Win-Win in villages: The benefits of inventory advances to direct salespeople

Using socially responsible marketing to yield economic and social benefits in emerging markets

The link between socio-economic impoverishment and unhealthy, unhygienic, and most importantly unsafe conditions of living is well known. As is the fact that implementation of better living solutions is constrained by ability, access and awareness. Using a lens of socially responsible marketing, this research shows that advancing inventory on credit to local salesforce for selling utilitarian products in rural settings can help achieve two objectives: financial objectives of profit and social objectives of increased self-confidence. This study aims to better document the mechanisms of these win-win outcomes.




The challenge

Respiratory illnesses and transmission of diseases are mundane occurrences for rural consumers on the lower rungs of the socio-economic scale. Despite the existence of targeted solutions, psychological barriers of residents often preclude their implementation. For instance, usage of wood-fired stoves is one of the major contributors to indoor pollution, however rural communities are unwilling to switch to smokeless stoves because they believe food cooks and tastes better using a wood-fired stove.

Another barrier to implementation of targeted solutions is lack of trust. Given the importance of community in these environments, residents are typically unwilling to rely on advice and intervention from sources they do not know personally, such as salespersons that do not hail from their community. This creates a vicious cycle with no behavioural change and no socio-economic betterment.

The intervention

The research carries out a randomised controlled trial (RCT) in rural India by advancing inventory on credit to local women who acted as a network of door-to-door salesforce. The study empirically measures the impact of a ‘win-win’ phenomenon and introduces the ‘demonstration effect’ as an explanation to its observations. This effect is the impact on customers and salesforce of describing the merits of a tangible product – in this case smokeless cookstoves, solar lamps, and sanitary napkins.

The rationale behind using a local salesforce comprising primarily women was to amplify the ‘reliability’ factor which underpins decision-making in rural communities.

The potential impact

This research is a first of its kind to demonstrate that socially responsible marketing can be used not only to yield economic benefits to firms but also social benefits to targeted communities.

Initial results from the research indicate a direct positive relationship between application of inventory on credit and sales, and thus economic profits. The research also goes a step further to measure the non-economic impact by tracking the self-confidence of its salesforce, which was demonstrated to be higher in the experiment group.

Sales of products were approximately four times higher while activating inventory on credit, leading to salesforce income being up to fourteen times higher. This was also matched with high self-confidence in the same group, a social benefit accruing in an environment where women are otherwise faced with lack of opportunity, and/or biases.