Addressing the Ethical Challenge of Market Inclusion in Base-of-the-Pyramid Markets: A Macromarketing Approach

  • Anaka Aiyar
  • Srinivas VenugopalEmail author
Original Paper


Making transformative services such as healthcare accessible to low-income consumers is an ethical challenge of vital importance to marketers. However, most low-income consumers across the world are excluded from the market for such transformative services because of financial constraints arising from poverty. In this paper, instead of focusing on the micro-interplay between firms and consumers, we examine the macro-interplay among firms, consumers, and public policy in addressing the ethical challenge of market inclusion at the base of the pyramid. Specifically, we examine how the Vietnam government used a policy of free and universal health insurance for children under the age of six as a means of lowering affordability barriers and fostering market inclusion in the healthcare market. Overnight in 2005, all children under the age of six living anywhere in Vietnam became eligible for free health insurance. Using this policy intervention as a natural experiment, we compare market inclusion outcomes of children under the age of six with older children who were ineligible before and after the program was implemented. We show that lowering affordability barriers through public policy (1) increases access to target services, (2) increases consumers’ overall out-of-pocket spending, and (3) increases access to complementary services. By adopting a macromarketing lens, this study makes a strong case for collaboration among firms, governments, and communities in addressing the ethical challenge of system-wide market inclusion in base-of-the-pyramid markets.


Market inclusion Base of the pyramid Subsistence marketplaces Poverty 



No funding was received for this project.

Compliance with Ethical Standards

Conflict of interest

The authors have no conflicts of interest to disclose.

Ethical Approval

The paper employs secondary data gathered from human subjects by General Statistics Office, Government of Vietnam. The dataset preserves participant confidentiality by eliminating all identifying information.

Informed Consent

For this type of secondary data analysis, formal consent is not required.


  1. Adkins, N. R., & Ozanne, J. L. (2005). The low literate consumer. Journal of Consumer Research, 32(1), 93–105.Google Scholar
  2. Almond, D., & Currie, J. (2011). Killing me softly: The fetal origins hypothesis. Journal of Economic Perspectives, 25(3), 153–172.Google Scholar
  3. Andreasen, A. R. (1978). The ghetto marketing life cycle: A case of underachievement. Journal of Marketing Research, 15(1), 20–28.Google Scholar
  4. Angrist, J. D., & Pischke, J. S. (2008). Mostly harmless econometrics: An empiricist’s companion. Princeton, NJ: Princeton University Press.Google Scholar
  5. Araujo, L. (2013). What have markets ever done for the poor? Marketing Theory, 13(3), 385–388.Google Scholar
  6. Arndt, J. (1983). The political economy paradigm: Foundation for theory building in marketing. Journal of Marketing, 47(4), 44–54.Google Scholar
  7. Baicker, K., Taubman, S. L., Allen, H. L., Bernstein, M., Gruber, J. H., Newhouse, J. P., et al. (2013). The Oregon experiment—Effects of Medicaid on clinical outcomes. New England Journal of Medicine, 368(18), 1713–1722.Google Scholar
  8. Bairagi, R. (1980). Is income the only constraint on child nutrition in rural Bangladesh? Bulletin of the World Health Organization, 58(5), 767.Google Scholar
  9. Barrington, D. J., Sridharan, S., Saunders, S. G., Souter, R. T., Bartram, J., Shields, K. F., et al. (2016). Improving community health through marketing exchanges: A participatory action research study on water, sanitation, and hygiene in three Melanesian countries. Social Science and Medicine, 171, 84–93.Google Scholar
  10. Bhandari, A., & Wagner, T. (2006). Self-reported utilization of health care services: Improving measurement and accuracy. Medical Care Research and Review, 63(2), 217–235.Google Scholar
  11. Blocker, C. P., & Barrios, A. (2015). The transformative value of a service experience. Journal of Service Research, 18(3), 265–283.Google Scholar
  12. Campana, M., Chatzidakis, A., & Laamanen, M. (2017). Introduction to the special issue: A macromarketing perspective on alternative economies. Journal of Macromarketing, 37(2), 125–130.Google Scholar
  13. Currie, J. (2000). Child health in developed countries. Handbook of Health Economics, 1, 1053–1090.Google Scholar
  14. Currie, J., & Almond, D. (2011). Human capital development before age five. Handbook of Labor Economics, 4, 1315–1486.Google Scholar
  15. Currie, J., & Madrian, B. C. (1999). Health, health insurance and the labor market. Handbook of Labor Economics, 3, 3309–3416.Google Scholar
  16. Davies, I. A., & Torrents, A. (2017). Overcoming institutional voids in subsistence marketplaces: A Zimbabwean entrepreneurial case. Journal of Macromarketing, 37(3), 255–267.Google Scholar
  17. Deaton, A. (2007). Height, health, and development. Proceedings of the National Academy of Sciences, 104(33), 13232–13237.Google Scholar
  18. Dholakia, N. (2012). Being critical in marketing studies: The imperative of macro perspectives. Journal of Macromarketing, 32(2), 220–225.Google Scholar
  19. Dholakia, N., Firat, A. F., & Bagozzi, R. P. (1980). The de-Americanization of marketing thought: In search of a universal basis. In C. W. Lamb & P. M. Dunne (Eds.), Theoretical developments in marketing (pp. 25–29). Chicago: American Marketing Association.Google Scholar
  20. Dholakia, R. R., Dholakia, N., & Firat, A. F. (1983). From social psychology to political economy: A model of energy use behavior. Journal of Economic Psychology, 3(3), 231–247.Google Scholar
  21. Duflo, E. (2001). Schooling and labor market consequences of school construction in Indonesia: Evidence from an unusual policy experiment. American Economic Review, 91(4), 795–813.Google Scholar
  22. Dupas, P. (2011). Health behavior in developing countries. Annual Review of Economics, 3(1), 425–449.Google Scholar
  23. Escobar, M. L., Griffin, C. C., & Shaw, R. P. (Eds.). (2011). The impact of health insurance in low- and middle-income countries. Washington, DC: Brookings Institution Press.Google Scholar
  24. Fisk, G. (1981). An invitation to participate in affairs of the. Journal of Macromarketing, 1(1), 3–6.Google Scholar
  25. Gitter, S. R., & Barham, B. L. (2008). Women’s power, conditional cash transfers, and schooling in Nicaragua. The World Bank Economic Review, 22(2), 271–290.Google Scholar
  26. Godinho, V., Venugopal, S., Singh, S., & Russell, R. (2017). When exchange logics collide: Insights from remote Indigenous Australia. Journal of Macromarketing, 37(2), 153–166.Google Scholar
  27. Grossman, M. (1972). On the concept of health capital and the demand for health. Journal of Political Economy, 80(2), 223–255.Google Scholar
  28. Gulyani, S., & Talukdar, D. (2008). Slum real estate: The low-quality high-price puzzle in Nairobi’s slum rental market and its implications for theory and practice. World Development, 36(10), 1916–1937.Google Scholar
  29. Hahn, R. (2009). The ethical rational of business for the poor–integrating the concepts bottom of the pyramid, sustainable development, and corporate citizenship. Journal of Business Ethics, 84(3), 313–324.Google Scholar
  30. Hart, S. L. (2005). Capitalism at the crossroads: The unlimited business opportunities in solving the world’s most difficult problems. Upper Saddle River, NJ: Pearson Education.Google Scholar
  31. Hill, R. P. (2002). Stalking the poverty consumer: A retrospective examination of modern ethical dilemmas. Journal of Business Ethics, 37(2), 209–219.Google Scholar
  32. Hill, R. P. (2008). Disadvantaged consumers: An ethical approach to consumption by the poor. Journal of Business Ethics, 80(1), 77–83.Google Scholar
  33. Hill, R. P., & Martin, K. D. (2014). Broadening the paradigm of marketing as exchange: A public policy and marketing perspective. Journal of Public Policy & Marketing, 33(1), 17–33.Google Scholar
  34. Hsiao, W., Shaw, R., Fraker, A., Hanvoravongchai, P., Jowett, M., Pinto, D., et al. (2006). Social health insurance for developing nations. Washington, DC: WBI Development Studies, The World Bank.Google Scholar
  35. Hsu, M. (2013). Health insurance and precautionary saving: A structural analysis. Review of Economic Dynamics, 16(3), 511–526.Google Scholar
  36. Jha, S. K., Pinsonneault, A., & Dube, L. (2016). The evolution of an ICT platform-enabled ecosystem for poverty alleviation: The case of eKutir. Management Information Systems Quarterly, 40(2), 431–445.Google Scholar
  37. Jones, T. M., Donaldson, T., Freeman, R. E., Harrison, J. S., Leana, C. R., Mahoney, J. T., et al. (2016). Management theory and social welfare: Contributions and challenges. Academy of Management Review, 41(2), 216–228.Google Scholar
  38. Klein, P. G., Mahoney, J. T., McGahan, A. M., & Pitelis, C. N. (2010). Toward a theory of public entrepreneurship. European Management Review, 7(1), 1–15.Google Scholar
  39. Laczniak, G. R., & Murphy, P. E. (2012). Stakeholder theory and marketing: Moving from a firm-centric to a societal perspective. Journal of Public Policy & Marketing, 31(2), 284–292.Google Scholar
  40. Layton, R. A. (2007). Marketing systems—A core macromarketing concept. Journal of Macromarketing, 27(3), 227–242.Google Scholar
  41. Lieberman, S. S., & Wagstaff, A. (2009). Health financing and delivery in Vietnam: Looking forward. Washington, DC: World Bank Publications.Google Scholar
  42. Lindeman, S. (2014). “Until we live like they live in Europe”: A multilevel framework for community empowerment in subsistence markets. Journal of Macromarketing, 34(2), 171–185.Google Scholar
  43. London, T., & Hart, S. L. (2004). Reinventing strategies for emerging markets: Beyond the transnational model. Journal of International Business Studies, 35(5), 350–370.Google Scholar
  44. Mahoney, J. T., & Sanchez, R. (2004). Building new management theory by integrating processes and products of thought. Journal of Management Inquiry, 13(1), 34–47.Google Scholar
  45. Mair, J., Martí, I., & Ventresca, M. J. (2012). Building inclusive markets in rural Bangladesh: How intermediaries work institutional voids. Academy of Management Journal, 55(4), 819–850.Google Scholar
  46. Mason, K., & Chakrabarti, R. (2017). The role of proximity in business model design: Making business models work for those at the bottom of the pyramid. Industrial Marketing Management, 61, 67–80.Google Scholar
  47. Nakata, C., & Weidner, K. (2012). Enhancing new product adoption at the base of the pyramid: A contextualized model. Journal of Product Innovation Management, 29(1), 21–32.Google Scholar
  48. Navajas, S., Schreiner, M., Meyer, R. L., Gonzalez-Vega, C., & Rodriguez-Meza, J. (2000). Microcredit and the poorest of the poor: Theory and evidence from Bolivia. World Development, 28(2), 333–346.Google Scholar
  49. Nguyen, H., & Knowles, J. (2010). Demand for voluntary health insurance in developing countries: The case of Vietnam’s school-age children and adolescent student health insurance program. Social Science and Medicine, 71(12), 2074–2082.Google Scholar
  50. Ozanne, J. L., & Anderson, L. (2010). Community action research. Journal of Public Policy & Marketing, 29(1), 123–137.Google Scholar
  51. Ozanne, J. L., Davis, B., Murray, J. B., Grier, S., Benmecheddal, A., Downey, H., et al. (2017). Assessing the societal impact of research: The relational engagement approach. Journal of Public Policy & Marketing, 36(1), 1–14.Google Scholar
  52. Prahalad, C. K. (2009). The fortune at the bottom of the pyramid, revised and updated 5th anniversary edition: Eradicating poverty through profits. Upper Saddle River, NJ: Pearson Education.Google Scholar
  53. Prahalad, C. K., & Hammond, A. (2002). Serving the world’s poor, profitably. Harvard Business Review, 80(9), 48–59.Google Scholar
  54. Rosa, J. A., & Viswanathan, M. (Eds.). (2007). Product and market development for subsistence marketplaces. Bingley: Emerald Group Publishing.Google Scholar
  55. Santos, N. J., & Laczniak, G. R. (2009). “Just” markets from the perspective of Catholic social teaching. Journal of Business Ethics, 89(suppl 1), 29–38.Google Scholar
  56. Santos, N. J., Laczniak, G. R., & Facca-Miess, T. M. (2015). The “Integrative Justice Model” as transformative justice for base-of-the-pyramid marketing. Journal of Business Ethics, 126(4), 697–707.Google Scholar
  57. Scaraboto, D., & Fischer, E. (2012). Frustrated fatshionistas: An institutional theory perspective on consumer quests for greater choice in mainstream markets. Journal of Consumer Research, 39(6), 1234–1257.Google Scholar
  58. Schwittay, A. (2011). The marketization of poverty. Current Anthropology, 52(S3), S71–S82.Google Scholar
  59. Shei, A., Costa, F., Reis, M. G., & Ko, A. I. (2014). The impact of Brazil’s Bolsa Família conditional cash transfer program on children’s health care utilization and health outcomes. BMC International Health and Human Rights, 14(1), 10.Google Scholar
  60. Sheth, J. N. (2011). Impact of emerging markets on marketing: Rethinking existing perspectives and practices. Journal of Marketing, 75(4), 166–182.Google Scholar
  61. Shultz, C. J. (1997). Improving life quality for the destitute: Contributions from multiple-method fieldwork in war-ravaged transition economies. Journal of Macromarketing, 17(1), 56–67.Google Scholar
  62. Shultz, C. J. (2007). Marketing as constructive engagement. Journal of Public Policy & Marketing, 26(2), 293–301.Google Scholar
  63. Shultz, C. J. (2012). Vietnam: Political economy, marketing system. Journal of Macromarketing, 32(1), 7–17.Google Scholar
  64. Shultz, C. J., Deshpandé, R., Cornwell, T. B., Ekici, A., Kothandaraman, P., Peterson, M., et al. (2012). Marketing and public policy: Transformative research in developing markets. Journal of Public Policy & Marketing, 31(2), 178–184.Google Scholar
  65. Sommers, B. D., Baicker, K., & Epstein, A. M. (2012). Mortality and access to care among adults after state Medicaid expansions. New England Journal of Medicine, 367(11), 1025–1034.Google Scholar
  66. Sridharan, S., Barrington, D. J., & Saunders, S. G. (2017). Markets and marketing research on poverty and its alleviation: Summarizing an evolving logic toward human capabilities, well-being goals and transformation. Marketing Theory, 17(3), 323–340.Google Scholar
  67. Strauss, J., & Thomas, D. (1998). Health, nutrition, and economic development. Journal of Economic Literature, 36(2), 766–817.Google Scholar
  68. Sun, S. L., & Im, J. (2015). Cutting microfinance interest rates: An opportunity co-creation perspective. Entrepreneurship Theory and Practice, 39(1), 101–128.Google Scholar
  69. Tashman, P., & Marano, V. (2009). Dynamic capabilities and base of the pyramid business strategies. Journal of Business Ethics, 89(4), 495–514.Google Scholar
  70. Thomas, D. (1994). Like father, like son; like mother, like daughter: Parental resources and child height. Journal of Human Resources, 29(4), 950–988.Google Scholar
  71. Thomas, D., Strauss, J., & Henriques, M. H. (1991). How does mother’s education affect child height? Journal of Human Resources, 26(2), 183–211.Google Scholar
  72. Venugopal, S., & Viswanathan, M. (2015). Developing customer solutions for subsistence marketplaces in emerging economies: A bottom-up 3C (customer, community, and context) approach. Customer Needs and Solutions, 2(4), 325–336.Google Scholar
  73. Venugopal, S., & Viswanathan, M. (2017). The subsistence marketplaces approach to poverty: Implications for marketing theory. Marketing Theory, 17(3), 341–356.Google Scholar
  74. Venugopal, S., Viswanathan, M., & Jung, K. (2015). Consumption constraints and entrepreneurial intentions in subsistence marketplaces. Journal of Public Policy & Marketing, 34(2), 235–251.Google Scholar
  75. Vikas, R. M., Varman, R., & Belk, R. W. (2015). Status, caste, and market in a changing Indian village. Journal of Consumer Research, 42(3), 472–498.Google Scholar
  76. Viner, R. M., Ozer, E. M., Denny, S., Marmot, M., Resnick, M., Fatusi, A., et al. (2012). Adolescence and the social determinants of health. The Lancet, 379(9826), 1641–1652.Google Scholar
  77. Viswanathan, M., Jung, K., Venugopal, S., Minefee, I., & Jung, I. W. (2014). Subsistence and sustainability: From micro-level behavioral insights to macro-level implications on consumption, conservation, and the environment. Journal of Macromarketing, 34(1), 8–27.Google Scholar
  78. Viswanathan, M., Seth, A., Gau, R., & Chaturvedi, A. (2009). Ingraining product-relevant social good into business processes in subsistence marketplaces: The sustainable market orientation. Journal of Macromarketing, 29(4), 406–425.Google Scholar
  79. Viswanathan, M., & Sridharan, S. (2009). From subsistence marketplaces to sustainable marketplaces: A bottom-up perspective on the role of business in poverty alleviation. Ivey Business Journal, 73(2), 1–15.Google Scholar
  80. Viswanathan, M., & Sridharan, S. (2012). Product development for the BoP: Insights on concept and prototype development from university-based student projects in India. Journal of Product Innovation Management, 29(1), 52–69.Google Scholar
  81. Viswanathan, M., Sridharan, S., Ritchie, R., Venugopal, S., & Jung, K. (2012). Marketing interactions in subsistence marketplaces: A bottom-up approach to designing public policy. Journal of Public Policy & Marketing, 31(2), 159–177.Google Scholar
  82. Wagstaff, A. (2010). Estimating health insurance impacts under unobserved heterogeneity: The case of Vietnam’s health care fund for the poor. Health Economics, 19(2), 189–208.Google Scholar
  83. Walters, R. G. (1991). Assessing the impact of retail price promotions on product substitution, complementary purchase, and interstore sales displacement. Journal of Marketing, 55(2), 17–28.Google Scholar
  84. Weidner, K. L., Rosa, J. A., & Viswanathan, M. (2010). Marketing to subsistence consumers: Lessons from practice. Journal of Business Research, 63(6), 559–569.Google Scholar
  85. Xu, K., Evans, D. B., Kawabata, K., Zeramdini, R., Klavus, J., & Murray, C. J. (2003). Household catastrophic health expenditure: A multicountry analysis. The Lancet, 362(9378), 111–117.Google Scholar

Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.Cornell UniversityIthacaUSA
  2. 2.University of VermontBurlingtonUSA

Personalised recommendations