Marketing Interactions in Subsistence Marketplaces: A Bottom-Up Approach to Designing Public Policy

Abstract

In many developing countries, buyer-seller exchange among the poor occurs mainly in unique, socially embedded environments that are essentially informal markets. This article describes the findings of an in-depth, in situ study of an informal-economy subsistence marketplace in South India. Through interviews with consumers and owners of survivalist microenterprises, the authors identify seven themes that characterize the subsistence marketplace context, buyer-seller interactions within them, and specific elements of exchange. Drawing on these findings, along with theories of social capital and consumption in poverty, they make the case that business policy in developing countries should aim to empower subsistence entrepreneurs and consumers, embrace emergent solutions, help build bridges between informal and formal economies, and adopt a bottom-up orientation to policy development. The study's findings offer important insights into policy that can help microenterprises of the informal economy become engines of economic growth in these countries.

Framing hybrid exchanges in subsistence contexts

“…Consequently, this paper considers embeddedness, a common theme in subsistence market exchange research (Viswanathan, Sridharan and Richie, 2010;Viswanathan, Rosa and Ruth, 2010;Viswanathan et al, 2012Viswanathan et al, , 2014 as useful to MNCs in gaining the insider knowledge necessary to operate in these markets (Schuster and Holtbrügge, 2012). Within the international marketing literature, embeddedness emerges in discussions around networks and linkages forged to enable firms to gain entry into, and integrate within, new markets (Elg et al, 2008;Boso et al, 2013;Gao et al, 2016).…”

Step-Change: Micro-Entrepreneurs’ Entry into the Middle-Class Market

“…In addition to some of the resources that entrepreneurs already exploited to serve their current clientele of customers at the BoP (resource continuity), making a step-change from BoP to middle-class markets requires access to resource extensions, notably competences, capital and insurance, to improve the value proposition. In a subsistence context, entrepreneurs usually do not own all the existing resources, but they obtain them on the basis of credit (Viswanathan, Sridharan, Ritchie, Venugopal, & Jung, 2012). The micro-entrepreneur's relationship-management competence determines the extent to which he or she can obtain the resources that are required for their step-change.…”

What Is a Sustainable Innovation? Cultural and Contextual Discoveries in the Social Ecology of Cooking in an African Slum

“…Prahalad, for instance, defined poverty contexts as markets characterized by illiterate consumers, poor in health and of meager resources, as well as inaccessible geographically and by the media, and therefore inexperienced with consumption (Moser, 1998). Viswanathan, in contrast, takes a more structured approach, proposing themes that characterize the marketplace experience and classifying them into three different groups: marketplace context, interactional environment and exchange elements (Viswanathan et al, 2012).…”

“…Yet, as Viswanathan et al noticed, marketplace relationships and interactions can yield social capital reserves, which can be traded in the informal economy (Viswanathan et al, 2012) and result in a range of benefits that emerge from the collaboration, trust, reciprocity and knowledge flowing within social networks. In fact, the investment in social capital is such a central aspect of Kitintale life that the conversion of private activities into social activities has also been observed.…”