The subsistence marketplaces approach to poverty

Abstract

Marketplace exchange occupies a central place in the lives of poor consumers and entrepreneurs across the world. The subsistence marketplaces literature has systematically examined marketplace exchanges in contexts of poverty and built a critical mass of knowledge. This knowledge stems from an approach with roots in the discipline of marketing and represents the unique contribution of scholars in marketing and related disciplines to the global discourse on poverty. This article reviews a decade and a half of research on subsistence marketplaces and clarifies certain conceptual, methodological and axiological positions that underlie marketing theory generation within this stream of research.

Keywords

BOP poverty subsistence marketplaces TCR

Introduction

Picture a migrant wage-labourer buying lunch from a roadside food hawker in urban Chennai or a Maasai woman bartering goats for warm clothes in a weekly village market in Tanzania. These scenarios evoke vivid images of the poor engaging in marketplace exchange in order to meet the most basic of human needs. Marketplace exchange, in all its different manifestations, occupies a central place in the lives of poor consumers and entrepreneurs across the world (Prahalad, 2006). Marketplaces shape the subjective experience of poverty on the part of individuals and communities. For example, studies in the Unites States have highlighted how aspects of the retail market space, which are implicitly designed for affluent and literate consumers, can be daunting for low-literate, low-income consumers to navigate (Gau and Viswanathan, 2008; Viswanathan et al., 2005). Acknowledging the centrality of marketplaces in poverty, the subsistence marketplaces literature has systematically examined marketplace exchanges in contexts of poverty and built a critical mass of knowledge (Viswanathan et al., 2014a). This knowledge stems from an approach with roots in the discipline of marketing and represents the unique contribution of scholars in marketing and related disciplines to the global discourse on poverty.

A look at the past often sheds light on the present. In this article, we trace more than a decade and a half of research on subsistence marketplaces in order to shed light on the present state of understanding. Along the way, we clarify certain conceptual, methodological and axiological positions underlying to the system of thought that has come to be labelled the subsistence marketplaces approach. Further, we also explicate the implications for marketing theory that flow from the subsistence marketplaces literature.

A systematic stock-taking of this nature is important for several reasons. First, the subsistence literature is characterized by a bottom-up approach that aims to build from a micro-level understanding of individuals and communities in subsistence contexts rather than adopting a priori theoretical stances. Consequently, a review of the kind attempted in this article helps to infer higher order patterns that emerge from the collective body of work that has accumulated over time. Second, despite the diversity of research topics studied by scholars in this stream of research, there remain some unarticulated shared assumptions. In this article, we aim to explicitly articulate these assumptions to render them visible and accessible for scholars outside the stream of research. Third, it is often suboptimal for a fledgling field of research to adopt narrow definitions and lenses prematurely. This is a pitfall that subsistence marketplaces research has avoided to date. However, there is now a critical mass of published work in subsistence literature to attempt to crystallize insights, as they emerge organically from the collective body of work. We believe that clarifying some definitional, conceptual and methodological issues will make the field of research more accessible to new scholars entering this arena of research. Fourth, a review of the literature uncovers the terrain explored by researchers thus far. But more importantly, it also illuminates the terrain that still remains unexplored. We believe our brief summary of insights from extant research will spark new research on hitherto unexplored areas in subsistence marketplaces.

In the following sections, we focus first on articulating conceptual issues underlying marketing theory in subsistence marketplaces literature. We then turn our attention towards methodological approaches employed by researchers to generate marketing theory. Subsequently, we discuss certain tacit axiological positions that characterize subsistence marketplaces research. We then conclude the article by reiterating the key implications for marketing theory.

Subsistence marketplaces research: Conceptual underpinnings

In this section, we first clarify certain definitional issues related to the terms ‘subsistence’ and ‘marketplaces’. Subsequently, we present the argument for focusing on the conjunction between ‘subsistence’ and ‘marketplaces’. We then proceed to explicate the concept of consumer–entrepreneur duality that has emerged across multiple investigations in subsistence contexts and informs the dual focus on both consumers and entrepreneurs within subsistence marketplaces research.

Understanding ‘subsistence’

The notion of subsistence has been invoked sporadically in poverty studies (Scott, 1977). However, the subsistence marketplaces literature has been the first to systematically develop a voluminous body of research on the subject. The term, subsistence, emphasizes the qualitative nature of life circumstances wherein the ability to meet basic needs is chronically under threat (Viswanathan and Rosa, 2007). Such a definition avoids the pitfalls of reducing poverty to a unitary dimension such as resource scarcity or social exclusion (Laderchi et al., 2003). The ability to meet basic needs is, indeed, influenced by factors such as (a) income, (b) assets, (c) institutional arrangements and (d) social capital (De Soto, 2000; Moser, 1998; Woolcock and Narayan, 2000). However, the subsistence marketplaces approach does not reduce poverty to any one of these factors. This non-reductionist approach allows for the experience of fullness in other facets of life, despite the constant struggle to meet one’s most basic needs. For example, there is a considerable volume of research that characterizes individuals in various subsistence contexts as being socially rich, elaborating how they use social resources in innovative ways (Viswanathan et al., 2010b; Woolcock and Narayan, 2000).

The definition of subsistence also allows for variation in the depth of resource constraints as individuals and households across different levels of resource constraints continue to experience threat in meeting their basic needs but to varying degrees. Individuals and households that fall within a wide band of resource endowment levels ranging from survival to subsistence and below can be termed as facing the threat of meeting basic needs (Sharif, 2003). This implies that scholars interested in examining the heterogeneity within the phenomenon should focus not just on one cut-off level of resources (e.g., poverty line) but a broad band of resource/income levels (Sharif, 2003). Such an approach is essential because individuals at different levels of resources exhibit different motivations and behaviours within subsistence contexts (Sharif, 2003). This stands in contrast to the poverty line approach that employs a sharp cut-off point to separate the poor and the non-poor into two broad categories¹ (Lipton, 1988). Noted economists have argued against the use of such poverty lines based on calorie consumption norms arrived at by ‘experts’ who lack awareness of the contextual factors in which consumption occurs (Deaton and Dreze, 2014). This also implies that the edges of the continuum on either side need to be examined such as survival at one end and transformation and movement out of poverty on the other side. Moreover, such an approach also emphasizes the many stages or steps involved in movement within the band of resource endowment levels. The idea of treating everyone below a fixed poverty line as ‘the poor’ often results in non-nuanced recommendations. For example, blanket recommendations for the need for employment of the poor (Karnani, 2007) or the need to focus on only entrepreneurs with high growth potential (Schoar, 2010) do not capture the nuance in terms of the different gradations within subsistence and the movement from one level to the next.

To summarize, there are two key implications that stem from the definition of subsistence that the literature adopts. First, the label subsistence is non-reductionist in character and captures the multidimensional nature of life in poverty. Second, it allows for studying the experience and impact of varying degrees of poverty as well as the edges of the continuum instead of treating all individuals below a certain income threshold as ‘the poor’.

Understanding ‘marketplaces’

It is important to note the distinction between the terms ‘market’ and ‘marketplaces’ as employed within subsistence literature. The term ‘market’ implicitly assumes the perspective of the external marketing organization and is often used in relation to an offering (e.g., market for higher education). It carries the connotation that these markets exist for the marketing organization to serve. The term ‘marketplaces’, on the other hand, is defined from the perspective of individuals and communities in subsistence contexts. This definition encompasses (a) pre-existing exchanges that take place in subsistence contexts and (b) practices and social relationships that influence marketplace exchange. The existence of these marketplaces is not predicated on the existence of external marketing organizations to serve them.

The term ‘marketplaces’ also captures the diversity that exists across subsistence context, reflecting the notion that marketing is inherently a contextual discipline (Sheth and Sisodia, 1999). The focus on context often entails gathering detailed accounts of the institutional environment within which consumption takes place. This is because the institutions that govern marketplace exchange in informal subsistence marketplaces are drastically different from formal markets in affluent contexts (Webb et al., 2009). In addition, much institutional diversity exists even across different subsistence marketplaces. Consequently, it is difficult to analyse behaviours in subsistence marketplaces without paying attention to the local institutional context. For example, many poor women in South Indian villages do not consume certain important nutrients such as iron during pregnancy. Part of the reason is the institutionally derived belief that consuming iron would result in difficult delivery due to larger infants (Nichter and Nichter, 1983). Therefore, care must be exercised by researchers in obtaining an accurate understanding of the institutional environment prior to interpreting behaviours of market actors in subsistence contexts.

Based on the aforementioned perspective, marketplaces are not inert spaces within which exchange is carried out. In contrast, marketplaces are perceived as organic systems that are shaped by the bundles of practices evolved and adopted by market actors (Kjellberg and Helgesson, 2007). Consequently, a significant amount of research has explored initiatives through which subsistence consumers and entrepreneurs could augment their ability to shape marketplaces in a way that enhances their well-being (Lindeman, 2014; Viswanathan et al., 2009). The common thread running through these investigations is the facilitation of self-determination on the part of individuals and communities in subsistence marketplaces. Scholars have referred to this process as the bottom-up creation of marketplaces (Chakrabarti and Mason, 2014). This approach is starkly different from that of external interventions that are conceived by outsiders and imposed in subsistence contexts, as highlighted in prior research (Abdelnour and Branzei, 2010).

To reiterate, the label ‘marketplaces’ conveys that subsistence marketplaces are pre-existing marketplaces with ongoing exchanges that are shaped by locally evolved practices. Local actors in these marketplaces possess, or can acquire, market agency in order to shape the markets. The existence of these marketplaces is not predicated on the existence of external marketing organizations seeking to enter these contexts. Such marketplaces are worthy of study in the marketing discipline in their own right. This represents a novel approach to generating marketing theory in subsistence contexts.

The conjunction of ‘subsistence’ and ‘marketplaces’

The definition of subsistence is consumption centric in nature (ability to meet basic needs) rather than being resource centric. Such a consumption-based view accentuates the provisioning role of markets (Layton, 2007) through which individuals satisfy their needs, thus forming the basis for a focus on ‘subsistence marketplaces’. It is indeed difficult to talk about ‘subsistence’ without actively considering it within the marketplace in which the consumption activity is carried out. In that sense, the ‘subsistence marketplaces’ approach is different from ‘subsistence farming’, which is a production-based view. The subsistence marketplaces approach also investigates characteristics of the marketplace that aid or deter in the process of satisfying basic consumption needs (Viswanathan et al., 2012). For example, studies have shown how technology assimilation (mobile money) in rural Cambodian marketplaces can bring about enhanced consumer well-being by aiding consumers in overcoming multifarious constraints arising from geographical isolation (Fang et al., 2014).

In essence, subsistence marketplaces research explores aspects of consumers, entrepreneurs and marketplaces in subsistence contexts that aid or deter in the process of satisfying basic consumption needs.

Consumer–entrepreneur duality

Being able to meet one’s basic consumption needs is a lingering threat that has a significant bearing on the economic behaviour of individuals, households and communities (Scott, 1977). Consequently, there are more than a billion individuals globally who live in poverty and run subsistence enterprises as a way to fulfil their basic consumption needs (Venugopal et al., 2015). The subsistence marketplaces literature characterizes subsistence entrepreneurs as those who run micro-enterprises in contexts of poverty, for the sole purpose of economic survival and are poor themselves (Viswanathan et al., 2014b). They operate in resource-poor but network-rich contexts (Viswanathan et al., 2010b), with limited access to formal capital, physical infrastructure and formal business training (Rogerson, 1996). In the face of these constraints, they mobilize all the resources at their disposal such as family, social networks, local-knowledge and prior informal-business experience to create a venture to meet their survival needs (Viswanathan et al., 2012).

The key characteristic of these subsistence enterprise is that ‘unlike a capitalist enterprise, they are a unit of consumption as well as production’ (Scott, 1977: 13). When many livelihood opportunities are unavailable, entrepreneurship provides a pathway for these individuals to exercise agency, aimed towards meeting basic consumption needs of their families (Webb et al., 2013). These entrepreneurs experience what is termed ‘consumer-entrepreneur duality’ (Viswanathan et al., 2010a). This duality blurs the boundaries between consumption and entrepreneurship, which have traditionally been distinct domains of scholarly inquiry. As a result of this duality, factors in the consumption domain can impact important outcomes in the entrepreneurial domain and vice versa.

Consumption and entrepreneurship are fundamentally intertwined in the fabric of economic life in subsistence contexts. Therefore, subsistence marketplaces research has focused on both consumers and entrepreneurs in contexts of poverty. For example, Viswanathan et al. (2010) theorizes how subsistence entrepreneurs move resources across domains of household, business, suppliers and customers to balance needs in all these domains. Toledo-López et al. (2012) show that entrepreneurs in subsistence are highly heterogeneous and can display diverse motivations ranging from survival to innovative leadership (Toledo-López et al., 2012). Studying entrepreneurial issues along with consumption-related issues in subsistence contexts is both important and necessary owing to the strong interconnections between these two realms of activity.

Much of prior research on entrepreneurship is focused on entrepreneurship on the part of firms. Consequently, the study of the entrepreneurial phenomenon and consumption phenomenon is carried out in different disciplines, and their interconnections have not been sufficiently explored. The notion of consumer–entrepreneur duality as conceptualized in subsistence marketplaces research brings the study of entrepreneurial phenomenon within the scope of marketing research by forging strong linkages with the domain of consumption. This is an important implication for marketing theory flowing from subsistence marketplaces research.

Summary

The subsistence literature adopts a definition of subsistence marketplaces with a strong basis in experienced reality, a notion that has been explicated by researchers in marketing (Thompson et al., 1989). This idea is at the root of the bottom-up approach, where primacy is accorded to the lived experiences of individuals and communities as they organize, conduct and sustain their marketplace interactions (Viswanathan et al., 2014c). This definition of subsistence serves to circumscribe the phenomenon of interest across multiple geographies and within multiple substantive domains such as health care, education, sanitation and water. For example, many individuals and communities in developed countries also experience threats in meeting their basic needs and, therefore, have been studied in subsistence literature. Consider, for example, the Saatcioglu and Corus (2014) study of a trailer park community or the Viswanathan et al. (2005) study in adult education centres, both in the United States. The study of subsistence marketplaces is not restricted to any specific geography or any specific substantive domain.

The definition of subsistence is guided by the goals of not homogenizing poverty in terms of depth or sources of resource constraints. The goal is to capture the qualitative nature of struggle of meeting basic necessities, which are context dependent but have an objective quality within each context. Being bottom-up, the goal is not to use standards such as poverty line, as the objective is not to compare numbers across context but rather to look at the processes (cognitive, social, cultural and economic) as they intersect with the marketplace. For example, extant research finds that the constant struggle to meet one’s basic needs among low-income farmers in Thailand fosters a mindset of focusing on the ‘here and now’ during the consumption of seeds (Scott, 1977). Such cognitive processes in subsistence contexts have important implications for consumer welfare and have to be studied in their own right. These are the types of investigations that have been carried out by scholars within the rubric of subsistence marketplaces research.

Subsistence marketplaces research: Methodological approach

This section begins with an elaboration of the bottom-up approach employed in subsistence marketplaces research to generate marketing theory. It subsequently discusses the interplay between bottom-up and top-down research and concludes with an explication of intersectionality in subsistence marketplaces research.

The bottom-up approach

Scholars often do not possess a deep understanding of the life circumstances in poverty (Chakravarti, 2006). In such situations, employing a priori theoretical lenses to frame the phenomenon often does not capture the depth of the human experiences in poverty settings (Viswanathan et al., 2012). First-person account of lived experiences in poverty must form the micro-level foundation for evolving marketing theory in this context. Let us illustrate the importance of this through an example. During our fieldwork in a refugee camp in Uganda, one of our informants, Peter, told us that on most days he is able to afford just one square meal a day. Peter went on to add that he typically spends his days playing soccer and has his one meal for the day before going to sleep. Extant theories do not help us understand why calorie-starved Peter would engage in intense physical activity, such as soccer, and why he would consume the one square meal in the night instead of beginning of the day. Peter explained to us that soccer helped distract him from the feeling of hunger during the day. Since he cannot sleep while being hungry, eating at night was the best option available to him. Peter’s account helped us understand the factors that were salient in his life. It helped us understand the thoughts and behaviours that his condition of life engendered. This is the key process that underlies the bottom-up approach adopted by scholars conducting subsistence marketplaces research.

Being rooted at the micro-level aids us in understanding how individuals in subsistence marketplaces think, feel, make decisions and act. Further, it also helps us understand how social relationships are formed and maintained in these contexts (Viswanathan et al., 2010a). These factors related to life circumstances transfer over to the arena of marketplaces exchange, since the social and the economic spheres of life are intertwined in subsistence marketplaces (Viswanathan et al., 2012). The bottom-up approach is markedly different from meso-level approaches to poverty such as the base-of-the-pyramid (BOP) approach (Prahalad, 2006) and macroeconomic approaches such as the pro-poor growth approach (Ravallion, 2004). Both of these approaches take the implicit perspective of outside actors. The BOP approach adopts a managerial perspective and asks what firms can do to design solutions in contexts of poverty that create both social and economic value (London and Hart, 2004). Macroeconomic approaches to poverty ask how policy-makers can craft policies or interventions that lift large numbers of people out of poverty. Subsistence marketplaces research, on the other hand, focuses on the micro-behavioural level as a starting point, aggregating insights for relatively macro-level issues such as product development, enterprise models and sustainable development, hence the bottom-up characterization (Viswanathan and Sridharan, 2012; Venugopal and Viswanathan, 2015). In this regard, poverty as a phenomenon needs unpacking from this perspective in terms of associated cognitive, affective and behavioural variables. For instance, low literacy is correlated with low income, emphasizing cognitive in addition to material resource constraints and phenomena such as concrete and pictographic thinking among consumers (Viswanathan et al., 2005). In turn, such constraints lead to patterns of decision-making. Such decision-making plays out in a context of extreme resource constraints, often combining and accentuating the separate effects of resource and cognitive constraints (Gau and Viswanathan, 2008).

Many of our theories generated in contexts of affluence may offer limited aid in framing, explaining or predicting behaviours and experiences in subsistence contexts. Scholars have alerted us to this issue by demonstrating that a theory that has enjoyed wide empirical support does not hold when tested in countries plagued by consumption inadequacies (Martin and Hill, 2012).

Bottom-up versus top-down marketing theory development processes

The fundamental difference between top-down research and bottom-up research is as follows. In top-down research, new knowledge is always anchored in old knowledge. However, in bottom-up research, new knowledge is anchored in the lived experiences of people (Gioia et al., 2013). In other words, bottom-up research is discovery oriented, whereas top-down research is deduction oriented. Although emphasizing bottom-up studies, the subsistence marketplaces research remains open to top-down theorizing as long as top-down approaches are informed by bottom-up studies (Ingenbleek, 2014). For example, Venugopal et al. (2015) combine the insight of consumer–entrepreneur duality (Viswanathan et al., 2010a) from bottom-up research with insights from the appraisal theory of stress (Lazarus, 2006) to show how chronic and periodic constraints in poverty interact to determine entrepreneurial intention among women in subsistence contexts. The emphasis placed on bottom-up approach in subsistence marketplaces research is an effort at counterbalancing the predominantly top-down orientation of research (and practice) relating to poverty.

In this regard, Allen (1970) argues for simultaneous inquiry employing the deductive ‘psychology in poverty’ approach as well as the more inductive ‘psychology of poverty’ approach. There are certainly creative complementarities in using both approaches in subsistence marketplaces research. However, in applying psychological or sociological theories in contexts of poverty, care must be exercised to ensure that the important socio-cultural and contextual factors are captured. Several scholars across disciplines have noted the pitfalls of universalizing from the West’s experiences and applying them to radically different contexts of poverty (Seers, 1963). Within the realm of consumer research, Viswanathan et al. (2005) observe that prevailing psychological models in marketing do not capture the decision-making of low-literate, low-income consumers and, therefore, need to be substantially expanded. To illustrate, consider the example of conditional cash transfers in education wherein individuals in poverty are compensated with cash transfers in return for sending their children to school. Such policies assume that the poor have access to schools imparting good quality education. Further, they assume the existence of labour markets that would absorb students who have completed schooling. Both of these assumptions might be valid in the Western context but unfounded in most developing nations. Consequently, arguments can be made for a deep understanding of the contextual realities of the poor in order to understand behaviour as well as propose policy interventions.

Knowledge creation in subsistence marketplaces literature is characterized by the emphasis placed on nuanced contextual understanding and not by its choice of specific methods. Scholars in this tradition have embraced both qualitative and quantitative methods to study the nature of poverty (Christenson, Parsons and Fairbourne, 2010; DeBerry-Spence and Elliot, 2012). The quantitative methods are informed by a keen understanding of the local contexts and quantitatively capture contextually relevant psycho-cognitive and social variables. For example, Chaturvedi et al. (2009) uncover the tendency of low-income women in South India for negotiated fate belief as an adaptive response to their most challenging conditions.

Focus on intersectionality

Individuals and households experience intersecting sources of hardship that reinforce each other, often accentuating the struggle in attaining, maintaining or exceeding a subsistence standard of living (Gopaldas, 2013). Although traditional research has emphasized intersection of disadvantages stemming from gender, class and race affiliations, there are many other contextually salient sources of systemic disadvantage that need to be examined in subsistence contexts (Saatcioglu and Corus, 2014). For example, Viswanathan et al. (2005) examine how intersecting disadvantages stemming from being a low-literate and poor consumer in a predominantly literate and affluent society combine to create challenges in an impersonal and transactional marketplace environment. It is important to note here that it is not just the characteristics of individuals that form the source of their disadvantage but the interaction between characteristics of the individual and characteristics of the system (Baker et al., 2005). For example, Viswanathan et al. (2010) find that, in a deeply relational marketplace, low-literate, low-income consumers partially overcome their difficulties by relying on one-to-one, empathic exchanges carried out through oral interaction.

The intersectional view has been increasingly adopted by researchers to capture the multitude of factors that are at play simultaneously in subsistence marketplaces. Scholars have argued that an exclusive focus on the exchange dyad alone is limiting in its ability to capture the myriad interconnections and porous boundaries observed in subsistence marketplace ecosystems (Hill, 2010). Such a holistic analysis allows researchers to consider mechanisms operating at multiple levels of analysis.

Summary

Subsistence marketplaces research has emphasized the bottom-up approach as a way of discovering new insights that are informed by realities in subsistence contexts. The bottom-up approach is seen as an important complement to top-down studies, and it is argued that a balance must be maintained between both approaches in generating marketing theory in subsistence contexts. Further, scholars should also adopt an intersectional approach to studying poverty because poverty is often concomitant with other structural sources of disadvantage such as gender, race, literacy and so forth.

Subsistence marketplaces research: Axiological positions

The axiological position of a system of thought captures the assumptions and beliefs regarding what are considered to be appropriate ways of functioning or acting (Ruona and Lynham, 2004). Other researchers have called it the ‘politics’ of a research paradigm (Gopaldas, 2013). In the following text, we delineate the axiological position of the subsistence marketplaces approach.

Developmental versus instrumental outlook

The subsistence marketplaces approach emphasizes studying exchanges in poverty in their own right and not as potential markets for external entities and/or contexts for policy initiatives (Viswanathan et al., 2012). The first responsibility of researchers is towards the individuals and communities they are studying and not towards any other external stakeholders. This is an important philosophical distinction. It suggests the need to study these marketplaces from the bottom-up, where emphasis is placed on studying and enabling informed consumption and entrepreneurship within subsistence contexts. The principal goal of scholarship is not to generate insights for external entities to engage in and develop new markets. An exemplar of this orientation is the notion of marketplace literacy education that emerged within subsistence marketplaces literature (Viswanathan et al., 2009). The goal of the education program is to enable subsistence individuals to participate in the marketplace effectively, as consumers and as entrepreneurs (Viswanathan et al., 2009).

Research often has an implicit perspective that determines what aspects of the phenomenon are studied and what kind of insights are generated. Approaching subsistence marketplaces with an implicit managerial perspective prevents us from studying and understanding the potentialities of these pre-existing marketplaces, where millions of consumers and entrepreneurs across the world are transacting to meet their basic needs. This bottom-up perspective can be detected across several investigations that study how markets can be created in a bottom-up fashion, where the agenda of subsistence consumers and entrepreneurs is placed front and centre rather than the agenda of any external agents (Chakrabarti and Mason, 2014; Lindeman, 2014).

In this regard, subsistence marketplaces research offers important insights for external stakeholders such as businesses or social enterprises. Unique to this approach, the insights for external stakeholders stem from a micro-level understanding of subsistence contexts. Consider, for example, the notion that social and economic realms of life are intertwined in subsistence contexts (Viswanathan et al., 2010a). This notion lies at the foundation of Unilever’s project Shakti that employs women entrepreneurs in Indian villages to sell their products within their relational network in the village (Rangan et al., 2007). In addition, extant research has uncovered how services such as mobile-based money transfer create well-being in subsistence contexts and provides recommendations for how this can be further augmented (Fang et al., 2014).

Mutual learning mindset

The subsistence marketplaces approach takes the view that subsistence contexts are new contexts to learn from and therefore must be approached with an open mind and the acknowledgement that there is expertise and experience in subsistence communities, not the least of which is the ability to survive in these conditions (Viswanathan, 2010). Outside entities come with strengths and vulnerabilities, the latter including unfamiliarity and lack of experience in resource-constrained settings and the uncertainty that comes with it. In turn, individual and enterprise in subsistence communities come with their own set of strengths and vulnerabilities, the former including an understanding of survival in the most difficult of settings. Going in with pre-formulated ideas would prevent researchers from seeing the rich and vibrant processes that play out within subsistence marketplaces. Consequently, these local resources are often not harnessed in evolving business or policy interventions. There is indeed tremendous scope for individuals and communities in subsistence marketplaces to learn and benefit from external entities. However, this approach suggests that the top-down orientation of external organizations must meet bottom-up understanding of processes that exist and thrive across subsistence contexts. For example, researchers have theorized about the notion of transformative entrepreneurs in subsistence contexts who not only uplift their own lives through their entrepreneurial ventures but also enable other members of the community to grow (Sridharan et al., 2014). Awareness of these micro-level processes within subsistence contexts assists us in harnessing creative energies both within subsistence marketplaces and external to subsistence marketplaces. In addition, studying subsistence marketplaces can also be the source of innovation that can have implications back in developed markets (Venugopal and Viswanathan, 2015). For example, Govindarajan and Trimble (2013) outline how the sports-drink, Gatorade, was inspired by a solution developed in Bangladesh for combating cholera outbreak in low-income communities.

The sacred responsibility of representing voices unheard

Social scientists have the prerogative of representing the populations they study in print. Given that scholars studying poverty are working with vulnerable groups of individuals, extraordinary care needs to be exercised in ensuring that our representations of those living in subsistence is grounded in reality and eschews both romantic and pathological views on poverty (Venugopal and Viswanathan, 2015). For example, pathological views, such as the notion of ‘culture-of-poverty’, hold that low-income communities evolve a set of cultural norms that further entrench poverty (Lewis, 1966). In other words, poverty is seen as its own cause. Romantic perspectives, on the other hand, tend to romanticize life in poverty and underplay the harsh conditions of life in poverty. The romantic view of poverty could be detected in works such as the ‘moral economy of the peasant’ or ‘assault on paradise’ (Kottak, 1992; Scott, 1977). Top-down scientific investigations require us to anchor-on or ground our investigations in certain a priori perspectives. The top-down literature on poverty is rife with conceptualizations that, to varying degrees, share the ‘poverty as traps’ perspective. In Appendix 1, we provide a list of such views accompanied by a brief explication of their core perspective on poverty. A central concern in adopting such a priori perspectives is that it conceals the creative agency exhibited by individuals and communities in subsistence contexts. A phenomenon such as poverty is a distant reality for a majority of those studying it. Consequently, anchoring investigations in the impoverished person’s experienced reality rather than a priori positions promise to yield rich intellectual dividends. A bottom-up approach to subsistence marketplaces eschews ‘grand narratives’ on the nature of poverty and focuses on both strengths and weaknesses that might exist in subsistence contexts. For example, Viswanathan et al. (2005) find that low-income and low-literature consumers face significant challenges in negotiating marketplace environments designed for literate consumes. However, their investigation also reveals several creative responses on the part of low-literate consumers, such as pictographic thinking, which enable them to overcome these limitations. A cornerstone of the bottom-up perspective is to approach subsistence marketplaces with an open mind so as to learn from these pre-existing marketplaces, which obviate the need for researchers to commit to a priori positions. It recognizes though that the bottom-up then has to meet the top-down in terms of prior theories.

The subsistence marketplaces approach relies on a local definition of poverty, in keeping with the bottom-up approach. This approach also acknowledges how individuals and communities may be resource-poor but rich in other dimensions, such as being network-rich (Viswanathan et al., 2010). The approach also emphasizes strengths and vulnerabilities in poverty contexts when sometimes, the natural entrepreneurial ability is often hyped (Khanna, 2013) or the vulnerabilities overemphasized (Lewis, 1966).

Summary

Some key ideas underlie the axiological approach of subsistence marketplaces research. First, the primary responsibility of researchers is towards the communities they are studying. Therefore, scholars must balance their commitment to the community and to knowledge creation (DeBerry-Spence, 2010). Second, bottom-up and top-down research can possess creative complementarities; however, there must be a balance between these two approaches. Third, there are other structural disadvantages that are highly associated with poverty (e.g., race, gender, and literacy), and it is often worthwhile to study the nexus of these disadvantages in a holistic fashion.

Conclusion

In this article, we have clarified several foundational issues that have come to characterize subsistence marketplaces research. While explicating these characteristics, we have also highlighted some important implications for marketing theory that stem from subsistence marketplaces research. We reiterate some of the key implications below.

What is the subsistence marketplaces approach

Subsistence marketplaces research adopts an approach to studying poverty that does not reduce poverty to a limited number of theoretical dimensions. Per this view, poverty is seen as a subjective experience, which is structured by a complex and varying concatenation of factors that engenders a threat to meeting one’s basic consumption needs. The human experience of threat to basic consumption needs, such as food, water and shelter, that is, subsistence, is the unifying concept. However, such contexts are filled with uncertainty, the factors involved are multifarious and complex and the typical researcher is unfamiliar with these settings. This approach is, therefore, starting at the micro-level. In other words, ‘lived experience’ is the starting point for knowledge creation. This is in contrast to the hypothetico-deductive approach, where we seek new knowledge through deduction from past theoretical knowledge.

Knowledge creation in subsistence marketplaces

As noted by Heisenberg, ‘What we observe is not nature itself but nature as exposed to our method of questioning.’ Therefore, the methodology adopted for knowledge creation has a significant bearing on the nature of insights that are generated. Existing approaches to poverty have adopted a predominantly top-down methodology of knowledge creation (Viswanathan and Venugopal, 2015). The bottom-up approach advocated by subsistence marketplaces research presents a new avenue of generating insights on subsistence marketplaces that is complementary to other forms of knowledge creation. More specifically, the bottom-up approach argues for the generation of marketing theories that are (a) anchored in premises that accurately describe the realities in poverty, (b) parsimoniously explain the empirical regularities observed in contexts of poverty and (c) predict interventions or programs that enhance well-being in contexts of poverty.

Implications for future research

Subsistence marketplaces research has opened up many lines of original inquiry possessing both scientific vitality and transformative capability. In line with the bottom-up philosophy, more research should be focused on how policy-makers can create hospitable environments that empower individual and communities to exercise their own agency in order to achieve transformative outcomes (Ozanne and Anderson, 2010). Future research must also examine how approaches such as the BOP stream interact with bottom-up approaches such as the subsistence marketplaces approach.

Subsistence marketplaces are radically different from affluent marketplaces and encompass a substantially bigger fraction of humanity. However, most of the knowledge archived in our journals can be traced to affluent markets of the West (Chakravarti, 2006). Therefore, more focused research on subsistence marketplaces holds the promise of yielding rich intellectual dividends for marketing as a field of research. In addition, research on subsistence marketplaces also holds the potential to enhance the living standards of billions of poor globally. Marketing scholars are ideally placed to inform policy and organizational interventions aimed at transforming the lives of the underprivileged.

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

Note

Appendix 1

Economic traps: The notion of the poverty trap enjoys substantial popularity in development economics. It stems from the idea that the poor have less than sufficient income to position themselves on the growth part of the ‘S’ curve. The implications of such a view would be that an injection of resources into poor households from the outside would place them on a growth trajectory (Sachs, 2006).

Psychological traps: Researchers have found that scarcity is all consuming and leads to narrowing of attention, leaving little room for flourishing and thought on other aspects of life. The implications of such a view is that the poor might be driven to making sub-optimal choices because of the psychological dispositions engendered by scarcity (Mullainathan and Shafir, 2013)

Cultural traps: Lewis (1966) proposed the notion of sub-culture of poverty, positing that individuals living in poverty create a culture that initially helps them come to terms with poverty but subsequently turns into a liability, keeping them trapped in poverty. The sub-culture of poverty has significant political overtones as it positions the poor as the cause for their own predicament.

Institutional traps: This view holds that the poor operate in institutional voids that prevent them from engineering an escape out of poverty. Examples of such institutional voids are (a) lack of property rights and (b) lack of access to formal credit (De Soto, 2000)

Social exclusion traps: The poor are caught in a social exclusion trap wherein the more powerful members in society systematically deny them opportunities and resources for flourishing (Laderchi et al., 2003)

References

Abdelnour

Branzei

(2010) ‘Fuel-efficient Stoves for Darfur: The Social Construction of Subsistence Marketplaces in Post-conflict Settings’, Journal of Business Research 63(6): 617–29.

Allen

V.L.

(ed) (1970) Psychological Factors in Poverty. Chicago: Markham Publishing Company.

Baker

S.M.

Gentry

J.W.

Rittenburg

T.L.

(2005) ‘Building Understanding of the Domain of Consumer Vulnerability’, Journal of Macromarketing 25(2): 128–39.

Chakrabarti

Mason

(2014). ‘Designing better markets for people at the bottom of the pyramid: Bottom-up market design’, in Geiger

Harrison

Kjellberg

Mallard

(eds), Concerned Markets: Economic Ordering for Multiple Values, pp. 153–177. Cheltenham, UK: Edward Elgar Publishing.

Chakravarti

(2006) ‘Voices Unheard: The Psychology of Consumption in Poverty and Development’, Journal of Consumer Psychology 16(4): 363–76.

Chaturvedi

Chiu

C.Y.

Viswanathan

(2009) ‘Literacy, Negotiable Fate, and Thinking Style Among Low Income Women in India’, Journal of Cross-Cultural Psychology 40(5): 880–93.

Christensen

L.J.

Parsons

Fairbourne

(2010) ‘Building entrepreneurship in subsistence markets: Microfranchising as an employment incubator’, Journal of Business Research 63(6): 595–601.

Deaton

Dreze

(2014). Squaring the poverty circle. The Hindu, 25 July. Available at http://www.thehindu.com/opinion/lead/squaring-the-poverty-circle/article6246084.ece

DeBerry-Spence

(2010). ‘Making Theory and Practice in Subsistence Markets: An Analytic Autoethnography of MASAZI in Accra, Ghana’, Journal of Business Research 63(6): 608–16.

10.

DeBerry-Spence

Elliot

E.A.

(2012). ‘African Microentrepreneurship: The Reality of Everyday Challenges’, Journal of Business Research 65(12): 1665–73.

11.

De Soto

. (2000) The Mystery of Capital: Why Capitalism Succeeds in the West and Fails Everywhere Else. New York: Basic Books.

12.

Fang

Russell

Singh

(2014). ‘Exploring the Impact of Mobile Money Services on Marketing Interactions in Relation to Consumer Well-Being in Subsistence Marketplaces–Lessons from Rural Cambodia’, Journal of Marketing Management 30(5–6): 445–75.

13.

Gau

Viswanathan

(2008). ‘The Retail Shopping Experience for Low-Literate Consumers’, Journal of Research for Consumers 15: 1–8.

14.

Gioia

D.A.

Corley

K.G.

Hamilton

A.L.

(2013). ‘Seeking Qualitative Rigor in Inductive Research Notes on the Gioia Methodology’, Organizational Research Methods 16(1): 15–31.

15.

Gopaldas

(2013). ‘Intersectionality 101’, Journal of Public Policy & Marketing 32(special issue): 90–94.

16.

Govindarajan

Trimble

(2013). Reverse Innovation: Create Far from Home, Win Everywhere. Boston: Harvard Business Press.

17.

Hill

R.P.

(2010) ‘A Naturological Approach to Marketing Exchanges: Implications for the Bottom of the Pyramid’, Journal of Business Research 63(6): 602–07.

18.

Ingenbleek

P.T.

(2014) ‘From Subsistence Marketplaces Up, from General Macromarketing Theories Down Bringing Marketing’s Contribution to Development into the Theoretical Midrange’, Journal of Macromarketing 34(2): 199–212.

19.

Karnani

(2007). The mirage of marketing to the bottom of the pyramid: How the private sector can help alleviate poverty. California Management Review 49(4): 90–111.

20.

Khanna

(2013) Billions of Entrepreneurs: How China and India are Reshaping their Futures and Yours. Boston: Harvard Business Press.

21.

Kjellberg

Helgesson

C.F.

(2007) ‘On the Nature of Markets and their Practices’, Marketing Theory 7(2): 137–62.

22.

Kottak

C.P.

(1992) Assault on Paradise: Social Change in a Brazilian Village. New York: McGraw-Hill, Inc.

23.

Laderchi

C.R.

Saith

Stewart

(2003) ‘Does it Matter that We do not Agree on the Definition of Poverty? A Comparison of Four Approaches’, Oxford Development Studies, 31(3): 243–74.

24.

Layton

R.A.

(2007) ‘Marketing Systems—A Core Macromarketing Concept’, Journal of Macromarketing 27(3): 227–42.

25.

Lazarus

R.S.

(2006) Stress and Emotion: A New Synthesis. New York: Springer Publishing Company.

26.

Lever

J.P.

Piñol

N.L.

Uralde

J.H.

(2005) ‘Poverty, Psychological Resources and Subjective Well-Being’, Social Indicators Research 73(3): 375–408.

27.

Lewis

(1966) La vida: a Puerto Rican Family in the Culture of Poverty-San Juan and New York (Vol. 13). New York: Random House.

28.

Lindeman

(2014) ‘“Until We Live Like They Live in Europe” A Multilevel Framework for Community Empowerment in Subsistence Markets’, Journal of Macromarketing 34(2): 171–85.

29.

Lipton

(1988). The poor and the poorest: Some interim finding. Washington, DC: The World Bank.

30.

London

Hart

S.L.

(2004) ‘Reinventing Strategies for Emerging Markets: Beyond the Transnational Model’, Journal of International Business Studies 35(5): 350–70.

31.

Martin

K.D.

Hill

R.P.

(2012) ‘Life Satisfaction, Self-Determination, and Consumption Adequacy at the Bottom of the Pyramid’, Journal of Consumer Research 38(6): 1155–68.

32.

Moser

C.O.

(1998) ‘The Asset Vulnerability Framework: Reassessing Urban Poverty Reduction Strategies’, World Development 26(1): 1–19.

33.

Mullainathan

Shafir

(2013) Scarcity: Why having too Little Means so Much. New York: Macmillan.

34.

Nichter

(1983) ‘The Ethnophysiology and Folk Dietetics of Pregnancy: a Case Study from South India’, Human Organization 42(3): 235–46.

35.

Ozanne

J.L.

Anderson

(2010) ‘Community Action Research’, Journal of Public Policy & Marketing 29(1): 123–37.

36.

Prahalad

C.K.

(2006) The Fortune at the Bottom of the Pyramid. New Jersey: Pearson Education.

37.

Rangan

V.K.

Sehgal

Rajan

(2007), ‘The complete business of serving the poor: Insights from Unilever’s Project Shakti in India’, in Rangan

V.K.

Quelch

J.A.

Herrero

Barton

(eds), Business Solutions for the Global Poor: Creating Social and Economic Value, pp. 144–54. San Francisco, CA: Jossey-Bass.

38.

Ravallion

(2004) ‘Pro-poor Growth: A Primer’, World Bank Policy Research Working Paper, 3242, Washington DC: World Bank.

39.

Rogerson

C.M.

(1996) ‘Urban Poverty and the Informal Economy in South Africa’s Economic Heartland’, Environment and Urbanization 8(1): 167–79.

40.

Ruona

W.E.

Lynham

S.A.

(2004) ‘A Philosophical Framework for Thought and Practice in Human Resource Development’, Human Resource Development International 7(2): 151–64.

41.

Saatcioglu

Corus

(2014) ‘Poverty and Intersectionality A Multidimensional Look into the Lives of the Impoverished’, Journal of Macromarketing 34(2): 122–32.

42.

Sachs

(2006) The End of Poverty: Economic Possibilities for Our Time. New York: Penguin.

43.

Schoar

Antoinette

. (2010). ‘The Divide between Subsistence and Transformational Entrepreneurship’, in Lerner

Joshua

Stern

Scott

(eds). Innovation Policy and the Economy, pp. 57–81, vol. 10. National Bureau of Economic Research.

44.

Scott

J.C.

(1977) The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia. New Haven: Yale University Press.

45.

Seers

(1963) ‘The Limitations of the Special Case’, Bulletin of the Oxford University Institute of Economics & Statistics 25(2): 77–98.

46.

Sharif

(2003) ‘A Behavioral Analysis of the Subsistence Standard of Living’, Cambridge Journal of Economics 27(2): 191–207.

47.

Sheth

J.N.

Sisodia

R.S.

(1999) ‘Revisiting Marketing’s Lawlike Generalizations’, Journal of the Academy of Marketing Science 27(1): 71–87.

48.

Sridharan

Maltz

Viswanathan

Gupta

(2014). ‘Transformative Subsistence Entrepreneurship: A Study in India’, Journal of Macromarketing 34(4): 486–504.

49.

Thompson

C.J.

Locander

W.B.

Pollio

H.R.

(1989) ‘Putting Consumer Experience back into Consumer Research: The Philosophy and Method of Existential-Phenomenology’, Journal of Consumer Research 16(2): 133–46.

50.

Toledo-López

Díaz-Pichardo

Jiménez-Castañeda

J.C.

Sánchez-Medina

P.S.

(2012) ‘Defining Success in Subsistence Businesses’, Journal of Business Research 65(12): 1658–64.

51.

Venugopal

Viswanathan

(2015). ‘Developing customer solutions for subsistence marketplaces in emerging economies: A bottom -up 3C (customer, community, and context) approach’. Customer Needs and Solutions, 2(4): 325–336.

52.

Venugopal

Viswanathan

Jung

(2015) ‘Consumption Constraints and Entrepreneurial Intentions in Subsistence Marketplaces’, Journal of Public Policy & Marketing.

53.

Viswanathan

Madhubalan

(2010), ‘A micro-level approach to understanding BOP marketplaces,’ in London

Ted

Hart

Stuart

, (eds). Next Generation Business Strategies for the Base of the Pyramid, pp. 129–164, Upper Saddle River, NJ: FT Press.

54.

Viswanathan

Echambadi

Venugopal

Sridharan

(2014a) ‘Subsistence Entrepreneurship, Value Creation, and Community Exchange Systems: A Social Capital Explanation’, Journal of Macromarketing 34(2): 213–26.

55.

Viswanathan

Jung

Venugopal

Minefee

Jung

I.W.

(2014b) ‘Subsistence and Sustainability From Micro-Level Behavioral Insights to Macro-Level Implications on Consumption, Conservation, and the Environment’, Journal of Macromarketing 34(1): 8–27.

56.

Viswanathan

Rosa

J.A.

(2007) ‘Product and Market Development for Subsistence Marketplaces: Consumption and Entrepreneurship Beyond Literacy and Resource Barriers’, Advances in International Management 20: 1–17.

57.

Viswanathan

Rosa

J.A.

Harris

(2005) ‘Decision-Making and Coping by Functionally Illiterate Consumers and Some Implications for Marketing Management’, Journal of Marketing 69(1): 15–31.

58.

Viswanathan

Rosa

J.A.

Ruth

J.A.

(2010) ‘Exchanges in Marketing Systems: The Case of Subsistence Consumer-Merchants in Chennai, India’, Journal of Marketing 74(3): 1–17.

59.

Viswanathan

Sridharan

(2012) ‘Product Development for the BoP: Insights on Concept and Prototype Development from University-Based Student Projects in India’, Journal of Product Innovation Management 29(1): 52–69.

60.

Viswanathan

Sridharan

Gau

Ritchie

(2009) ‘Designing Marketplace Literacy Education in Resource-Constrained Contexts: Implications for Public Policy and Marketing’, Journal of Public Policy & Marketing 28(1): 85–94.

61.

Viswanathan

Sridharan

Ritchie

(2010) ‘Understanding Consumption and Entrepreneurship in Subsistence Marketplaces’, Journal of Business Research 63(6): 570–81.

62.

Viswanathan

Sridharan

Ritchie

Venugopal

Jung

(2012) ‘Marketing Interactions in Subsistence Marketplaces: A Bottom-up Approach to Designing Public Policy’, Journal of Public Policy & Marketing 31(2): 159–77.

63.

Viswanathan

Shultz

C.J.

Sridharan

(2014) ‘Introduction to the Special Issue on Subsistence Marketplaces: From Micro-Level Insights to Macro-Level Impact’, Journal of Macromarketing 34(2): 119–21.

64.

Webb

J.W.

Tihanyi

Ireland

R.D.

Sirmon

D.G.

(2009) ‘You say Illegal, I say Legitimate: Entrepreneurship in the Informal Economy’, Academy of Management Review 34(3): 492–10.

65.

Webb

J.W.

Bruton

G.D.

Tihanyi

Ireland

R.D.

(2013) ‘Research on Entrepreneurship in the Informal Economy: Framing a Research Agenda’, Journal of Business Venturing 28(5): 598–14.

66.

Woolcock

Narayan

(2000) ‘Social Capital: Implications for Development Theory, Research, and Policy’, The World Bank Research Observer 15(2): 225–49.