What do mainstream consumers think about product launches in emerging markets to low-income consumers?  And why should companies worry about what they think? Prof. and Deputy Dean Reetika Gupta, ESSEC Business School Asia-Pacific, along with Deepa Chandrasekaran from the University of Texas at San Antonio, Sankar Sen, from Baruch College, City University of New York, and Tanvi Gupta from the Indian Institute of Management Ahmedabad, provide a detailed analysis of the implications of the concept of “marketing to the bottom of the pyramid” in today’s globalized world.  

Related research: Marketing to Bottom-of-the-Pyramid Consumers in an Emerging Market: The responses of Mainstream Consumers, Reetika Gupta, Deepa Chandrasekaran, Sankar Sen and Tanvi Gupta, Journal of Business Ethics  (2024). 

Consumer Segments and “Permissible consumption” 

Prof. Gupta and her colleagues’ research assesses how mainstream consumers react to a company’s marketing efforts to a lower-income segment in emerging countries and if their reactions depend on the product type, the cultural closeness, and the company type. 

In her study, Prof. Gupta refers explicitly to “Bottom-of-the-Pyramid” (BoP) – consumers living in a state of extreme poverty and deprivation. Numbering 4-5 billion people, they make up the largest and poorest part of the world population, living on less than $2 a day. Nowadays, an increasing number of companies launch products and market them to BoP consumers. These could be products like “Minute Maid Vitingo”, a drink by the Coca-Cola Company addressing malnutrition in rural India or Shiseido’s “Les DIVAS” make-up line for women in rural Bangladesh. 

Mainstream consumers perceive the type of product differently, having a negative opinion of companies that treat poorer customer segments unequally in the marketplace. However, they also have beliefs about what the poor should be consuming. When companies communicate their BoP efforts, this could, in turn, impact how these mainstream consumers perceive the company and thereby harm the latter’s standing in the mainstream market.  

A new globalised and connected era of communication

Researching this topic is helpful in understanding how companies should communicate their BoP efforts to mainstream consumers. In fact, a good BoP communications strategy could even lead to a competitive advantage. Gupta et al.’s insights on the permissible consumption mindset in developed economies can indeed show companies how product launches in the BoP market could affect company evaluations in the mainstream market. 

The increasing significance of an effective communication strategy is highlighted by the growing importance that mainstream consumers place on companies’ purpose and actions. Moreover, due to global social media and news, as well as increasing cross-border movements, consumers in both emerging and developed countries are now easily informed about companies’ global and local activities. In the future, companies will need to involve these consumers in their strategic considerations, as any company activity has the potential to impact the opinions and attitudes of mainstream consumers.

The difficulty of walking a mile in unknown shoes

The studies conducted by the authors show that US consumers have a less positive attitude towards companies launching hedonic BoP products than their Indian counterparts, whereas Indian mainstream consumers do not have a significantly different attitude between companies launching a hedonic or a utilitarian product. 

On the one hand, these findings can be traced back to the concept of permissible consumption, which in this context is linked to mainstream consumers’ beliefs that utilitarian products should be prioritised over hedonic products, as the latter fulfil higher-order needs. This finding corroborates with extant research has shown that mainstream consumers view a consumer who receives government assistance as less moral and ethical if they choose to spend money on discretional goods, even if they, themselves, spend money on perceived “luxury goods.” Connected to consumers increasingly perceiving companies as moral agents with moral responsibility, their permissibility-based judgements on BoP consumer consumption carry over to the expectation of which products companies should be launched on the BoP marketplace. 

On the other hand, however, these beliefs may not be based on actual understanding of BoP consumer wants, needs, desires or their overall life situation. This explains why consumers from developed countries are more susceptible to these stereotypes, as they are less equipped to take the perspective of a consumer segment that is both culturally and physically very distant from them. This is also why Indian mainstream consumers have a less negative opinion of hedonic product launches – they are more empathetic to the situation of their fellow BoP citizens and, therefore, have different expectations of product launches, which are met.

Empathy and Expertise: How country of origin and profitability affect perceptions

Furthermore, Reetika Gupta et al. found that mainstream Indian consumers had a slightly more favourable reaction to domestic companies launching a hedonic product compared to a foreign one. They also perceived for-profit companies more positively than non-profit ones when launching a hedonic product.

The research found that the country-of-origin of a company is central as it shapes the expectations of emerging market consumers of how well that company can understand the needs and desires of BoP consumers. Especially when launching hedonic products, consumers perceive domestic companies as more empathetic than foreign companies. 

Similarly, consumers perceive for-profit companies as being more suitable for launching a hedonic product to BoP consumers, and their efforts are better received.

Managing company and product expectations in a globalised world

Prof. Gupta and her colleagues’ studies have implications for academia as well as the management profession itself. Firstly, for the research suggests that mainstream consumers who are more culturally distant will evaluate companies more positively if their BoP products address utilitarian needs.  Secondly, Gupta found that mainstream consumers who are culturally closer to the BoP markets have a similar judgment of companies, regardless of whether they are marketing utilitarian or hedonic products. 

On a management dimension, in order to prevent potentially negative attitudes from culturally distant mainstream consumers, companies would be wise to communicate their hedonic BoP product launches neutrally and draw less attention to them. 

At the same time, specifically international and/or foreign companies should engage with local communities in emerging markets to prevent negative publicity while introducing hedonic products. For example, they could directly involve target BoP consumers in their product development and communication campaigns to be perceived as more genuine and empathic in their efforts. 

All in all, Prof. Gupta’s research suggests that companies would be wise to adjust their communication strategy for BoP product launches and take their mainstream consumers’ expectations into account.  

Prof. Reetika Gupta

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