Selling to the Poor
Introduction: In the 21st century, poverty still remains one of the world’s most daunting problems. Hence, a better approach is needed; that involves partnering companies (corporations) with the lowincome community to innovate and achieve sustainable win–win scenarios. The low-income need to be actively engaged and, at the same time, the companies providing products and services to them are profitable. Aim: The objective of this report is to critically analyze C.K. Prahalad’s notion that involving lowincome population in economic system is more profitable and sustainable in overcoming poverty in the long-run. Then, it will be discuss further in what sectors and in which ways (the strategies), do the companies selling into emerging country. We choose selling soap in India as an example to illustrate this idea.
Part 1: Selling to the poor, the problem and its potential benefits The problem: The greatest misperception is that selling to low-income is not profitable. Even worse, sometimes those companies were condemned for exploiting low-income community as cheap labour and for extracting natural resources without fairly compensating locals. However, it is actually doing more harm to them if the companies ignoring low-income consumers than by engaging them (Hammond and Prahalad, 2002). Low-income people are asking why they should not share the benefits of globalization? The fundamental barriers to serving them exist within companies and governments in rich nations, where leaders have uncritically accepted the myth that the poor have no money. Another myth is that low-income people resist new products and services, when in truth they are rarely offered products designed for their lifestyles and circumstances, leaving them unable to interact with the global economy.
Figure 1: Slums community in India 1|
The benefits of engaging low-income customers: In reality, low-income households collectively possess most of the buying power in many developing countries.
Part 1: Selling to the poor, the problem and its potential benefits The problem: The greatest misperception is that selling to low-income is not profitable. Even worse, sometimes those companies were condemned for exploiting low-income community as cheap labour and for extracting natural resources without fairly compensating locals. However, it is actually doing more harm to them if the companies ignoring low-income consumers than by engaging them (Hammond and Prahalad, 2002). Low-income people are asking why they should not share the benefits of globalization? The fundamental barriers to serving them exist within companies and governments in rich nations, where leaders have uncritically accepted the myth that the poor have no money. Another myth is that low-income people resist new products and services, when in truth they are rarely offered products designed for their lifestyles and circumstances, leaving them unable to interact with the global economy.
Figure 1: Slums community in India 1|
The benefits of engaging low-income customers: In reality, low-income households collectively possess most of the buying power in many developing countries.
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