Integrated approach to understanding consumer behavior at bottom of pyramid Saroja Subrahmanyan and J. Tomas Gomez-Arias Saint Mary’s College of California, Moraga, California, USA Abstract Purpose – It is estimated that the poorest of the world, termed as being economically at the bottom of the pyramid (BoP), have a purchasing power of $5 trillion. This paper aims to study what and why they consume, and how firms can best address those needs, an area that is relatively new. Design/methodology/approach – The authors categorize the products and services people at the bottom of the pyramid consume with specific examples of both products and companies in Asia, Africa, and Latin America, and look at the theoretical frameworks that could explain those consumption patterns. Findings – The authors find that despite income and resource constraints, BoP consumers are sophisticated and creative. They are motivated not just by survival and physiological needs but seek to fulfill higher order needs either to build social capital, for cultural reasons or as a compensatory mechanism. They also find that when firms offer products that also fulfill these higher order needs, especially through linkages to education and job offerings, there is a greater chance of their success. Research limitations/implications – The evidence is based on inference from examples in literature and related research on developmental economics. Empirical research to uncover motivations and their linkages to product success in different BoP markets would help to better understand sustainable approaches to BoP marketing. Practical implications – BoP markets offer profitable opportunities. A lot can be learnt from both local and multinational companies successfully operating there. Firms should go beyond the mentality of merely removing features or services to make them cheaper. The lesson here is relevance, adaptability and tailoring products to suit specific BOP needs in an efficient manner. Also, enabling BoP education and providing marketplace services make for more sustainable approaches. Originality/value – The study adds to BoP literature by examining consumption of this segment in an integrated manner: across various categories and linking it to motivation theories. This broad perspective would be useful not only for potential BoP marketers, but also for government and aid agencies. Keywords Consumers, Motivation (psychology), Integrated marketing, Poverty, Disadvantaged groups Paper type Conceptual paper An executive summary for managers and executive readers can be found at the end of this issue. Introduction The UN Millennium Project has turned the spotlight on measures to end poverty for about four billion people who live in poverty. Such people who are economically at the bottom of the pyramid (BOP) have been a challenging market for firms that seek to make profit. This market is traditionally considered the domain of governments, aid agencies, non- profits, NGOs and other do-gooders. Yet, as recent articles and books point out, this is a market that merits attention even by for-profits (Prahalad and Hart, 2002; Letelier et al., 2003; Hammond and Prahalad, 2004; Prahalad, 2004; Kirchgeorg and Winn, 2006; Hammond et al., 2007; Anderson and Bilou, 2007). However, this line of thinking has been considered to be more of hype by others due to the abject poverty and extremely low income of such people (Aiyar, 2006; Karnani, 2007; Jaiswal, 2007). The main point of criticism appears to be that BOP is severely constrained by lack of income and hence only certain products or services that are more utilitarian would be viable. If the cost of producing a reasonable quality product is still high, then BOP would be unable to afford it and hence there is no fortune at BOP. Other criticisms are that increasing consumption is not necessarily sustainable; that such ideas are western and MNC oriented (Landrum, 2007). However, if we look across the different categories of products that BoP consumes, do we see BoP consuming only basic needs? In which categories do we see successful innovations? What can BoP marketers learn from these examples? What we can all acknowledge is that no matter what the income level is, human beings consume in some manner. Consumption, however, has been has been more semantically related to consumerism, the pursuit of material goods or the satisfaction of higher order needs after subsistence needs are met (Ger, 1997; Clarke et al., 2003). However, as pointed out by Belk (2001), humans have satisfied their “higher-order” needs even when there was a lack of material goods as evident from cave paintings and sculptures from 30,000 years ago. He also cites various examples where luxury products are consumed by the poor who logically would not have been able to afford it. In one such example, poor Romanian consumers preferred to buy imported candy and liquor over necessities such as severely rationed flour, meat and petrol during a Christmas season. Such examples have led to ethical The current issue and full text archive of this journal is available at www.emeraldinsight.com/0736-3761.htm Journal of Consumer Marketing 25/7 (2008) 402–412 q Emerald Group Publishing Limited [ISSN 0736-3761] [DOI 10.1108/07363760810915617] 402