Enhancing New Product Adoption at the Base of the Pyramid: A Contextualized Model

Companies are recognizing and pursuing the opportunity to serve the market known as the base of the pyramid (BOP), i.e., consumers who live in poverty in developing countries. The BOP constitutes the largest remaining global market frontier for businesses. Until recently, it has been ignored because of its seeming unattractiveness and insurmountable challenges compared with middle‐ and high‐income markets. However, BOP consumers desire and are able to pay for quality products tailored to their needs. In response, firms are developing new products specific to the demands and conditions of this low‐income population. To innovate effectively, ensuring new products are well received, firms need to know how to enhance new product adoption among these consumers despite the barriers of poverty. We address this need by developing a model of adoption contextualized to the BOP. Based on theories of innovation and poverty, and drawing on the emergent subsistence market literature, we propose that certain new product characteristics, social context dynamics, and marketing environment approaches moderate or counter some of the limits of poverty, making adoption possible. We then discuss the managerial and theoretical implications of our model for innovation practitioners and researchers.     

Marketing to subsistence consumers: Lessons from practice

Over 4 billion people live in what is commonly referred to as the “bottom of the pyramid” or as subsistence marketplaces. These individuals and families live in substandard housing, with limited or no access to sanitation, potable water, and health care, have low levels of literacy, and earn very low incomes. Scholars and practitioners alike suggest that the problems existing in subsistence marketplaces demand the attention and involvement of responsible businesses and that doing business with consumers in such marketplaces can be both socially responsible and profitable. This research explores the strategies and tactics currently being used across commercial and social enterprises engaged in subsistence marketplaces. The analysis leads to recommendations about marketing practices currently used by companies and organizations that are successfully operating in subsistence marketplaces.     

Identifikation neuer Ansätze zur individuellen Kfz-Tarifierung

This paper analyzes innovative approaches to the pricing of German motor insurance. The aim is to calculate premiums more fairly in terms of consumer protection. Furthermore we aim to achieve a better level of coverage from the insurer’s point of view. This is to be achieved through reduction of information asymmetries by collecting data respective the driver, the driving behavior and the use of vehicle as well as through optimization of claims management. There are trade-offs between the feasibilities of our different approaches, their respective benefits for calculation and data privacy. The analysis focuses on including telemetry data such as speed, acceleration as well as the used road type in the tariff calculation. Different driving profiles can be identified, which allows for determining probabilities of risk depending on driving behavior by taking into account the accident statistics. Profile-certified risk-probabilities in turn are the basis for greater tariff differentiation.