Pump-priming markets at the base of the pyramid

A randomised controlled trial of push vs. pull marketing strategies in rural India

Even though marketers of better-quality, socially-beneficial products such as non-polluting stoves, water filters and ‘clean’ lights have attempted to make them more available and affordable to millions of rural consumers in developing countries, adoption rates remain very low. This study examines the effects of ‘pump-priming’ investments targeted at consumer behaviour change to promote the use of products that eliminate potentially lethal risks. The aim is to generate important insights to inform more effective marketing decisions and better crafting of outcome-based financial instruments.

SOUTHERN ASIA

India

The challenge

For millions of rural consumers in developing countries, the means used for everyday tasks such as cooking, drinking water, and lighting are potentially lethal acts, even though less harmful alternatives are widely used by their urban contemporaries. The quality, availability and affordability of socially-beneficial products such as non-polluting cook stoves, water filters and ‘clean’ lights have improved substantially in recent years and marketers of these products have attempted to penetrate rural areas of emerging markets; yet adoption and usage rates remain stubbornly low.

The intervention

This research examines the effects of ‘pump-priming’ investments targeted at consumer education and behaviour change on sales and use of socially-beneficial products. Through a randomised controlled trial in 240 rural Indian villages, it examines the impact of three marketing approaches particularly salient to marketing new products to rural consumers in emerging markets. Strategies involve substantial investments in educating consumers on problems created by current behaviours and the advantages of the new consumption behaviours promoted through these strategies.

The impact

The researchers hypothesise the return on investment from making these additional investments is, on average, disproportionately higher compared to not making them. The outcome will be of great interest to governments, development organisations and corporations since it would, for the first time, quantify the financial and social returns on pump-priming investments. Insights from the research can lead to more effective marketing decisions and more effective crafting of outcome-based financial instruments.