141

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BOP attractivenessA constant question raised by critics of the BOP proposition has been justification ofits viability and lack of tangible contribution to poverty reduction. So why shouldfirms focus on conducting business at the BOP? There are number of reasons thatjustify increased interest on the BOP by firms. The market represents what somescholars have referred to as the last untapped island of opportunities for globalbusiness that are faced with decreasing consumer demand in advanced economies(Nakata and Weidner, 2012). The BOP is the largest and fastest growing market in theworld with approximately half to two-thirds of the world’s population residing in BOPcountries thereby providing a critical mass of potential customers for firms (Prahalad,2012). Contrary to criticism that points at lack of income by BOP consumers andtherefore lack of demand for products, collectively BOP consumers’ assets total morethan $9 trillion and there is a vibrant informal economy worth more than $2 billion(Hammond et al., 2007; Nakata and Weidner, 2012). There is growing evidence of themarket’s willingness to buy products that address their specific needs. A good exampleis the growth of the mobile phone industry in BOP markets in Asia, Latin America andsub-Saharan Africa where high adoption rates have resulted in a market of more thanfour billion mobile phones (Rangan et al., 2011). Critics of the BOP would pinpoint tocreation of false needs as demonstrated by the demand for mobile phones in BOPmarkets. However, the reality is mobile phone technology has a transformative impacton the lives of BOP consumers since the technology has become a critical tool forfacilitating survival mechanisms such as conducting business in the informal economywhich in turn accounts for these consumers’ income generation. This in turn can resultin more income and consumption and therefore opportunities for firms. Other examplescited include India’s Tata Nano success with provision of low cost transportation forBOP consumers (Prahalad, 2012).

The challenges of serving the BOPWhilst there is a strong case for the potential viability of the BOP, firms operatingin BOP markets often have to contend with diverse macro-environmental constraintsnot consistently faced in more affluent markets (Arnold and Quelch, 1998; Austin,1990; Ersado, 2006) that can act as a disincentive to continuing business involvement.Economic constraints identified include low gross domestic product, low income,high inflation, import price shocks, foreign currency shortages, lower remittancesand reduced private capital inflows (Coorey et al., 2007; Eifert et al., 2005; Ersado,2006; Johnson et al., 2007; Ndulu et al., 2007; Nwanko, 2000). Political and governanceconstraints include political instability, poor governance, corruption and weak legalsystems (Gyimah-Brempong and Traynor, 1999; Kauffman et al., 2008). Such conditionsare likely to impact on firms’ operations in various ways: for example, in allocation ofscarce foreign currency and raw materials which affect production of products.Infrastructure challenges, such as lack of reliable electricity, poor distribution channelsand unreliable transport, are common at the BOP (Austin, 1990; Fay and Morrison, 2006).

Policy and natural induced risks, social conflict, political instability and economicmismanagement are also common at the BOP. These are evident in countries such asZimbabwe for the best part of a decade (Scoones et al., 2006). This environment posesdistinct challenges for firms and questions the rationale of continuing their operationsin such tough contexts. Observing the way firms in Zimbabwe have responded canprovide insights potentially useful to other BOP markets that are exposed to similarcircumstances, which is common in sub-Saharan African countries. Drawing from a

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study of major businesses currently operating in Zimbabwe in the food and personalhygiene sector, this paper examines the motivating factors for firms’ continued presencein a difficult BOP environment outlining the challenges of establishing a marketorientation and required key strategic marketing requirements for effective engagementof this segment. Thus the study’s contribution is in these three main areas, namely,understanding the reasons for continued presence, understanding the challenges they facein adapting a market orientation for the BOP segment and making a recommendation of astrategic framework that can be used to achieve a market orientation for the BOP. Becauseestablished perceptions of firms’ continued presence in such markets is limited toprotection of capital investment, this study provides a contrasting detailed perspective.

Literature reviewBOP criticismWhile the call for increased business targeting of the BOP has many proponents (Hart,2002; London and Hart, 2004; Prahalad, 2005; Rangan et al., 2007, 2011; Viswanathan andSridharan, 2012), there has been an evolution of a body of studies that questions thedesirability of focusing on the BOP market. The main focus of these studies has beenon questioning the impact of BOP market-based initiatives on reducing poverty, thecontribution that is made by firms conducting business at the BOP towards developmentof policies that help reduce poverty in BOP markets and lack of consensus onclassification (Arora and Romijn, 2011; Bendell, 2005; Crabtree, 2007; Hopkins, 2005;Jenkins, 2005; Karnani, 2007; Landrum, 2007; Munir et al., 2010). However, these concernshave been addressed in emerging studies on the BOP which demonstrate elements ofwin-win situations for both firms and consumers (Ansari et al., 2012; Chikweche andFletcher, 2012a). The emerging model being advocated for and used by firms is one thatis not just market based, but one that views BOP consumers as active partners ratherthan consumers or producers (Varman et al., 2012). This paper situates itself within thisbody of literature, which acknowledges the differences in opinion about the BOPrecognising the inevitable limits that exist in extending full inclusion or eradication ofpoverty where elements of market-based mechanisms are used to conduct business inenvironments such as the BOP. However, there is consensus by both advocates andopponents of firms’ engagement with the BOP on the fact that it is an important marketwhich requires increased research on its dynamics and the behaviour of its consumers(Ansari et al., 2012; Crabtree, 2007; Landrum, 2007). A key pre-requisite for serving theBOP is the need for firms to develop locally relevant business models that are responsiveto the needs of BOP consumers (Mahajan and Banga, 2006; Prahalad and Hart, 2002;Viswanathan et al., 2008).

Strategic frameworks and market orientationStrategic frameworks. Strategic marketing frameworks are at the centre of firms’ability to establish competitive advantage in terms of business, financial and marketshare performance, long-term survival and importantly how such frameworks impacton the other functional areas of the business (Fahy and Smithee, 1999; Jocumsen, 2004;Nels et al., 1998; Walker et al., 2010). Trim and Lee (2007, p. 271) argue that strategicmarketing should be “all-embracing, flexible and adaptable”. Studies in this researcharea have largely been based on western developed markets. However, some scholarshave argued that research into strategic frameworks should be expanded and tested inmarkets such as the BOP and should encompass other key business issues that havean impact on strategy formulation (Prahalad and Hamel, 1990; Slater and Olson, 2001;

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Steenkamp and Burgess, 2002). In the context of the BOP, the marketing mix hasbeen prescribed as the foundation for strategic marketing frameworks (Mahajan andBanga, 2006; Prahalad, 2005; Viswanathan et al., 2008). However, this focus on themodification of the marketing mix does not address broad strategic issues that need tobe considered, in order to ensure that firms can both survive and are successful indifficult BOP markets. This is a gap which this paper seeks to address. Key examplesof marketing mix modifications covered in previous literature include, using cheaperpackaging, lower quality products and visual promotion aids (Chikweche and Fletcher,2012a; Mahajan and Banga, 2006; Nwanko, 2000). Olsen and Boxenbaum (2009), usea Norwegian company case study to illustrate organisational barriers faced by the firmin implementing its corporate social responsibility strategy at the BOP. Their studycovers elements of broad strategic issues relevant to the BOP such as a change oforganisational mindset.

Market orientationThere is an established recognition of the need for firms to continually reviewcustomers’ needs and expectations due to the changes that take place in themarketplace. These changes require constant monitoring and change of strategiesfrom marketers. Jaworski and Kohli (1993) refer to this as part of the process of firmsbecoming market oriented in order to enhance their performance and competitiveness.Their observations are part of the literature on the concept of market orientation whichhas become central to marketing strategy discussion (Day, 1992; Kohli and Jaworski,1990; Micheels and Gow, 2012; Narver and Slater, 1990). Jaworski and Kohli and Narverand Slater have been leading advocates of market orientation. Jaworski and Kohli(1993) defined market orientation from the perspective of firms focusing on threekey activities that are present within market-oriented cultures, namely, intelligencegeneration, intelligence dissemination and response to new information. They discussthe concept from the perspective of factors that may hinder firms from being marketoriented. Narver and Slater (1990) suggest that a market orientation consists of threeinter-related components, namely, a customer orientation, a competitor orientation andinterfunctional coordination. Advocates of market orientation argue that there is adirect relationship between firm performance and market orientation, i.e. firms that aremarket oriented have better chances of responding to changing customer needs andmarketplace dynamics (Deshpande and Webster, 1989; Narver et al., 1998; Ruekert,1992; Slater and Narver, 1994). The scope of research on market orientation hasbeen expanded to include investigation of its relevance and application to small tomedium-sized companies and application to the different market segments such assegmented, fragmented and commodity markets (Pelham, 1997, 1999; Verhees andMeulenberg, 2004). The lack of consensus on the variations of application of marketorientation provides an opportunity for expanding the scope of studies beyond theabove mentioned studies. Moreover these studies have largely been based on westernmarkets thereby excluding other markets such as emerging markets. Varman et al.(2012) advocate for firms’ increased contribution to the development of public policiesthat govern marketing at the BOP. This is a gap which this study seeks to contribute toby investigating the nature of challenges related to market orientation implementationfaced by firms operating in emerging markets. This is a growing area of debate inmarketing led by scholars such as Steenkamp and Burgess (2002), who argue forexpansion of marketing theory building beyond advanced western markets to includeemerging markets such as the BOP.

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Firms’ motivation for conducting business at the BOPA number of reasons have often been offered as motivation for MNE’s conductingbusiness at the BOP. These include cheap labour and operation costs, as well as short runprofit motives (Arnold and Quelch, 1998; Austin, 1990; Collier, 2007; Johnson et al., 2007).There has been limited research to establish motivating factors for firms that continue todo business specifically at the BOP beyond the historical ones mentioned earlier on. Thisis a gap which this paper seeks to address. Research on the challenges firms face ina BOP market environment has been largely concerned with the broad category ofemerging markets without consideration of the widely different macro-environmentalconditions that prevail within the broad classification. Differences between BOP marketsin the degree of economic instability, social unrest and socio-economic divisions, canundermine general conclusions about the attractiveness of BOP markets, perhaps givingdifferent business perspectives on the assessment of market attractiveness.

Methodology and research contextAfrica’s BOP market is worth US$429 billion, the BOP consumer is the dominantconsumer in the region. World population growth is forecast to be highest in this regionbetween 2005 and 2050 compared to other regions with BOP markets such as Asia(Hammond et al., 2007). Zimbabwe is an example of a BOP market that reflects thecharacteristics of BOP markets that have been subjected to policy and natural inducedrisks such as social conflict, political instability and economic mismanagement whichpose distinct challenges for firms and consumers (Scoones et al., 2006). As such,Zimbabwe provides an example of a BOP market from which insights can be drawn onthe issues which this paper seeks to examine.

The approachIn view of the difficulties of applying quantitative research methods in emerging marketsgiven the constraints mentioned in earlier sections such as weak infrastructure(Chikweche and Fletcher, 2012b), a qualitative mixed method research approach wasused, comprising qualitative case studies and ethnographic field observations (Axinnand Pearce, 2006; Creswell, 2007). This method affords researchers a chance to integratemultiple sources of information from multiple approaches and operates as a form oftriangulation (Clark and Creswell, 2008). Four case studies, comprising two local firmsand two MNC subsidiaries that manufacture food and personal hygiene products wereconducted to investigate how the firms engaged the BOP (Stake, 1994; Yin, 2003).

Case descriptions. Confidentiality was a condition for firms participating in thestudy hence firms will be referred to as Cases A, B, C and D.

Case A. Case A is a company that was created in 1981 as part of one of Zimbabwe’sbiggest publicly listed conglomerates. The conglomerate has wide interests in variousparts of the economy such as manufacturing, mining, insurance and tourism. Thecompany was unbundled from the conglomerate in 1998 and is now a private groupmade up of three companies which are leading food processors, producing a wide varietyof staple food products. The company is now owned by a management consortium andforeign shareholders from South Africa. The company prides itself on being a key playerin the nation’s food sufficiency since it produces products that are consumed by themajority of the population, i.e. the BOP. The company has heavy capital investment inmanufacturing plants, boasting some of the biggest mills in southern Africa.

Case B. Case B is a company which is a subsidiary of a locally owned diversifiedgroup of agro-industrial and fast-moving consumer goods businesses with many

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synergies that are involved in the production, processing and distribution of proteinfoods. The company was established as a co-operative and has since evolved to be thecountry’s largest and leading producer of processed protein foods. The companyexperienced significant growth during the pre-liberation era when there wereinternational sanctions and it had a virtual monopoly on supplying protein-basedproducts. Its core products are processed protein foods. The company has sincediversified its operations and product range to cover a broad spectrum of foodproducts. Its product range is targeted at both the high- and low-income consumers,and it also exports its products to countries in Africa and Europe. It also operates itsown retail chain of outlets to distribute its products nationally.

Case C. Case C is a subsidiary of one of the world’s biggest multinationals whichmanufactures a variety of fast moving consumer goods and industrial products. Thecompany’s aim is to be part of every Zimbabwean household in one way or the other.The company’s brands are some of the biggest in Zimbabwe and have internationalrecognition. The company operates as a private company. All of the subsidiarycompanies changed their names to embrace the MNC’s global identity in 2002. Eachcountry entity operates as an independent business although it reports to the regionalhub. The Zimbabwean operation has some of the company’s biggest investments inplant and equipment in Africa. The political stability and economic prosperity ofZimbabwe after independence in 1980 through the 1990s encouraged the MNC to investin the country and use it as a regional manufacturing hub to supply other surroundingcountries which did not have the same level of prosperity and public utilitiesinfrastructure. Investment in manufacturing plants continued even in 2002 when thecountry’s economic crisis had started; the MNC still had confidence to continueinvesting in its operation in Zimbabwe.

Case D. Case D is a subsidiary of one of the world’s leading food multinationals.Its brands are internationally recognised. The company has made significant investmentsin its manufacturing plants with technologically advanced equipment installed at itsHarare base. It has a network of branches across the country which it uses to distributeits products. The company is actively involved in developing agriculture in the countrythrough its contract farming partnership with farmers. It also supports and encouragesthe expansion of other primary agricultural products such as grains and vegetablesthrough various support schemes for farmers involved in these areas of operation. Thecompany is active in the export market, where it exports products to various markets insouthern Africa to independent buyers and also to its sister companies.

The approach used to conduct the case studies is outlined in Figure 1.A total of 24 interviews were conducted with junior management (salesforce) middle

management (brand and channel managers), top management (marketing managers/directors, managing directors) over a period of three years. These were then followedup with interviews with the heads of the other functions that were involved in productionplanning and interacted with the marketing function. For example, finance andproduction. All interviews were conducted in English (since all interviewees were fluentand conversant in the language) using a semi-structured case study protocol. A keyrequest which was met by all firms was granting of permission to the researcher toattend production planning meetings or any meetings that involved marketing and theother functions, primarily production and finance. The purpose of this attendance was toobserve the nature of interaction that occurred among the departments in order toestablish whether there was a structured approach to resource allocation for the BOPand discussion on strategic requirements for the segment. More time was spent on

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observations of interactions by marketing and sales team members with channels ofdistribution and by direct observation of promotional activities conducted by these firms.Observations focused on conduct of sales calls and promotional activities, commentsfrom customers and use of marketing support material. The four firms chosen wereinformation rich and accounted for more than 72 per cent of the output of food andpersonal hygiene products in Zimbabwe.

Input data from interviews was in word format after transcripts had beenconstructed. A data mining and visualisation software tool called NVIVO 7 was usedto manage the data. Detailed description was critical to capture the ethnographicdimensions of both consumer interviews and cases studies. Sets of what Creswell(2007) describes as families of themes were then derived. One example of a family ofthemes is motivating factors, whose subthemes are the various factors that emergedfrom the data. There is limited use of counts or frequencies of counts in the studybecause such an approach “conveys a quantitative orientation of magnitude and

Pilot Study

• Initial visit to research location-Zimbabwe• Established contacts with nine of the firms in the food and

personal hygiene sector • Purposeful sector analysis to identify information rich firm• Identified the 4 firms based on their information richness

Preparatory Stage• Developed case study protocol• Identified heads of marketing in the firms and established contact

Data Collection• Commenced data collection over spread over two years• Phase 1 interviews• Phase 2 Interviews• Trade visits for observation• Promotional activities• Review of archival records and documents

Analysis• Transcription and translation of interviews• Validation of interview and interpretation of translations with

sample interviewees to confirm content• Within-case analysis• Cross-case analysis

Figure 1.Procedure used toconduct case studies

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frequency contrary to qualitative research” which is the approach used for this study(Creswell, 2007, p. 153).

Cross-case synthesis was used in order to enhance the findings from the casestudies. Hence the main focus of the interpretation of the findings was more on thedevelopment of solid, plausible and fair arguments “that are supported by directevidence from the data” (Yin, 2003, p. 137). The strength of this interpretation does notlie in numeric tallies, but on argumentative interpretation which makes reference tomultiple sources of evidence such as archival records, interviews, internal records andobservation. Analysis of meaning of text was then achieved through condensation,categorisation, narration and interpretation of the data. Condensation involved reductionof the huge texts into succinct summaries where long statements were compressed, whilecategorisation involved the reduction of the data to simple categories from the emergingthemes. Some of the data was then converted to figures and tables (Creswell, 2007).Narrative structuring involved creation of a coherent structure and plots of the data andexpanding new potentialities of meaning. Interpretation of the text involved a re-contextualization of the statements within a broader framework of reference, such asprevious literature.

Findings and discussionWhilst the focus on the study was specifically on establishing firms’ motivation tocontinue business at the BOP and the challenges for developing strategic marketingframeworks and attaining market orientation in this market, it was imperative to re-visit the constraints that firms face when conducting business in this environment inorder to confirm the turbulent nature of the environment. This is in line with calls forinvestigation of marketing phenomenon in such markets (Steenkamp and Burgess,2002; Pelham, 1999). The presence of diverse macro-environmental challenges cited byBOP researchers are supported by findings from this study (Arnold and Quelch, 1998;Austin, 1990; Ersado, 2006; Johnson et al., 2007; Kauffman et al., 2008; Loayza et al., 2007;Ndulu et al., 2007). These challenges include corruption, hyperinflation, poor distributionchannels, political instability, foreign currency and raw materials shortages and weakpublic utility infrastructure. New constraints identified by executives in this studyinclude, shortages of cash to conduct transactions and the personal threat of arrest tocompany executives who did not implement government policies such as price control.

Motivating factors for persisting in the marketSix major motivating factors for firms persisting in this market emerge from the dataanalysis, namely, market importance potential; experience; benefit of incumbency toreduce the threat of new entrants, long-term profit orientation; capital investment; andgoodwill. These are outlined in Figure 2.

Market importance and potentialIn spite of the difficult economic and social conditions, all firms acknowledged theimportance and attractiveness of the BOP market in Zimbabwe (see Table I).

Almost 85 per cent of the market was now made up of BOP consumers andpopulation growth was forecast to increase among this group of consumers, whilstnumbers in the high-income group were shrinking. In terms of turnover contribution,the BOP market accounted for an average of 59 per cent of total sales for the four firmswhich confirm the attraction and viability of the BOP. In all four case studies,contribution to turnover from the BOP had increased between 2000 and 2007 and

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prospects for growth were all high and positive in all firms. However, they all indicatedthat prior to the crisis, the BOP constituted a key contributor of revenue and profit tothe firms under study. The gradual increase in focus on the BOP market was not ashort-run event but rather a shift which the firms had forecast would take place, butwhich was expedited by the economic crisis. The importance and potential of thesegment is reflected by the statements below:

Case C Informant: The reality of the matter is that such markets have a demand for productssuch as food and personal hygiene products as long as a firm can be proactive and change itsbusiness model of serving the market taking into consideration the growing importance ofmarkets such as the BOP.

Case B Informant: The BOP is where the future growth of this company is and our strategieshave to reflect this potential growth and increasing contribution of this market to ourturnover. Population growth rates have been and are forecasted to outstrip those in the highincome groups.

Case D: Whilst our main categories have not been traditionally targeted at the BOP, this haschanged over the years, we now focus on developing products for this market or extendingour current products to this market because that is where growth is given the increases in thenumbers of consumers in this market. However, we are still learning how to tap this market.

Ethnographic observations of on-going capital works investment on new machineryand extension of factory facilities in Cases B, C and D in some ways confirmed thevalue the firms placed on serving the BOP segment. In case B, the researcherswitnessed an on-going refurbishment and expansion of the pie factory and freshproduce. Pies and fresh produce were primarily targeted at the BOP and were thefastest growing lines for this business. Further observations were made on sales visits

MOTIVATINGFACTORS

Benefit of Incumbency toreduce threats of new

entrants

Focus on Long-term profitOrientation

MarketImportance and

Potential

Goodwill

PreviousInvestment

MarketExperience

Figure 2.Key motivating factorsfor conducting business

Indicator Case A Case B Case C Case D

Importance of BOP market Main market Key market Strategic market Key marketBOP sales contribution (%) 86 56 62 47Growth prospects High High High High

Table I.Summary of BOP’sstrategic importanceto the firms

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to distributors of these products in BOP residential areas. Demand of the products wasalso confirmed by distributors in informal ad hoc interviews. Both Cases C and Dcommissioned new plants for expanding production capacity and new productstargeted at the BOP, both in the culinary product category. The researcher had theopportunity to witness both occasions and informal discussions with the productionmanagers who were in charge of the process indicated that they believed that thepurpose of the new plants was more for maximising their capacity and having newtechnology, and not so much of being a recognition of the increasing need for servingthe BOP with new products. This is reflected by the following informal observations:

Production Manager Case C: The new plant was long overdue, we have been experiencing alot of breakdowns and this comes as a major relief to us since we now have state of the artmachinery.

This is compared to the marketing director’s viewpoint:

Marketing Director Case C: This new plant allows us to redirect our focus to developing andproducing new products for our mass market [y].

Market experienceFirms in the cases studies had been operating in this market for an average of 35 years.Experience in doing business in this market was mentioned by all as one reason forcontinuing. Respondents argued that the BOP was a viable market if firms understoodthe needs of the market and made an effort to adapt their approach to serving it, takinginto consideration the impediments imposed by the environment. This is reflected bythe statement below:

Case D Informant: We believe we know the environment and understand the obstaclesinherent in the system; we have been in this environment for a long time and have the benefitof experience which has enabled us to develop internal coping strategies.

Case A Informant: There is still potential for good returns in this environment as long as thefirm adapts to the changes and understand the mindset of the consumers in the market.

Case B: We have experience of dealing with different obstacles that have come our way in allour years of doing business in Zimbabwe and nothing can substitute the experience and bondwe have with the country and our customers.

Case C Informant: We have been in this country long enough to know how to deal with anychallenges that come our way.

Ethnographic observations – market visit observations around the country demonstratedthe firms’ dominance in terms of share of key promotion media, such as strategic outdooradvertising sites which the firms were able to keep by virtue of their established presencein the market. This does not discount the possibility that these firms were able to get sitesalso by virtue of their bigger marketing budgets.

Benefit of incumbency to reduce the threat of new entrantsThreat of potential new entrants into the Zimbabwe market was identified as a greaterchallenge and a more likely situation than the threat of the incumbent firms ceasingoperations. Respondents believed that whilst there were potential new entrants, theirexperience in operating in this environment created entry barriers. The political andsocial networks which the firms had created over the years were highlighted as anincentive for continuing business in this environment, as these connections cushioned

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the firms from the impact of some of the constraints and created goodwill with somekey stakeholders. This is reflected by the following statements:

Case A Informant: We have been through difficult periods of doing business over the yearsbut this has given us a chance to develop relationships with key different stakeholders whichallows us to survive especially under the threat of new competitors.

Case B Informant: Whilst we have seen an increase in competition especially from SouthAfrica, we remain competitive because of our better understanding of the different aspects ofdoing business in this country which new players especially foreign ones would not befamiliar with. But the threat of competition is a real threat which we have to deal with and ourexperience will count for something in this fight.

Ethnographic observations – there was evidence of an increase of new entrants acrossall the four firms’ business. This was evident from the observations made duringmarket trade visits in retail outlets where new brands were common on the shelves, butthe four firms’ brands continued to have more shelf space in both formal and informaldistribution channels. Spending time with the firms’ merchandisers also demonstratedthe aggression they had to protect their shelf space which was complemented by thestrong relationships they had with managers and supervisors.

Focus on long-term profit orientationIn all four cases, there was acknowledgement of a cultural shift towards long-termprofit orientation instead of a short-term profit goal. The main objective was not just tomake profits through margins but through volume, taking into account the limiteddisposable income of these BOP consumers. Hence, their business models werestructured around making profits through maximising volume of products, whilstmanaging costs of producing these products using coping strategies such as rawmaterial substitution and use of cheaper packaging. This model was also based on along-term approach to doing business instead of a short-term focus. This is reflected bythe statement below:

Case B Informant: The assumption that such an environment is totally unviable for businessis not true. As long as you are proactive and manage the business within the framework ofthe constraints there is always an opportunity to make good returns in the long run.

Ethnographic and archival evidence – archival records for Cases A and B (being publiclisted companies) supported the above observation of an increase in focusing onrevenue instead of margins. This was also reflected by the general price reductionsacross all firms. Whilst there was an element of pressure from price controls, some ofthe reductions were for products not on the gazetted price controls. This was alsoobserved on visits with sales teams when they constantly had to change prices to keepup with the hyperinflation and competitor activity.

Previous investmentPrevious established investment in plant and equipment was cited as one of the mainreasons for continued presence in Zimbabwe. This confirms previous findings byKauffman et al. (2008). However, firms were not only protecting past investment, butwere investing in new equipment in order to tap into the growing BOP market asdiscussed in the section on market importance and potential. Investments by C and Dwere undertaken with the objective of utilising these facilities for the benefit of theirregional sister companies, as was evident in the contract manufacturing arrangementsmade by the firms.

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The importance of the investment made in this country by these firms is reflectedby the following statements:

Case A Informant: Investment that has been put in the manufacturing plants also makes itdifficult to abandon ship when there is still potential to make money.

Case B Informant: We have invested in world class facilities because we are confident that weare in this for the long run.

Case C Informant: Our investment in plant and equipment has been done with a long-termintention of doing business in this country, so we can not anticipate closing shop.

Case D Informant: We have been in this country for so many years and have invested inmanufacturing plants and brands over the years.

GoodwillAll the firms in the case studies engaged in various forms of corporate citizenshipwhich they believed made them a part of Zimbabwe society, and gave them anobligation to assist in bringing about change and improving the livelihoods of localcommunities. The firms viewed themselves as providing solutions to the problemsfaced by the country. For example, investment by all of the firms in partnerships withcontracted farmers was critical to securing their raw materials, improving agriculturein the country and at the same time provided employment for thousands of people.Whilst employment of marginalised BOP consumers as franchisees by Case Dprovided income-generating opportunities for these consumers.

The importance of corporate social responsibility was reflected by the followingstatements:

Case A Informant: Our company is a key player in the economy of this country especially inmanufacturing sector, therefore we take responsibility for being part of the solution to theproblems the country faces.

Case B Informant: We are also part of the society and we feel it is our responsibility to be partof the solution to the problems this country faces.

Case C Informant: As a global company it is part of our values to help improve the economiclivelihood of markets that we operate in since they are likely to constantly face challenges.

Case D Informant: We are part of the economic machinery of this country and, we also have acorporate social responsibility as a global company to improve the livelihoods ofcommunities they live in.

Ethnographic observations – a number of notable investments in corporate socialresponsibility programmes by all four firms were observed mainly in the areas ofsupporting women’s groups in different BOP residential areas. Visits were also made toschools were these firms were running a variety of projects such as provision of freemeals to disadvantaged school kids.

This approach to some extent provides some response to criticism levelled againstBOP participation by Arora and Romijn (2011) and Munir et al. (2010) who raiseconcerns over the motive of firms’ corporate social responsibility and its inability tohelp alleviate poverty among BOP markets.

Strategic marketing and market orientation challenges for serving the BOPFindings from the study based on the combination of personal interviews, ethnographicobservations and archival documents, indicated there was lack of a structured focus on

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implementing strategic marketing initiatives to enhance market orientation for servingthe BOP segment that now constituted approximately 85 per cent of the firms’ potentialcustomers. Whilst the study acknowledges previously established components ofstrategic marketing frameworks and market orientation, it is important to reconsider theapplication and relevance of these components in markets such as the BOP where thechallenges that firms face and the context in which market orientation is perceived isdifferent from that of established western markets.

This is a growing area of debate in marketing especially in the context of marketorientation where there is an acknowledgement of the potential for variations on whatconstitutes market orientation given the different conditions that firms are exposed to(Micheels and Gow, 2012). Thus, the advocacy for expansion of marketing theorybuilding beyond established markets and constructs based on these markets to includeemerging markets such as the BOP. Hence, this study identifies a set of challenges thatwere deemed to be detrimental to firms’ adaptation of market orientation and strategicmarketing planning in the context of BOP. These were then further identified as beingcentral to the development of any framework that could be used to enhance marketorientation and strategic marketing planning at the BOP. There was recognitionby all the marketing personnel interviewed that their strategic marketing did not fullyaddress some pertinent strategic elements which could enhance their marketorientation of the BOP. These challenges are outlined in Table II and then integratedinto the framework in Figure 3.

Four key variables emerge from the study as the key challenges and potential driversof any initiative by the firms for adapting market orientation for serving the BOP. Thefour variables are discussed in the context of being challenges which are then framed intoa framework that firms can use to effectively engage the BOP. The variables emerged inthe context of the BOP but can be linked to established variables from frameworks suchas Jaworski and Kohli and Naver and Slater’s variables on market orientation. These arethe need for management commitment in the overall organisational implementation ofstrategies to serve the BOP, allocation of organisational resources specifically to serve theBOP market, use of marketing research and inter-departmental co-ordination whenimplementing activities.

Management commitmentAdvocates of increased marketing to the BOP argue for the need for a paradigm shiftby firms in order to serve this market and highlight the need for management

Indicator Case A Case B Case C Case D

Managementcommitment

Some generalfocus

TheoreticallyCEO driven

Some generalfocus

TheoreticallyCEO driven

Organizationalresources

Sales teamInformalstrategic plans

Van salesDistributorsInformalstrategic plans

Trade representativesDistributorsInformal strategicplans

Channel managementVan salesFranchisingInformal strategic plans

Marketing research Informal Informal Formal InformalInterdepartmentalco-ordination

Informal Informal Informal Informal

Table II.Summary of key strategicchallenges to marketorientation adaptationwhich form basis fordriving BOP engagement

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commitment to make this shift (Ansari et al., 2012; Prahalad, 2012; Rangan et al., 2011).Findings from this study confirm the need for this paradigm shift for firms that intend totap the potential at the BOP. From the interviews with functional managers in the four casestudies and observations at departmental meetings and on field visits, it was evident thatthere was lack of management commitment in the overall organisational implementationof strategies to serve this market. For example, there were no structured programmes oftrade market visits whereby by top management visited BOP markets to engage channelsof distribution and BOP consumers. In Cases A, B and C trade and market visits by topmanagement were still confined to high-income markets instead of the BOP.

Ethnographic observations – this was confirmed by observations made by theresearchers of retailers and other distributors complaining to the firms’ juniormanagement about the lack of support from the firms’ top management. This is capturedin the following quotes:

Retailer 1: We are still waiting for your managers to come and visit us so that we can tell themabout the problems we are having which we have mentioned to you before such as the newcash on delivery terms.

Retailer 2: We heard your manager was here to talk to the women at the community club [y]why did they not come to visit us so that we could discuss some of the problems we continueto face with your products [y] I am sure you report back to them but maybe if they hear itfrom us directly it might make them move.

Retailer 3: I am still waiting for your company to produce the new cooking aid products thatwe heard about on the news from your boss [y] how come they never come down to talk tous as well about these products, we could give them some new ideas.

However, in Case D there were some unstructured visits to both formal and informalchannels of distribution such as grocery shops and open market stalls to interact withboth sellers of the firms’ products and with final BOP consumers. This was to gain firsthand information about any new developments in the buyers and sellers’ markets.There was an informal monthly schedule for all management to conduct trade andmarket visits to the BOP market although these were often left to the channelmanagers and sales representatives and not top management.

The research found that whilst top management (such as the CEO in Cases B and D)in principle adopted a strategic vision to serve the BOP, as evident from differentcompany publications and public announcements, this was not translated into

Overall firm’s strategic vision

MANAGEMENTCOMMITTMENT

Overall firm’s strategic vision

ORGANISATIONALRESOURCES

BOP MarketingpersonnelBOP Strategic plansBOP marketing relatedexpenses

BOPMARKETINGRESEARCH Structured and regular

INTER-DEPARTMENTALCO-ORDINATION

Sharing vision and dataon BOP

Figure 3.Firms’ framework

for effectively servingthe BOP

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implementation. The vision was not articulated to the rest of the key functional groups ofthe company which in turn resulted in an uncoordinated programme to serve the market.This lack of alignment was also observed during the production planning and marketingmeetings where there was little evidence of the functions (besides marketing) positioningtheir strategies or thinking around the CEOs proclamations of the importance of the BOP.The lack of this internal alignment in terms of what the companies claimed to aim for andthe reality on the ground had repercussions on key strategic marketing issues such asallocation of resources and inter-departmental co-ordination. These will be discussed inseparate sections. The finding complements findings by Olsen and Boxenbaum (2009)who discuss the need for organisations to have a different mindset when tapping theBOP market. Their call for a change in mind-set supports the call for a paradigm shift byfirms serving the BOP advocated by BOP advocates such as Prahalad. However, findingsfrom this study emphasize the need for firms to demonstrate more than just a changeof mind set, but to have a well-articulated policy that is integrated in the firms’ strategy ofserving the BOP.

Organisational resourcesThe allocation of specific organisational resources to serve the BOP was identified byall the firms in the case studies as a critical support tool for the firm’s decision-makingprocess on how to serve this market effectively. Discussion with the marketingpersonnel suggested the need for strategic plans specifically targeted at the BOP inorder to enhance market orientation for this segment, managed by specific marketingpersonnel assigned to the BOP market (such as brand managers) who could keep trackof the changing needs of this market. All the firms acknowledged the importance ofstrategic planning in their organisations, although they mentioned that the modelsthey were currently using did not reflect the challenges of serving the BOP. This isreflected by the following statements:

Case A Informant: I do not believe that we are currently focused on serving the BOP in thebest possible way given the limited resources we allocate to this segment on an adhoc basis[y]. our brand plans are still focused on high income segment [y] and this is an area weneed to change if we are to penetrate this segment.

Case B Informant: The mass market is not part of my key performance area and I do not haveany specific budget that is meant for product related marketing expenses for this group, I justinclude them in my general budget [y] but this is proving difficult since their needs anddemands are different to our traditional segments.

Case C Informant: We are currently serving the BOP by default since they are the majority inthe market [y] we still lack proper planning and allocation of our resources for this segment[y] and this will be a major issue going forward especially with the increase of cheaperforeign products now flooding the market.

Although all firms had some form of sales representation for the BOP, there were nodedicated marketing personnel to develop strategies to serve this market. Firms in two ofthe cases had channel managers who had some limited responsibility for the BOP.However, their roles were not well integrated into each firm’s overall channel managementobjectives. The negative or less glamorous tag associated with being in charge offunctions that served the BOP contributed to this reluctance to manage this market.

Whilst this lack of resources was also attributed to the constraints in theenvironment in which they operated, the key challenge was for firms to realisethe importance of the BOP and the need to re-align their resource allocation to reflect

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the importance of the market to their overall revenue and profit generation mentionedin earlier sections. In all four case studies, contribution to turnover from the BOP hadincreased between 2000 and 2007. However, they all indicated that prior to the crisis,the BOP constituted a key contributor of sales to the firms.

Studies by Chikweche and Fletcher (2012a) and Prahalad (2012) have recommendeda 3A pre-requisite framework for successful penetration of the BOP. The frameworkemphasises the importance of ensuring that there is availability of products that meet BOPconsumer needs, an effort to make BOP consumers aware of these products and theproducts must be accessible to BOP consumers. In so many ways, the challenges ofmeeting these requirements were found to be stifled by the lack of organisational resourcesin all four case studies, particularly in A and B. The volatile economic environment putpressure on the management of cash flow in all the four case studies. This resulted in lackof adequate marketing support being provided to the marketing team to drive business inthe BOP segment, even though in principle there was top management commitment toserving the BOP. This resulted in budgetary cuts in key marketing functions such as newproduct development. However, new product development is a key tool for creatingcompetitive advantage when serving the BOP given the well established fact on the needfor firms to develop products that are relevant for BOP consumers identified by scholarssuch as Nakata and Weidner (2012) and Viswanathan and Sridharan (2012). Thischallenge was particularly strong in Cases A and B, unlike C and D where there was stillsome support for new product development often driven by the MNCs’ research anddevelopment teams at headquarters level.

Further evidence of lack of organisational resources and its impact on serving theBOP highlighted by all four firms, but more prominent in Cases A and B was ininvestment in innovative integrated marketing communications tools that wererelevant to BOP consumers. Creating awareness of new product innovations (whenexistent) was crucial in getting BOP consumers to actually purchase these products.However, in an environment where there were regular electricity cuts and wherenewspapers had become a luxury for BOP consumers, above the line promotion toolssuch as television, radio and print were unlikely to be effective when communicatingwith BOP consumers. Hence firms such as Cases C and D had gradually increased theirbelow the line promotion activities by developing innovative direct marketing toolssuch as road shows and product demonstrations.

Ethnographic observations – these activities were conducted at shopping malls inareas where BOP consumers resided, at social gatherings and other social networkinggroups such as women’s self-help groups. The researcher had the opportunity to attendthese events and observed discussions among the audience which demonstrated thepotential impact of the activities as reflected by the following quotes:

BOP Consumer 1: I had never tested this product until now and I didn’t realise that it wasavailable here in our local shop, but I think I will try it since it is a good substitute for beefwhich is now very expensive.

BOP Consumer 2: The tips that were being given by Chigutiro (popular actor actordramatising the product) make sense on how you can save money by buying the singleservings of this product [y] I was not aware of this up until today.

BOP Consumer 3: For once we get to see these companies coming to visit us and showing usnew products, and actually getting us to try the products for free, it’s good to taste somethingbefore you but it because in these tough times you cannot afford to make a mistake when youbuy products.

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Distribution of products to the BOP in an environment where essential infrastructurethat facilitates the process is dilapidated was highlighted in all four cases as being achallenge and an area which required investment. Whilst all four cases made an effortto expand their distribution network by introducing new forms of distribution such asfranchises and van sales, the capital investment required was often not readily availableespecially in the case of A and B, thereby limiting the firms’ reach of BOP consumers whowere increasingly buying products from informal distributors such as communitycornerstores. These were the distributors that would be targeted by van sales operations.The various interventions highlighted above have implications on the potential role offirms at the BOP especially in the contested area of poverty reduction. In summary theabove discussion provides further evidence of the dilemma that firms are likely to face ifthere is inadequate alignment of internal strategy and systems to firms’ focus on the BOP.

Marketing researchThere was little evidence to demonstrate the use of marketing research on the BOPmarket or any subsequent sharing of information on this market within theorganisation (with the exception of firm C where marketing research was used togather data about BOP consumers). However, the dissemination of research in this casewas limited to marketing personnel and excluding managers from other functionalareas in the firm so that they might better understand the BOP market. The generalreluctance to conduct research at the BOP was attributed in part to the challenges ofconducting research in a volatile environment and the unavailability of qualifiedresearch firms in Zimbabwe (Chikweche and Fletcher, 2012b)

Case B Informant: We have not used market research firms in a very long time [y]. they areexpensive and take time to produce results such that by the time they do these would havebeen overtaken by events [y]. but we do need to do research on the BOP because we really donot understand this group of consumers.

Case A Informant: In all my four years here I have never used a research firm, I just do not havethat kind of money so I rely on my activities with the clubs to get information about the market.

However, Case C provided evidence of the practicality of undertaking market researchas evident from the following:

Case C Informant: We have adopted an anonymous housecall market research programmewhich involves us going for home visits with our research partner firm to observehousewives using our products although we do not identify ourselves [y]. this has given ushands on experience of how our customers use our products and it has also created some newproduct ideas which we might pursue.

Ethnographic observations – this was witnessed by the researcher during theseresearch visits where the consumers hosted the panel of three members from thecompany and the research company which facilitated the visits. The average visit tookan hour and involved observations of the consumers cooking or washing and doingtheir shopping in their local area. The women involved had experience in interactingwith firms from their participation in community club activities. The other three firmsused informal methods such as the trade and market visits and promotion activities tocollect data about the BOP market. Marketing personnel were observed to be morecomfortable interacting with customers from high-income groups rather than those atthe BOP, which is understandable given their limited understanding and grounding ofthe nuances of consumer behaviour at the BOP. This provides further justification forCase C to engage specialist market research companies to conduct research for them at

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the BOP, where they can use research assistants who are knowledgeable of theBOP environment.

Inter-departmental co-ordinationLack of internal strategy alignment in all four cases resulted in departments focusing ondifferent strategic issues. The marketing department in all the four cases had the challengeto share whatever information they had on the BOP with the various departments in orderto enhance a joint focused approach to serving the BOP market. A key point to note is thefact that this was a limitation in as far as sharing of information on BOP initiatives wasconcerned; there were some concerted effort to share information on the firms’ strategieson other segments since these were integrated in their strategic planning process. Therewas distinct ownership of strategic marketing initiatives by the various marketingpersonnel in all four cases. This ownership was then transferred or reflected in theirinterest in sharing information with other service functions who had the potential toimpact on the success or failure of such initiatives, but this was not done for BOP-relatedinitiatives. For all the firms, information sharing was generally informal. In all four cases,functional managers from other departments such as production and finance were notaware of the fact that the BOP was the main contributor to the firm’s turnover and thatresources needed to be allocated to serving this market. This was reflected in theirresponse to questions on what was the main focus of the firms strategic vision:

General Manager Production Case A: Our focus is on continuous creation of quality productsbecause that is what our customers want but they have to be prepared to pay the price forhigh quality.

Costing and production planner Case B: I just focus on making sure that each week weproduce enough products and cut down on overtime and any other downtime of production[y] that is the focus of the company.

Finance Executive Case C: I am more worried about our margins which have been goingdown and the poor collections from the sales team, these are my KPAs (key performanceareas)and what the company wants to achieve.

Budget Planner Case D: I am not sure if we have changed our strategy but I think the focus ismanaging costs and making sure we achieve our margins and keep our customers with ussince there is now a lot of competition.

Ethnographic observations – for example, whilst the marketing function’s focus wason the BOP’s needs, this focus was not shared with other departments such as theproduction team in all four case studies. This lack of “common purpose” washighlighted as a key barrier for all four firms’ ability to maximise on their penetrationof the BOP. This was reflected in disputes between departments such as marketing andproduction, production and finance, marketing and finance which were observedduring the production planning meetings. Key debates were around sales forecastingand which lines to focus on and on new product development priority. The marketingfunctions advocated for more focus on products for BOP whilst the production andfinance teams were more concerned about capacity utilisation and costs of downtimewhen changing machines.

Other key issues of disagreement were over allocation of resources and prioritisationof tasks. For example, Cases B, C and D had well defined production planning systemswhich required contribution from the marketing and production teams and to someextent the finance team. However, there were constant disagreements in all threecases as to which department had the ultimate say on what was to be produced.

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The marketing teams in all three cases wanted to take ownership of the forecasts sincethey were supposed to be more tuned to understanding what the marketplace demanded.Whilst this is a conventional marketing function, production teams in all three casesoften took ownership of this process in order to meet their own core performance targetssuch as plant capacity utilisation. This issue was even made complicated by the absenceof empowered specific marketing personnel with a sole responsibility for the BOP.The marketing personnel involved in the planning in all cases highlighted the fact thatdepartments such as finance and production often questioned their knowledge andunderstanding of the BOP given the lack of market research information and specificstrategic plans for the BOP. Further cases of conflict cited included those with the financeteam over allocation of resources for marketing activities targeting the BOP.

ImplicationsStrategic frameworkThe major key implication that emerges from the study indicates the lack of structuredstrategic marketing frameworks and market orientation towards the BOP, yet thesegment is the major segment for these firms. Evidence of the segment’s attractivenessis confirmed in earlier sections. Findings from this study provide an expanded scope ofinsights on key marketing issues such as market orientation and strategic marketingframeworks beyond that from developed markets. This is a gap advocated for bySteenkamp and Burgess (2002) and Pelham (1997, 1999). A key gap identified inprevious literature, is the need to investigate the need for market orientation andstrategic marketing frameworks in markets that are exposed to turbulence in the formof the various macro-environmental constraints, this is an established state of affairs inBOP markets. Thus, central to this study’s contribution is the articulation of marketorientation challenges and other strategic marketing framework issues in the contextof BOP markets beyond the established frameworks such as Jaworski and Kohli (1993),Kohli and Jaworski (1990) and Narver and Slater (1990). The bias towards servingmiddle to high income segments by firms at the BOP has created a cultural and processlimitation for these firms to adapt a change in their mindset in order to developa market orientation for the growing BOP segment. The challenges for establishingsome form of market orientation and implementation of strategic frameworksoutlined in the previous section provides a basis for the firms to develop a strategicframework that addresses these shortcomings. Central to this initiative, is not just theimplementation of strategic issues outlined in the discussion of the challenges, but theneed for the firms to integrate all four variables as part of the firm’s overall strategicvision and direction. These four variables and the need for an overall strategic visionand direction is summarised as a strategic framework illustrated in Figure 3.

Whilst there are established notions about the constraints of serving the BOP suchas economic, political and infrastructure challenges,(these have been covered in earliersections) these do not appear to be the main impediments to firms’ effective penetrationof the BOP segment especially from the context of firms being market oriented. Thesefirms have developed strategies and mechanisms to deal with these challenges overtime as evident from the period the firms in the case study have been operating in anenvironment with such challenges. What is evident is the lack of market orientationtowards serving the BOP segment, yet the market has emerged as the key segment inBOP markets. The implementation of the above framework which will enhance firms’adaptation of market orientation at the BOP has implications on marketing practice.These are detailed below.

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Marketing practiceFindings from the study provide practical insights for marketing managers to considerwhen developing strategies to serve the BOP. Primarily, managers could implement avariety of strategies to enhance the way they engage the BOP market. These strategiesmight include:

(1) formalising management commitment to serving the BOP – this couldbe implemented as key performance indicators for the various managementlevels;

(2) allocation of specific organisational resources to serve the BOP – this could bedone by creating specific portfolios for managing the BOP such as brandmanagers, channel managers and BOP marketing budgets;

(3) market research – this could be done by introducing formal structuredresearch to study the dynamic changing needs of the BOP market;

(4) internal marketing – this could be done by developing clear internalmarketing systems that facilitate exchange of information in the organisationespecially that which pertains to the strategic direction being pursued toserve the BOP; and

(5) 3As framework – by addressing the 3As pre-requisites, marketers havethe opportunity to develop a marketing mix that is tailor-made and relevant toBOP consumer needs.

Social implicationsFindings from the study indicate the potential for extending the benefits of conductingbusiness at the BOP beyond the profit objective by engaging in initiatives that canbenefit the communities in which firms conduct business. This is reflected by thenature of corporate social responsibility activities undertaken by some of the firmsunder study which empowered BOP consumers through various ways. These includecreation of employment through collaboration that took place via the engagement ofBOP consumers, especially women in the distribution of products at market stalls andthe support for agriculture through the sub-contracting arrangements. There willalways be debate on the quantification and extent to which such activities help reducepoverty but findings from this study create a platform for expanding this contribution.

Future research and limitationsThe macro-environmental constraints that were prevalent in Zimbabwe such as hyperinflation might not be as extreme in other BOP markets. However, as these couldpotentially impact on the way firms develop marketing strategies, caution might berequired in generalising the findings across all BOP markets. Generalisation could beenhanced by using a bigger sample of firms catering to the BOP in a number ofdifferent countries. Notwithstanding the above, the basic macro-environmentconstraints prevalent in Zimbabwe are reflective of the situation in countries withhuge BOP segments. A key area for further research would be to measure the potentialimpact of market orientation and improved strategic marketing frameworks on theperformance of the firms. Whilst this is implied by virtue of the findings from thisstudy on the need for addressing the challenges that may hinder this process there isroom to expand the scope of the study and investigate the impact of market orientationand strategic marketing frameworks on the firms’ performance.

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ConclusionWhile considerable literature espouses the opportunities of marketing to the BOP,unforeseen and often long-enduring macro-environmental challenges in some of thesemarkets raise the question as to why firms continue to operate in this environment andwhat they need to do to continue. Findings from this study provide insight into thereasons why firms in turbulent BOP environments may persist in their operations,the challenges for market orientation and strategic marketing requirements for them tooperate effectively in the market at the BOP. The paper extends the discussion on theimportance of market orientation in emerging markets such as those at the BOP beyondthe focus on advanced markets, which has been the focal point of previous studies. It alsoexpands insights on motivation for firms’ presence in BOP markets beyond previouslyheld notions of firms’ quest for raw materials. In some ways, the paper makes somecontribution to the on-going debate about the merits of market based approach of servingthe BOP which views the BOP as partners and not just consumers and producers.

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About the author

Tendai Chikweche has worked in both academia and corporate sector primarily in marketing fordifferent countries. He has taught at universities in Zimbabwe, South Africa and Australia. Hisresearch interests are primarily on enquiry on the Bottom of Pyramid and small to medium sizeenterprise. His PhD thesis was on Marketing to the BOP and has published refereed conferenceand journal papers on the subject area. Tendai Chikweche can be contacted at: [email protected]

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Marketing at the bottom of pyramid: market attractiveness and strategic requirements

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