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Marketing to the poor: an institutional model of exchange in emerging markets

Author

Listed:
  • Jaideep Prabhu

    (University of Cambridge)

  • Paul Tracey

    (University of Cambridge)

  • Magda Hassan

    (University of Warwick)

Abstract

In this paper we argue that formal exchanges with poor consumers in emerging markets are hard to create and maintain, resulting in widespread market failure. More specifically, in emerging markets the institutions required for exchange either function poorly or are entirely absent, making it difficult for sellers to deliver affordable and accessible offerings to poor buyers in a financially sustainable manner. The marketing challenge thus becomes (1) developing a viable business model to facilitate market-based exchanges and (2) shaping the institutions needed to implement this business model. Drawing on institutional theory and extending it with insights from the marketing and business model innovation literatures, we develop a model of exchange in emerging markets. At the heart of our model is the idea that sellers often need to act as institutional entrepreneurs in order to create and deliver value when marketing to the poor in emerging markets. We discuss the implications of our model for future research on marketing, exchange and emerging economies, as well as the implications for managers seeking to market to the poor in emerging economies.

Suggested Citation

  • Jaideep Prabhu & Paul Tracey & Magda Hassan, 2017. "Marketing to the poor: an institutional model of exchange in emerging markets," AMS Review, Springer;Academy of Marketing Science, vol. 7(3), pages 101-122, December.
    • Handle: RePEc:spr:amsrev:v:7:y:2017:i:3:d:10.1007_s13162-017-0100-0
    DOI: 10.1007/s13162-017-0100-0
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    Cited by:

    1. S. Arunachalam & S. Cem Bahadir & Sundar G. Bharadwaj & Rodrigo Guesalaga, 2020. "New product introductions for low-income consumers in emerging markets," Journal of the Academy of Marketing Science, Springer, vol. 48(5), pages 914-940, September.
    2. Tiwari, Rajnish & Prabhu, Jaideep, 2018. "Soft power of frugal innovation and its potential role in India's emergence as a global lead market for affordable excellence," Working Papers 104, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    3. Magda Hassan & Jaideep Prabhu & Rajesh Chandy & Om Narasimhan, 2023. "When Bulldozers Loom: Informal Property Rights and Marketing Practice Innovation Among Emerging Market Microentrepreneurs," Marketing Science, INFORMS, vol. 42(1), pages 137-165, January.
    4. Priyanka Jayashankar & Samantha Cross, 2020. "Expanding exchange: how institutional actors shape food-sharing exchange systems," AMS Review, Springer;Academy of Marketing Science, vol. 10(1), pages 116-134, June.
    5. Salman Ali & Guihua Li & Yousaf Latif, 2020. "Unleashing the importance of creativity, experience and intellectual capital in the adaptation of export marketing strategy and competitive position," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-26, November.
    6. Hubert Gatignon & Xavier Lecocq & Koen Pauwels & Alina Sorescu, 2017. "A marketing perspective on business models," AMS Review, Springer;Academy of Marketing Science, vol. 7(3), pages 85-89, December.

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