Marketing to the Poor

Marketing to the PoorQuestion: May God continue to bless your works for the impactful response to my request for hints, on what to do in order for Nigerians to give a little to change the lives of the rural poor. It was quite rewarding to me personally and my organisation generally. I’m back with another related question – What is the place of marketing towards alleviating the plight of the poor? – Geraldine Kumba.

For the benefit of other readers, Madame. Geraldine Kumba works for a humanitarian/developmental organisation that has helping the poor in Nigeria as a major objective. Her earlier query and my response to a related issue are conveyed in an earlier article entitled, Promotion for Nigerians to give a little to change lives. Request for it, if you are interested or visit the business section of Comptes" (Nigerian online news/other purposes portal).

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As you know, the principles of marketing are applicable to various endeavours. That is why there is justification in your interest towards ascertaining if marketing is applicable to other areas of your calling, aside from what this earlier piece harped on. I strongly support the improvement of the lot of the poor through genuinely strengthening his economic position (through creation of opportunities to raise his incomes and improve his livelihoods), rather than handouts in the form of humanitarian gestures. The old saying, “stop giving me fish, but teach me how to fish instead” holds in this regard.

May I state clearly here that I’m a proponent of an approach in marketing tagged, Marketing to the Poor” or in the words of C.K. Prahalad, “Bottom of the pyramid” (BoP) marketing. It is also referred as “Base of pyramid” (BoP). In economics, the bottom of the pyramid is the largest, but poorest socio-economic group (with the few very rich comprising the apex, the top-most part).

The bottom is comprised of the more than 2 billion people (in global term) that live on less than $2 per day. Prahalad urged that, “if we stop thinking of the poor as victims or as a burden, and start recognising them as resilient and creative entrepreneurs and value-conscious consumers, a whole world of opportunity will be open”. BoP is a model of doing business that deliberately targets the poor, often applying new technologies.

In this article, I intend dwelling extensively on this concept, pointing out related product designs (created around customer need, often involving manufacturing from local materials, cheap and affordable to the poor); business models (made to create income for the rural or urban poor); and even projects all reflective of marketing to the poor. BoP should not be left to initiatives in Corporate Social Responsibility (CSR), as there is money to be made at the bottom of the pyramid. The poor can be empowered through engagements in vital productive system (without exploitation), bringing such out of poverty and impacting on the country’s economy generally.

As regards sponsoring related initiatives, many are likely to see such as of governments’ or development organisations’ engagements. A change in this trend has aroused my interest, as private sector (my constituency) organisations are now making increasing in-road into this area.

I see a lot of sense in making the poor “smile to the bank”, while the private sector (leaving out the governments and development agencies) sees opportunities to serve important public purposes (engaging or benefiting the poor all the same) to improve its bottom line.

Brazil’s immediate past president, Luiz Inacio Lula da Silva, achieved a major fit of bringing millions of Brazilians out of poverty and reversed the rural urban drift in his country. I remain an advocate of the adoption of President Lula’s concept.

Marketing to the poor" (also referred as Market for poor or M4P) is a marketing approach which emphasizes that specifically targeted intervention are required to make the market work for the poor (Creating a market where the poor operates to earn a living, and not await humanitarian donations). A typical poor often has an uphill task of falling short of basic needs such as food, logement, mobility, and health.

Going by World Bank’ figures, Nigeria’s economy is the second-largest in Africa; 37th largest economy in the world; 25th poorest in the world; more than 50 percent of it citizens live under $2 per day (the poverty line); with an inflation rate of 12.8 percent in 2010. The poverty being referred to here is ‘Income-poverty’, as it is glaring that ‘Non-monetary poverty’ takes the shape of powerlessness, ill-health and physical weakness, social inferiority, humiliation, decrease in consumption level, isolation, etc.

As various markets seem not to work well for the poor due to very obvious reasons (e.g. enabling environment from lack of education, lack of information, and deprivation), there is a general conviction that the environment should be boosted, through direct intervention, in order to create conducive market for the poor.

Prahalad’s BoP marketing assumes that when the poor are converted into producers and also consumers, they get more access to products and services which help them acquire the dignity of attention and choices from the private sector (a status previously reserved for the middle class). Accessible, transparent and remunerative markets are essential in order to increase the incomes, improve livelihood of the poor (especially the rural poor). More than 80 million Nigerians live in rural areas, with an obvious majority classified as poor.

As “Marketing to the poor” portends business engagement with impoverished consumers as a distinct strategy towards achieving marketing objectives, imagine a typical Nigerian rural agricultural environment whereby the poor derives these: Benefits from engaging in planning and production, growing and harvesting, grading, packing, transport; storage; processing, distribution, promotion and then selling. This is obviously a sure way of “saying good-bye” to poverty. This is why I favour initiatives that make markets favourable for the poor (purging any form of exploitation and fraud) – Impacting on cost of goods/services to the poor (through cost reduction); enhanced storage system; and favourable distribution system.

(…to be continued)

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