- Email: [email protected]
Understanding subsistence marketplaces: Toward sustainable consumption and commerce for a better world
Journal of Business Research 63 (2010) 535–537
Contents lists available at ScienceDirect
Journal of Business Research
Understanding subsistence marketplaces: Toward sustainable consumption and commerce for a better world Madhu Viswanathan a,⁎, José Antonio Rosa b a b
University of Illinois at Urbana Champaign, 61 Wohlers Hall, 1206 South Sixth Street, Champaign, IL 61822, USA University of Wyoming, Dept. 3275, 1000 E. University Avenue, Laramie, WY 82071, USA
a r t i c l e
i n f o
Keywords: Subsistence marketplaces Base of the pyramid
a b s t r a c t This article provides the background and the events leading up to this special issue, and the composition of articles that follow. This special issue includes articles that take a bottom-up approach in understanding and explaining subsistence marketplaces, focusing on individual, communal, and cultural factors that influence consumers and entrepreneurs who live at or near subsistence, and who comprise a majority of the world's population. This bottom-up focus is distinct and complementary to the macro-level economic development and mid-level business strategy (e.g., base of the pyramid) approaches to the role of business in poverty alleviation. This special issue consists largely of papers based on presentations at the second subsistence marketplace conference held in Chicago in 2008, with articles and essays reflecting a healthy commingling of disciplinary perspectives that cuts across social and commercial enterprises. © 2009 Elsevier Inc. All rights reserved.
1. Why a special issue on subsistence marketplaces? This special issue of the Journal of Business Research represents another milestone toward expanding and making more profound the understanding of subsistence marketplaces and their constituents among management scholars and practitioners. Management and marketing circles accept the urgent need to better comprehend and respond to subsistence marketplaces (Prahalad, 2005; Hart, 2007; Rosa and Viswanathan, 2007), giving rise to an interesting and valuable literature in sub-areas of business research such as strategy and organizational theory, entrepreneurship, microfinance, and marketing. This special issue comprises of articles that take a bottom-up approach in understanding and explaining subsistence marketplaces — an approach focused on gaining a more nuanced understanding of individual, communal, and cultural factors that influence the persons – consumers and entrepreneurs – who live at or near subsistence, and who comprise a majority of the world's population. This bottom-up focus is distinct from, and complementary to, the macro-level economic development and mid-level business strategy approaches, that have characterized research on this topic. Using the metaphor of planes flying at different altitudes (Viswanathan and Rosa, 2007), the macroeconomic view takes a policy-oriented 30,000 feet view, while business strategy research such as the base of the pyramid approach adopts a mid-level altitude compatible with managerial concerns and applications. The goal is to fly ⁎ Corresponding author. University of Illinois, Department of Business Administration, 1206 South Sixth Street, Champaign, IL 61820, USA. E-mail addresses: [email protected] (M. Viswanathan), [email protected] (J.A. Rosa). 0148-2963/$ – see front matter © 2009 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2009.06.001
as close to the ground as possible with a distinctive micro-level focus on buyer, seller, and marketplace behavior, and the primary objective is to inform business policy and decisions effectively. The bottom-up perspective complements other approaches by providing a deeper understanding of behavioral, familial, and sociological fundamentals underlying the economic transactions and marketplace interactions of consumer and merchants who live at or near subsistence. We strongly believe that a detailed understanding at this level is central in developing effective business models and technological innovations for these marketplaces. The terminology requires some explanation. “Subsistence” connotes barely having sufficient resources for day-to-day living, yet allowing for the possibility of abundance in other life dimensions — such as familial and community networks of relationships (Viswanathan, 2007; Viswanathan et al., 2008; Viswanathan and Sridharan, 2009). “Marketplaces” emphasize preexisting, rich, and culture-specific arenas for exchange that businesses in resource-rich economies often ignore. The growth in consumption in subsistence marketplaces, and the expansion in diversity of the products and services being successfully marketed there clearly contravene the notion that subsistence consumers are not interested in sophisticated products and brands nor capable of buying them, and we use the term “subsistence marketplaces,” to be descriptive but not patronizing, reflecting the need to understand such marketplaces in their own right. A second objective, hence, is for business to appreciate subsistence marketplaces as more than markets into which to sell what consumers in developed economies will no longer buy. We want business to see that these are sophisticated markets, comprised of individual consumers and their families, entrepreneurs, communities, and markets from which we can learn much. Moreover, we wish for
536
M. Viswanathan, J.A. Rosa / Journal of Business Research 63 (2010) 535–537
business to recognize that, with aggregate purchasing power in excess of $5 trillion (Hammond et al., 2007), the potential in subsistence marketplaces is impressively high; and as an additional one billion new consumers, mostly from underdeveloped economies, enter the global market for discretionary spending before 2020 (Davis and Elizabeth, 2006), that potential will increase markedly. An additional important task facing 21st Century business toward which some articles in this special issue contribute is to find ways to meet the known and latent needs of subsistence marketplace participants that also move them toward being sustainable marketplaces, i.e., marketplaces characterized by sustainable production and consumption that conserve natural resources and enhance individual and community welfare. Having an additional billion consumers using products, packaging, and services in quantities and ways similar to the consumption practices of consumers in developed economies is likely to generate raw material shortages and environmental contamination in hard-to-imagine magnitudes. Moreover, what does sustainability mean in subsistence contexts? Are we trying to sustain — the local economy? The culture? Local traditions? Family units? Or simply the opportunity for future generations to survive? Individuals living in subsistence manage the deep tensions between a natural necessity to conserve and the need to use resources to survive the immediate term. Trade-offs are being made between surviving in the present and a sustainable future, and the economic expansion of subsistence markets will only raise the magnitude and frequency of such trade-offs. Business leaders should focus on their firms providing enduring value by developing product and packaging designs, distribution systems, and other aspects of market offerings that concurrently enhance consumer quality of life and their sustainable behaviors. The trade-offs are significant, and the answers are still forthcoming. We believe that the micro-level orientation adopted by contributors to this special issue – often the perspective of buyers and sellers living in subsistence – provide us with insights that help address the co-occurring needs of survival and sustainability profitably and responsibly. 2. Events leading up to the special issue In August, 2006, over eighty academicians, business practitioners, and social enterprise leaders came together for the first subsistence marketplaces conference at the University of Illinois, Chicago. Unique to this enclave was the bottom-up approach to subsistence marketplaces described earlier — focusing on better understanding and responding to the people – consumers and entrepreneurs – who live at or near subsistence, and who comprise a majority of the world's population. Response to the event and the subsequent output from the first conference was unambiguously positive, energizing projects and collaborative arrangements that cut across traditional boundaries. A collection of readings from that conference were published as a volume in the Advances in International Management series by Elsevier in 2007 (Rosa and Viswanathan, 2007). The second subsistence marketplace conference in June 2008 aimed to build on momentum from the first conference and give visibility and critical assessment to new developments in business research and responses to subsistence marketplaces over the preceding two years. This conference was made possible by the generous support of the University of Illinois at Urbana-Champaign, the University of Wyoming, the University of Illinois at Chicago, and the Center for International Business Education and Research, University of Illinois at Urbana-Champaign. The fundamental motivation for the 2008 conference was once again to apply contemporary and rigorous scholarship from academic, business, and social enterprise sources to the task of meeting the needs of subsistence consumers and small merchants in ways that are economically, socially, and ecologically sustainable. The conference retained the distinctive bottom-up approach in understanding subsistence marketplaces based on buyer, seller, and other market constituent behaviors, with paper submissions and research presentations drawing on scholarly research, business practice, and social entrepreneurship and management education
initiatives in the realm of subsistence marketplaces, all constituencies that were widely represented among the attendees. Keynote addresses, plenary panels, presentations from invited guests, and presentations of submitted papers all contributed to a vibrant and synergistic array of outcomes. Some of the topic areas reflected in the papers of this special issue are the roles of buyers and sellers in business processes and value creation, research methods, business practices and the need for sustainability, technology identification, product design, development, and testing, distribution systems and their influence on consumer welfare, promotion of consumption and its implications, pricing for value and sustainability, management education in subsistence marketplaces, and social enterprises. 3. Contents of the special issue This special issue consists largely of papers based on presentations at the second subsistence marketplaces conference and divides into articles and essays. The collection reflects a healthy commingling of disciplinary perspectives that cuts across social and commercial enterprises. Commingling is in fact a thematic undertone to the special issue, reflecting the blurring of boundaries between buyers and sellers, between families and communities, between consumption and survival, between profit and nonprofit, and between social and commercial enterprises. We thank Oana Branzei (University of Western Ontario, London, Canada), Lisa Jones-Christensen (University of North Carolina, Chapel Hill), Raed Elaydi (University of Illinois, Chicago), William Frederick (University of Pittsburgh, Pittsburgh), Roland Gau (Tulane University, New Orleans), Ujwal Kayande (Australian National University, Canberra, Australia), Ted London (University of Michigan, Ann Arbor), S. Usha Nandini (Amrita School of Business, Bangalore, India), Julie Ozanne (Virginia Tech. University, Blacksburg), Robin Ritchie (Carleton University, Ottawa, Canada), Benet DeBerry Spence (University of Illinois, Chicago), Linda Tuncay (Loyola University, Chicago), William Qualls (University of Illinois, Urbana-Champaign), Jelena Spanjol (University of Illinois, Chicago), and Srinivas Sridharan (University of Western Ontario, London, Canada) for their invaluable efforts in reviewing articles submitted for consideration for this special issue. Three articles extend the field's knowledge of subsistence consumers and the effectiveness of efforts to reach them. In the area of consumer responses to new product technologies, and how subsistence consumers differ from nonsubsistence ones, Trujillo, Barrios, Camacho, and Rosa conduct an interesting study which shows that consumer expectations of complexity, a known influence on responses to novel technologies, are negatively affected by consumer self-esteem, self-assessed capabilities, and product domain knowledge, all of which in turn are influenced by consumer socioeconomic status. The study provides scholars and practitioners with insight into the complex interplay of beliefs and the socioeconomic factors shaping those beliefs, and raises awareness of the complexity of subsistence consumer thinking and motivations in spite of educational and income deficits. Along similar lines, Peterson, Ekici, and Hunt compare subsistence and nonsubsistence consumers also, focusing on their beliefs about marketing institutions and initiatives, and the relationship of such beliefs on the consumers' self-assessed quality of life. This is an intriguing study by virtue of the constructs explored, such as quality of life and consumer trust in marketing institutions, and also because the subsistence conditions came about as a result of economic dislocations in contrast to the more typical institutional and structural causes of poverty. Consumers can see themselves as living in subsistence and alter their attitudes accordingly, according to Peterson et al., even if their objectively assessed situation would not place them in the subsistence market segment, something that must be taken into account by companies seeking to serve markets affected by economic and other types of externalities which are best described as having temporary outcomes. Finally, Weidner, Rosa, and Viswanathan offer a comprehensive assessment of the diverse marketing strategies and
M. Viswanathan, J.A. Rosa / Journal of Business Research 63 (2010) 535–537
tactics currently being used by companies serving subsistence marketplaces globally, and insights into which approaches are proving most effective and the possible reasons for such effectiveness. Many, but not all, companies are being very thoughtful about their approach to the marketing of products, services, and sometimes ideas, and innovate across an array of business activities that involve packaging, distribution, pricing, and promotion in addition to product designs. Also evident from the study is the value of involving subsistence marketplace constituencies in the co-production of marketing elements (e.g., repackaging for affordability and access, transportation to remote areas, and word-ofmouth promotion) because of the intimate knowledge and social networks that subsistence consumers hold. Several articles that touch on microenterprise operators and entrepreneurs among the poor develop the notion of co-production with subsistence consumers. Their social network; a network that cuts across family and community boundaries at multiple levels and allows for a fluid movement of information and exchange is one of the most valuable assets held by subsistence merchants. Viswanathan, Sridharan, and Ritchie take on the difficult task of applying survey research to low-literate subsistence consumers and entrepreneurs, and provide the field with a rich understanding of the types of information being shared through the networks, how the information influences consumer decisions, and how it ultimately drives sophisticated marketing and consumption skills in environments devoid of formal business educational opportunities. The importance of social networks and entrepreneurial fervor is also captured by London, Anupindi, and Sheth as they apply case study methodology to gain a better understanding of factors that facilitate and constrain value creation. Highly beneficial in this study are detailed descriptions of strategies used by ventures serving subsistence producer entrepreneurs, and demonstration that, by reducing constraints, the welfare of both subsistence producers and the market-serving venture is enhanced. A similar focus on the creation and capture of value is taken by Jones-Christensen, Parsons, and Fairbourne in their study of microfranchising ventures. The paper describes in detail the notion of microfranchising in subsistence marketplaces, the benefits it can engender, and the challenges to management that it poses. A key take away from the research is that microfranchising generates numerous and accessible entry level job opportunities in subsistence marketplaces, which in turn serve to increase consumer savings and contribute to community well-being. Another set of articles focuses at the marketplace level while emphasizing the need for methodological innovativeness, tangentially made evident by several aforementioned articles. Such innovation is a key motivator for several authors who, because of their experiences, are keenly aware that research methods and perspectives rooted in developed markets may not be effective in capturing interesting and important aspects of subsistence marketplaces. Hill provides us with a detailed and comprehensive summary of how traditional approaches for capturing exchange dynamics in developed markets fall short in highly verbal and personal-contact intensive subsistence marketplaces. He follows with equally comprehensive and passionately delivered arguments for the adoption of a naturological perspective that is specifically developed to capture the porous boundaries and reverberating consequences of marketing exchanges among low-income consumers. DeBerry-Spence introduces the field to the idea of a permanent third space, an approach and frame of mind designed for participant observation, and that allows for the researcher to inhabit the realms of subsistence marketplaces and academic inquiry concurrently. She discusses comprehensively the rigor and mental discipline required to inhabit third space, and the richness of insights that can be gained from the approach, including the possibility of sharing third space with other researchers and market players. In contrast to the above-mentioned articles, Abdelnour and Branzei apply a proven methodology – discourse analysis – but in the atypical market setting of market voids created by armed conflicts that displace large populations, an all-too-common
537
situation around the world. More specifically, they explore the competing discourses put forth by NGOs and government agencies to encourage displaced subsistence consumers to adopt fuel efficient stove technologies. In addition, they provide the field with another window into the sophisticated thinking and decision making exercised by subsistence consumers in even the direst of circumstances, as the target consumers of the competing discourses rejected the wholesale adoption of any single advocated solution and instead created their own valued solutions. A collection of essays based on direct experiences with subsistence marketplaces and in-depth case studies round out the special issue. Toledo, Hernandez, and Griffin explore the behaviors and successes of subsistence microenterprise operators in the artisan crafts industry of southern Mexico. They argue that agency theory may be an appropriate theoretical lens through which to explain why subsistence business operators repeatedly refuse government assistance and programs designed to enhance their market scope and capabilities. Moreover, they show that subsistence operators hold a complex view of government agencies and do not trust their motivations. Crawford-Mathis, Darr, and Farmer examine The Village Network approach to poverty alleviation, which involves applied collaboration between subsistence marketplace communities and nonprofit organizations such as universities. The Village Network's primary objective is to provide learning opportunities to students from developed countries while at the same time harnessing their talents and energy toward improving the lives of the poor. Chikweche and Fletcher examine factors that influence purchase in subsistence marketplaces in Zimbabwe, and bring out the unique characteristics of this context, highlighting the importance of understanding differences between subsistence marketplaces. Finally, Elaydi and Harrison conduct an in-depth comparison of microlending initiatives by established financial service providers in Sri Lanka and find that contrasting motivations, such as poverty alleviation and revenue enhancement, can lead to substantially different marketing strategies and market outcomes. All four essays provide the field with detailed knowledge of individual markets and, in aggregate, help to illustrate the high diversity that future business engagement in subsistence marketplaces must address. Together, this collection represents a step forward in the nascent understanding of subsistence marketplaces. With the dearth of volumes or special issues on this topic, we hope that the articles and essays here provide a foundation to build on. Most importantly, we hope that this special issue contributes in a small way toward creating relevant, research-based insights that increase understanding of subsistence marketplaces and, in turn, help in the effort toward sustainable consumption and commerce for a better world. References Davis I, Elizabeth S. Ten trends to watch, published by McKinsey & Company, 2006, (electronic resource). Hammond AL, Kramer WJ, Katz RS, Tran JT, Walker W. Washington, DC: World Resources Institute, International Finance Corporation, 2007. Hart, Stuart L. Capitalism at the Crossroads. Upper Saddle River, NJ: Pearson; 2007. Prahalad CK. The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. Upper Saddle River, NJ: Wharton School Publishing; 2005. Rosa J, Viswanathan M. Product and market development for subsistence marketplaces: consumption and entrepreneurship beyond literacy and resource barriers. In: Cheng Joseph, Hitt Michael, editors. Advances in international management series, Elsevier; 2007. Viswanathan M. Understanding product and market interactions in subsistence marketplaces: a study in South India. In: Rosa José Antonio, Viswanathan Madhu, editors. Advances in international management series, vol. 20. Elsevier; 2007. p. 21–57. Viswanathan M, Rosa J. Product and market development for subsistence marketplaces: consumption and entrepreneurship beyond literacy and resource barriers. In: Rosa Jose, Viswanathan Madhu, editors. In: Cheng Joseph, Hitt Michael, editors. Advances in international management series. Elsevier; 2007. p. 1–17. Viswanathan M, Sridharan S, Ritchie R. Marketing in subsistence marketplaces. In: Wankel Charles, editor. Alleviating poverty through business strategy. Palgrave Macmillan; 2008. p. 209–31. Viswanathan, M., Sridharan, S., From subsistence marketplaces to sustainable marketplaces: a bottom-up perspective on the role of business in poverty alleviation. Ivey Business Journal, 2009 (March/April).
Contents lists available at ScienceDirect
Journal of Business Research
Understanding subsistence marketplaces: Toward sustainable consumption and commerce for a better world Madhu Viswanathan a,⁎, José Antonio Rosa b a b
University of Illinois at Urbana Champaign, 61 Wohlers Hall, 1206 South Sixth Street, Champaign, IL 61822, USA University of Wyoming, Dept. 3275, 1000 E. University Avenue, Laramie, WY 82071, USA
a r t i c l e
i n f o
Keywords: Subsistence marketplaces Base of the pyramid
a b s t r a c t This article provides the background and the events leading up to this special issue, and the composition of articles that follow. This special issue includes articles that take a bottom-up approach in understanding and explaining subsistence marketplaces, focusing on individual, communal, and cultural factors that influence consumers and entrepreneurs who live at or near subsistence, and who comprise a majority of the world's population. This bottom-up focus is distinct and complementary to the macro-level economic development and mid-level business strategy (e.g., base of the pyramid) approaches to the role of business in poverty alleviation. This special issue consists largely of papers based on presentations at the second subsistence marketplace conference held in Chicago in 2008, with articles and essays reflecting a healthy commingling of disciplinary perspectives that cuts across social and commercial enterprises. © 2009 Elsevier Inc. All rights reserved.
1. Why a special issue on subsistence marketplaces? This special issue of the Journal of Business Research represents another milestone toward expanding and making more profound the understanding of subsistence marketplaces and their constituents among management scholars and practitioners. Management and marketing circles accept the urgent need to better comprehend and respond to subsistence marketplaces (Prahalad, 2005; Hart, 2007; Rosa and Viswanathan, 2007), giving rise to an interesting and valuable literature in sub-areas of business research such as strategy and organizational theory, entrepreneurship, microfinance, and marketing. This special issue comprises of articles that take a bottom-up approach in understanding and explaining subsistence marketplaces — an approach focused on gaining a more nuanced understanding of individual, communal, and cultural factors that influence the persons – consumers and entrepreneurs – who live at or near subsistence, and who comprise a majority of the world's population. This bottom-up focus is distinct from, and complementary to, the macro-level economic development and mid-level business strategy approaches, that have characterized research on this topic. Using the metaphor of planes flying at different altitudes (Viswanathan and Rosa, 2007), the macroeconomic view takes a policy-oriented 30,000 feet view, while business strategy research such as the base of the pyramid approach adopts a mid-level altitude compatible with managerial concerns and applications. The goal is to fly ⁎ Corresponding author. University of Illinois, Department of Business Administration, 1206 South Sixth Street, Champaign, IL 61820, USA. E-mail addresses: [email protected] (M. Viswanathan), [email protected] (J.A. Rosa). 0148-2963/$ – see front matter © 2009 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2009.06.001
as close to the ground as possible with a distinctive micro-level focus on buyer, seller, and marketplace behavior, and the primary objective is to inform business policy and decisions effectively. The bottom-up perspective complements other approaches by providing a deeper understanding of behavioral, familial, and sociological fundamentals underlying the economic transactions and marketplace interactions of consumer and merchants who live at or near subsistence. We strongly believe that a detailed understanding at this level is central in developing effective business models and technological innovations for these marketplaces. The terminology requires some explanation. “Subsistence” connotes barely having sufficient resources for day-to-day living, yet allowing for the possibility of abundance in other life dimensions — such as familial and community networks of relationships (Viswanathan, 2007; Viswanathan et al., 2008; Viswanathan and Sridharan, 2009). “Marketplaces” emphasize preexisting, rich, and culture-specific arenas for exchange that businesses in resource-rich economies often ignore. The growth in consumption in subsistence marketplaces, and the expansion in diversity of the products and services being successfully marketed there clearly contravene the notion that subsistence consumers are not interested in sophisticated products and brands nor capable of buying them, and we use the term “subsistence marketplaces,” to be descriptive but not patronizing, reflecting the need to understand such marketplaces in their own right. A second objective, hence, is for business to appreciate subsistence marketplaces as more than markets into which to sell what consumers in developed economies will no longer buy. We want business to see that these are sophisticated markets, comprised of individual consumers and their families, entrepreneurs, communities, and markets from which we can learn much. Moreover, we wish for
536
M. Viswanathan, J.A. Rosa / Journal of Business Research 63 (2010) 535–537
business to recognize that, with aggregate purchasing power in excess of $5 trillion (Hammond et al., 2007), the potential in subsistence marketplaces is impressively high; and as an additional one billion new consumers, mostly from underdeveloped economies, enter the global market for discretionary spending before 2020 (Davis and Elizabeth, 2006), that potential will increase markedly. An additional important task facing 21st Century business toward which some articles in this special issue contribute is to find ways to meet the known and latent needs of subsistence marketplace participants that also move them toward being sustainable marketplaces, i.e., marketplaces characterized by sustainable production and consumption that conserve natural resources and enhance individual and community welfare. Having an additional billion consumers using products, packaging, and services in quantities and ways similar to the consumption practices of consumers in developed economies is likely to generate raw material shortages and environmental contamination in hard-to-imagine magnitudes. Moreover, what does sustainability mean in subsistence contexts? Are we trying to sustain — the local economy? The culture? Local traditions? Family units? Or simply the opportunity for future generations to survive? Individuals living in subsistence manage the deep tensions between a natural necessity to conserve and the need to use resources to survive the immediate term. Trade-offs are being made between surviving in the present and a sustainable future, and the economic expansion of subsistence markets will only raise the magnitude and frequency of such trade-offs. Business leaders should focus on their firms providing enduring value by developing product and packaging designs, distribution systems, and other aspects of market offerings that concurrently enhance consumer quality of life and their sustainable behaviors. The trade-offs are significant, and the answers are still forthcoming. We believe that the micro-level orientation adopted by contributors to this special issue – often the perspective of buyers and sellers living in subsistence – provide us with insights that help address the co-occurring needs of survival and sustainability profitably and responsibly. 2. Events leading up to the special issue In August, 2006, over eighty academicians, business practitioners, and social enterprise leaders came together for the first subsistence marketplaces conference at the University of Illinois, Chicago. Unique to this enclave was the bottom-up approach to subsistence marketplaces described earlier — focusing on better understanding and responding to the people – consumers and entrepreneurs – who live at or near subsistence, and who comprise a majority of the world's population. Response to the event and the subsequent output from the first conference was unambiguously positive, energizing projects and collaborative arrangements that cut across traditional boundaries. A collection of readings from that conference were published as a volume in the Advances in International Management series by Elsevier in 2007 (Rosa and Viswanathan, 2007). The second subsistence marketplace conference in June 2008 aimed to build on momentum from the first conference and give visibility and critical assessment to new developments in business research and responses to subsistence marketplaces over the preceding two years. This conference was made possible by the generous support of the University of Illinois at Urbana-Champaign, the University of Wyoming, the University of Illinois at Chicago, and the Center for International Business Education and Research, University of Illinois at Urbana-Champaign. The fundamental motivation for the 2008 conference was once again to apply contemporary and rigorous scholarship from academic, business, and social enterprise sources to the task of meeting the needs of subsistence consumers and small merchants in ways that are economically, socially, and ecologically sustainable. The conference retained the distinctive bottom-up approach in understanding subsistence marketplaces based on buyer, seller, and other market constituent behaviors, with paper submissions and research presentations drawing on scholarly research, business practice, and social entrepreneurship and management education
initiatives in the realm of subsistence marketplaces, all constituencies that were widely represented among the attendees. Keynote addresses, plenary panels, presentations from invited guests, and presentations of submitted papers all contributed to a vibrant and synergistic array of outcomes. Some of the topic areas reflected in the papers of this special issue are the roles of buyers and sellers in business processes and value creation, research methods, business practices and the need for sustainability, technology identification, product design, development, and testing, distribution systems and their influence on consumer welfare, promotion of consumption and its implications, pricing for value and sustainability, management education in subsistence marketplaces, and social enterprises. 3. Contents of the special issue This special issue consists largely of papers based on presentations at the second subsistence marketplaces conference and divides into articles and essays. The collection reflects a healthy commingling of disciplinary perspectives that cuts across social and commercial enterprises. Commingling is in fact a thematic undertone to the special issue, reflecting the blurring of boundaries between buyers and sellers, between families and communities, between consumption and survival, between profit and nonprofit, and between social and commercial enterprises. We thank Oana Branzei (University of Western Ontario, London, Canada), Lisa Jones-Christensen (University of North Carolina, Chapel Hill), Raed Elaydi (University of Illinois, Chicago), William Frederick (University of Pittsburgh, Pittsburgh), Roland Gau (Tulane University, New Orleans), Ujwal Kayande (Australian National University, Canberra, Australia), Ted London (University of Michigan, Ann Arbor), S. Usha Nandini (Amrita School of Business, Bangalore, India), Julie Ozanne (Virginia Tech. University, Blacksburg), Robin Ritchie (Carleton University, Ottawa, Canada), Benet DeBerry Spence (University of Illinois, Chicago), Linda Tuncay (Loyola University, Chicago), William Qualls (University of Illinois, Urbana-Champaign), Jelena Spanjol (University of Illinois, Chicago), and Srinivas Sridharan (University of Western Ontario, London, Canada) for their invaluable efforts in reviewing articles submitted for consideration for this special issue. Three articles extend the field's knowledge of subsistence consumers and the effectiveness of efforts to reach them. In the area of consumer responses to new product technologies, and how subsistence consumers differ from nonsubsistence ones, Trujillo, Barrios, Camacho, and Rosa conduct an interesting study which shows that consumer expectations of complexity, a known influence on responses to novel technologies, are negatively affected by consumer self-esteem, self-assessed capabilities, and product domain knowledge, all of which in turn are influenced by consumer socioeconomic status. The study provides scholars and practitioners with insight into the complex interplay of beliefs and the socioeconomic factors shaping those beliefs, and raises awareness of the complexity of subsistence consumer thinking and motivations in spite of educational and income deficits. Along similar lines, Peterson, Ekici, and Hunt compare subsistence and nonsubsistence consumers also, focusing on their beliefs about marketing institutions and initiatives, and the relationship of such beliefs on the consumers' self-assessed quality of life. This is an intriguing study by virtue of the constructs explored, such as quality of life and consumer trust in marketing institutions, and also because the subsistence conditions came about as a result of economic dislocations in contrast to the more typical institutional and structural causes of poverty. Consumers can see themselves as living in subsistence and alter their attitudes accordingly, according to Peterson et al., even if their objectively assessed situation would not place them in the subsistence market segment, something that must be taken into account by companies seeking to serve markets affected by economic and other types of externalities which are best described as having temporary outcomes. Finally, Weidner, Rosa, and Viswanathan offer a comprehensive assessment of the diverse marketing strategies and
M. Viswanathan, J.A. Rosa / Journal of Business Research 63 (2010) 535–537
tactics currently being used by companies serving subsistence marketplaces globally, and insights into which approaches are proving most effective and the possible reasons for such effectiveness. Many, but not all, companies are being very thoughtful about their approach to the marketing of products, services, and sometimes ideas, and innovate across an array of business activities that involve packaging, distribution, pricing, and promotion in addition to product designs. Also evident from the study is the value of involving subsistence marketplace constituencies in the co-production of marketing elements (e.g., repackaging for affordability and access, transportation to remote areas, and word-ofmouth promotion) because of the intimate knowledge and social networks that subsistence consumers hold. Several articles that touch on microenterprise operators and entrepreneurs among the poor develop the notion of co-production with subsistence consumers. Their social network; a network that cuts across family and community boundaries at multiple levels and allows for a fluid movement of information and exchange is one of the most valuable assets held by subsistence merchants. Viswanathan, Sridharan, and Ritchie take on the difficult task of applying survey research to low-literate subsistence consumers and entrepreneurs, and provide the field with a rich understanding of the types of information being shared through the networks, how the information influences consumer decisions, and how it ultimately drives sophisticated marketing and consumption skills in environments devoid of formal business educational opportunities. The importance of social networks and entrepreneurial fervor is also captured by London, Anupindi, and Sheth as they apply case study methodology to gain a better understanding of factors that facilitate and constrain value creation. Highly beneficial in this study are detailed descriptions of strategies used by ventures serving subsistence producer entrepreneurs, and demonstration that, by reducing constraints, the welfare of both subsistence producers and the market-serving venture is enhanced. A similar focus on the creation and capture of value is taken by Jones-Christensen, Parsons, and Fairbourne in their study of microfranchising ventures. The paper describes in detail the notion of microfranchising in subsistence marketplaces, the benefits it can engender, and the challenges to management that it poses. A key take away from the research is that microfranchising generates numerous and accessible entry level job opportunities in subsistence marketplaces, which in turn serve to increase consumer savings and contribute to community well-being. Another set of articles focuses at the marketplace level while emphasizing the need for methodological innovativeness, tangentially made evident by several aforementioned articles. Such innovation is a key motivator for several authors who, because of their experiences, are keenly aware that research methods and perspectives rooted in developed markets may not be effective in capturing interesting and important aspects of subsistence marketplaces. Hill provides us with a detailed and comprehensive summary of how traditional approaches for capturing exchange dynamics in developed markets fall short in highly verbal and personal-contact intensive subsistence marketplaces. He follows with equally comprehensive and passionately delivered arguments for the adoption of a naturological perspective that is specifically developed to capture the porous boundaries and reverberating consequences of marketing exchanges among low-income consumers. DeBerry-Spence introduces the field to the idea of a permanent third space, an approach and frame of mind designed for participant observation, and that allows for the researcher to inhabit the realms of subsistence marketplaces and academic inquiry concurrently. She discusses comprehensively the rigor and mental discipline required to inhabit third space, and the richness of insights that can be gained from the approach, including the possibility of sharing third space with other researchers and market players. In contrast to the above-mentioned articles, Abdelnour and Branzei apply a proven methodology – discourse analysis – but in the atypical market setting of market voids created by armed conflicts that displace large populations, an all-too-common
537
situation around the world. More specifically, they explore the competing discourses put forth by NGOs and government agencies to encourage displaced subsistence consumers to adopt fuel efficient stove technologies. In addition, they provide the field with another window into the sophisticated thinking and decision making exercised by subsistence consumers in even the direst of circumstances, as the target consumers of the competing discourses rejected the wholesale adoption of any single advocated solution and instead created their own valued solutions. A collection of essays based on direct experiences with subsistence marketplaces and in-depth case studies round out the special issue. Toledo, Hernandez, and Griffin explore the behaviors and successes of subsistence microenterprise operators in the artisan crafts industry of southern Mexico. They argue that agency theory may be an appropriate theoretical lens through which to explain why subsistence business operators repeatedly refuse government assistance and programs designed to enhance their market scope and capabilities. Moreover, they show that subsistence operators hold a complex view of government agencies and do not trust their motivations. Crawford-Mathis, Darr, and Farmer examine The Village Network approach to poverty alleviation, which involves applied collaboration between subsistence marketplace communities and nonprofit organizations such as universities. The Village Network's primary objective is to provide learning opportunities to students from developed countries while at the same time harnessing their talents and energy toward improving the lives of the poor. Chikweche and Fletcher examine factors that influence purchase in subsistence marketplaces in Zimbabwe, and bring out the unique characteristics of this context, highlighting the importance of understanding differences between subsistence marketplaces. Finally, Elaydi and Harrison conduct an in-depth comparison of microlending initiatives by established financial service providers in Sri Lanka and find that contrasting motivations, such as poverty alleviation and revenue enhancement, can lead to substantially different marketing strategies and market outcomes. All four essays provide the field with detailed knowledge of individual markets and, in aggregate, help to illustrate the high diversity that future business engagement in subsistence marketplaces must address. Together, this collection represents a step forward in the nascent understanding of subsistence marketplaces. With the dearth of volumes or special issues on this topic, we hope that the articles and essays here provide a foundation to build on. Most importantly, we hope that this special issue contributes in a small way toward creating relevant, research-based insights that increase understanding of subsistence marketplaces and, in turn, help in the effort toward sustainable consumption and commerce for a better world. References Davis I, Elizabeth S. Ten trends to watch, published by McKinsey & Company, 2006, (electronic resource). Hammond AL, Kramer WJ, Katz RS, Tran JT, Walker W. Washington, DC: World Resources Institute, International Finance Corporation, 2007. Hart, Stuart L. Capitalism at the Crossroads. Upper Saddle River, NJ: Pearson; 2007. Prahalad CK. The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. Upper Saddle River, NJ: Wharton School Publishing; 2005. Rosa J, Viswanathan M. Product and market development for subsistence marketplaces: consumption and entrepreneurship beyond literacy and resource barriers. In: Cheng Joseph, Hitt Michael, editors. Advances in international management series, Elsevier; 2007. Viswanathan M. Understanding product and market interactions in subsistence marketplaces: a study in South India. In: Rosa José Antonio, Viswanathan Madhu, editors. Advances in international management series, vol. 20. Elsevier; 2007. p. 21–57. Viswanathan M, Rosa J. Product and market development for subsistence marketplaces: consumption and entrepreneurship beyond literacy and resource barriers. In: Rosa Jose, Viswanathan Madhu, editors. In: Cheng Joseph, Hitt Michael, editors. Advances in international management series. Elsevier; 2007. p. 1–17. Viswanathan M, Sridharan S, Ritchie R. Marketing in subsistence marketplaces. In: Wankel Charles, editor. Alleviating poverty through business strategy. Palgrave Macmillan; 2008. p. 209–31. Viswanathan, M., Sridharan, S., From subsistence marketplaces to sustainable marketplaces: a bottom-up perspective on the role of business in poverty alleviation. Ivey Business Journal, 2009 (March/April).