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Paper info: Networks and Buyer Behaviour at the Base of the Pyramid (BOP)

Title


Networks and Buyer Behaviour at the Base of the Pyramid (BOP)

Authors


Richard Fletcher and Tendai Chikweche

Place of Publication


The paper was published at the 24th IMP-conference in Uppsala, Sweden in 2008.

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Abstract


Networks traditionally have been studied in the context of areas such as industrial marketing in developed country markets and economics and sociology (focusing on livelihoods) in developing countries. There has been limited research on their influence on the decision making process of consumers as it applies to their engagement with firms that produce products at the BOP. This paper argues that among lower income groups in developing country markets - i.e. those at the base of the pyramid (BOP), networks are a powerful force in the decision making of consumers and networks facilitate understanding the behaviour of consumers and their interaction with firms. Unlike in 'western' environments where decision making tends to be by individuals, at the BOP the collective entity has a significant influence on what consumers buy and how they interact with manufacturers of products such as food, and personal hygiene items. This collectivism reduces perceived risk of transactions by embedding them in relationships that are both continuous and multipurpose. At the BOP sector, the resulting formal and informal networks take on a particular significance as a buffer against natural and policy induced risks. Such risks affect t both firms and consumers and derive from political uncertainty, ethnic clustering and absence of the rule of law. In these networks, economic and non economic activities overlap and network ties of race, religion, marriage, education, friendship, work and information transfer, operate to influence decision making, consequent buying behaviour and interaction between consumers and firms. This is illustrated by research undertaken into consumer behaviour at the BOP in Zimbabwe.