The Impact of Culture and Relationships on International Marketing at the Bottom of the Pyramid

Richard Fletcher 1University of Western Sydney

Abstract

International marketers have been turning increasingly to markets in developing countries as markets in developed countries reach saturation point. Generally they target the wealthy elite and the expanding middle class in such countries. Rarely do they target the masses in these countries who account for 65% of the world's population. It will be argued thai a different mindset will he necessary to lap the potential offered b\> this group who are termed 'Bottom of the Pvramid (BOP). Those at the BOP exhibit cultural traits that are different and less influenced by globalisaiion. Thev are highly dependent on relationships involving both (he family and the local community and highly influenced bv the nehvorks within which they are imbedded. Buyers at the BOP behave differently not only from their counterparts in developed country markets but also from the upper and middle-income customers in their own societies. A standardised 'western' marketing mix offering will not work with this group whose circumstances require a highly customised approach. This is illustrated by a study undertaken in Vietnam relating to one element of the marketing mix -promotion. Specifically, a pilot study into the perceived need by local marketing executives to modify their approach when directing communication to customers at the lower income strata was compared with those at the upper and middle income levels. The conclusion of the paper is that managers cannot tap the BOP sector by a modified global approach and must create a totally new approach based on the cultural drivers, the existing relationships and the embedded networks that operate at the bottom of the pyramid.

INTRODUCTION

As "western" markets become saturated, international marketers have been turning increasingly to markets in developing countries. In most cases they have been targeting the wealthy elite at the top of the income scale and \\hen considering the future potential of such markets, their focus has usuall) been on the expanding middle class. Rarely do international marketers focus on the masses in these countries, be they the urban poor or occupants of rural towns and villages. Prahalad and Lieberthal (1998) attribute this to firms having an 'imperialist mindset' which drives firms to sell the same products as in the west in an unchanged form to established upscale markets in developing countries. London and Hart (2004) claim that this approach onl\ captures the tip of the iceberg of commercial potential in such markets and Prahalad (2005) illustrates this in Figure 1.

School of Marketing and International business, University of Western Sydney Email: R.FletcherY/ uxvs.edu.au

Figure 1: The Economic Pyramid(Source: Prahalad and Hart. 2U02)

This figure shows that the number of potential customers \\hose annual purchasing power is less than USD 1500 per year amount to 4 billion people (which is estimated to exceed 6 billion by 2045). This group at the bottom of the pyramid (BOP) accounts for 65% of the world's population and it is amongst this group that future growth prospects are likely to be greatest. However, a different mindset will be necessary to tap this potential, particularly in the short term. As will be shown, those at the BOP exhibit cultural traits that are different and less influenced by globalisation. They are highly dependent on relationships involving both the family and the local community and are highly influenced by the network w ithin which they are embedded.

This network could be based on family, clan or caste, religion, ethnic group or location. A standardised 'western' marketing mix offering will not k cut it' with this group whose circumstances will require a highly customised approach. Furthermore, such a standardised offering is unable to cope with the informal economy that accounts for between 30 and 60% of total economic activity in most developing countries (de Soto, 2000). In this situation, those at the bottom of the pyramid are likely to be heavily involved in the informal economy that can extend from simple barter to smuggling and corruption. Prahalad (2005) cites a retailer in Brazil as advising that the informal market is twice as big as the formal market, especial!) \\ith the lower income population and that the retailer has to believe what his customers are telling him as thes do not declare their income. In this situation, trust assumes considerable importance in the behaviour of buyer and seller. The role of trust varies from one culture to another and the issue of culture needs to be taken into account in reaching customers at the bottom of the pyramid.

Culture

The \\ork of Hofstede (1994) and Trompenaars and Hampden-Turner (1997). although criticised in terms of methodology and recency, does illustrate major cultural

differences between emerging and developed markets. Schutte and Ciarlante (1998) compared Hofstede's and Trompenaars dimensions between Asian and Western markets and found that of Hofstede's dimensions, Asian markets reflected higher power distance (i.e. an acceptance of hierarchy and inequality as the natural order of things), and greater collectivism than in western markets. They found with Trompenaars dimensions that Asian markets reflected more focus on relationships (particularism), on group rights (collectivism), on the indirect expression of emotions (neutral rather than affective) and a \ie\\ of status being due to position (ascription) rather than to individual efforts. Subsequently Hofstede and Bond (see Hofstede 2001) came up with an Asian cultural dimension of Confucian Dynamism (long term orientation).

These findings were supported b> another study that compared the fourteen least developed (i.e. emerging) with the fourteen most developed countries (Fletcher and Melewar, 2001). This study found that with Hofstede's dimensions, emerging markets exhibited much greater degrees of both power distance and collectivism. With Trompenaars dimensions, the study found that emerging markets tend to be particularist rather than universalist with obligations and particular circumstances taking precedence and that ascription played a greater role than achievement in such cultures. They also found that emerging markets were specific rather than diffuse and characterised by cultures that are highly focused on context. In such cultures, information is largelx obtained from personal information networks. These findings are illustrated in Table 1.

Table 1. Comparison Between Developed and Emerging Markets(Source: Fletcher and Melewar)

Hofstedu Hofsteciti h'omfiwHtsafs !"«•jtnp'-.Mi- (developed)' (ernergi-.'-,} (developed)' (<:f'it?r<j(iuj

38 7?58 S9

Ifii'is/ickialisir, /'-' '.''AMasculinity S9 47umversalism « 1J o.Affective 43 45Specific focus 83 69Achievement 83 73

AubUdlia Austua, Canaca Denmark Franci.', Gcrnia'sy GKMI b'ltan Italy .l;ip ii> N'jv, /f-,ji,iiii1 Sp.uri'v.'.i ilf-M SvViVcrl.mil USA

•-,: i ,\ : i >l AIM. ,i Vv-sl • • •-.'.1 ni i i. iiiri'i-' i.il.-i 'nl •; Ir.i; .-in .-. i.ia ,i .-.1,3 (.•!>•> N .1 <\>n ^i u f.-j ..-in , i , Philippines I fiiiilafi'j Urnijiiay'Australia. AuPtrin. Canndn, Denrnaik, Fianoi.1 . Gciniany. Oicat Bntai'i Italy. Itelanrt. Japan, .'Jorway Sp,;u Swil7^iland, USA''Hi i.'il. f'hirm Oo-'t'ic.f.iovnki/j Cu[,>a f-:li.;'>pin HurxiHi 1/ hvri ;\ If,-'.-,-v;,,ia . Mr-.- c Mif]r.<;- i 'iiitir>:'>inos '•',-,I r; ;:'..;n'l -'!U'-'--|.T

However, these researchers and others do not explore cultural differences between the more affluent and those at the bottom of the pyramid in the developing countries. In Hofstede's case, his sample of IBM empknees b\ its ver\ nature excluded those at the bottom ot the pyramid.

It is likely that in emerging markets, those at the bottom of the pyramid will more strongly reflect cultural differences due to their lack of exposure to external (and often western) influences as a result of limited access to the media and limited education. A knowledge of the cultural drivers for those at the BOP is necessary so as to appreciate their underlying thinking. This was the approach adopted by the highly successful Grameen bank in Bangladesh and with 'barefoot banking' as exemplified by the Wao Microbank in Papua New Guinea. Hindustan Lever Limited (HLL), when promoting their iodised salt in India, had to educate the local population as to the product's health benefits and include local village women in their distribution activities (Prahalad, 2005). These cultural drivers may be reflected in the social climate of communities at the BOP For example, collectivism is manifest in India where it is not uncommon for there to be collective purchasing and common use of facilities as when several families band together to buy a washing machine. Such collective activities also create an emphasis on the need to maintain relationships. This is illustrated in the Chinese concept of'guanxi' where the aim is never to completely discharge the obligation as the existence of an undischarged obligation in a relationship ensures its continmtv.

Relationships

Effective international marketing is becoming increasingly dependent on the cultivation of mutually beneficial relationships and nowhere is this more evident than in emerging markets due to the cultural drivers mentioned above. Such dependence on relationships is especially important at the BOP The collectivism at the BOP can result in a deep loyalty to the product or service that becomes available to this group for the first time. Although the concept of'giianxi' discussed above is usually associated with China, its underlying promise of reciprocal obligation is manifest in most Asian countries and in many non-Asian BOP markets. As a prerequisite for doing business in many BOP markets, reciprocal obligations mostly operate at the individual rather than at the firm level. Interpersonal trust is also important and provides the sources of information for making decisions. This trust in turn derives from connections that are viewed as key assets in societies at the BOP In such societies, the family has a strong influence on decisions. Social capital plays an important role in transactions at the BOP as evidenced in lending by a group and the implicit peer pressure to payback the loan. In BOP groups, there is strong emphasis on integrating activities into the local environment as this is better understood. As earlier mentioned, there vsill he a greater presence ol the informal economy at the BOP and when the informal economy is insolved. relationships will be grounded on social rather than on legal contracts. Hgure 2 illustrates the dependence of a range of countries on the informal economy and highlights the difference in this respect between developed and emerging economies.

From the above discussion of relationships at the BOP it would appear that trust is an important factor in consumer decision-making. The networks created b\ these relationships provide a means of getting around such mistrust as may exist. It is for this reason that appeals to buy need to be made by persons whom the consumer knows, with whom they can identify or to whom they look up to. This is also important in establishing a distribution structure to tap the BOP sector of the market in an emerging economy. Culture, relationships and networks will influence how buyers behave at the bottom of the pyramid.

Figure 2. Shadow Economy as a Percentage of Official GDP(Source: The Economist, 1999)

0 0.3 04 0.6 0.8 1

BUYER BEHAVIOUR

There are a number of 'western' derived models of buyer behaviour that research has shown need to be modified when doing business in developing countries. Different tastes, customs and habits are likely to result in different preferences. Also the popularity of western luxury goods among non-western consumers mas be due to different factors such a^ sa\ing or giving Mace or peer pressure, rather than because ot perceptions of value. These factors explain \\h> people at the bottom of the pyramid arc brand conscious, especially for aspirational reasons.

The model of innovation adoption for example does not apply uniform!) to all international markets. In many respects, this is due to differences in culture. Different cultures have a different attitude towards the past, present and the future, which in turn impacts on the degree of enthusiasm for adopting new technologies. Also different

cultures exhibit different degrees of individualism and collectivism and this influences the readiness to adopt something new or preference to \\ait until man\ others ha\e adopted the technology. Some research has been undertaken on differences in buver behaviour between the 'west' and Asia. Figure 3 (from Bradles 2003) shows thai in 'eastern* countries, the response pattern is different to that in the '\\cst and the life cvcle much shorter.

Figure 3. Innovation Adoption in Western and Eastern Markets(Source: Bradley. 2003)

Another model impacting on the \\a> buyers behave is Maslow's hierarchy of needs this shows the order in which needs are satisfied by buyers. Research by Schutte and Ciarlante (1998) shows that in Asia not only is the order in which these needs are satisfied different, but the needs themselves van compared to the 'west' This is illustrated in Figure 4. These models of buyer behaviour illustrate that in emerging or less developed markets consumers are driven by different motivations to those that operate in western developed markets.

Figure 4. Hierarchy of Needs Between Different Cultural Groups

Asia

The problem with these models is that they view eastern or Asian markets as a whole and do not differentiate between groups within such markets on socio economic lines. In these countries, buyer behaviour is likely to be markedly different between the wealthy elite and growing urban middle class on the one hand and the urban poor/rural masses on the other. Whilst advocates of globalisation argue that over time such consumers will become more 'westernised', to the extent that this is true, it is onl\ likely to apply to the upper and middle class elements of such markets. Those in the markets at the bottom of the pyramid are much less likel) to be exposed to \\estern influences as disseminated by eC'ommerce and the media. Only 50% of those at the BOP in many developing markets actually have access to the media (Prahalad. 2005) Therefore, the observed buyer behaviour differences commented upon above are more likely to be evident at the BOP This is because embedded cultural differences are likel) to be greater or subject to less modification by exposure to western influences.

Marketing Mix Issues

In BOP markets, each element of the marketing mix needs to take existing relationships into account. Prahalad (2005) cites cases of multinational firms such as Hindustan Lever Limited, who have been successful in tapping this group by totally revamping one or more elements of the marketing mix. London and Hart (2004) observe that accessing the BOP market usually involves a new product, targeted at a new set of customers and distributed via an innovative distribution channel.

ProductPrahalad (2005) argues that western entrepreneurs are caught up in form instead of functionality. Washing clothes in an outdoor stream is generally a communal activity and will require a different soap product formulation to washing clothes in a washing machine that adjusts itself to levels of soiling and for coloured vs white garments Overcoming this and tapping BOP markets may require making units of sale smaller and therefore affordable - cigarettes sold b\ the stick instead of b\ the packet of 25 or 50; shampoo sold by the single use sachet instead of b) the bottle. Approaching the market in this way brings the product into the consideration set of the poor for the first time even if they onl\ bu> the sachet once a month \\hen the) have mone\.

This is particularly the case with non-durable consumer goods where, according to D'Andrea (2003), expenditure on these products accounts for a ver> high percentage of total income amongst respondents at the BOP In this category, D'Andrea argues that consumers are willing to pay a premium for leading brands as a means of reducing the risk of purchase of an item that accounts for a significantly larger percentage of income for those at the BOP. Collectively, these purchases can result in a substantial volume of product. London and Hart (2004) argue that products offered to BOP markets will need local content added to the product design so as to improve both their credibility and acceptability. Also there is the problem in some product categories of quality. Scaling down some products at the expense of quality can make the difference in perceived quality between a pirated and an authentic version of a product minimal - therefore as computer firms have found, the need is to offer cheap products but not poor ones. The example of the Tata Group of India is informative. Its CFO, Rattan Tata, plans to reach into the BOP market, not by stripping down an existing vehicle but by designing a

quality vehicle from scratch aligned to the cost structure necessary to tap this market. The infrastructure at the bottom of the pyramid is often hostile and products may need to be adapted to withstand shortcomings such as fluctuating voltage, impure and intermittent water and movement over unsealed roads or tracks. Contrary to popular perception, the BOP market is not averse to technology as evidenced by the rapid expansion of PC kiosks.

PricingResearch by London and Hart (2004) found that MNC's usually tried to impose their pricing formulae on developing country markets with little success at the BOP This is because they overlook the need to both make products affordable and price the offering in a way that takes into account the unique circumstances faced by BOP consumers. Dramatic cost reductions are often necessary to achieve this. The technique required is low margins and high volumes. By virtue of their numbers, those earning less than USD2 per day represent a significant potential purchasing power. Firms who have been successful in this sector have recognised that millions of small sales can vield big profits and that this is achieved by providing goods and services at a lower price point while still maintaining margins. This may involve taking the goods or services, reducing them to their bare essentials and offering them on a massive scale. It also involves \\a\s of making the offering cheap enough to offer to this larger, poorer market. According to Sanderson (2005), this requires low price points, minimum marginal costs, de-skilling services so non-experts can deliver them and the use of local entrepreneurs, all of which have relationship implications.

Creating aftbrdability may require repackaging and recovery of cost so that the upfront cost of access is reduced. This might be achieved through charging a small upfront payment and a monthly usage fee, instead of selling the product outright. This will inject a performance promise into the transaction as the monthly fees will continue only as long as the product performs. To achieve affordability in the face of smaller units of sale is likely to require innovative financial techniques such as that adopted by the Grameen Phone Operation in Bangladesh where the firm loans a female entrepreneur the price of a phone so she can resell it in minute increments to individuals in the village. The BOP causes considerable emphasis to be placed on the price-performance relationship and to be successful, firms must focus on all aspects of cost. In essence, it is availabilit), affordabilitv and access that creates a neu market at the BOP bv taking advantage of the consumer's capacity to consume at a particular point of time.

DistributionReaching the BOP is likelv to involve breaking the economic and phvsical bottlenecks created by traditional systems of distribution and extending the 'break-bulk" functions of the distribution channel even further. Contrast the milk collection arrangements ol the Kaira District Coop in Anand (India) where for years at dawn, ladies deliver the milk of a single cow carried in a bowl on their head to the collection site, with methods used in intensive dair\ farming in countries like Australia. Research b\ London and Hart (2004) showed that existing local partners in an overseas market often do not have the knowledge and capabilities to reach customers at the BOP Such partners were unable to create sufficient incentives for current distributors to promote the product because promoting to the BOP cannibalized existing more lucrative product lines.

This suggests for the BOP, a new distribution channel is needed. Innovations in the distribution system are critical for tapping the BOP market. As previous!) mentioned, distribution will need to involve networks at the BOP built on existing relationships. This is illustrated in the case of firms in one countr) accessing a BOP market in another via the ethnic group in the host country. Gateway Pharmaceuticals collected remittances from Vietnamese in Australia, converted them into its medicines on a favourable basis and shipped the medicines to relatives in Vietnam. It is also illustrated in the preference for shopping at small stores as relationships are a significant determinant of purchase and ad-hoc credit is provided.

PromotionMany at the BOP live in the media "dark zones" where they do not have access to the print media due to illiteracy, limited access to the radio, little access to TV and no access to the internet. However, the research to date including that by Prahalad (2005), has little to say about promotion at the BOP. Research by Thomas (1996) stresses that unique innovative promotion methods will be necessary to communicate with potential BOP customers. He illustrates this by citing 'wokabauf marketing in the highlands of Papua New Guinea, where promotion is by a troupe of actors going from village to village undertaking plays from the back of a truck that promote products, supplies of which have been previously augmented at the little shops along the route.

Of the marketing mix variables discussed above, this paper reports the findings from a pilot study on communicating with customers in a developing countr) and the differences between managerial perceptions of communicating with upper/middle class customers and those at the bottom of the pyramid.

METHODOLGY

Approaches to international marketing communication have traditionally been grounded in ways of communicating with customers who are not dissimilar to customers in one's domestic market. Whilst these customers might be found at the upper socio-economic levels in transitional economies and amongst the upper and middle classes in many developing economies, they do not inhabit the bottom of the pyramid.

In order to research this issue, a typical communications model was applied to a developing country (Vietnam). Each aspect of the model, as shown in Figure 5, was analysed in terms of its perceived importance to customers at the higher/middle socio- economic level and customers at the lower socio-economic level to see whether the promotional approach to the two groups should be different.

An exploratory research strategy was devised that \\us appropriate to gathering data in a BOP country such as Vietnam. It was based on qualitative research because this technique was considered more suitable when implicit assumptions, new relationships and abstract concepts are being investigated in low income markets in an emerging economies where there may be a culturall} based reluctance to respond to questionnaires.

Figure 5. The Communication Process

Figure 2: The communication process

>• F.nvironmental factor***—

_ __ __ lnlenercncc_._._ _ _I

(Source, Griffin, 1993, pi I)

Eight semi-structured interviews were conducted as part of this pilot study so as to establish the extent to which a traditional communications model as used in the west operates in an emerging market. Because the questions being asked related to a western communications model, the selected informants were persons who were knowledgeable about marketing and the situation in Vietnam. They were selected on the basis of their having a need to engage in communications activities such as Vietnamese business persons (2); Vietnamese marketing managers for foreign corporations (2); a Vietnamese advertising agency executive (1); a Vietnamese market research agenc\ executive (1): a foreign government commercial representative (1), and an official from a non government organization (1). All the above respondents were Vietnamese except for the last two who were assisted in their responses by their senior local Vietnamese manager.

The interviews were structured around a series of questions designed to ascertain the 'goodness of fit" between typical communications models applied in international marketing and the circumstances that exist in emerging markets. Responses were sought as to how each element of the model (sender issues; medium issues; receiver issues; feedback issues; interference issues and environmental issues) were thought to apply to the upper and urban middle class on the one hand and those at the BOP (the urban lower and rural classes), on the other. A number of questions explored how culture and relationships might impact on various aspects of communication (e.g. influence of the group, relevance of background, appeals to long term loyalty). Respondents were asked to rate issues on a 10 point scale.

RESULTS

The results are indicative only as only seven interviews were conducted. This explains why paired T tests (to see if the responses for each of the grouped variables was independent or not) showed no statistical independence at the 95% confidence level. The same comment applies to the fact that paired sample correlations were high and significant for the receiver (.828) and for the feedback (.818). moderate for the medium (.748). but not for the sender.

Tab

le 2

. Su

mm

ary

of R

espo

nses

INTE

RVIE

W G

UIDE

- Q

UEST

IONS

FOR

DIS

CUSS

ION

SEND

ERW

ho is

the

pre

ferr

ed s

ende

r/pr

esen

ter

of t

he m

essa

ge7

Use

of t

estim

onia

ls n

eeds

for

cre

dibi

lity

Mes

sage

con

tent

s sh

ould

ref

lect

1 h

igh

(1)

or l

ow (

10)

pow

er d

ista

nce

Mes

sage

app

eal s

houl

d be

to

grou

p be

nefit

(1)

or

indi

vidu

al a

chie

vem

ent

(10)

Mes

sage

sho

uld

be c

ouch

ed in

spe

cific

(1

) or

abst

ract

(10

) ite

ms

Mea

ning

sho

uld

be c

onve

yed

by c

onte

xt o

f th

e m

essa

ge (

1 ) o

r by

wor

ds u

sed

(10)

Imag

e co

nvey

ed s

houl

d de

pend

on

the

back

grou

nd o

f pr

esen

ters

(1)

or

indi

vidu

al a

ccom

plis

hmen

ts (

10)

Mes

sage

sho

uld

refle

ct c

ultu

ral s

peci

fics

(1)

or c

ultu

ral

univ

ersa

l (1

0)M

essa

ge a

ppea

ls s

houl

d be

util

itaria

n (1

) or

aest

hetic

(10

) as

pect

sM

essa

ge s

houl

d re

ly o

n ve

rbal

(1

) vs

non-

verb

al (

10)

stim

uli

Mes

sage

app

eals

sho

uld

be d

esig

ned

to c

reat

e lo

ng t

erm

loy

alty

(1)

or

shor

t te

rm r

eact

ion

(10)

Mes

sage

con

tent

s ne

eds

to b

e po

litic

ally

sen

sitiv

eM

essa

ge a

ppea

l sho

uld

be b

ased

on

info

rmat

ion

(1 ) o

r pe

rsua

sion

(10

)

MED

IUM

Use

of r

adio

for

pro

mot

ion

to c

onsu

mer

sUs

e of

TV

for

prom

otio

n to

con

sum

ers

Use

of I

nter

net

for

prom

otio

n to

con

sum

ers

Use

of m

agaz

ines

for

pro

mot

ion

to c

onsu

mer

sUs

e of

pub

lic r

elat

ions

foi

pro

mot

ion

to c

onsu

mer

sUs

e of

offe

rs (

eg m

oney

off,

cou

pons

etc

iUs

e of

tra

de f

airs

for

pro

mot

ion

to c

onsu

mer

sUs

e of

dire

ct m

arke

ting

for

prom

otio

n to

con

sum

ers

Is ro

le o

f pe

rson

al s

ellin

g gr

eate

r ot

les

s co

mpa

red

to w

este

rn c

ount

ries

Is go

vern

men

t co

ntro

l ove

r m

edia

usa

ge v

ery

high

<1

) or

very

low

(10

)

(loca

l=1;

for

eign

er=1

0l(y

es=1

; no

=lO

)

(ver

y de

fimte

ly=1

; no

t at

all=

10)

(ver

y hi

gh=1

; ve

ry l

ow-1

0)

(ver

y hi

gh-1

; ve

ry l

ow^1

0)(v

ery

high

=1 ;

very

low

-10)

(ver

y hi

gh=1

, ve

ry l

ow --

10)

MID

DLE

CLAS

S

4.1

4.3

1.8

5.7

1.6

5.7

6.2

6.6

3.4

3.3

3.3

2.4

5.1

7.1

2.7

6.8

2.9

6.2

4.1 5 4.1

5.2 2

LOW

ER

URBA

N CL

ASS

2.8

4.7

2.6

3.8 2 5.4 5 5 7

2.9

3.3

3.8

2.2

5.7

2.9 5 10 5.5

6.6

5.5

4.7

6.8

4.8

1.6

RECE

IVER

Is th

e av

aila

bilit

y of

med

ia r

elat

ed in

frast

ruct

ure

a pr

oble

m?

Is th

e af

ford

abili

ty o

f m

edia

rel

ated

infra

stru

ctur

e a

prob

lem

?Ar

e pr

omot

iona

l mes

sage

s us

ually

rec

eive

d in

a g

roup

situ

atio

n (1

) or

on a

n in

divi

dual

bas

is (1

0)?

Is th

e re

actio

n to

a m

essa

ge in

fluen

ced

by a

ccep

tanc

e of

the

mar

ketin

g co

ncep

t'Is

the

resp

onse

to

a m

essa

ge li

kely

to

be in

fluen

ced

by g

roup

nor

ms

(1)

or in

divi

dual

bel

iefs

(10

)?W

ill r

espo

nse

to th

e m

essa

ge b

e de

pend

ent

on le

vel o

f lit

erac

y an

d ed

ucat

ion?

Are

resp

onde

nts

to th

e m

essa

ge m

ore

likel

y to

be

influ

ence

d em

otio

nal (

1) o

r by

rat

iona

l (10

) ap

peal

s?

INTE

RFER

ENCE

Influ

ence

of g

roup

or

ethn

ic a

ffilia

tion

over

rides

indi

vidu

al r

eatc

tion

to th

e m

essa

geIn

fluen

ce o

f loc

al/re

gion

al lo

yalti

es o

verri

des

indi

vidu

al r

eatc

tion

to th

e m

essa

geG

over

nmen

t wis

hes

impa

ct o

n in

divi

dual

rea

ctio

n to

mes

sage

s

FEED

BACK

Mes

sage

rec

ipie

nts

are

very

rel

ucta

nt (

1) o

r ve

ry p

leas

ed (

10)

to e

xpre

ss a

n op

inio

n ab

out t

he

com

mun

icat

ion

Obt

aini

ng a

rea

ctio

n to

a p

rom

otio

n m

arke

t re

sear

ch is

ver

y di

fficu

lt (1

) or

ver

y ea

sy (

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6.3 6 6.8 6 5.4

Taking the above qualifications into account, indications are that as far as 'sender oriented' aspects were concerned, lower income customers were perceived as preferring local presenters of messages and liked messages containing testimonials (especially from authority figures/glamorous persons) reflecting acceptance of power distance. They preferred appeals to cultural universals rather than to cultural specifics and those that had a focus on persuasion rather than on convex ing information, fhere \\as little difference between the groups as far as use of context to conve) meaning, preference for verbal stimuli, need to create long term loyalty and the need for message content to be politically sensitive.

Concerning 'medium' issues, differences in media usage are apparent between high/middle and lower income groups. The latter are heavier users of radio, buy fewer magazines, are less likely to watch TV, have little if any exposure to the internet and find direct marketing of little appeal compared to the upper/middle group. Their choices of media are heavily influenced by their lower literacy and education levels.

With 'receiver' oriented elements of the model, affordability of the equipment to receive the message is a greater problem for the lower income group as is the reliability of overall communications infrastructure, especially in rural areas. For this group, it is more common to receive the message in a communal situation (around the village TV) and messages couched in terms of group norms rather than individual preferences have greatest appeal. This group is also likely to respond to emotional appeals.

Sources of'interference' in the interpretation of the message, such as group influence, local and regional loyalties and government wishes had more impact on the lower income group compared with the upper/middle group.

Finally, with 'feedback', the lower income group were perceived as being more reluctant to provide information, or to express an opinion. This has implications lor conducting market research.

IMPLICATIONS FOR INTERNATIONAL MARKETERS

From this exploratory research into communication, it appears necessary for managers wishing to do business in BOP markets to develop separate marketing strategies for these markets. To successfully access such markets requires approaches tailored to such markets rather than a global approach. This is because the BOP markets have not had the exposure to 'western' influences as they do not have the same media access as do the upper and middle income groups in developing countries. Appeals to those at the BOP will need to be tailored to their cultural differences and take into account local conditions. Approaches to BOP consumers will need to capitalise on existing relationships and employ those who are insiders as far as local networks are concerned. Offerings to the BOP segment will require a deep understanding of the local environment and involve a 'bottom-up' approach resulting from identifying, leveraging and shoring up the existing social infrastructure. Strategies need to be culturall> sensitive and relationship based. They might include:

creation of a unique business model tailored to the local market that is both culturally sensitive and economically feasible;

identification of the real needs of the consumer and product adaptation to meet these needs in a way that creates opportunity for local participation;

development of tactics to overcome the infrastructure problems faced by BOP consumers;

detailed research into the BOP market, its needs and characteristics; collaboration with non-traditional partners in the market so as to gain expert

knowledge of the existing social infrastructure, and a conscious and publicised plan to develop local talent.

This pilot study has a number of limitations, the major one being the difficult) of collecting data in developing countries especially data pertaining to those at the bottom of the psramid. It was for this reason that interviews \vere conducted \\ith managers dealing with marketing at the bottom of the pyramid rather than with bottom of the pyramid customers themselves. The results of this study, however, do indicate that further research is warranted into the impact of culture and relationships on the other marketing mix variables at the bottom of the pyramid and that research into these and promotion should cover the actual bottom of the pyramid customers themselves.

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