Market Development and Value Creation for Low Socioeconomic Segments in Emerging Markets: An Integrated Perspective Using the 4A Framework

Abstract

This article uses the 4A framework (awareness, acceptability, affordability, accessibility) to examine the impact of marketing activities on market development (i.e., access to markets, access to people) and value creation (financial value and relationship value) in low-income segments in emerging markets. Using cross-national survey data spanning mobile phone users in five emerging Asian markets (countries: Bangladesh, India, Pakistan, Sri Lanka, and Thailand), the study findings provide empirical support for the 4A framework for small farmers and business persons (i.e., low-income entrepreneurs) in these markets. The study uniquely contributes to the base of pyramid literature in emerging markets since the 4A marketing framework has not been studied for its effectiveness on micro-entrepreneurs so far. This article also contributes to research and practice by showing how market development and value creation go hand-in-hand for micro-entrepreneurs in emerging markets.

Keywords

market development emerging markets access to markets low income segment 4A framework value creation

Introduction

Over the last few decades, several researchers have focused their attention and resources on the lower socioeconomic segments (i.e., low SEC) in emerging markets (EM) (e.g., Ellis 2005; London and Hart 2004; Prahalad 2004), often defined as consisting of low-income population. However, research on the process of market development (i.e., access to market and access to people) and value creation in these segments is essentially absent, barring some recent studies (e.g., Tarafdar, Singh, and Anekal 2013).

In this research, we use the 4A framework that consists of awareness, accessibility, affordability, and acceptability (Sheth and Sisodia 2012), to examine the impact of marketing activities on market development (i.e., access to markets and access to people) and value created (i.e., financial value and relationship value). It is well accepted in the literature that the 4A framework is more useful for analyzing emerging market conditions (Anderson and Billou 2007; Dadzie, Amponsah, and Winston 2017); Mathur, Mehta, and Swami (2020); Prahalad 2004; Seth and Sisodia (2012); Sinha and Seth (2018)) compared to other marketing frameworks (e.g., 4Ps, 7Ps of marketing mix). Thus, this research aims to fill important research voids in examining how each of the 4A’s can lead to market development, and value creation in EMs (Prahalad 2012; Sheth and Sisodia 2012).

We undertake this research in the context of the continued use of technology (e.g., mobile phones) by two groups of users (farmers and business owners) in low SEC segments in EMs. We investigate market development among micro-entrepreneurs, and the 4A framework provides us with an opportunity to capture the perspective of the consumer as well as the microentrepreneur (i.e., small businesses and farmers) – that is, in this market, the microentrepreneur simultaneously represents the consumer as well as the trader/farmer (e.g., Viswanathan and Sridharan 2009). Several approaches that have emerged to advance our understanding of market development in the low SEC segments in EMs, are usually divided into two broad approaches: bottom-up and top-down (Pels and Sheth 2017; Sheth 2011). The 4A framework uniquely allows us to capture the top-down as well as the bottom-up approach of market development. In this research, the mobile service ecosystem put in place by telecommunication firms represents the top-down approach (i.e., the perception of the “consumer” is captured in our research), and the adoption and use of mobile services by the micro-entrepreneurs for the purpose of furthering their business goals represent the bottom-up approach (i.e., the perception of the “farmer/trader” is captured in our research). The two approaches together provide insight into the process of market development, and value creation for the consumer/micro-entrepreneur.

We use the micro-entrepreneurship definition provided by the Government of India in the MSMED 2006 Act, in which a micro-enterprise is an enterprise where the investment in equipment does not exceed INR 2.5 million (approximately USD 33,500). It is also known that such micro-enterprises constitute a significant share of the economic activity in EMs (La Porta and Shleifer 2008).

The findings reported in this paper are based on the analysis of a dataset that contains responses obtained from a structured survey of 357 unskilled/semi-skilled farmers/farm laborers, and 238 small shop owners/business persons from low SEC markets across five countries in Asia (i.e., Bangladesh, India, Pakistan, Sri Lanka, and Thailand). Our empirical findings provide support that the 4A framework leads to access to markets and people (i.e., aids market development), and value creation for both groups of micro-enterprises. Our findings show that for the farmers, all the 4As significantly impact access to people, but not access to markets; access to people in turn impacts access to markets. For the small-business persons, awareness and acceptability impact access to markets; awareness and affordability impact access to people. We note that for both groups, access to people afforded by the mobile phone significantly contributes to financial value, which underscores the importance of the connections afforded by mobile telephony.

The research contributes to literature in multiple ways. First, we investigate market development among micro-entrepreneurs (i.e., farmers and small business persons), and situate our findings in an integrated perspective that captures the top-down as well as the bottom-up approaches of market development in a single model. Second, this is probably the first empirical study that seeks to apply the 4A framework to study market development among businesses in low SEC markets. Third, this study reports findings on robust data that has been collected from five countries in south-east Asia, rather than using a small sample from a single-country market. The findings from the study are also likely to be useful for managers and policymakers who may note that accessibility alone is not the only driver of adoption of mobile phones; other drivers (e.g., affordability, acceptability) need to be communicated to the user groups to encourage use of mobile phones for obtaining financial and relationship value. Therefore, market development is likely to occur if the adoption of the technology is affordable for the user group. Managers also need to note that access to people and relationship value significantly impact financial value. Thus, encouraging the adoption of information and communication technologies (ICT) among low SEC enterprises can also enhance financial value.

The rest of the article is structured as follows. In the next section, a review of literature is provided as a theoretical grounding for our research. This discussion is followed by a section on the development of hypotheses using the literature on the 4A framework. This presentation is followed by the sections on method, findings and discussion. We then provide implications of the findings, and conclude by highlighting the limitations of the study and suggest future research directions.

Theoretical Grounding

Market Development

Emerging markets present substantial departures from the assumptions of theories applied in the context of developed countries that may challenge established points of view. For example, literature suggests that EMs are often marked by market heterogeneity, sociopolitical governance, chronic shortage of resources, unbranded competition and inadequate infrastructure (Sheth 2011). Such markets call for actions that include market development and purpose-driven marketing (Sheth 2011). Research on EMs have highlighted the nature of economic, social, cultural, geographical and historical diversity that contrasts with that of other markets (Sinha and Sheth 2018). EMs are also characterized by low disposable incomes, shortage of skilled work-force, weak supply chains and poor infrastructure that act as barriers to development of these markets (Sheth, 2011).

There is a large population that lives at or near the bottom of the pyramid (BoP) in EMs, thus the marketing focus in these markets is often on increasing adoption among non-users that constitute a large proportion of the market. Several scholars have highlighted the need to generate new research on EMs rather than extrapolating findings from other markets (Burgess & Steenkamp 2006; Pels and Kidd 2012). Other studies (e.g., Abendroth, and Pels 2017) have suggested that given the heterogeneity and pace of market development in most emerging markets, organizations should recognize that the abundance or scarcity of resources may vary in EMs compared to developed markets.

Market development is a business strategy that businesses pursue in order to enter new markets with the use of existing products and/or services (Ansoff 1957). Two leading dimensions of market development for those that belong to the low SEC segments in EMs are access to people and access to markets (Tarafdar, Singh, and Anekal 2013), because market development in this context is about accessibility (for those that sell as well as purchase products), and about affordable products (Sheth 2011). We investigate the use of mobile telephony as a possible conduit that facilitates market development for businesses in low SEC markets.

Approaches Explaining Market Development

Various researchers have explained the process of market development for low SEC segments in EMs. The “bottom-up orientation toward subsistence market-places” (Viswanathan et al. 2009, p. 407), has been contrasted with “top-down approaches” (p. 407). The former approach, also known as the grassroots approach, considers the requirements, strengths and constraints faced by low SEC consumers/buyers and micro-entrepreneurs, often in EMs, and offers suggestions on the types of interventions needed. As discussed earlier, since EMs are characterized by market heterogeneity, shortage of resources, and weak infrastructure, the approach adopted is frequently focused at the micro-level such that emphasis is placed on creating interventions for these micro-entrepreneurs to work on creating value that leads to inclusiveness and social good in businesses (Yunus, Moingeon, and Lehmann-Ortega 2010). Given the nature of market-related shortfalls in the EMs compared to developed markets, micro-entrepreneurship is also seen as a response to the uncertainties faced by the poor with regard to their livelihoods.

In contrast, the top-down approach, starts with a macro-level perspective of the business/government entity that wishes to enter a hitherto fore underexplored market territory (Pels and Sheth 2017; Sheth 2011). The top-down approach further argues that EM firms can achieve superior financial performance through demand aggregation in the mass market of subsistence consumers who have fragmented demands (Sheth 2011) rather than practicing demand differentiation. Some studies (e.g., Anderson and Billou 2007; Prahalad 2002) suggest that EM firms should develop marketing strategies using the 4A’s marketing mix activities that are more applicable for the unique set of marketing challenges observed in these EMs.

Literature and practices espousing a bottom-up approach may consider the possibility of focusing only on a single aspect of social betterment or enhancement of well-being (e.g., Seelos and Mair 2007), or may envisage interventions that are all-encompassing in their impact on buyers and sellers, where these players in the marketplace are seen as leading a networked existence (e.g., Viswanathan et al. 2010). Interventions that are designed to create ecosystems that benefit not just those that participate in the market mechanism, but non-market actors as well (e.g., strengthening relationships with all actors in a community such that business opportunities lead to the betterment of the community), is an integral part of the market development narrative (Pels and Sheth 2017). Extant work on this route to market development urges multinational corporations (MNCs) to innovate and collaborate with local non-government organizations (NGOs) in order to bring new products and services to the target segment comprising low SEC buyers (e.g., Prahalad 2004; London and Hart 2004).

The 4A framework

The 4A framework consists of four constructs: awareness, accessibility, affordability and acceptability – each of which is discussed in this section.

Awareness

One of the 4As, awareness is related to the communication outcomes in low SEC markets, and may be defined as the firm’s attempt to communicate to the potential users about the purported good that product adoption brings to the life of a user, which rests on functional dimensions such as quality, and reliability, as well as on psychological dimensions such as brand or emotional value (Sheth and Sisodia 2012). Since these markets consist of first-time users, the level of their knowledge about the benefits and attributes of a product or service directly impacts adoption (Sheth and Sisodia 2012). In this study, awareness is the product knowledge that users from low SEC segments have, including the knowledge of the functional utility obtained from the use of a product or service. Given that in many low SEC markets, there are several environment-related challenges such as market heterogeneity, and sociopolitical governance mechanisms, among others (Sheth 2011), market-related education of these customers become important.

Accessibility

Another factor among the 4As, accessibility, encompasses the non-economic barriers for low SEC segment consumers, such as time and other restrictions including spatial market separations to enhance accessibility of product offerings for these consumers. Firms must understand and fulfill consumer needs to make the solutions accessible to these consumers, which rests on the user’s ability to acquire and use the product, and is captured by the product’s availability (e.g., supply), and convenience (e.g., time/effort required) (Sheth and Sisodia 2012). Specifically referring to firms that use technology to reach low SEC segment markets, for example, ITC Ltd., a company based out of India, built hundreds of e-choupals (i.e., Internet-based kiosks) to cover thousands of villages in India, providing these farmers with access to market and people, and was able to establish financial and relationship value for medium and large farmers (Prahalad 2004).

Affordability

According to Sheth and Sisodia (2012), affordability of a product/service includes both, consumers’ ability as well as their willingness to pay, and is about “democratizing the offer” (Sinha and Sheth 2018, p. 218). This construct is the economic (e.g., income, budget) and psychological (e.g., perceived value, fairness) willingness to pay the product’s price. Firms operating in the low SEC segment need to ensure that the solutions they seek to market to these consumers can be afforded by them given their resource constraints. Mobile phone adoption continues to increase as the cost of ownership of the device decreases in the EMs (LiveMint 2013).

Acceptability

Higher acceptability implies the desire of customers to adopt the product, which is more likely to happen when the offering exceeds their expectations (Sheth and Sisodia 2012) on functional dimensions (i.e., capabilities, quality, reliability) as well as on psychological dimensions (i.e., perceived value, fairness). Increasing acceptability of products and services among low SEC segments implies adapting these products to suit their applicability among the consumers such that these products fit with consumers’ functional as well as psychological needs (Prahalad 2004; Sheth 2011). By localizing and customizing products, several MNC firms including McDonalds, and Coca Cola has been successful in several EMs including India (Prahalad 2004). For example, Coca Cola sells low-cost ice boxes in rural communities due to lack of sufficient refrigeration in these areas. Such adaptations help to enhance acceptability of the company’s products not only by retailers, but also by consumers. Similarly, Nokia has increased acceptability of its weather forecasting service by selling the service at only one cent to farmers in India.

Constituents of Market Development and the Proposed Model

The above discussion leads us to make several observations. First, the approaches to market development make one underlying assumption which is crucial to the success of the process: the bottom-up approach as well as the top-down approach assume adoption and use of the product/service by micro-entrepreneurs and consumers. Second, in the context of a bottom-up approach, it is often difficult to distinguish between the micro-entrepreneur and the consumer as the producer/vendor and the consumer (usually in an EM) belong to the same socioeconomic setting, and may undertake both these activities (e.g., Viswanathan and Sridharan 2009). Third, we note that the process of market development – whether it is bottom-up or it is top-down – is expected to lead micro-entrepreneurs to broadly achieve two things: access to markets/people where they can sell their produce, and to reap benefits that may be societal or commercial in nature.

The resource-scare and infrastructure-starved environment of EMs, often requires the “democratization of innovation” (Sheth 2011, p. 177). ICT in general, and the mobile phone in particular, is one such innovation, which has been widely adopted by users from low SEC segment in EMs (Sridhar and Sridhar 2006;). We acknowledge that making mobile telephony accessible is an MNC-led (i.e., mobile telecommunication service providers, mobile phone manufacturers) and government-led strategy that makes the innovation accessible and affordable, which is a top-down approach of market development for mobile phones. However, the phones and the service have to be adopted by the actors and used in order for the market development to take place, which is a bottom-up approach. Adoption of ICT in general and mobile phone services in particular by micro-entrepreneurs, serves as the resource and the infrastructure that are required for a bottom-up market development process to flourish.

Therefore, investigating the use of mobile phones for the purpose of access to market and people provide us with a unique opportunity where the top-down and the bottom-up approaches are simultaneously represented. We propose and empirically test a model of market development (Figure 1) for the low SEC segment in EMs that focuses on the impact of enabling conditions (i.e., the 4As) in the microentrepreneur/consumer environment, which leads to access (to markets and to people), and value/benefit obtained.

Figure 1.

Hypothesized framework: farmers and business persons (Control Variables are indicated in the Box).

Access to markets and access to people

The access afforded by resources and infrastructure available in the marketplace is a key feature in the process of market development. Access may be further divided into two components as identified in the literature: access to markets and access to people (Tarafdar, Singh, and Anekal 2013). Access to markets is the ability of the micro-entrepreneur to obtain meaningful information about markets and market conditions such that her/his produce or goods may be sold, thereby reaching new markets (or, obtaining new information easily) through the use of mobile phones that were previously not reachable (Donner 2008; Jensen 2007). Access to people is the access afforded to the micro-entrepreneur by mobile phones to reach people (comprising customers/consumers and businesses) (e.g., Sarkar 2018). The theory of market separations (Bartels 1968) also speaks about spatial and informational separation between the buyers and sellers which need to be bridged in order for successful market development to take place.

Research has investigated how SMEs in EMs are using mobile phones for the purposes of business (e.g., Donner 2008; Donner and Escobari 2010), granting them access to possible markets and people who could help them in furthering their engagements. For example, research on fishermen in the Indian state of Kerala, through five-year time series data at three fish markets demonstrate that the adoption and use of mobile phones by fishermen and wholesalers led to reduction in price dispersion, and elimination of waste, with a more efficient access to markets (by these fishermen and wholesalers) (Jensen 2007). The research also demonstrated an increase in consumer and producer welfare (Jensen 2007, p. 879).

A survey of small and medium enterprises (SMEs), including one-third microenterprises, conducted across 13 countries, indicates that mobile phones are often used for keeping in “contact with customers and clients” (Esselaar et al. 2007, p. 92). Therefore, we submit that in the context of mobile phone use, the literature contains strong evidence of the increased access to more efficient markets and people that become available to low SEC markets because of adoption of mobile phones. We include the two constructs access to markets and access to people in our proposed model (Figure 1) as the access gained by traders and farmers because of use of mobile phones.

Financial value and relationship value

The value obtained by using the resources and infrastructure available in the marketplace, is another important feature in the process of market development. Extant research in the context of the use of mobile phones among business persons from low SEC strata in EMs also indicate that two primary outcomes obtained by these traders are more frequent, which include exchange of price information (Jensen 2007; Overå 2006), and an increased communication with customers (Esselaar et al. 2007;). Financial value is the actual monetary gain obtained by the micro-entrepreneur because of expanding business through the use of mobile phones. Relationship value is the contact that the micro-entrepreneur establishes because of the use of mobile phone, which in itself may or may not yield direct monetary benefits, but opens up opportunities for deepening relationships with customers as well as with friends and family.

Some studies concentrate on the impact of mobile use on middlemen, wholesalers or traders as enterprises in Nigeria (Jagun, Heeks, and Whalley 2008) and in other countries (Overå 2006), focusing on how mobile phone services allow SMEs in EMs to perform their roles more effectively in accessing markets. Samuel, Shah, and Hadingham (2007) report that among a sample of MSEs in the non-mobile service sector in Egypt and South Africa, 26–29% of businesses attributed their start to the availability of the mobile.

In sum, for SMEs, literature on mobile telephony indicates that changes brought about by mobile phone-based interactions lead to more information, increased financial benefits, and more customers. Therefore, we submit that the literature contains strong evidence of the increase in financial value and relationship value obtained because of the access to more efficient markets and people that has become available to low SEC segment because of the adoption of mobile phones. We include these two constructs in our proposed model (Figure 1) as the final set of value obtained by traders and farmers using mobile phones.

Development of Hypotheses

The specific hypotheses presented in the proposed model are discussed here.

Awareness: Access to Markets and People

Firms have realized that awareness building based on social marketing principles, also help to increase stakeholder relationships (Kull, Mena, and Korschun 2016). Given the limited media access of most consumers in low SEC segment of EMs, awareness regarding available resources and infrastructure becomes an important aspect of marketing activities in EMs (Anderson and Billou 2007).

We extend the argument presented in the preceding sections to include small businessmen/traders and farmers from low SEC markets, and expect that as their awareness about mobile phone services increase, they will consider this knowledge as a resource, and this knowledge is likely to provide greater access to markets and people that are otherwise not accessible to them. Thus, we hypothesize that:

H1a: Increase in awareness of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to markets.

H2a: Increase in awareness of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to people.

Accessibility: Access to Markets and People

There are also logistical challenges including long transportation to interior hinterland markets, poor roads, lack of available warehouses and wholesalers in low SEC markets, as well as low access to convenient retail outlets (Shah 2012). Moreover, there is also lack of access to financial services that can facilitate consumer financing, and easy credit facilities.

The discussion on accessibility of resources indicates that obtaining access to products or services for low SEC segment users increases the use of the product or service among them. We extend the argument to include small businessmen/traders and farmers from low SEC markets, and expect that as their accessibility to mobile telephony increases, they will have a greater access to marketplace and people that are otherwise not accessible to them. Thus, we hypothesize that:

H1b: Increase in accessibility of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to markets.

H2b: Increase in accessibility of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to people.

Affordability: Access to Markets and People

There is the need to adopt marketing strategies that tailor to the level of economic development in EMs, and to match the purchasing power of consumers, including their willingness to pay for products and services (Shah 2012). To enhance the affordability of products and resources, firms in EMs should address the issue of consumers’ ability to pay, beyond their willingness to pay. Firms must also recognize the low and volatile nature of income of these consumers that make many services and products difficult to for them purchase. One example of increasing affordability is to sell products in small unit pack sizes which are popularly called sachets. Cavin Kare is a good example of a marketing firm that has popularized the affordability of shampoo in India by selling it in sachets.

We extend the argument to include small businessmen/traders and farmers from low SEC markets, and expect that as the affordability of resources like mobile telephony increases (and adoption increases), these users are likely to have a greater access to marketplaces and develop relationships with consumers or others business stakeholders that are otherwise not accessible to them. We therefore hypothesize that:

H1c: Increase in affordability of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to markets.

H2c: Increase in affordability of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to people.

Acceptability: Access to Markets and People

Firms may try to increase the acceptability of their products in EMs. Coca Cola has increased the acceptability of soft drinks in rural India by selling at low, acceptable price points. Referring specifically to innovations in the mobile phone market, adapting offerings to local conditions increased the acceptability of Nokia’s initiative in India to market rugged mobile handsets with torchlight that were of high use among rural customers (Daga 2007). We extend the argument to include small businessmen/traders and farmers from low SEC markets, and expect that as the acceptability of mobile services increase, adoption increases and these users are likely to obtain a greater access to marketplaces and develop relationships with consumers/business stakeholders that are otherwise not accessible to them. We hypothesize that:

H1d: Increase in acceptability of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to markets.

H2d: Increase in acceptability of resources (i.e., mobile phones) among low SEC segment traders and farmers, increases their access to people.

As micro-entrepreneurs reach out to new consumers or traders/vendors, they learn about ways in which they can obtain more information about access to more resources that they can then use in order to further increase their reach to people and to markets. Therefore, we hypothesize that:

H3: Increase in access to people, increases access to markets.

Based on the above discussion, we also expect that:

H4a, 4b, 4c, 4d: Increase in awareness, accessibility, affordability and acceptability of resources (i.e., mobile phones) among low SEC segment traders and farmers, increase financial value obtained.

H5a, 5b, 5c, 5d: Increase in awareness, accessibility, affordability and acceptability of resources (i.e., mobile phones) among low SEC segment traders and farmers, increase relationship value obtained.

Access to Markets: Financial Value and Relationship Value Obtained

It is well-known in the EMs and low SEC consumer literature that market challenges such as limited customer knowledge, market failures due to under-developed institutions (Mair and Marti 2009), severe resource constraints, and poor infrastructure restrict market access and market entry (Christensen, Siemsen, and Balasubramanian 2015; Kistruck et al. 2015). Given higher access to markets, businesses in low SEC markets, would be able to get higher financial value for their businesses and higher relationship strength with their stakeholders. This case is more visible for low SEC segment in EMs since for other segments or in developed markets, the incremental gain in access to markets would show decreasing returns of scale, while for low SEC segment it would show increasing returns of scale.

Research studies (e.g., Lee 2010) suggest that firms operating in the low SEC segment tend to do a more sustainable business when they increase their relationships and community involvement, which enhances market development and their access to deeper pockets within these markets by building long-lasting relationships with communities in the last mile. From a stakeholder theory perspective too, it may be argued that firms that are in the business of managing complex stakeholder relationships in turn increases firm performance (Kull, Mena, and Korschun 2016). Based on the above discussed literature, we hypothesize that since relationships enhance financial value of businesses, relationship value in low SEC segment should lead to an increase in the financial value of the business. Therefore, we hypothesize that:

H6: Increase in relationship value for low SEC segment users, increases financial value obtained.

The discussion above also indicates that increased access to markets, leads to stronger relationship value, and stronger financial value, by reducing transaction costs, developing knowledge about the market, bridging market separations, and so on. Therefore, we hypothesize that:

H7a: Increase in access to markets for low SEC segment users, increases financial value obtained.

H7b: Increase in access to markets for low SEC segment users, increases relationship value obtained.

Access to People: Financial Value and Relationship Value Obtained

According to Sridharan and Viswanathan (2008), low SEC marketplace solutions must be situated within the context of “symbiotic relationships between buyer and seller” (p. 459) while also respecting the value co-creation process (Prahalad 2012). Therefore, access to people is important for micro-entrepreneurs to do business. However, since low SEC markets are generally isolated, with large spatial distances between them, it results in information asymmetry, which increases the costs of doing business. Such market separations (Bartels 1968) in terms of spatial, temporal, informational and financial aspects must be bridged before firms are able to connect and get access to low SEC segment consumers. Given that the financial and relationship value of small businesses at the low SEC segment are largely about their capabilities, the access to these communities for these businesses enhances the capabilities of these businesses to augment their financial value and relationship value in the market. We therefore hypothesize that:

H8a: Increase in access to people for low SEC segment users, increases financial value obtained.

H8b: Increase in access to people for low SEC segment users, increases relationship value obtained.

Research Methods

Data Collection

The data used for testing the proposed model is obtained from a structured survey conducted to obtain mobile phone usage data from individuals who belong to low SEC strata across five countries in south-east Asia (i.e., Bangladesh, India, Pakistan, Sri Lanka, and Thailand). Individuals included in this study were unskilled/semi-skilled laborers and small shop owners/businessmen who have a maximum of middle-school level education. A structured survey questionnaire was first prepared in English and then translated to local languages. Back-translation and pre-tests were conducted to modify any obscure questions and words, as per guidelines provided by Brislin (1970). Finally, the survey was administered by trained field administrators.

Usable data consists of 357 mobile phone owners who are farmers (mean age = 38.32 years; male = 78.9%), and 238 mobile phone owners who are business persons (mean age = 37.49 years; male = 68.4%). All participants were between 15 and 60 years of age. Participants were approached at their households to take part in the survey. All participants belonged the socioeconomic (SEC) classification of D or E in the urban area, and R2, R3 or R4 in the rural areas. The yearly income levels of these workers range between USD 1,076 and USD 1,500. (See Appendices A, B(a), B(b), C(a) and C(b) for more details.)

Note that United Nations World Development Reports categorize those with less than USD 1,500 yearly income as belonging to the lowest economic pyramid (Prahalad and Hart 2002). The World Bank identifies USD 1 a day as an indication of extreme poverty, and USD 2 as those belonging to the bottom of the pyramid (Pels and Sheth 2017). Some researchers put the cut-off at USD 8 (Karnani 2011), while some suggest a cut-off at USD 10 (Yurdakul, Atik, and Dholakia 2017) for determining low-income consumers (for an extended discussion see Yurdakul, Atik, and Dholakia 2017).

Literature also suggests that social indicators may be assessed in order to ascertain whether consumers may be categorized as belonging to the low-income stratum. Supplementing the economic approach, researchers have extended the contours of “felt poverty” (Yurdakul, Atik, and Dholakia 2017, p. 289) to include sociocultural dimensions of consumption, which encompasses low levels of skill and knowledge and very modest dwelling spaces (Pels and Sheth 2017). Given the characteristics of the sample participants in the study, we may say that our participants can be classified as belonging to the low-income segment.

Measurement and Empirical Results

Existing literature was used as the source of measurement for most of the constructs defined in the theoretical model. Specifically, awareness, affordability, and acceptability, were measured using validated scale items. The measures for accessibility, financial value, relationship value, access to markets, and access to people were collected through items based on their conceptual definitions obtained from existing literature. All items were measured on a five-point scale. A refined list of question items is summarized in Table 1.

Table 1.

The Measurement Items.

Construct	Scale	Source
Awareness	Using mobile phone is a good idea. Using mobile phone is a wise idea. I like the idea of using mobile phone.	Venkatesh et al. 2003
Accessibility	It takes a long time for the balance to be updated. (R) The top-up card value that I want is often not available. (R) I can’t always check my balance when I want to. (R)	LIRNEaisa Researchers
Affordability	I think mobile phone is reasonably priced. I think mobile phone offers values for money.	Venkatesh et al. 2003; Zeithaml 1988
Acceptability	I find mobile phone to be useful in my life. Using mobile phone increases my chances of achieving things that are important to me. Using mobile phone helps me accomplish things more quickly. I find mobile phone gives me useful information.	Davis 1989; Donner 2008
Financial Value	Your ability to make more money (Should not be directly selling calls to earn money). Your ability to find out about employment/work opportunities. Your ability to save money.	Based on Jensen 2007, Donner 2008
Relationship Value	Your ability to reduce travel. Your ability to act or contact others in an emergency. Your relationships with family and friends.	Based on Donner 2008
Access to Markets (Farmer) Access to Markets (Business)	Your access to accurate and timely market price information that you use to improve the price you can get for your crops. Your access to information on sources and costs of inputs (seeds, fertilizers, etc.). Your access to finance sources for your farming activities. Your access to government services that aid your farming activities. Your access to accurate and timely market price information that you use to improve the price you can get for your goods that you sell. Your access to information on sources and costs of inputs (crops/vegetables/fruits/tea coffee etc.). Your access to finance sources for your business. Your access to government services/ schemes that aid your business.	Based on Jensen 2007, Donner 2008 Based on Jensen 2007, Donner 2008
Access to People (Farmer) Access to People (Business)	Your ability to maintain/improve relationships with traders/agents/suppliers of inputs. Your ability to improved trust in relationships with people you have to interact with for your farming activities. Your ability to coordinate with people you have to interact with for your farming activities Your ability to access a wider set of people/ businesses of relevance to your farming activities. Your ability to improve your knowledge and skills related to running a business. Your ability to improved trust in relationships with people you have to interact with for your business. Your ability to coordinate with people you have to interact with for your business. Your ability to access a wider set of people/ businesses of relevance to my business.	Based on Donner 2008 Based on Donner 2008

Five-point Likert scales:

1=Strongly Disagree; 5=Strongly Agree

The following variables are used as controls in the model: age, gender, number of mobile sets owned, time span for which the current mobile set is owned, and price paid for the current mobile phone. Age and gender are often used as control variables (e.g., Berman and Greenhouse 1992). A potential confound in our study could be the amount of experience with mobile phone use. This aspect of mobile phone use is captured through two variables: number of mobile sets owned and time span for which the current mobile set is owned. Studies have shown that the size of the firm often affects firm’s performance and other outcomes (Lee 2009).

In our study, participants are farmers and small business owners, but most of them do not report their income from business, which would be an ideal variable to serve as a control variable in our model. We use the variable price paid for the current mobile phone as a control variable since this variable provides a monetary representation of the discretionary expenditure in place of income.

Reliability and validity checks

We run the analysis for the two groups of users of mobile phones: farmers (M1), and business persons (M2). For each model (i.e., M1 and M2), confirmatory factor analysis (CFA) was employed to assess the dimensionality and validity of the measures. SPSS-AMOS (version 18.0) was used as the analytical tool for the estimation of the measurement model as well as the structural path model.

Farmers

To assess the overall fit of the measurement model for the farmers (M1) we reviewed a number of goodness-of-fit indices: RMSEA (.049), TLI (.931), CFI (.943), and a Chi-square/degrees of freedom ratio of 1.87 (χ² ₂₇₁ = 506.807; p > 0.05). Chi-square value is usually significant in large samples. However, according to the criteria summarized in Hair et al. (2010), a battery of fit indices establishes a good fit between the proposed model and the data for farmers.

Business persons

The goodness-of-fit indices for the measurement model for the business owners (M2) are: RMSEA (.062), TLI (.908), CFI (.917), and a Chi-square/degrees of freedom ratio of 1.92 (χ² ₂₇₁ = 520.753; p > 0.05).

The descriptive statistics, Cronbach’s alpha values, composite reliability, average variance extracted (AVE), and the standardized factor loadings for M1 and M2 are reported in Table 2. All coefficient alphas are substantially higher than the generally recommended benchmark of .60 (Churchill 1979), demonstrating internal consistency for all constructs included in the study.

Table 2.

Properties of the Measurement Model.

	Farmer Model M1				BusinessPersons Model M2
Construct	Mean (S.D.)	Standardized Loading	Average Variance Explained	Composite Reliability (α)	Mean (S.D.)	Standardized Loading	Average Variance Explained	Composite Reliability (α)
Awareness	4.135	0.730	0.501	0.750	4.207	0.873	0.637	0.840
	(.322)	0.743		(.749)	(.540)	0.778		(.836)
		0.646				0.738
Accessibility	4.136	0.694	0.423	0.687	4.538	0.667	0.548	0.782
	(.536)	0.629		(.754)	(.539)	0.676		(.778)
		0.625				0.862
Affordability	3.866	0.953	0.637	0.769	3.82	0.794	0.696	0.821
	(.482)	0.604		(.730)	(.771)	0.873		(.819)
Acceptability	4.192	0.642	0.447	0.763	4.278	0.749	0.621	0.867
	(.309)	0.617		(.764)	(.537)	0.891		(.864)
		0.709				0.805
		0.701				0.693
Financial Value	3.332	0.808	0.579	0.804	3.236	0.785	0.546	0.782
	(1.876)	0.802		(.799)	(2.630)	0.758		(.780)
		0.664				0.668
Relationship Value	4.494	0.875	0.607	0.828	4.237	0.713	0.444	0.705
	(.705)	0.662		(.700)	(1.050)	0.668		(.813)
		0.786				0.614
Access to Markets	3.298	0.766	0.634	0.874
(Farmer)	(1.730)	0.775		(.947)
		0.848
		0.794
Access to People	3.853	0.769	0.681	0.895
(Farmer)	(1.622)	0.853		(.923)
		0.834
		0.842
Access to Markets					3.056	0.712	0.680	0.894
(Business)					(2.193)	0.835		(.864)
						0.866
						0.876
Access to People					3.933	0.840	0.619	0.866
(Business)					(1.408)	0.737		(.891)
						0.823
						0.741

S.D. = Standard Deviation in parentheses

All loadings are significance at p < .001 level;

Coefficient alphas are reported within parentheses in the last column.

A composite reliability above the 0.70 threshold and an AVE above the 0.50 threshold, as recommended by Hair et al. (2010), are achieved for all constructs except accessibility and acceptability for M1, and for relationship value for M2. Overall, empirical results indicated that discriminant validity was achieved for all constructs for the two groups (farmer and business) (Tables 3).

Tables 3.

Fornell and Larcker Tables (Farmer, Business Persons) (AVE in the diagonals; Square of correlations in the other cells) Farmer (Model M1).

Construct	1	2	3	4	5	6	7	8
1. Awareness	0.501
2. Accessibility	0.169	0.423
3. Affordability	0.185	0.027	0.637
4 Acceptability	0.498	0.139	0.145	0.447
5. Financial Value	0.000	0.025	0.010	0.000	0.579
6. Relationship Value	0.072	0.016	0.035	0.095	0.104	0.607
7. Access to Market	0.045	0.000	0.019	0.061	0.305	0.151	0.619
8. Access to People	0.064	0.000	0.044	0.086	0.188	0.213	0.771	0.681
Business Persons (Model M2)
Construct	1	2	3	4	5	6	7	8
1. Awareness	0.637
2. Accessibility	0.140	0.548
3. Affordability	0.241	0.035	0.696
4 Acceptability	0.349	0.094	0.089	0.621
5. Financial Value	0.018	0.023	0.036	0.044	0.546
6. Relationship Value	0.086	0.032	0.027	0.152	0.064	0.444
7. Access to Markets	0.067	0.010	0.100	0.067	0.102	0.176	0.680
8. Access to People	0.010	0.002	0.193	0.007	0.254	0.025	0.293	0.619

Robustness Check

Pooling tests

When testing our hypotheses, we compare the results obtained for the two models (i.e., two groups). Using multi-group analysis procedure in structural equations modeling (SEM) we test for possible invariance of covariance structure across these two groups (as per Bass and Wittink 1975). We test invariance across farmer-business grouping, and constrain all the covariance paths in the measurement model (Byrne 2004). We note that the invariance of covariance structure finds full support for the model (χ² ₍₂₅₅₎=486.477, p > .05; RMSEA =.039; TLI =.925; CFI =.937) (acceptable as per Hair et al. (2010) (Table 4). Therefore, we demonstrate that the data across the two groups are comparable and may be compared for drawing overall inferences.

Table 4.

Invariance of Covariance Matrices.

	Farmer-Business Persons Invariance
Fit Indices
χ2	486.477
Df	255
TLI	.925
CFI	.937
RMSEA	.039

Common method variance

When a study collects the dependent and the independent variables from the same source, common method bias may be a potential concern. Harman’s one-factor test (Podsakoff et al. 2003) (through an exploratory factor analysis) finds out whether no single factor emerges, or whether a single factor explains the majority of the variance. Seven factors (eigenvalue > 1) emerge for each of the two groups: the farmers, and the business persons. In each of the two cases, a single factor accounts for a maximum variance of 22.80% and 12.33%.

These results suggest that common method bias is probably not a problem with the data set. However, some researchers contest Harman’s one-factor test for its ability to detect common methods bias (Podsakoff et al. 2003). In another test (Pavlou, Liang, and Xue 2007), an examination of the construct correlation matrix (reported in Tables 3) determine whether any constructs correlate extremely highly (more than .90). In this study, none of the constructs are so highly correlated. This finding likewise indicates that common methods bias is not a problem.

Testing of Hypotheses

Farmers

We test the hypothesized model M1 for the farmers, without and with the control variables. The fit indices of the structural model present good fit for the overall sample: Without control variables: RMSEA (.049), TLI (.931), CFI (.943), and a Chi-square/degrees of freedom ratio of 1.87 (χ² ₂₇₁ = 506.897; p > 0.05); With control variables: RMSEA (.044), TLI (.923), CFI (.940), and a Chi-square/degrees of freedom ratio of 1.70 (χ² ₃₆₁ = 615.288; p > 0.05) (Table 5). Our model with the control variables achieves the following R² values for the endogenous variables: Financial Value: 41.2%; Relationship value: 33.4%; Access to Markets: 81.0%; Access to People: 13.9%. Therefore, we observe that we find good support for the 4A framework, which is one of the major objectives of this research.

Table 5.

Model Fit for Tested Models.

	Farmer Model M1			Business Persons Model M2
	Measurement	Structural Without Control Variables	Structural With Control Variables	Measurement	Structural Without Control Variables	Structural With Control Variables
Fit Indices
χ2	506.807	506.807	615.288	520.735	520.735	627.478
Df	271	271	361	271	271	361
χ2/Df	1.87	1.87	1.70	1.92	1.92	1.74
TLI	.931	.931	.923	.908	.900	.904
CFI	.943	.943	.940	.917	.917	.915
RMSEA	.049	.049	.044	.062	.062	.056

For the model for farmers, we find support for twelve (H2b, H2c, H2d, H3, H4b, H4c, H4d, H5d, H6, H7a, H8a and H8b) of the twenty-two hypotheses. We find that each of the 4As other than awareness, impacts access to people and financial value. Access to markets and access to people impact financial value, and access to people impacts relationship value. Overall, our findings indicate that for farmers, the access to people that mobile phones enable is an important feature that contributes to the business and the financial value obtained. We do not find support for ten hypotheses (Table 6). For the farmers, we find that none of the 4As (H1a, H1b, H1c, H1d) has a significant relationship with access to markets. We also do not find support for H2a, H4a, H5a, H5b, H5c and H7b. We do not find the impact of awareness to be a significant contributor to the value obtained by users, a possible reason for this could be that the context of our research is the continued use of mobile phones. Another possible reason for this finding could be that the participant farmers included in the study do not access mobile-based services in order to access market-based information. Overall, for the farmers, our findings suggest that the connections that they make with other people and the markets that they have access to because of the mobile phone, serve as an important path to the financial value obtained (support for H7a, H8a). Our findings also suggest that the people-based connections are valued for the sake of the relationships formed (support for H8b; and no support for H7b).

Table 6.

Coefficients Reported for Two Models: Farmer and Business Persons.

Effects	Causes	Hypotheses	Farmer (R2) Model M1 Without Control Vars	Farmer (R2) Model M1 With Control Vars	Business Persons (R2) Model 2 Without Control Vars	Business Persons (R2) Model 2 With Control Vars
Access to Markets			(77.3%)	(81.0%)	(17.0%)	(40.0%)
	Awareness	H1a	.004	.019	.123*	.169*
	Accessibility	H1b	.027	.023	.038	-.024
	Affordability	H1c	.050	.058	-.024	.027
	Acceptability	H1d	.009	.001	.136*	.189*
	Access to People	H3	.890***	.902***	.529***	.529***
	Age	Control	----	.019	----	-.095*
	Gender	Control	----	-.033	----	-.028
	No. of mobile sets owned	Control	----	.089*	----	-.088
	Time the current mobile set is owned	Control	----	.000	----	.007
	Price paid for current mobile phone	Control	----	-.167**	----	.201**
Access to People			(11.8%)	(13.9%)	(25.5%)	(33.5%)
	Awareness	H2a	.089	.045	.144*	.151*
	Accessibility	H2b	.149*	.141*	-.098	.012
	Affordability	H2c	.105*	.112*	.515***	.547***
	Acceptability	H2d	.240**	.266**	.044	.014
	Age	Control	----	-.131*	----	-.092*
	Gender	Control	----	.003	----	-.257**
	No. of mobile sets owned	Control	----	-.068	----	-.120*
	Time the current mobile set is owned	Control	----	-.030	----	-.124*
	Price paid for current mobile phone	Control	----	.026	----	-.141*
Financial Value			(39.9%)	(41.2%)	(24.4%)	(42.0%)
	Awareness	H4a	.011	.024	.082	.085
	Accessibility	H4b	.157*	.160*	.219**	.281**
	Affordability	H4c	.104*	.105*	.098	.144*
	Acceptability	H4d	.146*	.134*	.162**	.206**
	Relationship Value	H6	.228**	.210**	.153*	.157*
	Access to Markets	H7a	.787***	.825***	-.029	-.077
	Access to People	H8a	.339***	.380***	.508***	.551***
	Age	Control	----	-.118*	----	-.138*
	Gender	Control	----	-.014	----	-.066
	No. of mobile sets owned	Control	----	-.030	----	.178**
	Time the current mobile set is owned	Control	----	.072	----	.155*
	Price paid for current mobile phone	Control	----	.013	----	.166*
Relationship Value			(25.3%)	(33.4%)	(19.9%)	(29.7%)
	Awareness	H5a	.040	.015	.047	.046
	Accessibility	H5b	.062	.086	.049	.068
	Affordability	H5c	.017	.037	-.043	-.028
	Acceptability	H5d	.129*	.154*	.268**	.268**
	Access to Markets	H7b	.067	.077	.374***	.377***
	Access to People	H8b	.469***	.468***	-.051	-.075
	Age	Control	----	-.050	----	.097
	Gender	Control	----	-.289**	----	-.097
	No. of mobile sets owned	Control	----	-.030	----	.029
	Time the current mobile set is owned	Control	----	.014	----	-.108
	Price paid for current mobile phone	Control	----	.029	----	.050

* p<0.05; ** p<0.01; *** p<0.001

Empty cells indicate that those variables are not included in the model tested.

Regarding the impact of control variables, for the sub-group farmers, we note that age has a significant relationship with access to people, and financial value. It is also noted that gender has a significant relationship with relationship value. These findings indicate that demographic variables are significant factors that determine extent of access and value obtained through the use of mobile phones.

Business persons

We test the hypothesized model M2 for the business persons, without and with the control variables. The fit indices of the structural model present good fit for the overall sample: Without control variables: RMSEA (.062), TLI (.900), CFI (.917), and a Chi-square/degrees of freedom ratio of 1.92 (χ² ₂₇₁ = 520.735; p > 0.05); With control variables: RMSEA (.056), TLI (.904), CFI (.915), and a Chi-square/degrees of freedom ratio of 1.74 (χ² ₃₆₁ = 627.478; p > 0.05) (Table 5).

Our model with the control variables achieves the following R² values for the endogenous variables: Financial Value: 42.6%; Relationship value: 29.7%; Access to Markets: 40.1%; Access to People: 33.7%. Therefore, once again we find good support for the 4A framework, which is validates this research overall.

For the model for business persons, we find support for twelve (H1a, H1d, H2a, H2c, H3, H4b, H4c, H4d, H5d, H6, H7b and H8a) of the twenty-two hypotheses. We find that awareness and acceptability impact access to markets, and awareness and affordability impact access to people. Three of the 4As (other than awareness) impact financial value. Access to people impact financial value, and access to markets impacts relationship value.

We do not find support for ten hypotheses (Table 6). For the business persons, we find that accessibility and affordability (H1b, H1c) have no significant relationship with access to markets, and accessibility and acceptability (H2b, H2d) have no significant relationship with access to people. Three of the 4As (other than acceptability) (H5a, H5b, H5c) have no significant relationship with relationship value. Moreover, access to people does not have a significant relationship with relationship value (H8b). A possible reason for these findings could be that for the business persons, mobile phones are already accessible, and therefore, this is not an important factor. However, despite an access to mobile phones, the traders are not able to reach out to other traders or business associates who may help them in their business. Overall, for the traders, our findings suggest that the connections that they make with other people because of the mobile phone, serve as an important path to the financial value obtained (support for H8a). We may further infer that the mobile phones do not necessarily contribute to the traders’ financial value through direct access to markets (no support for H7a). Our findings also indicate that the business-based relationships that are formed, are valued for the access to markets that may be facilitated by these connections (support for H7b), and not for the people-base connections (support for H8b).

Regarding the impact of control variables, for the sub-group business persons, we note that age and the price paid for the current mobile phone have significant relationships with access to market, access to people, and financial value. It is also noted that gender, number of mobile phone sets owned, and the time the current mobile set is owned have significant relationships with access to people, and with financial value.

Segment-wise differences

Therefore, a fundamental difference between the farmers and business persons is that the former group values people relationships for its own sake, while the latter group adjudges these people connections as valuable conduits through which financial value is obtained.

Our findings do indicate that farmers are probably confined to specific markets where they can sell their produce (H1a, and H1d are not significant). Nonetheless, the farmers attribute obtaining financial benefit because of the access that mobile phones provide them. Another difference is that compared to the farmers, the traders have increased access to markets (H1a, H1d are significant). The heterogeneous findings for the two groups also suggest that future studies need to examine context-specific factors.

General Discussion

In the context of EMs, our study contributes to marketing theory, practice and public policy. First, the current study empirically tests the impact of the 4A framework (awareness, acceptability, affordability, accessibility) on market development, by specifically assessing the impact of each of the 4A’s on access to markets and access to people, and on the financial value and relationship value obtained in the context of farmers and traders from low SEC segment in EMs. This framework allows us to uniquely capture the top-down as well as the bottom-up approaches of market development in a low-income emerging market context. Therefore, through our research we are able to demonstrate that the 4A framework is useful in explaining market development for small businesses that operate at the lower end of the socioeconomic pyramid in EMs.

Second, through this research, we contribute to studies that investigate the impact of the use of mobile technologies in low SEC markets, in terms of establishing access to markets as well as access to people. The testing of the impact of the 4A framework on market development is similar to Bartels’ (1968) concept of market separations that discusses how markets develop when four types of market separations are reduced or removed. Our research provides an enhanced and holistic view of the process through which financial value and relationship value are obtained, and adds to the literature by suggesting a mechanism that explains the process through which the effect of mobile telephony shows on the well-being of poor customers and micro-entrepreneurs. Our contribution lies in showing the two-pronged mechanism through which the 4A framework impacts the low SEC segment traders and farmers.

Third, we demonstrate that the 4A’s and their impact on market development may hold in the context of a low SEC segment population. Fourth, we use a large dataset from multiple countries in order to address our research objectives, which augment the credibility and generalizability of our research findings. Fifth, empirical investigations concerning market development for low SEC segment participants are few in extant literature, and establishing empirical findings fills that gap.

We note that the four countries that are included in our data set (i.e., Bangladesh, India, Pakistan, Sri Lanka), are – geographically speaking – part of the Indian subcontinent. We also note that these countries have common ethnic ties, and much of common values, beliefs, tastes and preferences that make them culturally similar. Therefore, we are able to state that our findings are generalizable to all of the South Asian region. Such findings are valuable for research and to marketers who simultaneously operate across many of these countries.

Research Implications

Our research offers several implications for theory. First, the theoretical implications of our findings include the need to revisit the 4A framework, to incorporate other and new A’s. We make a mention of this as an implication of our study since we have found that not all four A’s impact market development and value creation for small businesses, and therefore there is a need to look for an extension of the 4A framework that can enrich the marketing mix framework that is more aptly applicable to EMs. Such a theoretical exercise is akin to the extension of the original 4Ps of marketing to incorporate more and new Ps in marketing.

Second, our findings demonstrate that the proposed model holds equally well for two separate groups: farmers, and business persons. However, we report group-specific differences, which may be because of resource constraints, lack of infrastructure, governance-related mechanisms or distribution systems that may be fundamentally different among the two different groups of micro-entrepreneurs. These factors are those that have large variations in the context of EMs, and therefore, may vary across various contexts.

Third, research on market development has largely considered either a top-down or a bottom-up approach as almost being mutually exclusive. Our research draws attention to the simultaneously operating mechanisms of the two approaches, wherein market development is an outcome of the two processes working in tandem.

Managerial Implications

Our research makes several contributions to practice as well. First, when working on the various antecedents to access to markets and access to people, it is important for marketers to keep in mind that demographic factors along with the 4A’s have a determining effect on the value obtained from mobile phones by those from lower socioeconomic segments in emerging markets. This tenet implies that when faced with resistance to adoption, the intervening agency – be it the marketer, non-profit organization, or the state – can resort to communicating about the benefits obtained from the mobile phone to ensure greater adoption, which is likely to lead to stronger market development.

Second, acceptability of mobiles phones, and any new technology needs to be created in order to encourage adoption. Acceptability of a product/service may be achieved through incentives, or by demonstrating the value obtained by adopting that technology. Among those from low socioeconomic strata, social norms often play an important role in encouraging group behavior. Therefore, community-level adoption of mobile phones may be encouraged in order to increase acceptability of the device/service, and hence, expedite market development. For example, evidence exists that network proximities encourage adoption ICT-based business practices in emerging economies (e.g., Africa – Aker and Fafchamps (2015); Fafchamps and Soderbom 2014). Such effects have been demonstrated in developed economies as well (Katz and Shapiro 1986).

Third, the managerial implications of our findings include urging managers in the telecommunication industry to note the price-sensitive nature of the users who participated in this investigation, which means that the affordability of the device is significant in contributing toward access to markets and access to people. Fourth, managers also need to note that relationship value significantly impacts financial value. Thus, communication urging the development of people relationship should be undertaken to encourage adoption of ICT, which in turn will help in financially benefitting the adopter. These findings indicate that probably for the business persons, the people that they are able to reach through their mobile phones help them to obtain more business, or facilitate them in some manner in reaching more diverse markets.

Finally, managers need to note that demographic variables are significant factors in determining the extent of access and value obtained through the use of mobile phones by both farmers and business persons. The marketing strategies adopted for the different genders and for different age-groups need to be different.

Policy-Level Implications

We demonstrate that the adoption and use of mobile phones make doing business for small business persons from lower SEC strata in EMs more productive and less costly. Mobile phones also help build and expand networks, which in turn help low SEC segment businesses develop social capital, and leverage that in terms of financial value and relationship value. Based on the findings of the study, we are able to make several inferences regarding the implications of our findings for policymakers. We may infer that by enhancing and accelerating the adoption of mobile telephony in low SEC markets, the people there can adopt new market practices, which eventually leads to market access and people access, and eventually to their well-being. Thus, technologies in general and mobile telephony in particular can be leveraged as an enabler of creating value in these markets.

Policymakers may need to decide whether mobile phone use may be encouraged for all traders and businesses (including farmers), or specific subsectors may be isolated where use would have a particularly large impact on the livelihood of that subsector. The current discourse and emphasis at the policy level in many of the EMs is on the issue of accessibility of mobile phones; our findings indicate that the issues of affordability and acceptability for the purposes of businesses need to be underscored. A case in point is electronic money payments via mobile phones – while the technology is available in EMs, very few micro-entrepreneurs from low SEC have actually adopted the technology for the purposes of business. For example, in the year 2012, the Central Bank of Sri Lanka (CBSL), saw the culmination of a 5-year effort to establish an enabling regulatory framework for mobile money. Such an initiative opened the market to both bank and non-bank providers and extended services to Sri Lanka’s unbanked population. The launch of eZ Cash, a new mobile money service managed to sign up over one million customers in just one year, working toward achieving financial inclusion and economic growth. Therefore, a stakeholder-based approach needs to be followed by policymakers, whereby the various stakeholders in the community are encouraged to adopt a technology as it is likely to contribute to the well-being of the group as a whole.

We note that it is imperative to enhance the use of technologies such as mobile phones among farmers, and small businesses, so that the intended consequences – including access to markets and access to people (to enhance social capital) – increases, leading to higher beneficiary value. However, it is important to note here that even well-designed social interventions such as bringing incentives to enhance technology adoption by low income consumers or low SEC segment may fail based on how these programs, or their objectives are construed by the targeted beneficiaries. Few reasons why these programs may fail include forced adoption through paternalism or stigmatization by the intervening body, be it the state or the non-profit organization working with the low SEC segment (Ross and Nisbett, 1991). Hence, it is pertinent to note that when policy measures are designed and implemented to enhance technology adoptions that in turn can increase access to markets, then the message in the communication to the intended beneficiaries must focus on the intended construal, else the policy intervention may miss the impact.

Research suggests that when beneficiaries are low-literate (such as farmers and small business in low SEC segment), the acceptance of the stigma associated with being low-literate can lead these beneficiaries to be more risk-averse to market interactions, engage less in problem solving, and also limit their social interactions (Adkins and Ozanne 2005). All these factors can not only reduce the access to people, but also the access of the beneficiaries to the market, which may be counter-productive. Hence, it is imperative to reduce any stigma that may be attached with low SEC segment before social interventions for adoption are conducted.

E-governance is one of the major focus areas in emerging markets. However, those in rural areas may have limited awareness and accessibility to government-related schemes (e.g., distribution of benefits, employment schemes for rural population). As this research demonstrates, the 4A’s lead to value creation. Therefore, encouraging the adoption of mobile phones is likely to increase access to avenues for economic and social well-being. For example, the government of India encourages its citizens (especially from the low SEC segment) to link their beneficiary account numbers with their official identification numbers and their mobile phone numbers (i.e., the JAM trinity – Jandhan account, Aadhar card, Mobile phone), which allows the Indian government to uniquely identify the beneficiaries and provide them with the services/benefits that they are eligible for. Similarly, in Bangladesh, mobile services improve social cohesion, assist in reducing the digital divide, improve access to healthcare and can help improve users’ quality of life.

Limitations and Future Directions

The study findings notwithstanding, this research has a few limitations. First, this research tests the 4A framework to find empirical evidence for the framework, with little emphasis focused on estimating the impact mobile phones can have on people in starting new initiatives. Second, our study has not looked into the Internet-based use by small businesses in market development – specifically, the underlying information and communication behaviours facilitated by Internet use. Third, this research does not investigate the impact of any of the 4A’s on each other, which is another possible avenue for future research.

Future research may also investigate the context of Internet use by these communities as well. There are instances of poor weavers in some of the low SEC segment communities across India and Bangladesh, using Whatsapp groups to connect to their customers, suppliers and resource providers to enable them to leverage higher value in the supply chain of the organizations they work with.

Many communities leverage secondary benefits of financial and relational value created by the use of Internet-enabled mobile technologies to better their well-being. For example, some people in low SEC segments view videos to educate themselves and/or listen to songs on their mobile phone as a source of entertainment, like those in developed countries (Andrews, Drennan, and Russell-Bennett 2012). These uses of mobile-based Internet will yield secondary benefits that call for more research. The penetration of mobile phones is much higher in low SEC segments than any other media, which help reduce information asymmetry, enhance literacy and accelerate education in the low SEC segment. Thus, the degree of information asymmetry in low SEC segment and its impact on market development is also an interesting area of future research.

As mentioned above, all four A’s may not equally impact market development and value creation for small businesses, and there may be other factors that contribute to this process. Therefore, future research may investigate a possible extension of the 4A framework that can enrich the marketing literature.

Finally, there is scope for theory redevelopment in addressing the needs and wants of consumers/micro-entrepreneurs in EMs from the perspective of the well-being that these users are able to achieve given the environmental realities of EMs. The bottom-up perspective of theory building in the context of market development in EMs is yet to consider an actor-centric perspective in the market-place, which may be fertile ground for future research.

Supplemental Material

Supplemental Material, 4A_BOP_20200828_WebAppendix - Market Development and Value Creation for Low Socioeconomic Segments in Emerging Markets: An Integrated Perspective Using the 4A Framework

Supplemental Material, 4A_BOP_20200828_WebAppendix for Market Development and Value Creation for Low Socioeconomic Segments in Emerging Markets: An Integrated Perspective Using the 4A Framework by Moutusy Maity and Ramendra Singh in Journal of Macromarketing

Footnotes

Acknowledgments

The data used in this paper is part of LIRNEasia’s Teleuse@BOP4 study. The work was carried out with the aid of a grant from the International Development Research Centre, Ottawa, Canada (www.idrc.ca) and UKaid from the Department for International Development, UK ().

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Moutusy Maity

Ramendra Singh

Supplemental Material

Supplemental material for this article is available online.

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