Enhancing market exchanges at the base of the pyramid

Abstract

Purpose – The base of the pyramid (BOP) is characterized by deep and wide poverty, which dampens market exchanges, or making/selling and buying/consuming activities. The purpose of this paper is to address the specific issue of how national culture distinguishes BOP markets in terms of exchange activities, and the broad issue of how market exchanges can grow and flourish by accounting for comparative differences across BOP markets. Design/methodology/approach – The study design is a conceptual framework drawn from the extant BOP literature and several theories such as Amartya Sen’s theory on poverty, and Anthony Bebbington’s concepts of human capital. The framework specifies research propositions for future empirical examination. Findings – The conceptual framework proposes that BOP poverty lowers or inhibits market exchanges but is countered by several factors: national culture (performance orientation), non-traditional assets (creative and social capitals), and transformative technologies (mobile telephony). Assuming these factors vary by BOP setting, greater performance orientation alongside higher social capital, creative capital, and mobile telephony directly and/or interactively increase market exchange activities. Research limitations/implications – Among research implications are the application of other culture theories to the BOP market exchange issue, and the need to examine the role of government and other non-traditional capitals in exchanges. Practical implications – Managerial implications include the targeting and selection of BOP markets and development of marketing tactics that leverage cultural, nontraditional, and technological assets. Originality/value – This paper explores how to counter the negative effects of BOP poverty on market exchanges by leveraging the distinctives and variations among BOP markets.