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

  • Anaka Aiyar
  • Srinivas VenugopalEmail author
Original Paper

Abstract

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.

Keywords

Market inclusion Base of the pyramid Subsistence marketplaces Poverty 

Notes

Funding

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.

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© Springer Nature B.V. 2019

Authors and Affiliations

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

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