Marketing to the Poor: An Integrative Justice Model for Engaging Impoverished Market Segments

Nicholas J.C. Santos and Gene R. Laczniak
Journal of Public Policy & Marketing
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Executive Summary
Impoverished market segments include groups who are most “constrained” by a lack of income, wealth, opportunity, literacy, market access, and political power, among other factors. These constraints place impoverished consumers at a disadvantage when transacting in the market. Previous research has addressed some of these disadvantages and has drawn attention to several exploitative practices accompanying marketplace transactions with low-income consumers. In recent years, multinational corporations (MNCs) have shown an increased interest in the low-income segment. Optimistically, the entry of MNCs into the low-income market affords the opportunity for a more inclusive capitalism that attempts to include people who were previously kept at the periphery of economic development. Alternatively, because of the consumption constraints and disadvantages that impoverished consumers face, the involvement of MNCs in this segment presents the threat of greater exploitation. To dispel fears of such abuse, it is imperative that the involvement of MNCs in the low-income market be grounded in a strong ethical framework. The current research presents a normative, ethical framework, called the “integrative justice model” (IJM). The IJM is intended to be insightful for the macro question of distributive justice: Are the benefits or burdens of marketplace transactions being justly allocated? It is also formulated with the implicit goal of illustrating “fair and nonexploitative” micro marketing when engaging the poor. Although the IJM is inherently normative in nature, it also offers MNCs practical signposts for engaging impoverished segments with fairness and equity. The core elements of the IJM are derived from different strands of thought in moral philosophy and management theory. Ideally, these elements should be discernable in firms when they “fairly” and ethically market to poor and disadvantaged consumers. The elements are (1) authentic engagement with consumers, particularly impoverished ones, with nonexploitative intent; (2) cocreation of value with customers, especially those who are impoverished or disadvantaged; (3) investment in future consumption without endangering the environment; (4) interest representation of all stakeholders, particularly impoverished customers; and (5) a focus on long-term profit management rather than short-term profit maximization. The IJM offers several implications for public policy. Various policy interventions might both better protect vulnerable consumer segments and/or stimulate productive business intervention in such target segments. For example, the “authentic engagement” element of the IJM suggests that, whenever possible, firms should support the formalization of consumer rights that guarantee safety, redress, sufficient information, and other basic requirements of exchange fairness. The “interest representation” element implies that government subsidies might be extended when for-profit companies partner with nongovernmental organizations to better serve the needs of poor consumers. Finally, the “investment for future consumption” element might evoke exploring tax breaks or other subsidies to encourage productive corporate partnerships that enable local concerns to grow.

Biography
Nicholas J.C. Santos is a doctoral candidate in the Interdisciplinary Program at Marquette University, Wisconsin. He has three years experience as an industry accountant and eight years of business teaching experience at St. Vincent’s College of Commerce (Pune, India), an institution catering mainly to students coming from economically challenged backgrounds. He has several years of administrative experience in nonprofit organizations. He was a recipient of the American Marketing Association’s Nonprofit Travel Grant Scholarship for 2007–2008. His research interests include marketing strategy for impoverished market segments, marketing and society, and marketing for nonprofit organizations. He holds three undergraduate degrees in Accountancy and Economics, Philosophy, and Theology. He also holds three masters degrees in Accountancy and Costing (University of Pune, India), Moral Theology (Jesuit School of Theology at Berkeley, California), and Business Administration (Marquette University, Wisconsin).

Gene R. Laczniak is Professor of Marketing in the College of Business Administration at Marquette University, Wisconsin. He is former chair of the Department of Marketing and also former associate vice president/associate provost for academic affairs at the university. He has been a visiting professor or visiting fellow at the University of Western Australia (Perth) on several occasions. His research focuses on the influence of marketing strategy on society, especially on questions of ethics. He has published more than 100 journal articles and papers and has coauthored five books on business ethics, his most recent being Marketing Ethics: Cases and Readings (Pearson/Prentice Hall, 2006). He was a member of the editorial review board of the Journal of Marketing for 15 years and currently serves on two other editorial review boards. He holds an MBA and PhD from the University of Wisconsin–Madison.

Journal of Public Policy & Marketing, Volume 28, Number 1, Spring 2009
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Nicholas J.C. Santos and Gene R. Laczniak
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