Micro-entrepreneurs constitute the most common type of business in the world and marketing is the primary means by which they earn their livelihoods. In emerging markets there are a significant number of micro-entrepreneurs and many live precarious lives, characterised by poverty and potentially devastating exogenous shocks. Using detailed data on the marketing practices of grocery retailers in a large slum in Cairo, Egypt, this research examines why some micro-entrepreneurs deploy innovation in their marketing practices – and hence perform better – while others fail to do so.

This research highlights the effect of a key factor in the use of innovation in marketing by micro-entrepreneurs: informal property rights. Because few of the micro-entrepreneurs studied in this context have access to formal property rights, the threat of expropriation looms large in their lives. Those who possess their stores (without owning them) are substantially less likely to innovate in their marketing than those who lease them. The study makes use of a shock to property rights rules to assess the causal impact of informal property rights on innovation in marketing practices.

Understanding these marketing practices is of profound importance: how the microentrepreneurs conduct their marketing and how well they do are questions that have wide economic, social and political repercussions.

This paper offers a quantitative assessment of marketing practices among micro-entrepreneurs and represents an initial attempt to address significant gaps and opportunities in the literature.

Marketing Science