Business models to serve low-income consumers in emerging markets

Abstract

Multinational corporations addressing low-income consumers in emerging markets face the challenge of designing business models that provide truly beneficial products and services to the poor. Examples of successful cases are scarce, while the literature review provides little help. Guidelines range from a minimum shift from conventional marketing thinking and practice to radically new approaches involving a wide diversity of non-market actors in a variety of settlements. A classification to help researchers and practitioners is needed. The article contributes to the literature on business models to serve low-income consumers in emerging markets by proposing conceptual framework, a 2 × 2 matrix. One axis reflects different perceptions of the low-income consumer’s conditions (opportunity/constraint), and the other axis reflects the diverse approaches to developing business models (bottom-up/top-down). The four resulting cells become the article’s suggested alternative business models. The framework allows classifying the extant literature and identifying opportunities for future research. Typologies provide a first step towards theory development as well as offer managers a sound theoretical structure.