In his Sheth Foundation award-winning research paper “New product introductions for low-income consumers in emerging markets,” Bryan School Associate Professor Dr. S. Cem Bahadir examined the factors that motivate companies to develop and market new products internationally to those living at or below the poverty line.
Bahadir and his co-authors conducted in-depth interviews with low-income consumers and managers at international firms in India and Chile. The team tested a model based on insights from interviews across 27 emerging markets.
“The business idea is ‘OK, if you can innovate the products that this segment can afford, there might be a big market there,’” said Bahadir.
The research team found companies that tailored their marketing to the individual needs, wants, and cultures of different countries were more likely to succeed. Bahadir said it is a misperception that low-income consumers are fine with stripped down versions of branded products – rather, they’re interested in branded quality products at affordable prices.
He cites Unilever Global, a company that manufactures shampoo products, as an example. Unilever introduced a line of single-use shampoos in India after noticing the need for affordable and quality hygiene products. These single-use shampoos are both inexpensive to produce and purchase. Another example is Proctor & Gamble, which has produced a relatively inexpensive water cleaning solution that has done well in African countries.
Bahadir, who joined the Department of Marketing, Entrepreneurship, Hospitality & Tourism in 2017, says he tries to include research that adds this kind of futuristic and innovative global perspective to his international marketing courses.
“The interconnectedness of markets is here to stay,” Bahadir said. “For someone to be a good marketer, it’s imperative that they understand different cultures, consumer and market conditions.”