Markets and marketing research on poverty and its alleviation

Abstract

Marketing practitioners and business scholars now view some of the world’s poorest communities as profitable growth markets. Hence a market-based approach to poverty alleviation has gathered momentum. This article traces the evolution of such a market-based approach over four decades and highlights a gradual trend away from a deficit-reduction approach (focused on constraints and justice) towards an opportunity-expansion approach (focused on capabilities and well-being). This trend is summarized in an analytical framework of human capabilities, well-being goals and transformative impact evolved from the literature. The framework is then used to analyse the practice of sanitation marketing, which has emerged as a key method in one of the highest priority domains in international development discourse – sanitation. The article concludes with a discussion of how contemporary work can further take forward the key tenets of the framework and guide the development of ‘good markets’ for the poor.

Keywords

BoP capability approach market-based poverty alleviation sanitation marketing subsistence well-being

Introduction

The last two decades have seen an upsurge of business practitioners engaging in market transactions with poor communities – popularly called the base-of-the-pyramid (BoP) phenomenon (see Kolk et al., 2014). This phenomenon has achieved immense scale and scope in a relatively short period of time. Given the business sector’s strengths of efficiency, speed, and demand-based approach and targeting capabilities, many governments have welcomed their involvement as part of their anti-poverty measures (Sachs, 2005) and assigned to them the delivery of essential goods and services to the poor (Bayliss and Fine, 2007). Therefore, it is timely for marketing theory to critically analyse the antecedents, correlates and consequences of this phenomenon. Doing so will help clarify the relationship between theory and practice in the domain of BoP market engagement as well as take stock of potential future directions of theoretical contributions that market scholars could make to the poverty literature.

The practices of BoP engagement and theory development on market-based poverty alleviation have occupied cyclical positions in time. First, many market studies disciplines (e.g. economics, management and marketing) and market-advising institutions (e.g. World Bank, United Nations (UN) and Food and Agriculture Organization) have had a long history, ranging from 50 to 100 years, of compiling theory on the central role of markets in alleviating poverty via economic growth (see Ravallion, 2001). They laid a theoretical platform earlier than the recent global corporate movement of BoP market engagement. However, in a second sense, the recent practice-based movement has triggered a new generation of scholarship and theory-building, sharply focused on market ‘behaviour’ rather than the market ‘structure and policy’ emphasis of the earlier literature. A wide swathe of bold BoP market engagement experiments became elegantly summarized, interpreted, analysed and sense-made in pioneering collections of business school disciplines in the early-mid 2000s such as Prahalad (2005), Hart (2005), Viswanathan and Rosa (2007) and Rangan et al. (2007). Collectively, they have shed such incisive light into innovations and solutions evolved by corporate market actors that it is pertinent to consider this second generation of theory building in a distinctive light from the earlier theoretical traditions.

In this article, we examine ‘market’ scholarship regarding poverty, that is, literature anchored in some important way to the notion of a market while simultaneously addressing phenomena associated with poverty. We examine this literature over two temporal periods (see Table 1) – one period comprising the last two decades, that is, concomitant with the phenomenon, and an older two-decade period leading up to the mid-90s. Based on examining various theoretical streams and perspectives contained in this domain over four decades, we present some insights toward an evolving logic. The conclusion is that a newer logic of market-based BoP engagement is evident and worth dwelling upon as a foundation for future research – one that is premised on developing human capabilities, designing-in well-being goals and striving for transformative impact. The utility of this logic will need to be tested and leveraged by future research; we start that process in this article using it to analyse some of the writings and practices in a highly visible and urgent substantive domain of poverty – access to sanitation.

Table 1.

Locating coverage of poverty phenomena in market/marketing literature across two time periods.

	Pre-1995	Post-1995
Market literature	Corporate social responsibility Stakeholder theories Institutional theories Business ethics and fair trade Income inequality/market economy Globalization of markets Sustainable development Social/environmental justice	Base of the pyramid Inclusive business Entrepreneurship of the poor Social business Behavioural economics Economic slowdown, financial crisis Global supply chains Informal economy
Marketing Literature	Consumption restrictions Consumption coping Market exclusion Marketing system equity/justice Social marketing Consumer protection	Base of the pyramid Subsistence marketplaces Transformative consumer research Market studies Consumer culture theory Behavioural economics

A discussion of market-based approaches to poverty alleviation

The focus of this discussion is on management and economic literatures most closely linked with the practice of markets. The notion of a market is very broadly defined here. It can be viewed as a site of competition among firms, an institutional system, a consumer segment or an industry type (Venkatesh and Peñaloza, 2006). Further, the discussion examines the contributions of ‘marketing’ theory as a distinct sub-segment in order to more directly contribute to the quest of the marketing discipline in generating robust theory regarding the BoP. Marketing theory represents a distinctive voice within the overall discourse of markets, in that it explicitly focuses on the behaviours and mindsets of market actors and the relationships among them (Sheth and Parvatiyar, 1995). We now proceed to lay out the discussion along four ‘cells’ – earlier market literature¹, earlier marketing literature, later market literature and later marketing literature (see Table 1).

Earlier market literature

The dominant voice in the pre-1990s markets and poverty literature has been the discourse on globalization of markets, that is, the process by which nation states become more integrated by the economic actions of transnational market actors (Kilbourne, 2004). It is this discourse that spawned the widely used terms ‘underdeveloped economies’, ‘developing countries’ and ‘the Third World’ (Bhatia, 2012). Essentially, this research clarifies the macro-issue impinging upon poverty, that is, the relegation of what were once political priorities (education and health care) to the market for resource allocation. The dominant pro-globalization argument is that more open trade between countries can positively impact poverty because it spurs poor countries to invest in infrastructure, skills and institutions (Williamson, 1996). The dominant counterargument is that globalization exacerbates poverty because the marketization of essential public goods limits their accessibility by the poor (e.g. Apple, 2001). The globalization literature is very broad and contains many debates (Guillén, 2001) but in relation to poverty, these arguments of ‘development’ versus ‘market exclusion’ form the central and opposing theoretical strands.

Inevitably, organizational theories evolved to adapt to the globalization of markets in practice, and several theoretical streams began to address the issue of poverty from an organizational perspective – corporate social responsibility (CSR), fair trade and ethical business ideas, stakeholder and institutional theories. In particular, the practice and theory of CSR grew rapidly amidst global deregulation trends in the 1980s. CSR was originally conceptualized as an obligation of organizations to society at large (Carroll, 1979), thus positioning the organization as a service provider for communities and not just as a profit maker. This conceptualization afforded the initial, expansive views of the responsibility of markets to those living in poverty. Over time, however, the obligation became more narrowly ascribed to stakeholders, that is, those directly or indirectly affected by the organization’s activities (Clarkson, 1995). This narrowing of obligation focused the conversation on impoverished ‘stakeholders’ of the firm, such as smallholder farmer–suppliers in the case of global food supply chains.

This narrowing down seems coincident with the development of stakeholder theory also in the 1980s (Freeman, 1984), which asked two core questions: What is the purpose of the firm? and What responsibility do managers have to stakeholders? Stakeholder theory’s core premise has been that firms and their managers have significant responsibility for the well-being of constituencies they affect through their operations. As such, the CSR and stakeholder research streams coincided with a spurt of allied organization-poverty bridging discourses such as fair trade, ethical business, economic inequality (Albert et al., 1983) and environmental responsibility (Adams, 1995). The notion of fair-trade, in particular, which blossomed as a critique of the trading process in the 1990s (Brown, 1993), directly addressed the BoP segment in a supplier capacity. Typical exchange practices between purchasers in the global North and marginalized suppliers in the global South were deemed to be exploitative and inadequately respectful of the rights of poor farmers/suppliers. In response, fair trade became cast as a solution towards a more just and equitable North–South partnership. Again, although these streams of research cover a wide range of issues, overall the arguments of ‘responsibility’ and ‘justice’ form the central strands when this literature relates to poverty.

In summary, we conclude that the earlier strands of market literature addressing conditions of poverty may have concentrated on the conceptual themes of infrastructural development, market exclusion risks, responsibility of firms and the justice of exchange practices.

Earlier marketing literature

One of the earliest strands of research in marketing as it relates to poverty is the notion of consumption restrictions, that is, the extent to which consumers are inhibited from acting on their needs and desires in the marketplace (Andreasen, 1975). Many scholars have researched communities of consumers earning very low incomes (Holloway and Cardozo, 1969), suffering high levels of unemployment, living amidst decaying infrastructure (Sturdivant, 1969) and experiencing a lack of access to affordable goods and services (Alwitt, 1995). They have also explored the implications for consumer psychology and behaviour. For example, an upward comparison of the possession of material goods and services by poor consumers was often found to cause feelings of sadness resulting from feeling they have less (Clark and Oswald, 1996). The focus on consumption restrictions has continued into contemporary times. This stream can be thought of as the consumer level parallel to the discourse of market exclusion in the globalization literature. The core ideas revolve around constraints and restrictions that impoverished consumers face and the coping mechanisms that they must produce (Hill and Stephens, 1997).

The other dominant strand of earlier research in marketing with a perspective on poverty is the macromarketing stream of research, which evolved in the early 1980s (Fisk, 1981). Macromarketing theory enquires into the breadth and depth of ‘assortments’ of products and services that an impoverished community has access to and investigates why there is a disparity or inequity in this access in comparison to economically more prosperous segments (Layton, 1985). It describes how specific economic interests and institutions can and do structure and control marketing exchange at a systemic level (Meade and Nason, 1991). Further, this stream expands the inquiry of globalization of markets by including the quality of life of people as a consequence to explore explicitly (Kilbourne, 2004). For example, macromarketing research has explored the justice of the exchange process in leading to unintended but foreseeable consequences of diminished quality of life. By understanding markets at a systemic level, macromarketing scholars are in a position to begin identifying such unintended consequences, which help them speak to systemic inequities and inefficiencies causing adverse impact on individual market actors.

In summary, we conclude that the central theorization efforts of earlier strands of marketing literature have revolved around consumption restrictions, justice of the exchange process and systemic inequity in marketing systems. This focus as well as that of market theories outlined earlier would appear to reflect the pressures and priorities of the global business environment in the closing decades of the 20th century.

Later market literature

It would seem that later market theories with a perspective on poverty became shaped by the rise of global supply chains in the late 1990s onwards, the global economic slowdown of the 2000s and the spurt in recognition of the informal economy in developing countries. Projections had estimated that the financial crisis would, by 2010, force about 120 million more people to join the ranks of people living below US$2 a day (Ravallion, 2009). This was as an alert put out to market scholars regarding an impending would-be-poor segment of consumers; studying and outlining the characteristics of such a ‘vulnerable’ segment would be a valuable theoretical contribution. It is remarkable that work of such nature was already underway in a pioneering stream of research – the base-of-the-pyramid (BoP) initiative (Prahalad, 2005).

In essence, the BoP research stream forwards a core argument that, by treating poor communities as viable consumer segments, global business corporations could deliver them innovative solutions via the market mechanism and, in doing so, help alleviate global poverty. The implicit sub-arguments are: (1) wherever there is a void of products and services, global businesses can usher those in and help solve problems in conditions such as health, finances and productivity (i.e. a thesis of missing markets) and (2) wherever solutions exist but are dominated by usurious local purveyors, participation by global businesses can create more equitable choices for consumers (i.e. a thesis of distributive justice). These tenets underpin both scholarly work and practice in BoP markets. As such, BoP research advocates strategic action by private firms and urges them to think creatively about the functions they can fulfil in the quest for poverty alleviation (Prahalad, 2005).

As the BoP thesis shows a way for business firms to contribute to social progress without sacrificing their own economic progress, it has proved a compelling business premise over the past decade and more. The iterative practice and research in this domain has made such an impact that the broader development literature now readily acknowledges that market-mediated opportunity structures can interact powerfully with the poor’s own initiative and help them climb out of the poverty trap (Narayan et al., 2009). The BoP approach has proposed solutions to improve the overall equity of the system through greater consumption choice. However, critiques exist. Consumer psychologists have argued that BoP practice appears to overly rely on BoP consumers making market-rational choices, which may not be realistic in chronic poverty (Chakravarti, 2006). Organizational theorists have observed that BoP ventures appear to engage suppliers in areas of low or unspecialized skills, which in turn leave the ventures with limited scaling-up opportunity (Kolk et al., 2014). Marketing scholars have emphasised that if BoP strategies do not closely align with the rhythms of pre-existing market practices of everyday life in BoP contexts, they could fail the market acceptance test (Viswanathan et al., 2012).

Nevertheless, scholars have explored the BoP premise in diverse ways, in turn spawning parallel research streams such as inclusive business (Mair et al., 2011), social business (Yunus et al., 2010), social entrepreneurship (Mair and Martí, 2006) and the informal economy (Ketchen et al., 2014). The common theoretical thread running through these streams is the anchor of organizational theory. In other words, they all adopt some version of the perspective of organizations, such as institutional, network, resource-based, transaction cost and agency theories, as the core source of their theoretical constructs, that is, all these streams cast the resourceful private sector as the main catalyst of action. Research streams informed centrally by the BoP logic may remain constrained to theories and constructs that reflect an organisation-centric discourse. If newer theoretical structures are required that can explain locally embedded market practices of impoverished markets, one may need to look beyond these streams. However, they do shift the debate compared to the earlier generation of market theories – they all go beyond merely lending a hand to the poor economically and help them achieve improvements in their local market relations and roles.

We conclude that the later strands of market literature have begun to theorize market inclusion strategies of firms and improved market mobility of BoP actors.

Later marketing literature

The notion of consumption restrictions elaborated in earlier marketing theory gives way to the exploration of consumer vulnerability in the most recent generation of marketing theory (Baker et al., 2005). This exploration of the ‘experience’ of vulnerability can be seen as a robust conceptual frame for addressing the varied situations of consumption restriction that impoverished living can impose (e.g. ranging from being homeless to facing an impending state of poverty). It reflects a shift from marketing expert-inferred vulnerability towards listened accounts of actual consumer vulnerability through more participative and interpretive research methods. This shift has inspired more careful examination of how individual traits and external environmental situations interact to produce experiential states of vulnerability (Baker et. al., 2005; Chakravarti, 2006; Viswanathan and Rosa, 2007). It is also consistent with the trends in the broader work spheres of poverty and international development (Narayan et al., 2000).

Recent marketing theory has also explored more rigorously the flip side of such vulnerability and despair, that is, a sense of power and aspiration among the poor. The notion of transformative consumer research (TCR) reflects a growing collection of studies of consumption practices that serve to enhance consumer well-being (Mick et al., 2012). It is not grounded in a single epistemological, theoretical or methodological paradigm and instead draws from a wide range of consumer research perspectives, theories, methods and analysis techniques. Nevertheless, the common goals of studies in the TCR tradition seem to be the study of consumption experiences, aspirations and capabilities, and analyses of self-evolved solutions. The efforts by consumers in the marketplace are interpreted as reflecting creativity, adaptation, leveraging of local consumer assets and strategies of engaging with external institutions in ways that reduce felt stress, deprivation and powerlessness (Blocker et al., 2013). This consumer-centric view has been timely and useful, as Shultz and Hobrook (2009) caution about the paradoxical effect of marketing as both reducing and contributing to consumer vulnerability.

Complementing this consumer-centric view is an emerging practice-centric view of marketing theory, popularized through a series of theoretical critiques published in Marketing Theory (consult Araujo et al., 2008 and issues 8(1) and 13(3)). This market practices view has championed the notion that marketing theory is fundamentally about the practices occurring in markets. It acknowledges that in many developing countries, buyer–seller exchange among the poor occurs in socially embedded, informal markets (Varman and Costa, 2008). Araujo (2013: 386) takes a critical view of the participation of formal markets in engaging with the poor. Worrying over the possible interpretation of markets as ‘rescuers’ of the poor from the ‘tyranny’ of informal markets, he takes pains to show the sustaining character of informal economies and cautions against rushing to ‘formalize the informal’ or seeking sharp boundaries between formal and informal marketing systems. The market practices stream views markets as containing both embedded and external actors, with ongoing structural shifts and porousness among them.

As if anticipating the synergies possible between consumer-centric and practice-centric views, an omnibus volume was published in the mid-2000s, containing holistic analyses of the marketplace interactions among local actors in subsistence-level market locales (Viswanathan and Rosa, 2007). These studies proved to be the trigger for the subsequent coming together of a cohesive body of literature, the subsistence marketplaces (SM) research stream (consult issues 63(6) and 65(12) of the Journal Business Research, issue 34(2) of the Journal of Macromarketing and issue 30 (5-6) of the Journal of Marketing Management). A key tenet in this body of work is an emphasis on the diverse practices rooted in specific marketplace contexts, that is, micro-theorization. Accordingly, studies in this perspective have theorized about ground realities among the economies of the poor. For example, DeBerry-Spence and Elliot (2012) theorize everyday strategy of Ghanian crafts vendors; Viswanathan et al. (2012) theorize marketing exchange between subsistence consumers and merchants in India and Trujillo et al. (2010) examine how a consumer’s socio-economic level drives expectations of product complexity in a Colombian city. In this sense, the SM stream is consistent with the practice-based view because it sheds light on the marketplace process at work and how people organize for markets at the BoP. This contrasts somewhat with the BoP approach of viewing the market in the abstract. The stream has compiled a comprehensive set of factors as well as parsimonious in terms of what it adds to our understanding of market life in subsistence. Its clarifications of theoretical processes include psychological biases and heuristics, interdependence, social capital, marketplace literacy and the emergence of entrepreneurial initiative. It has also reflected methodological pluralism by compiling ethnographic, survey-based and experimental studies.

In summary, we conclude that the later strands of marketing literature have produced unique flavours that complement the inclusivity and mobility foci of later market literature – some of these are explications of vulnerable experiences and felt deprivation of subsistence consumers and sellers, as well as indigenous and everyday practices that shape markets, and a deep delving into the psychology of subsistence market actors and potential life transforming outcomes.

Evolving an analytical framework of capabilities, well-being and transformation

In this section, we interpret a broad transition in ideas from the pre-1990s to the post-1990s market-based poverty scholarship. We describe this transition in terms of the changing orientations and analytic frames in the literature and evolve from it an analytical framework for analysing markets at the BoP, anchored on human capabilities, well-being goals and transformative impact. For a snapshot of our interpretation of this transition and its implication for a framework for future research, please see Figure 1.

Figure 1.

Transitioning to a capability-oriented, well-being centric BoP market engagement logic.

An orientation of capabilities versus constraints and well-being versus ill-being

The central themes of earlier market theories we surfaced in our discussion suggest that those streams largely relied on a modernization approach to poverty alleviation (Joy and Ross, 1989), where large and powerful market actors diffuse ideas, products and technology to develop markets while being sensitive and responsive to the need for responsible and ethical conduct. Likewise, the themes of earlier marketing theories appear conceptually anchored on a deficit reduction approach to studying poverty situations, where marketing exchange conducted between market actors of unequal power and leverage is deemed to frequently cause restrictions for vulnerable and poor consumers, create unjust processes and result in unsavoury outcomes, all of which must be reduced and consumers protected. In comparison, the central themes of the later market and marketing literatures revolve around market participation, mobility, practices and experiences. In one sense, these concepts are just the flip side of the earlier focal concepts (e.g. market participation and inclusion objectives are solutions to problems of market exclusion and restrictions); they represent a continuity of concern for those concepts, which is necessary because the impact of market constraints for the poor is indeed fundamental and far reaching (Alwitt, 1995).

In another sense, the themes of the later market-based literature reflect a net new conceptual approach to poverty situations – a sort of ‘opportunity expansion’ view of the world. The literature has begun to expand the notion of markets as contested spaces of rights, ethics and equity of poor consumers and suppliers by also viewing them as platforms where aspirational mindsets can be unlocked among the poor. This transition is one from dwelling on household economics (income poverty levels) to starting to think about poor people’s mindsets (hopes and aspirations); a transition from a focus on providing things (e.g. finance) to thinking how to enable people’s productivity (e.g. market literacy) – Viswanathan et al., 2008; from reducing restrictions (e.g. clearing bottlenecks of access to markets) to expanding opportunities for people to transact in those new markets with sufficient clout (market mobility) – Prahalad, 2005. The transition is also from the dual-logic of selling to/buying from SM to a more encompassing logic of co-evolution and mutual learning (Viswanathan and Rosa, 2007).

A single construct typifies this transition in orientation and focus – marketplace literacy. Viswanathan et al. (2009) theorize three levels of market knowledge and literacy (vocational, procedural and conceptual) and position these as means by which subsistence market actors make sustained use of markets rather than just being sold to. They describe marketplace literacy training that helps sharpen functional skills which consumers already deploy in their economic exchange (e.g. verbal arithmetic) and provide new skills relevant to their local economic environment (e.g. coping with cheating). For entrepreneurs, such training not only supplies skills but also boosts entrepreneurial confidence. It builds a higher order awareness of why they are in business so that their business can sustain over long periods. Finally, marketplace literacy is constructed predominantly from the learner’s own social relations and local marketplace experiences. As such, the construct focuses on a human capability that could enable SM to genuinely benefit from interventions of external businesses.

This orientation shows consistency with the capability approach (CA) to human development (Sen, 1999). The CA approach holds that the goal of human development should be an increase in human well-being and not a reduction in poverty per se. It views well-being as a holistic concept, built from what people do in their lives (doings) and the kind of identity they develop (beings) and not only from what they possess (havings). This distinction between havings on the one hand and doings and beings on the other (together called functionings) provides a summary way to visually portray the structure of theory across the pre-1990s to the post-1990s literature. In Figure 1, we highlight that the left-lower corner seems dominated by having oriented constructs, while the right-upper corner is increasingly populated with doing- and being-oriented constructs. This reflects the broad transition in the literature toward a capabilities-oriented and well-being-centric logic of BoP market engagement (from an earlier logic that was predominantly about being sensitive to constraints and ill-being outcomes).

Although focusing on ill-being and well-being might appear as two extremes of the same continuum, there is an important difference. Innate capabilities are necessary for a person to experience well-being (Robeyns, 2005), while it is possible to reduce ill-being just by alleviating constraints and restrictions. The latter approach does not demand that the poor experience agency, that is, an autonomous capacity to act and bring about change meaningful in terms of their own values and objectives (Lindeman, 2012; Robeyns, 2005); the well-being approach does. In fact, the CA literature would suggest that well-being achievements cannot really be imposed on people and communities; they can only ever come about by people’s expressions of their own agency (Lindeman, 2012). It is their ability to think and act that becomes the pathway to well-being achievements which is where a construct like marketplace literacy makes its most fundamental contribution.

We postulate that the market-based poverty literature has gradually shifted its contributions from an era of highlighting and solving inequities and constraints towards a newer era of identifying human capabilities among the poor, explicitly benchmarking well-being goals, and as a result achieving social transformation.

An analytic frame of marketplaces and marketing systems versus markets and marketing exchange

A second, subtler transition in the literature across the two time periods has to do with the analytic frame adopted. Marketing theory has long held the notion of exchange as its central defining activity. Bagozzi (1975) defines exchange as an interaction between parties where goods and symbols are exchanged for money (see Figure 2). Marketing then becomes the set of processes and institutions that enable such exchanges to take place. These processes require a backdrop of rules and norms, which in the abstract is referred to as a market (Venkatesh and Peñaloza, 2006). From the perspective of earlier marketing and market theories therefore, rules of the game, that is, markets, enable firms to implement competitively superior marketing processes that facilitate exchange with customer segments (see Figure 2). A consequence of this analytic frame is that earlier scholarship excelled in compiling theory on consumer and organizational behaviours towards consummating exchange (Hunt, 1983); and therefore proceeded to analyse BoP segments with the belief that poverty is best reduced by applying (micro) marketing techniques – spawning the field of social marketing with its behaviour change focus (Kotler and Roberto, 1989). However, the incidence and intensity of poverty, reflected in multidimensional deprivations and dependence, have dictated that the exchange frame of analysis generally falls short in anticipating and addressing unintended consequences.

Figure 2.

Clarifying terms.

The key shift that has occurred with the later generation of theories is the redefinition of the term market, the rejuvenation and greater use of the analytic concept of ‘marketing system’ and finally the introduction of the notion of ‘marketplaces’ (see Figure 2). First, the practice-based view of markets discussed earlier sees markets as ‘ongoing processes of economic organising and as constituted by bundles of practices’ (Lindeman, 2012: 235) and as practical outcomes of organising and shaping efforts by various market actors (Araujo et al., 2010). These newer definitions imply that the set of discourses and practices enacted by economic actors are included in the meaning of the market. This is an important development, as it enables acknowledging the active role that BoP individuals play as autonomous market creators and participants. It is pertinent to note that the earlier theoretical era also contained analyses of ‘marketing systems’. However, where the pre-1990s ideas of individual marketing exchange behaviours versus dynamics of larger marketing systems grew along relatively unconnected lines, they are now beginning to see greater integration in the post-1990s market-based poverty scholarship (Journal of Macromarketing, 30: 5–6). The implication is that theories can more directly examine how micro-level insights can accumulate and exert macro-level impact and how macro-level insights can frame and inform micro-level practices in the markets (see Ingenbleek, 2014). The third dimension of the shift in analytical frames is the introduction of the notion of ‘the marketplace’. The SM literature has particularly highlighted this label; in this stream, marketplaces have been described as ‘thriving environments, devoid of technology but teeming with relationship energies’ (Viswanathan and Rosa, 2007: 5). This is consistent with the words of an early marketing scholar who said: ‘perhaps nowhere is the inner self of the populace more openly demonstrated than in the marketplace; for the marketplace is an arena where actions are the proof of words, and transactions represent values, both physical and moral’ (Lazer, 1969: 9).

One implication of focusing on this analytic concept rather than ‘the market’ is that economic outcomes, such as income from subsistence entrepreneurship, are viewed as just one strategic component of the struggle for sustenance and shelter, and not the exclusive road to poverty alleviation through markets (Viswanathan and Rosa, 2007). Viswanathan et al. (2014) recommend recasting the idea of microcredit, which only looks at the financial actions and potential of group borrowers, into holistic microenterprise fostering programs, which can leverage the power of a priori entrepreneurial networks; they contend that the impact of such translated thinking can be transformative. A second implication is the acknowledgement of local capabilities rather than focus on global capabilities. For example, the densely populated nature of subsistence contexts can be seen as ‘network rich’ in social relations (Viswanathan et al., 2012) rather than the more conventional observation of size, such as ‘bottom billion’. A third implication is the ability to adopt a pluralistic perspective in terms of which marketplace actors can participate and contribute to BoP progress. Rather than restricting the target audience of scholarship to a global private sector wanting to solve problems and conduct commerce at the BoP, a pluralistic perspective enables giving equivalent coverage to private sector firms and social sector organizations, to social entrepreneurs from the outside as well as to community entrepreneurs running small businesses as a way of life or survival. In summary, there have been key shifts that signal a changing logic in theory building regarding markets and poverty – a logic that emphasizes the development of human capabilities, designing-in well-being goals and striving for transformative impact.

The capabilities well-being transformation logic illustrated with the practice of ‘sanitation marketing’

It is useful to illustrate the value of this emerging logic in analysing a practice area. We do so in the area of sanitation, which is a highly visible and urgent substantive domain of poverty. In 2015, 32% of the world’s population still did not regularly use an improved sanitation facility (WHO and UNICEF, 2015). Poor sanitation can result in diseases that lead to increased mortality and morbidity and thus act as a self-reinforcing poverty trap, whereas improved sanitation can potentially lead to advances in human dignity, safety and opportunities to pursue education and income-generating activities (Bartram et al., 2005). Sanitation was proclaimed a standalone human right by the United Nations in 2015, and interventions to improve access to and use of sustainable sanitation solutions are a prominent poverty alleviation tool.

Since the 1980s, external support agencies have engaged with private markets as a result of experiencing sluggish rates of sanitation uptake by communities (e.g. Cairncross, 2003). The premise of this turn to a market-based approach was that it would usher in innovative sanitation products and services, substantially increase the demand for ‘improved’ sanitation among poor communities and strengthen emergent sanitation markets. It was purported that this approach would help develop local BoP entrepreneurship capacity by inducting new entrepreneurs in marketing sanitation solutions and also engage existing subsistence entrepreneurs in expanding their business and consumer base. This would increase incomes alongside providing essential goods and services to both entrepreneurs and their customers. The term sanitation marketing was coined:

‘Sanitation marketing is the application of the best social and commercial marketing practices to change behavior and to scale up the demand and supply for improved sanitation, particularly among the poor’ (Devine and Kullmann, 2012: 5). This particular practice is a useful platform for our intended illustration, as it is a contemporary global community of practice (www.sanitationmarketing.com/), complete with detailed guides and manuals developed by large governmental and multilateral agencies (Devine and Kullmann, 2012; Jenkins and Scott, 2010). It also reflects principles of social marketing theory (Devine, 2010).

Analysis of the available resources suggests that the focus of sanitation marketing has historically been on achieving increased consumer access to sanitation products and services (Barrington et al., 2017). This implicit equivalence of improved access with social good would seem to mirror the conceptual orientation of the earlier market and marketing research streams around consumption restrictions and market exclusion risks. Although paving the way to better access for the poor to sanitation solutions is undeniably good, the analytical framework discussed earlier would emphasize that the contributions of embedded, local actors are important in ensuring sustained use of these solutions and transformative impact. For example, a person can have a toilet because they purchased a toilet but that may not be enhancing their capabilities if they value the technical skills of toilet repair but are not taught how to do so. Similarly, the toilet in itself will not enable a person who values playing the role of a community health advisor to experience the well-being that comes with assuming that identity, but, for example, a sanitation-centric marketplace literacy program that can trigger a meta-awareness of why one is becoming a sanitation advisor may. In other words, as earlier outlined in the orientation towards capabilities, it is not ‘having’ a toilet per se that produces well-being; rather well-being is produced by ‘doing’ things a person values and ‘being’ in social states valued locally.

The manuals produced by the World Bank encourage practitioners to develop physical sanitation products using a human-centred design approach, whereby local masons and consumers develop the infrastructure in a participatory fashion (IDEO, 2009). Programs that involve potential consumers from the initial design of the sanitation systems (e.g. Cole et al., 2014) result in products that are more likely to be used sustainably. Products following a single standardized model or a checklist of models, which the ‘outside experts’ consider appropriate to the community (e.g. Scott et al., 2011), may not serve as context-appropriate sanitation solutions, as they do not allow for a full expression of agency by local subsistence actors. If the end users of sanitation interventions come to possess adequate market agency in that they autonomously act in and shape sanitation markets and hold market institutions accountable (Andersson et al., 2008), then the interventions would have moved towards the logic of capabilities, well-being and transformative impact. Further, interventions would seek to work within pre-existing and emergent marketing systems rather than rush to introduce formalized and large-scale systems through market practices and policy amendments. Such formalization of essential services is often unable to serve populations in the manner to which they aspire and can diminish well-being through erosion of local norms and trust (see Water Alternatives’ special issue, Informal Space in the Urban Waterscape, 2014). The practice-based view of markets has cautioned against such blanket ‘combating informality’ approaches (Araujo, 2013: 387); the SM literature similarly cautions that informal courtesies that sustain market actors may give way to rigidities with the sweep of modernization, leading to a net erosion rather than enrichment (Viswanathan et al., 2012). Finally, the market systems perspective, through its whole system frame of analysis, situates the autonomous contributions of local actors in the overall architecture of the marketing system – it helps make visible the functioning and interplay between the marketing system components and identify the systematic and structural inequities in the system. These views caution against the temptation to transform local market practices into models which ‘fit’ the idea of formal economies and instead encourage engaging consumers to play a significant role in defining the systematic and structural aspects of the sanitation marketplace.

In conclusion, an analysis of sanitation marketing through the lens of market-based capabilities, well-being and transformation indicates that although the practice has moved away from the utilitarian approach of focusing solely on sanitation provision, there is the opportunity to further develop the model to lead to greater consumer well-being. The issue is not a trivial one, as the spectre of unintended consequences of well-meaning sanitation programs has manifested in many scenarios around the world – exemplified by the ‘toilet wars’ of South Africa a few years ago (Robins, 2014).

Discussion and conclusion

We have undertaken a broad conceptual review of how the underlying theoretical paradigms of market-based research streams of poverty have evolved. We have outlined that the literature in this domain has undergone a gradual evolution in its theoretical dialogue over the past four decades: from analysing constructs solely anchored in modernized marketing systems (e.g. consumer restrictions), towards developing ones that are situated in socially embedded and autonomous marketing systems (e.g. subsistence entrepreneurship); from portraying inter-construct relationships within a premise of relatively passive consumer markets, towards beginning to consider the merits of marketplaces where human capabilities among the poor are real ingredients (e.g. consumer–entrepreneur duality); and finally from offering explanatory mechanisms that rely solely on organisational and institutional ideas of justice and responsibility, towards exploring ones that explicitly benchmark the felt experience of well-being and life transformation by the poor (e.g. agency, literacy). In all the yardsticks of theory development (Whetten, 1989), we have highlighted that contemporary market and marketing theory has moved closer towards holding the impoverished consumer as a central, embedded actor of the market whose practices and representations come to legitimately shape the market (we also presented an illustrative visual portrayal in Figure 1).

For the discussion of literature in this article, we adopted a longitudinal vision such that its observations can be grounded in the history of market and marketing scholarship. However, it is important to note that the analytical framework we have evolved is not a new lens in itself but rather an analysis and integration of prior thought and reflecting one particular interpretation of how it has evolved. Further, the process of analysis we adopted was to reflect on the core conceptual character of scholarship on market-based engagement with populations in poverty, based on observing the broad (rather than specific) contours of some (rather than all) streams of research based on their dominant presence and pervasive impact. In this sense, it is unlike a conventional literature review process, that is, we did not look to conduct an exhaustive review of individual articles that make up an individual stream of research. The choice of our approach was dictated by our main objectives for this conceptual exercise: (1) to discern and surface the core theoretical structure and content of market-based scholarship about poverty and (2) to help situate the distinct contributions of the more recent scholarship against a backdrop of longer standing writing in markets and marketing about the notion of poverty.

We have also illustrated the utility of these emerging ideas in the vexing subsistence domain of inadequate sanitation. Given the growing enthusiasm in this sector of development practice for market-based approaches such as sanitation marketing, it is pertinent for other researchers to continue such exploration. There is evidence that the poor anywhere in the world are constantly trying to leverage their own assets and move out of poverty (Narayan et al., 2009); to do so, they engage in market practices and use market devices that offer them an autonomous ability to fully participate in and shape markets. Such agency is critical to reduce a felt sense of vulnerability. Therefore, to understand how ‘good markets can be formed that work effectively on behalf of the poor’, it is desirable to use an analytical platform that would guide in preserving human agency. We believe that the evolving analytical framework of capabilities, well-being and transformation, evident in the market and marketing literature on poverty, can aid the quest of marketing theory to develop a holistic and defensible market-based approach to poverty alleviation, which can stand as a robust contribution of the marketing discipline.

Footnotes

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: The illustration of sanitation marketing in this manuscript was made possible by the authors’ involvement in a larger research project funded by the Australian Government under the Department of Foreign Affairs and Trade (DFAT) Development Research Awards Scheme, project number: 201200898. The project was managed by International Water Centre.

Note

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