Mirage at the Bottom of the Pyramid

Poor people -- at the bottom of the pyramid (BOP) -- represent a very attractive market opportunity. The ‘BOP proposition’ argues that selling to the poor can simultaneously be profitable and help eradicate poverty. This is at best a harmless illusion and potentially a dangerous delusion. This paper shows that the BOP argument is riddled with fallacies, and proposes an alternative perspective on how the private sector can help alleviate poverty. Rather than focusing on the poor as consumers, we need to view the poor as producers. The only way to alleviate poverty is to raise the real income of the poor.http://deepblue.lib.umich.edu/bitstream/2027.42/57215/1/wp835 .pd

Marketing and Poverty Alleviation: The Perspective of the Poor

The best way to reduce poverty is to focus on raising the productive capacity – not the consumption capacity – of the poor. This implies poverty reduction efforts must focus on two dimensions: raising income of the poor, and providing the poor access to basic public services (such as public health, education, sanitation, infrastructure and security). First, the best way to raise income is to create employment opportunities for the poor. The private sector is clearly the best engine for job creation; the government can play a useful facilitating role. Second, governments are responsible for, and should be held accountable for providing basic public services. Social marketing can play a useful role in designing and delivering these services to the poor more effectively

Corporate Social Responsibility Does Not Avert the Tragedy of the Commons - Case Study: Coca-Cola India

'Tragedy of the commons' is a powerful concept to analyze a variety of problems related to environmental sustainability. The commons problem can be solved if individuals behave altruistically. In the business context, this article studies the proposition that corporate social responsibility (CSR) can avert the tragedy of the commons by examining one case study in depth: Coca-Cola's bottling operations in Rajasthan, India. In spite of choosing a context favorable to the proposition, the results indicate that CSR does not avert the tragedy of the commons. To address the major environmental challenges, it is essential to develop regulatory regimes with appropriate incentives and ability to enforce sanctions.http://deepblue.lib.umich.edu/bitstream/2027.42/90509/1/1173_Karnani.pd

Doing well by doing good—case study: ‘Fair & Lovely’ whitening cream

According to the ‘doing well by doing good’ proposition, firms have a corporate social responsibility to achieve some larger social goals, and can do so without a financial sacrifice. This research note empirically examines this proposition by studying in depth the case of ‘Fair & Lovely,’ a skin whitening cream marketed by Unilever in many countries in Asia and Africa, and, in particular, India. Fair & Lovely is indeed doing well; it is a profitable and fast-growing brand. It is, however, not doing good, and I demonstrate its negative implications for public welfare. I conclude with thoughts on how to reconcile this divergence between private profits and public welfare. Copyright © 2007 John Wiley & Sons, Ltd.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/57340/1/645_ftp.pd

Employment, not Microcredit, is the Solution

Most studies suggest that microcredit is beneficial but only to a limited extent. The problem lies not with microcredit but rather with microenterprises. With low skills, little capital and no scale economies, these businesses have low productivity and lead to meager earnings that cannot lift their owners out of poverty. Creating opportunities for steady employment at reasonable wages is the best way to take people out of poverty. The government is responsible for providing public services that are critical for increasing the productivity and the employability of the poor.http://deepblue.lib.umich.edu/bitstream/2027.42/49419/1/1065-Karnani.pd

Social Entrepreneurship: Beyond the Hype

While social entrepreneurship has been attracting increasing attention, it is not clear what it really is. I argue that the term ‘social entrepreneurship’ is too ambiguous to be useful. It is more appropriate to characterize a particular organization, be it public, for-profit or not-for-profit, by how entrepreneurial it is and how much social value it creates. This article discusses the distinct characteristics of the three types of organizations. I then argue that the boundaries between these three sectors are not getting blurred; more importantly, it is better to sustain these boundaries.http://deepblue.lib.umich.edu/bitstream/2027.42/69232/1/1142_karnani.pd

Better Vision for the Poor

About 500 million to 1 billion poor people in the world need eyeglasses but do not get them. Visual impairment is more than just a health problem; it has economic, educational, and public safety implications. In 2005, the French multinational Essilor launched a 'bottom of the pyramid' initiative to market eyeglasses to the Indian rural poor. VisionSpring was founded in 2001 as a social enterprise with the mission to provide affordable eyeglasses to the poor. Another approach to solving the vision problem emphasizes technological innovation to provide low-cost self-adjustable spectacles. None of these approaches has succeeded on a large enough scale so far. We propose an alternative solution that emphasizes dramatic cost reduction by utilizing ready-made eyeglasses, basic screening without a trained optometrist, economies of scale, piggyback distribution, and low overheads.http://deepblue.lib.umich.edu/bitstream/2027.42/65066/1/1137_Karnani.pd

Romanticizing the Poor Harms the Poor

A libertarian movement that emphasizes free markets to reduce poverty has grown strong in recent years. It views the poor as “resilient and creative entrepreneurs and value-conscious consumers”. This romanticized view of the poor is far from the truth and harms the poor in two ways. First, it results in too little emphasis on legal, regulatory, and social mechanisms to protect the poor who are vulnerable consumers. Second, it results in overemphasis on microcredit and under-emphasis on fostering modern enterprises that would provide employment opportunities for the poor. More importantly, the libertarian proposition grossly under-emphasizes the critical role and responsibility of the state for poverty reduction.http://deepblue.lib.umich.edu/bitstream/2027.42/55470/4/1096-karnani_update.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/55470/1/1096-Karnani.pd