Abstract
Researchers in the marketing domain have investigated some key drivers of market development in subsistence marketplaces in emerging economies. This article contributes to the literature by proposing a 7A framework that identifies an enhanced set of drivers of market development in subsistence marketplaces in emerging markets (EMs) (by extending the 4A framework). Using qualitative data collected through in-depth interviews with farmers (i.e., micro-entrepreneurs) in subsistence marketplaces from two EMs (countries: India, Vietnam), the study findings provide evidence of the 7A's as facilitators and/or inhibitors of market development in such markets. This article draws attention to the growing importance of the selling processes and strategies used by farmers in such markets for maintaining relationships with customers and investigates the benefits and challenges of selling at farmers’ markets that contribute to developing the 7A framework. The study uniquely contributes to the base of pyramid (BoP) literature in emerging markets, which could be of interest to future researchers examining the effectiveness of the 7A marketing framework on micro-entrepreneurs. The study findings offer important insights into policy and practice by uncovering new dimensions of market development for micro-entrepreneurs in emerging markets.
Keywords
Introduction
Researchers have often investigated consumption in the lower socio-economic segments (i.e., low SEC) in emerging markets (EM) (e.g., Ellis 2005; London and Hart 2004; Prahalad 2004), largely consisting of subsistence marketplaces. While there is a vast literature investigating the drivers of market development and value creation in these marketplaces, there are a limited number of frameworks that provide a comprehensive understanding of such factors, barring a few studies (e.g., Sheth and Sisodia 2012).
Extant research offers several frameworks that explain market development in subsistence markets, and one of the prominent ones is the 4A framework (awareness, accessibility, affordability, and acceptability (Sheth and Sisodia 2012)), which is useful for analyzing subsistence marketplaces (Anderson and Billou 2007; Dadzie et al. 2017; Prahalad 2004; Sheth and Sisodia 2012; Sinha and Seth 2018) compared to other marketing frameworks (e.g., 4Ps, 7Ps of marketing). The 4A's proposed by Sheth and Sisodia (2012) focus on mechanisms that allow large firms/corporations to reach out to the consumer/customer (Pels and Sheth 2017). That is, the 4A framework has been developed to provide conceptual explanation and managerial guidelines that identify those aspects of the consumer that large organizations entering emerging markets need to pay attention to. Such a focus on the 4A's is likely to lead to market development when products and services are offered by established and strong companies or the government. This framework takes into consideration customers’ desires based on their willingness to pay for a product, ability to acquire and use the product, and meeting their needs and knowledge about the product and the brand (Dadzie et al. 2017).
However, whether the 4A framework provides conceptual clarity and practical direction in the context where the sellers are from subsistence marketplaces is questionable. Indeed, we submit that such sellers are very different from large corporations or the government, given their lack of resources and ability to even reach out to their potential consumers. For an interdependent relationship to exist between sellers in subsistence markets (i.e., farmers) and their consumers/customers, there is a need to investigate the market development process for the subsistence marketplace. While Abendroth and Pels (2017) have extended the 4A framework (i.e., they include literature from co-creation and market separation) to present a framework that firms can use for evaluating the nature of gaps between the firm and its consumers, Kamande and Jarhult (2013) proposed a 5A framework (i.e., adding availability to the 4A framework) to make it more applicable to BoP and subsistence marketplaces. In the existing frameworks (i.e., 4A, 5A framework), especially conspicuous is the absence of factors that may provide infrastructure and resource-related help that is much-required for subsistence-level entrepreneurs in EMs. The objective of this paper is to investigate the market development process in subsistence marketplaces among farmers (i.e., sellers), to identify possible barriers and/or facilitators of market development beyond the 4A's. To address the objective, we start with the 4A framework as the base; our investigation uncovers additional 3A's that are specifically applicable for the subsistence marketplace. Acknowledging the need for all the seven vital characteristics of market development leads us to offer the 7A framework. Some recent studies (e.g., Abendroth and Pels 2017; Lowe et al. 2018; Maity and Ramendra 2021) demonstrate the need to revisit the 4A framework to extend the framework and incorporate possible new A's.
Specifically, the literature notes that EMs are often characterized by market heterogeneity, a chronic shortage of resources, unbranded competition, and inadequate infrastructure (Sheth 2011). While the 4A framework does identify drivers of market development (Maity and Ramendra 2021), extant literature suggests that there may be other drivers of market development in the subsistence marketplaces that remain unaccounted for. Notwithstanding the fulfillment of the outcomes of the 4A framework by marketers and despite getting positive outputs, the 4A's are generic in nature in the BoP and subsistence marketplaces (Lowe et al. 2018). In the existing frameworks, especially conspicuous is the absence of factors that may provide infrastructure and resource-related help that is much required for subsistence-level entrepreneurs in EMs. Subsistence marketplaces suffer from a lack of proper infrastructure and basic resources (Prabhu and Jain 2015; Sheth 2011; Steinfield and Holt 2019; Viswanathan and Rosa 2007; Viswanathan 2013). In this research, we use a grounded theory approach to identify additional drivers of market development in subsistence marketplaces, thus extending the 4A framework. Hence, this research aims to fill an important gap in the marketing literature, whereby it presents an updated set of A's that are applicable for understanding market development in subsistence marketplaces.
We undertake this research in the context of subsistence marketplaces (represented by farmers’ markets in our investigation) in two EMs in Asia. We investigate market development among farmers and undertake an extension of an existing framework (i.e., the 4A Framework) using the grounded theory approach, which provides us with an opportunity to capture the perspective of the micro-entrepreneur (i.e., farmers). Subsistence marketplaces are often characterized as focusing on catering to the basic needs of consumers, with economic activities centering on relatively low-skilled, physically demanding labor (Gau et al. 2014). The output of subsistence marketplaces, therefore, consists of commodities focussing on local capacity as they strive towards poverty alleviation and self-sufficiency (Anderson and Billou 2007). Farmers’ markets have traditionally been a gathering of the tribe as much as a collection of freshly harvested fruits and vegetables (Carman 2016). A recent report indicates that small farmers in EMs (e.g., in Vietnam), are struggling to be profitable and that prices for many agricultural products are dropping due to oversupply (Viet Nam News, 2017). Studying farmers’ markets in subsistence marketplaces provide us with an opportunity to identify drivers of market development in these markets. Specifically, we pose the following research questions to the farmers (i.e., micro-entrepreneurs in subsistence marketplaces): (1) What are the antecedents, challenges, and benefits of selling at farmers’ markets (in emerging markets)? (2) How do the farmers (i.e., the sellers) maintain relationships with their buyers?
The findings reported in this paper are based on the analysis of responses to in-depth interviews of farmers from low socio-economic markets in two countries (i.e., India (25 participants) and Vietnam (10 participants)). Through a qualitative approach involving interviews and observations of individual farmers in terms of their roles as sellers, we examine how sellers living in poverty arrange to bring their goods to the marketplace, and transact with their customers in the marketplace (Viswanathan 2007). We also study the influence that these micro-entrepreneurs have in subsistence marketplaces in which they operate, which is an essential macromarketing concern. In this study, we have looked at how an important macromarketing actor like the government has employed public policy to create marketplaces thereby, facilitating micro-entrepreneurs to sell their agri-produce directly to buyers without any intermediaries. We examine the role of government as facilitators within the context of India and Vietnam, where poverty is widespread. Our infusion of a macromarketing perspective to the subsistence markets helps us conclude that government and market administrators play an important role in the success of these subsistence marketplaces. The results of this study further indicate that the infrastructure and facilities of the farmers’ markets need to be upgraded. This will require intervention by the relevant stakeholders operating within the farmers’ markets. Government is a crucial player in the subsistence marketplaces (Jones et al. 2016) that can condition the interaction between firms (sellers) and consumers (buyers) in the market by employing public policy as a controlling lever (Arndt 1983). Low affordability levels are a feature of the macromarketing context in subsistence marketplaces, and sellers have a restricted ability to make an impact without government intervention.
Our findings identify three new A's that drive market development and value creation in subsistence marketplaces: alignment, alliance, and assurance. These three drivers represent the need for the seller to ensure alignment of the value offered to the buyer by the seller (i.e., the farmer/micro-entrepreneur), the importance of forming alliances or relationships by the micro-entrepreneur among family members and in the marketplace, and the need for assurance offered by the government and the administrators to the micro-entrepreneur so that he/she is able to sell the product/produce in the subsistence marketplace.
This study makes several contributions to subsistence marketplace literature. First, this research undertakes an elaboration of the 4A framework and extends it by adding three new A's; this updated framework presents an enhanced set of antecedents to market development in subsistence marketplaces. Second, we extend Viswanathan (2007) study by concentrating on micro-entrepreneurs (i.e., farmers) and emphasize the need to develop a bottom-up understanding of needs, products, markets, and lives in subsistence marketplaces in emerging markets. Third, because studies focusing on farmers’ markets in subsistence marketplaces are limited, our study offers unique insights, where resources and support from the government are often limited (Viswanathan 2007; Azam et al. 2019), thus, underscoring the need for such support from the government and/or administrators (i.e., assurance).
The findings from this study are likely to be useful for policymakers who may note that alignment, alliance, and assurance need to be encouraged and facilitated for micro-entrepreneurs apart from awareness, accessibility, affordability, and acceptability that will cater to the outcomes as desired by customers. Therefore, market development is likely to deepen if policies facilitate the formation of alliances and provide the required assurance to the micro-entrepreneurs in emerging economies.
The rest of the article is structured as follows. In the next section, a review of literature is provided as a theoretical context for our research, where we discuss market development and subsistence marketplaces. This presentation is followed by the sections on method, findings, and the 7A framework. We conclude with a discussion of the implications of this work for research and public policy in the context of subsistence marketplaces in Asia, discuss the limitations of the study, and suggest future research directions.
Theoretical Grounding
Market Development
Literature suggests that EMs are often characterized by market heterogeneity, sociopolitical governance, chronic shortage of resources, unbranded competition, and inadequate infrastructure (Sheth 2011). Market development and purpose-driven marketing (Sheth 2011) need to be undertaken in such markets. EMs are also marked by constrained disposable incomes, scarcity of skilled workforce, inefficient supply chains, and under-developed infrastructure that act as barriers to the development of these markets (Sheth 2011).
Market development is a business strategy where businesses may expand in existing markets or enter new markets with the use of existing products and/or services (Ansoff 1957). Access to people and access to markets (Tarafdar, Singh and Anekal 2013) may be considered as two leading dimensions of market development for subsistence marketplaces in EMs, because market development in the context of EMs is about the accessibility of buyers based on product's availability and convenience of acquiring it, and about affordable products (Sheth 2011).
A significant population in the EMs lives at or near the bottom of the pyramid (BoP). New research on EMs is required in order to obtain the specific factors that are salient in these markets rather than extrapolating findings from other markets (Pels and Kidd 2012; Burgess and Steenkamp 2006). Given the heterogeneity and pace of market development in most EMs, organizations need to recognize that the availability of resources may vary in EMs compared to developed markets (e.g., Abendroth and Pels 2017).
Approaches Explaining Market Development
While explaining market development in EMs, the literature contrasts the “bottom-up orientation toward subsistence marketplaces” (Viswanathan et al. 2009, p. 407), with “top-down approaches” (p. 407). The former grassroots (or bottom-up) approach, considers the needs, advantages, and disadvantages faced by micro-entrepreneurs in subsistence marketplaces in EMs, and suggests interventions that may be effective. The approaches suggested are often at the micro-level, and the interventions are for these micro-entrepreneurs to work on creating value that results in the inclusiveness of communities and social good in businesses (Yunus, Moingeon and Lehmann-Ortega 2010). In such markets, micro-entrepreneurship is often a response to the uncertainties faced by the poor with regard to their livelihoods.
The top-down approach, on the other hand, is a macro-level perspective adopted by the government or a business entity that wishes to enter or facilitate a somewhat underexplored market territory (Pels and Sheth 2017; Sheth 2011). Such a top-down approach argues that large firms/governments in EMs are likely to contribute to the aggregation of demand in the subsistence consumers who have fragmented demands (Sheth 2011), thus leading to enhanced financial rewards for the micro-entrepreneurs as well as for businesses. Much research suggests that the marketing mix activities suggested by the 4A's are particularly well-suited to address the unique set of market development challenges observed in these EMs (e.g., Anderson and Billou 2007; Prahalad 2004).
The 4A Framework
The 4A framework consists of four constructs: awareness, accessibility, affordability, and acceptability (Sheth and Sisodia 2012). Awareness is related to the communication outcomes in subsistence markets and may be defined as the steps taken by the government or a firm to reach out to potential users about the benefits that may be obtained through the adoption of a specific product. Such gains/advantages of adoption may stem from functional dimensions (i.e., quality, and reliability), as well as psychological dimensions (i.e., brand or emotional value) (Sheth and Sisodia 2012). Accessibility points at the non-economic barriers in subsistence markets. Often, such markets suffer from spatial market separations that may act as a barrier for the buyer and seller to meet. Governments and businesses entities may work toward increasing access to products and markets (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), and is economic (e.g., income, budget) and psychological (e.g., perceived value, fairness). The government, as well as private firms operating in such marketplaces, need to provide solutions that these consumers can afford. Acceptability is the adoption of a product/service by users (Sheth and Sisodia 2012). 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 (Sheth 2011; Prahalad 2004).
Extending the 4A Framework
Many theories used by contemporary management researchers have been formulated several decades ago and have persisted mostly intact since then (Suddaby et al. 2011). Sometimes, existing theories/frameworks need to be revised/extended to take the evolving realities of the market/business environment. While, through the 4A framework, prior literature (see e.g., Anderson and Billou 2007; Sheth and Sisodia 2012; Prahlad 2004) have felt the need to look beyond the 4P marketing mix, which may be less suitable for emerging markets, the 4A framework focuses on what large sellers need to do for making products/services available to consumers in emerging markets. For sellers in subsistence marketplaces, they need help in areas of functioning that are not pertinent for large businesses; therefore, for a symbiotic relationship to exist between the seller (i.e., farmer at the subsistence market) and the buyer, requires a different kind of marketplace solution driven by a deep understanding of buyer-seller interactions, needs and usage situations (Sridharan and Viswanathan 2008).
Subsistence Marketplaces
Subsistence marketplaces can be characterised as “barely having sufficient resources for a day-to-day living yet allowing for the possibility of abundance in other life dimensions — such as familial and community networks of relationships” which “emphasize pre-existing, rich, and culture-specific arenas for exchange that businesses in resource-rich economies often ignore” (Viswanathan and Rosa 2007). Subsistence marketplaces consist of consumer and entrepreneur communities living at a range of low-income levels such as farmers. They are concentrated in developing countries such as India, China, Vietnam, Brazil, and sub-Saharan Africa (Viswanathan and Venugopal 2015) and remote Indigenous communities in Australia (Godinho et al. 2017). In India, 80% of the poor are largely dependent on farming (Abidi 2017). Interestingly, a study shows that 76% of farmers would prefer to do work other than farming, and most of them have suffered repeated losses (Sood 2018). Hence, investigating the activities of farmers’ markets and understanding that mechanism, is likely to strengthen the role of agriculture in poverty reduction (Sharma and Kumar 2011; Beninger and Shapiro 2019), and also promises an enhanced understanding of the facilitators and barriers to market development in subsistence markets, allowing us to extend the 4A framework.
In the last few decades, some studies have explored subsistence marketplaces in various contexts such as entrepreneurship in subsistence markets (Christensen, Parsons and Fairbourne 2010; Sridharan and Viswanathan 2008; Viswanathan et al. 2010b; Viswanathan et al. 2014), tourism in subsistence markets (Mai et al. 2014), consumer-merchant (Viswanathan, Rosa and Ruth 2010a; Upadhyaya et al. 2014), and poverty alleviation in subsistence markets (Crawford-Mathis, Darr and Farmer 2010). In light of increasing incomes in developing countries and the rapid development of technology, Viswanathan and Rosa (2010) discuss the need for a more profound understanding of subsistence marketplaces and their constituents among management scholars and practitioners. This study extends the current understanding of the existing challenges of farmers’ markets in subsistence marketplaces in Asia and identifies additional constructs/factors that extend the 4A framework and contribute to a greater explanation of market development in subsistence marketplaces.
Farmers’ Markets
A farmers’ market can be defined as “a predominantly fresh food market that operates regularly within a community, at a focal public location that provides a suitable environment for farmers and specialty food producers to sell farm-origin and associated value-added specialty foods for human consumption, and plant products, directly to customers” (Australian Farmers’ Markets Association 2018, p. 1). Farmers’ markets have become an increasingly visible part of the urban-farm linkage and they continue to rise in popularity due to increasing consumer demand for obtaining fresh products from the farm (Wolf et al. 2005). The concept of farmers’ markets has expanded to include consumer values such as community and embeddedness (Feagan and Morris 2009), sustainability and environmentalism (Garner 2014), health and product quality (Myae and Goddard 2012), and, more importantly, social inclusion and interaction with vendors (Garner 2017).
Increasingly, businesses and policymakers have begun to identify the potential role of farmers’ markets in developing a social support system between customers and farmers, by creating an overall culture of community support that bolsters farmers’ viability during times of crisis and ensures that consumers have access to healthy and high-quality local food (Garner 2017). Some studies have investigated various issues related to farmers’ markets such as consumer motives and geographic locations. For example, income, ethnicity, setting, and the desire for a variety of ingredients are critical antecedents of participating in farmers’ markets (Betz and Farmer 2016). Ownership of farmers’ markets influences outcomes (Gantla and Lev 2016) and community-based activities have a high level of interdependence (Lawson et al. 2008). Barriers and disincentives such as the lack of signage and promotions, time constraints, inconvenient location, and unwelcoming atmosphere (Colasanti et al. 2010) also contribute to the extent of participation of buyers and sellers in farmers’ markets. Farmers’ markets offer value sets that are complex, unique, and differ among and within-participant groups, where they are dependent upon their respective operating systems (Klimek et al. 2018).
Farmers’ Markets in Emerging Markets
Prior literature suggests that there exist both similarities and differences between the motivations behind farmers’ markets in developed and emerging markets, and how they operate (Steinfield and Holt 2020). While farmers’ markets enhance human and socio-economic interactions and trust (Carson et al. 2016), in the context of Western North Carolina in the USA, find that consumers are mainly motivated to attend farmers’ markets because of concerns for the environment. Furthermore, consumers in developed countries, in general, are motivated by the fact that they can address their concerns at farmers’ markets through active engagement and communication with producers about the products for sale, which can help them to lessen their environmental impact by making an educated choice. On the other hand, the notion of sustainability for small-scale farmers is beginning to gain momentum in EMs only in recent years, including in India (Parvathi and Waibel 2015; Sridharan et al. 2014) and Vietnam (Tran and Goto 2019). The studies find that moving into organic and sustainable farming and certification of products provides a comparative advantage in terms of receiving higher prices through market access to high-end consumers.
In regards to farmers’ market in emerging economies, such as India, there have been limited studies that investigate aspects of these markets such as the problems of access to markets, market development (Shankar et al. 2017), and benefits received by farmers (Dey 2012a). Furthermore, Shankar et al. (2017) find that there are considerable problems when marketing vegetables in farmers’ markets due to several factors, among which are costs of damaged goods, exploitative practices by intermediaries, and perishability of products, transportation costs, and high storage costs. Despite such problems associated with access to markets, Dey (2012b) finds that several financial benefits evolve through farmers’ markets in India, such as increased earnings and guaranteed income, immediate cash realization, higher margins for the vegetables, and proximity to the market yards. The author also finds that the farmers may benefit more if adequate storage facilities are provided in the market yards. A similar study by Mukherjee and Vasudev (2014) using a mixed-methods approach compares prices and other conditions in Rythu Bazaars (also known as farmers’ markets) and local markets in the city of Hyderabad in India. The authors find that Rythu Bazaars perform well according to rules and regulations, and benefit consumers in terms of price and freshness of produce.
There are similar studies in the context of South East Asia. Nguyen et al. (2017) use a hypothetico-deductive research design to investigate the influence of consumers’ collectivist and cultural values on their purchase intention in relation to environmentally-friendly products in Vietnam. According to the study, consumers with greater adherence to collectivism and long-term orientation tend to engage in green purchase behaviour, owing to their positive environmental attitudes, strong subjective norms, and tolerance of inconvenience associated with eco-friendly product purchases. Following this study, Nguyen et al. (2017) examine the key barriers that prevent consumers from purchasing eco-friendly products in developing economies and suggest intervention strategies to mitigate such barriers in Vietnam. The authors identify high price, scarce product availability, low level of credibility of eco-labels, and inadequate information as key barriers to purchasing green products. They further suggest that mitigating these obstacles requires effective government leadership, social initiatives, and marketing strategies. In their study, Cadilhon et al. (2003) focus on social and cultural elements within local institutions and their interactions with the stakeholders, and, more importantly, with farmers within the marketing system. Considering the context of South East Asia, and more specifically Ho Chi Minh City in Vietnam, the authors examine the critical factors in the development of improved fresh food marketing systems, while recognising the different environmental impacts on stakeholder interactions within the marketing system (Kadirov 2018; Layton 2007).
In summary, prior studies have identified a range of factors as to why farmers engage with farmers’ markets – such research represents the attempt to identify factors that act as inhibitors and facilitators of market development. These findings indicate an increasing interest on the part of buyers in consuming environmentally-friendly produce even at higher prices, as well as the ability of sellers to gain a competitive advantage over other sellers by securing increased earnings through higher retail prices for their produce – providing evidence of market development. Furthermore, such markets help in enhancing social inclusion in the agricultural supply chain system. In relation to the challenges, farmers’ markets in emerging markets, particularly in India, face a lack of infrastructure, such as storage facilities and transportation, which creates obstacles for farmers in realising higher retail prices. Such findings point to several factors that may act as facilitators and barriers to market development in subsistence marketplaces.
As the above discussion demonstrates, extant research points to the possible existence of drivers of market development that may not be captured in the 4A framework. In this research, the context of the farmers’ market is used as a representative marketplace of subsistence markets, to understand the process of market development. We note that the farmers’ market is a subsistence marketplace for which awareness is created by the government, and accessibility for the buyer-seller interaction is also made possible by the convenient location of such markets. Produce sold by the farmers are affordable and acceptable to the buyers (i.e., addresses the tenets of affordability, and acceptability). Therefore, while the 4A framework explains some of the characteristics of the farmers’ market, other constructs may be identified that contribute to a better explanation of market development. Such a research context helps in further identifying drivers of market development that may be included as additional factors that can extend the 4A framework.
This situation, therefore, warrants further investigation to examine the existence of additional factors that may be added to the 4A framework, whereby these additional factors provide an augmented explanation of the market development process in subsistence marketplaces.
Methodology
To undertake the advancement of the 4A framework, we adopt an elaboration procedure (Lee et al. 1999). Such an approach may be undertaken in the context of pre-existing conceptual ideas/frameworks that may require developing new insights. The need for extending the 4A framework is such a context. Elaboration is an important activity in the knowledge creation process (Fisher and Aguinis 2017), and aids in the exploration, expansion, and refinement of existing frameworks and ideas. In the context of an existing conceptual model that explains a phenomenon partially, researchers often collect additional data to specify and reshape constructs, which leads to the refining of existing frameworks. The output of this exercise is an elaborated framework (i.e., the 7A framework) that accounts for factors/constructs more thoroughly (compared to the existing theory/model – that is, the 4A framework).
Often, the grounded theory approach is pursued to undertake theory elaboration with an iterative examination of the codes that emerge from the data (Bechky 2003; Belk et al. 2012; Gephart 1997); grounded theory is an iterative process that allows theory development and theory elaboration – only the latter is undertaken in this research. We selected grounded theory qualitative approaches because it allows us to examine the data to inductively construct a theory while maintaining the worldview of the participants in this study (Clark et al. 2020). Grounded theory has been used to develop a conceptual framework of marketing interaction in a subsistence marketplace (Upadhyaya 2021; Viswanathan et al. 2012). Theory elaboration often takes a construct specification approach, which involves identifying new theoretical constructs that may reflect changed empirical realities – compared to the original specifications provided by an existing framework (Bechky 2003; Gioia.and Chittipeddi 1991). A construct specification approach can be used to improve the validity and scope of an existing framework through the inclusion of new constructs (Bacharach 1989; Fisher and Aguinis 2017).
To describe and understand the factors impacting market development for farmers in subsistence markets, we conducted in-depth interviews of farmers who regularly visit farmers’ markets in two EMs – India and Vietnam. The in-depth interview procedure was deemed as an appropriate method for this research because the research questions concerned why and how the farmers enter the market and engage in the exchange processes that happen there (Yin 2015) – that is, we investigate the process of market development that the farmers participate in. Two of the authors were personally involved in the data collection process, and they conducted interviews with farmers and sellers of farm produce from India (25 farmers) and Vietnam (10 farmers). The interviews were carried out over a period of six months.
The Socio-Cultural Context of Farmers’ Markets in India
All interviews of farmers from India were conducted in Rythu Bazaars, which were set up in 1999 by the state government of Andhra Pradesh – a state in South India (note that in 2014 the state was divided into two states: Andhra Pradesh and Telangana). Rythu Bazaars provide a direct selling platform to farmers. At present, there are 133 Rythu Bazaars in these two states (see Figure 1). Each Rythu Bazaar is built on a land area that measures more than an acre (note that one acre is a little over 0.4 hectare), typically covering 10 to 15 villages, with a minimum of 250 farmers, and includes roughly 10 self-help groups (SHGs). The farmers and the SHGs are selected by a team consisting of a Mandal Revenue Officer, a Horticulture Officer, and an Agriculture Officer (i.e., state government officers). The state government also provides transportation facilities, with the Joint Collector (i.e., a district-level official) of the concerned districts in consultation with the State Road Transport Corporation (i.e., a state government initiative), thus ensuring that adequate facilities are arranged to transport goods from farms to the market yards. To maintain transparency in relation to both quantity of goods sold and the price charged, information about price and commodity movements is provided online through the Rythu Bazaar Information System. Such a system provides lists of vegetable arrivals and prices in each of the bazaars in both Telangana and Andhra Pradesh, on a daily basis.
Farmer's market in India (rythu bazaar). Source: Authors’ collection.
The Farmers’ Charter is displayed in a prominent place so that all farmers are completely aware of it. In all, about 4,500 farmers operate from Rythu Bazaars, thus benefitting a large number of consumers (Ahmed and Dey 2012). While in India, almost two-thirds of the population is employed in agriculture, agriculture accounts for only 20% of the national income. Lack of marketing information and inadequate access to markets, as well as supply chain inefficiencies inherent in the farm sector, all contribute to low realizations and incomes for farmers (Dey 2012b). Rythu Bazaars play a key role in addressing some of these problems, and there is a clear need to facilitate similar marketing infrastructure throughout the country.
Data Collection in India
Considering the qualitative and exploratory nature of this research, participatory observation and in-depth interviews were conducted with farmers operating in Rythu Bazaars. A semi-structured questionnaire with open-ended questions in English was designed by the researchers. The interviews in India were conducted by one of the authors with the help of an expert with prior knowledge of both marketing research and Telugu (i.e., the local language spoken by farmers in this part of India). The research team employed an inductive theory-building process to conduct this research. All interviews were audiotaped with the consent of the participating farmers. It also helped the translator/transcriptionist to generate a verbatim translation of the interviews. The back-translation procedure followed suggestions by Brislin (1970).
In all, 25 farmers from the Erragada Rythu Bazaar in Hyderabad – the capital city of the state of Telangana – were interviewed. The researcher interacted with the farmers selling at this market between 12 noon to 4 pm. This period of the day usually witnesses a relatively low crowd and hence, farmer sellers could devote time for participating in interviews. As a first step, farmer sellers were identified (as opposed to non-farmer sellers or middlemen). In the second step, those farmer sellers who were willing to devote about an hour for the interviews were identified. Convenience sampling was used to select the participants.
The researchers selected the Erragada Rythu Bazaar as it is one of the model Rythu Bazaars and is also one of the largest market yards. Each interview lasted for a time ranging between 45 to 60 min. The farmers are well-acquainted with the markets and could respond to the questions with confidence and ease. To achieve optimum use of interview time, the researcher questioned the respondents systematically and comprehensively (DiCicco and Crabtree 2006). The questions were formulated to keep the focus on the topic of research. During the interviews, the respondent farmers were asked to share their experiences in doing business in relation to the Rythu Bazaar selling-buying process, facilities, and infrastructures available in the market yards, payment process, and relationships with other farmers and authorities of the market yards. Each respondent was paid INR 300 (∼ USD 4) as an incentive for their contribution to this research. The demographic characteristics of the respondents were also collected (see Table 1). Pseudonyms of participants are used in reporting the findings in order to protect the identities of the participants in this research.
Participant Profiles (India).
The Socio-Cultural Context of Farmers’ Markets in Vietnam
Thu Duc Agromarket is one of the three largest wholesale farmers’ markets in Ho Chi Minh City (see Figure 2). It is the place where farmers and wholesalers sell their agro-based products (e.g., vegetables, fruits, and flowers), to final customers and other retailers. This marketplace has 1,384 kiosks in full operation and is managed by the Thu Duc Agro Market Management Limited Liability Company. Construction of this marketplace began in the year 2002 with a total investment of up to 182.4 billion Vietnamese Dong or VND (1 US$ = 23153 VND). The Thu Duc Agromarket is built on 20 hectares of land and officially opened in the year 2003. On an average, around 2,800 tons of agricultural products are sold every day in this marketplace. The market is fully equipped with a warehouse, management area, operating area, preliminary processing area, waste treatment plant, underground water station, and wastewater treatment station, among other infrastructure facilities. The management's broad aim is to develop this market into the largest agricultural trading centre and agricultural import-export hub in Southern Vietnam where farmers can deal directly with their partners without any involvement of middlemen. Farmers harvest their produce during the daytime and sell those in the evening through the next day. The peak time of the market is from 8:00 p.m. to noon the following day.
Farmer's market in Vietnam (fruits and vegetable sellers). Source: Authors’ collection.
The agricultural products come from farms around Ho Chi Minh City and the Mekong Delta provinces of Vietnam. Some products that come into the market are not locally grown. Although there are food safety regulations in Vietnam, including 1821/QĐ-UBND, which was issued by the People's Committee of Ho Chi Minh City in 2005, and 4694/QĐ-BYT, which was issued in 2015 by the Ministry of Health to manage origin and food safety issues, there does not exist an adequate traceability system governed by the market management authority.
Data Collection in Vietnam
In line with the approach described for data collection in India, one of the members of the research team located in Ho Chi Minh City, Vietnam, employed an inductive theory-building process to conduct this research. To collect the data, participatory observation and in-depth interviews were undertaken. Semi-structured open-ended questions were formulated in the English language by a knowledgeable marketing researcher – the leader of this research team (the same questionnaire was used for data collection from participants in India). The interviews were conducted in the local language. With reference to schema theory (McVee, Dunsmore and Gavelek 2005), in the process of translating the interview content from English to Vietnamese, semantic, syntactic, and discourse relationships were carefully considered to select the best equivalent words in the target language. Moreover, the back-translation procedure suggested by Brislin (1970) was applied in the translation process.
In the farmers’ market in Vietnam, the Vietnamese author interviewed 10 farmers (Table 2). The participants were recruited through the snowball sampling method. Participants are regular sellers in the farmers’ market and therefore, had enough experience and knowledge to answer the in-depth questions related to the research topic. The data was collected by the Vietnamese researcher who is well acquainted with the research context (language, signs, and socio-cultural norms). The first-round of interviews was conducted with three random participants, and the translation process was undertaken to confirm the validity of the information with the other researchers. The interviews usually lasted for one to one-and-a-half hours. The informants voluntarily participated in the face-to-face interviews if they satisfied the sample selection criteria. Key selection criteria included: participants are farmers and have a kiosk in the market; participants agree to voluntarily share factual information with the interviewers, and participants have experience in dealing with both individual customers and retailers (who buy their products in bulk and then resell them in the smaller markets in town).
Participant Profiles (Vietnam).
Informed consent was obtained from all participants, and it was communicated that all interview content is to be utilized for academic research purposes only. The interviews were recorded via a mobile recorder, and field notes were taken. All interviews were transcribed and translated back to English. A friendly interview environment was fostered to ensure that the informants felt comfortable in answering all of the interview questions. After the interview, each participant received 100,000 Vietnam Dong (4-5 USD) as compensation. Pseudonyms of participants are used in this research in order to protect the identities of the participants in this research.
During the interview, the informants were asked to share their experiences in doing business in farmers’ markets in Vietnam, including their perception of the business environments, the selling-buying process, facilities and infrastructure in the marketplace, and payment methods, among other questions. The interviews began with demographic and shopping habit questions, and participants were encouraged to talk about their own selling and buying experiences, as well as their relationships with other business partners.
In qualitative research, the data is collected from participant observations and from interviewing several key informants (Creswell 2014). Consequently, in addition to interviewing the participants, the Vietnamese researcher also observed the interviewees during the buying and selling process in order to gain further insight into the experiences of the informants in the context of the marketplace. Moreover, the researcher observed the marketing system by acting as a buyer to better understand the buying and selling process. This participatory observation was very helpful for verifying the data collected during the field study. Furthermore, to ensure the objectivity, credibility, and trustworthiness of the collected information, the translated transcript was given to independent readers with high competence in the English language to ensure that their understanding was the same as that of the researchers. This stage enabled us to make certain that our data analysis followed the standards of qualitative research. Table 3 summarized how the data was collected in India and Vietnam.
Data Collection Method in India and Vietnam.
Analyses and Findings
Qualitative data analysis was undertaken through a process of thematic analysis and code development through which key themes and patterns present in the collected data were identified and analyzed (Boyatzis 1998). The themes identified in this study are used as attributes, descriptors, elements, and concepts which enable us to identify additional A's that contribute to the 7A framework (Ayres et al., 2003; Ryan and Bernard 2003). The analysis was undertaken manually coded using excel to track first-order concepts and second-order themes. Three of the authors examined the transcripts. The first-order concepts and the second-order themes (Figure 3) were identified by the three co-authors independently (i.e., the authors first classified similar participant opinions). They assign labels to words that represent recurring themes in each response. After this process, the three co-authors then discussed the classifications/themes with other researchers on the team until a consensus was reached. The aggregate dimensions were decided upon unanimously. For example, the words “negotiation”, “extra bonus” and “lower price” are noted in many responses (see Appendix). This observation leads to the identification of first-order concepts like “Customized transactions in subsistence markets” and “Negotiations with buyers are a prominent feature in these markets” (see Figure 3). Such concepts lead to the identification of the second-order theme “Constant adaptation and flexibility”, which is adjudged as part of the aggregate dimension Alignment (Figure 3).
Sample coding.
Throughout the analyses, the objective was to identify categories and sub-categories of drivers of market development and facilitation in subsistence marketplaces in EMs. During the analysis process, the authors shifted back and forth between the stages to re-determine the categories (wherever necessary). We aimed to achieve data saturation during our data analysis process (Creswell 1998; Thomas 2006). The interview data were subjected to the three-phase analysis method as suggested by Miles and Huberman (1994): data reduction, data display, and conclusion (see the example provided above).
We debriefed our research team by periodically meeting online to critique and question our emerging interpretation. The purpose of this process was to present the research findings among co-authors in order to verify the credibility of the analysis and to determine whether the findings reflected the research objectives (Thomas 2017). To protect the anonymity of the respondents, we use pseudonyms for the respondents.
Facilitators and Barriers of Market Development: Identifying Three Additional A's
Our research objective is to identify factors that facilitate and/or act as barriers to market development over and above those identified in the 4A framework: awareness, accessibility, affordability, and acceptability. Since these four factors are well-established in the literature, we report the specific findings for these four factors in the Appendix, but do not discuss these factors at length in the manuscript. Based on our research objectives, we identify three additional A's through our analyses: alignment, alliance, and assurance (see Figure 3 for sample coding), which are also discussed in the paper. Our findings add to the existing 4A's, and together, the seven factors may be considered as the 7A's of market development in subsistence marketplaces in EMs. (Note that all 7A's are reported in the Appendix, where the new 3A's identified in this study are presented first, the existing 4A's are reported next. In the Appendix, specific quotes from study participants (i.e., farmers) from India and Vietnam, that correspond to each of the 7A's, are reported.)
Alignment: Strategies for Maintaining Relationships with Customers
Our analyses indicate that the subsistence farmers need to align their market-related strategies with that of the buyers – that is, the alignment of the value offered to the customer in this context is a key ingredient that drives market development in the farmers’ markets. The customer, community, and context are important for the seller (Venugopal and Viswanathan, 2015). Interactions between buyers and sellers in subsistence marketplaces grow through enduring relationships and interactional empathy (Viswanathan et al., 2012). The environment of the interaction is marked by relationships that are long-standing and is infused with empathy (Venugopal and Viswanathan, 2015), where the context displays deep interdependence and oral communication. In this section, we discuss our findings regarding the selling process and strategies for maintaining relationships with customers.
Though the selling prices are fixed as per the market rules, I [farmer] still allow some negotiation, especially for the regular customers. – Raghavendar, Male, 23 years I allow negotiation, though I will never sell in loss. I allow some negotiation to compete with the other sellers. Of course, if my product is not fresh or at the end of the day I have not been able to sell much, I have to allow more negotiation. – Srikanth, Male, 24 years
Customers come to ask about a product, we [farmer] let them know the price, deal. Ask them how much they want to buy. If they buy a lot, we [farmer] can deliver products directly from our farm to their place by motorbike or by cycle. – Tran, Female, 32 years I spend a little extra time talking to the customers to build a good relationship with them. I [farmer] also share my concerns with the Estate Officers and have a good relationship with the office. – Yadhaiyya, Male, 35 years
Maintaining a relationship is about gaining mutual trust, which plays a large role in day-to-day marketplace activities and relationships (Viswanathan 2013). Also, the personalized marketplace in subsistence contexts involves small, local businesses or civic organizations that enjoy the trust and patronage of local consumers (Sheth and Parvatiyar, 1995). Subsistence markets are often unorganized, where prices of products are often negotiated rather than fixed. For large organizations, prices are fixed and negotiations regarding price are usually not possible or entertained by the seller. Products offered by large firms also tend to be well-packaged; the packaged good may be small in terms of the number of units, but products are not sold without proper packaging or ‘loose’. Also, consumers who buy from sellers in subsistence markets tend to bargain regarding the amount of product that they would like to buy; bargaining is often a cultural feature in emerging markets. Sellers recognize this consumer need and align themselves with such requirements. These features are essentially different from customer relationship management as it is described in the context of developed markets as well as the organized sector in emerging markets.
Alliance: Strategies for Maintaining Relationships with Producers and Administrators
The role of the family, as well as that of the community has been acknowledged in the literature on subsistence entrepreneurship (Sridharan et al. 2014). Our findings indicate that the farmers form alliances to function in the marketplace – that is, an alliance based on family members or close relatives/friends is a key factor that facilitates market development in the farmers’ markets. In this section, we discuss our findings regarding the strategies adopted for relationships with producers and suppliers.
My parents [farmer] have a kiosk in this market since the 1990s (at that time, this market was not officially built and managed by the government) and they do the business here. Now my parents [farmer] stay at home to take care of my babies so I take over the family business. I [farmer] work here every day with my [farmer] wife from around 8 p.m. to 10 a.m. – Nguyen, Male, 45 years My husband, son, daughter and I [all farmers] are involved in the business. I come for selling in this market, while the other three work on the farm. – Sarada, Female, 43 years I bring my produce and sell it directly to the customers. My family members are involved in agriculture –Gangamma, Female, 40 years
Selling produce at farmers’ markets is largely a family affair. Leveraging such relationships allow resources to be shared according to the strength of each person, which helps the family to offset challenges and resource constraints (Steinfield and Holt 2019).
The above-given comments reflect a strong element of entrepreneurship in subsistence economies. Most workers in low-income countries, such as India and Vietnam, are usually self-employed. People living in a subsistence market face severe resource constraints and limited job choices due to a lack of training and education (Viswanathan and Rosa 2007). Four out of every five farmers have education qualifications less than or equal to secondary school certification, while one out of every ten farmers is illiterate (Dey 2017). Thus, the betterment of economic life circumstances by continuing an existing family business becomes the primary motivation underlying people's behaviour in a subsistence market (Viswanathan et al. 2009). We also note that the economic activities are shaped by the context in which the subsistence farmers are embedded (Webb et al. 2015).
We [farmers] can sell directly to customers; we can also manage the daily supply. The income from selling our products is higher than my salary [income] before. – Pham, Male, 34 years By selling in the wholesale markets we [farmer] don't receive profits. When I [farmer] sell the vegetables directly here [in Rythu Bazaar], I get more income. – Raghavendar, Male, 23 years This is the most suitable place for farmers to sell without giving any cut to anybody. That is the reason why I [farmer] come here. – Vishal, Male, 22 years
Alignment is about the trust that is so important to get developed between buyers and sellers. It is about allowing customer preferences to dictate the terms of the process of the sale of products. Hence, sellers allow negotiations for regular customers or give them some additional services like delivering products directly from the farm. This also means that, unlike large organizations that have an organization-wide policy, subsistence sellers do not have a uniform policy that governs their transaction for all buyers. This alignment to buyer need is vital for the survival of the seller in the subsistence marketplace because the buyer has access to substitute products that are available from the competition. They cannot afford to be very rigid in their ways of dealing with the buyer. Such behavior is unique to emerging markets.
Assurance: Policy Support Required from the Government and/or Firms
The government is an important stakeholder in addressing the challenge of market inclusion for services that play a transformative role (Aiyar and Venugopal 2020) – such interventions are catalytic and bring about system-wide market inclusion by lowering barriers to the participation of different actors in the economy. Our analyses indicate that the farmers need support from the government (or, large firms) to function in the marketplace – that is, the assurance given to farmers plays a significant role in facilitating market development in the farmers’ markets and the crucial role of policy implementers in subsistence marketplaces (Upadhyaya 2021). In this section, we discuss our findings regarding the strategies adopted by farmers for dealing with the challenges of competition and inadequate infrastructure.
We note that Rythu Bazaar has a price fixation mechanism by which the administrators along with a committee of six farmer-representatives decide on the price of each vegetable before the start of transactions for the day. The prices are generally 25% more than the wholesale market and 25% lower than the retail markets. The prices are displayed on notice boards very prominently, and sellers (farmers) are instructed to implement the prices displayed on the notice boards. Farmers (legitimate sellers) are also given identity cards through a well-defined process.
It is therefore important that there is an assurance given to farmers on price, and only the authorized farmers (identity cardholders) are allowed to carry out business in these marketplaces. This will help reduce the measures that farmers are forced to take on account of non-authorized farmers operating from these marketplaces.
Competition is fiercer. Currently, there are only a few kiosks available for rent. All of them are in use. Therefore, we [farmer] need to set the price as competitive as possible. Customers have more choices; thus sellers need to make their products most attractive. – Tran, Male, 43 years
All sellers are my competitors. If someone sells at 18 rupees, I [farmer] will sell the same item at 15 rupees. That is the competition here.
– Vishal, Male, 22 years
The government needs to play an important role in encouraging market inclusion by bringing into alignment social welfare goals and commercial goals of the farmers operating in these subsistence markets (Aiyar and Venugopal 2020). Also, the administrators of these marketplaces need to ensure that the prices arrived at through the price-fixation mechanism are strictly adhered to. Adherence to the prices fixed by the price-fixation committee can happen through an assurance by the administrators that no seller will be allowed to reduce prices to attract customers to their stalls.
Stalls are not available for everybody. About 70 to 80% of the shops are occupied by sellers who pay money [small bribe] to the estate officers. I [farmer] have therefore no other option but to occupy the open slots outside the stalls We get drinking water. There is nothing beyond that. We have washrooms as well. – Srikanth, Male, 24 years The market should be expanded and re-organised. It is now becoming a bit messy. Farmers come here more and more so that they need to have more spaces. Also, there are some unregistered sellers who do their business here and they usually increase the price that makes customers want to bargain a lot. – Tran, Female, 32 years
I have benefitted from increased income. – Raja, Male, 55 years There are many benefits. Transacting here helps me earn some more additional money. I am able to know new methods of farming. Because of a healthy competition here, I feel that the atmosphere helps me focus on earning more. – Raghevendar, Male, 23 years There is some social contact that has developed here, since we meet each other regularly. – Jayamma, Female, 44 years Good benefits, especially financial. Some social contacts also have got developed over the last decade since I have started coming to this market. – Yadhaiyya, Male, 35 years
The 7A's
The proposed 7A framework extends the 4A's by additionally identifying factors that are required by sellers in the subsistence marketplaces. This research finds that the 4 A's - awareness, acceptability, affordability, accessibility are not sufficient enough drivers of market development in subsistence marketplaces in emerging markets. The findings of this research are in line with past research (Abendroth and Pels 2017; Lowe et al. 2018; Maity and Ramendra 2021) this research also identifies and proposes an additional three new A's - alignment, alliance, and assurance that contribute to market development in subsistence markets. This is captured in Figure 4 through the proposed, “7A framework for market development in subsistence marketplaces in emerging markets.”
The 7A Framework for Market Development in Subsistence Marketplaces In Emerging Markets. Note that the 3A's that are identified on the right (in the figure) may be considered as the contribution of this research; the 4A's identified on the left are from the existing 4A Framework.
There is also clear unhappiness among the farmers regarding the non-availability of stalls for selling their produce. This is on account of farmers without ID cards operating in these marketplaces. There is, therefore, a need for assuring the farmers that all the policies laid down by the government in the running of the marketplaces will be implemented properly. Proper policy implementation will result in the removal of middlemen, thereby reducing competition for stalls as only genuine farmer-sellers gain entry to the marketplaces. The researchers feel that there is a need for renewed assurance from the government through the proper implementation of policies. In addition, family-focused policies in subsistence contexts will help provide the necessary information and capital for people to enter the marketplace, increasing hope for a better future. Assurance to the subsistence market players in this regard has the potential to help them immensely.
Discussion and Conclusion
Studies on farmers’ markets have usually focused more on advanced countries such as Canada (Larsen and Gilliland 2009), the United States (Andreatta and Wickliffe 2002; Brown 2002; Hunt 2007; Wolf et al. 2005), and the United Kingdom (Holloway and Kneafsey 2000), and less on developing countries in which resources are often limited. Such markets in EMs may be examined through the macromarketing lens. Macromarketing includes the study of marketing systems, and the impact and interaction of marketing systems and society (Hunt and Burnett 1982). A marketing system is a network of units (including individuals, groups, and/or entities) connected in a set of economic exchanges that encompasses the process of creation through supplying of products/services in response to customer demand/need (Layton 2007). While the 4A framework allows us to examine subsistence markets, we also notice, as indicated in literature (e.g., Abendroth and Pels 2017; Lee et al. 2018; Maity and Ramendra 2021), that the 4A framework probable needs to be augmented with other possible factors of market development in the context of EM. The research investigates the market development process in subsistence marketplaces among farmers (i.e., sellers). We offer the 7A framework which is specifically applicable for subsistence marketplaces.
In the context of subsistence marketplaces in EMs, our study contributes to marketing theory, practice, and public policy. Our findings identify three new A's that contribute to market development in subsistence markets. Our study findings demonstrate that there are additional factors of market development over and above the 4A's that have been identified by the 4A framework (i.e., awareness, accessibility, affordability, acceptability) in literature. We identify alignment, alliance and assurance as integral drivers of market development in subsistence marketplaces, and propose the 7A framework. These three drivers represent the need for the micro-entrepreneur in such a marketplace to ensure alignment of the value offered to the buyer, the need to form alliances or build a core group of producers in the marketplace, and the need for the government to provide an assurance to the micro-entrepreneur that she/he is able to transact in the marketplace where certain facilitating conditions exist.
Theoretical Contributions
Our study makes several theoretical contributions. First, the current study extends the 4A framework and suggests a 7A framework for understanding market development in marketplaces in EMs (awareness, acceptability, affordability, accessibility, alignment, alliance, assurance). Through an inquiry into the antecedents, challenges and benefits of selling at farmers’ markets in emerging markets, we identify additional 3A's in this research that allow us to capture factors that are top-down as well as bottom-up that is likely to aid in market development in a low-income EM context. Therefore, through our research, we are able to demonstrate that the 7A framework is useful in explaining market development for micro-entrepreneurs in subsistence marketplaces. The need to acknowledge the additional three A's as part of a framework is necessitated by the literature as it has emerged over the last couple of decades in the EMs. The attempt of this research is theory elaboration, which is an important activity in the knowledge creation process (Fisher and Aguinis 2017). The identification of additional factors (i.e., 3 A's) allows us to add to the theory creation process.
Second, this research identifies the benefits and challenges faced by farmers in selling at farmers’ markets. Third, we identify the selling process and strategies for maintaining relationships with customers. This echoes the findings that are reported in the literature (Sakarya et al., 2012).
Finally, through this research, we contribute to studies that investigate farmers’ markets in low socio-economic segments in EMs. In this research, the context of the farmers’ market is used, as a representative marketplace of subsistence markets, to understand the process of market development. The aim of using the macromarketing perspective in studying subsistence markets has been to transform impoverished contexts (Beninger and Shapiro 2019). The 7A framework contributes to this ongoing attempt to identify factors, which explain the mechanism of micromarketing in EMs.
Managerial Implications
In the last few years, farmers’ markets in many parts of the world have witnessed declining consumer attendance. In developing countries, such as India and Vietnam, small farmers are struggling to be profitable. There is a need to examine the challenges faced by these farmers to ensure the sustainability of farmers’ markets (Hahn 2009; Viswanathan et al. 2009). The research presented in this paper contributes towards the need to understand market development in subsistence marketplaces in EMs. This research presents the benefits and challenges of selling in subsistence markets. We examine the selling process in these markets, uncover the strategies for maintaining relationships with customers in subsistence marketplaces, and consider the lessons that can be learned from these insights for more effective managerial implications.
First, the three additional A's of market development identified through this research (i.e., alignment, alliance, assurance) will allow managers at large firms to gain a better understanding of how the mechanism of market development works for micro-entrepreneurs who are from low socioeconomic groups. Especially, organizations like ITC 1 or Godrej 2 (i.e., companies that encourage entrepreneurship among those from subsistence communities), may adopt each of these strategies to achieve their social goals.
Second, we describe the benefits and challenges of selling at the farmers’ market. Large firms may educate the farmers regarding the need to align with the needs of the customer or to form alliances with partners/family members for the smooth running of the micro-entrepreneurial venture. For example, the study results show the key role of the family network in maintaining the business, a finding that is reported elsewhere in the context of subsistence markets in EMs (Sridharan et al. 2014). Farmers’ markets have become the only choice of employment due to limited employment opportunities elsewhere. Such large firms can also lobby with the government to influence policy formation regarding infrastructure assurance that may be given to these micro-entrepreneurs. For example, competition and overcrowded spaces are some of the main challenges in farmers’ markets, which will require intervention by relevant stakeholders operating within them.
Third, research findings demonstrate similarities between the two markets under investigation, which means that these study findings are likely to be useful for managers across a large number of EMs.
These subsistence marketplaces rely on the direct marketing of agricultural produce. An integrated supply chain model of these markets would ensure product, information, and financial flow directly between farmers (producers) and consumers. Farmers’ business is facilitated by administrators of the marketplaces where there is only information flow between the administrators and farmers.
A similar capitalist model of business operation exists in the form of contract farming. In contract farming, farmers supply their agricultural produce to large retail groups directly. Both parties are bound by mutually agreed pre-decided price, quality, quantity, or acreage with a limit of maximum and minimum time (Dey 2012). Since contract farming relies on an agreement made between a weaker party (farmers) and a stronger party (large retail groups), it does not (a) benefit the small and marginal farmers, and (b) provide any bargaining power to farmers.
Agri-marketing channels can be simply defined by the flow of agricultural produce from farmers to consumers via (i) wholesalers and retailers, (ii) food processors, (iii) co-operatives, and (iv) direct marketing channels. While the first three models do not challenge the business model suggested in our paper, contract farming is very similar to the direct marketing model of the subsistence market places studied in this paper. However, since contract farming is not based on the agreement between two similar parties, therefore, we feel that the best model suited for the subsistence market places is the integrated supply chain model suggested above.
Public Policy Implications
The results of our research show the key role of the family network in maintaining the business. The farmers’ market is probably the best choice of employment due to limited employment opportunities. Furthermore, competition is one of the main challenges in farmers’ markets. Eventually, some of the sellers may not be able to continue their business. The results further indicate that the infrastructure and facilities of the farmers’ markets need to be upgraded. This will require intervention by relevant stakeholders operating within the farmers’ markets.
It is evident that there exist both differences and similarities between how farmers’ markets in developed and developing countries operate, and in particular, in the two developing countries examined in this study: India and Vietnam. While farmers’ markets provide an important source of employment, there is a number of factors that pose threats to the success of farmers’ markets in both jurisdictions, which warrant rethinking within the public policy domain to promote the sustainability of small farms and farmers’ markets.
The implications of the study for public policy are (1) Empowerment of farmers: Farmers operating in the farmers’ markets in both jurisdictions were found to prefer selling their produce in those markets as opposed to wholesale markets, due to the increased level of margin that they earn by selling at these markets. There is also a fair amount of trust between the farmers (sellers) and customers in the farmers’ markets, in which efforts from both sides are visible. However, to enhance the level of trust, further education, and training in financial management and modern farming methods could be provided to the farmers. Government departments, agricultural NGOs, and farmers’ groups need to take part in designing and implementing such training programs that could focus on building awareness and technical knowledge about new crops and varieties to realise better economic benefits; (2) Incentives and improved infrastructure: Farmers at the farmers’ markets enjoy incentives from the government against forcible eviction from their lands, thereby enhancing security in terms of tenurial conditions. While farmers also enjoy financial incentives by receiving credits from institutional lenders (as opposed to money lenders), there remain some impediments owing to lack of adequate infrastructure in terms of sufficient sheds for selling the produce, lack of proper storage facilities and transportation services, as well as water and sanitation to attract more farmers to the farmers’ markets; and (3) Use of technology: Farmers’ markets in both jurisdictions use online market information systems that help both farmers and customers obtain information about the products available at each market, and also keep them aware of current prices. Such websites could be linked to connect with other local farmers’ markets.
Agriculture is the primary source of employment in India and Vietnam. Farmers’ markets can play an important role in improving rural economies by empowering small and marginal farmers. This study based on farmers’ markets in India and Vietnam has shown that such markets provide opportunities for employment to all working family members, who either are employed through agriculture or the direct selling in these markets. Farmers’ operations from the farmers’ markets has been benefited through increased earnings and immediate realisation of cash. There are, however, challenges for the farmers’ markets, including higher competition among sellers and the lack of adequate infrastructure and facilities, which are often outdated, insufficient, and overcrowded. Policy changes would further improve the quality of services at farmers’ markets, such as government support for the expansion of existing infrastructure and facilities, improvements in health and safety through enhancing education and soft skills of the farmers, and the introduction of stricter rules and codes of conduct to avoid any presence of middlemen.
Limitations and Future Research
Future studies should test the 7A framework through quantitative data, across other EMs. Such a test will provide empirical validation for the 7A framework. We are confident that future research shall provide an opportunity for such investigations. Another limitation of this study is the uniqueness of the farmers’ market in India and Vietnam, limiting this study's generalisability. Each country may have distinct policies toward the farmers’ market. Future research may extend the study to other developing countries such as Indonesia, the Philippines, etc. It will provide more insights into how various subsistence marketplace relates to the 7A framework. Finally, the number of people being interviewed in Vietnam may not be sufficient to achieve theoretical saturation. 3 Future research may increase the number of participants to reaffirm our findings. Despite its limitations, this study offers new insights for micro-entrepreneurs in emerging markets.
Footnotes
Associate Editor
Dave Webb
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) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Griffith University, (grant number Grant).
Notes
Author Biographies
Appendix: