Consumer Adoption of Pro-Poor Innovations in the Bottom of the Pyramid

In the context of the developing world the marginalised and poor have gained new significance and are a focus for marketers owing to C.K. Prahalad’s (2005) seminal work on the Bottom of the Pyramid (BOP) market. To lessen and improve the lives of the poor, pro-poor innovations are necessary for this market. However, when pro-poor innovations are developed for the BOP market, it is important to understand that the BOP exhibits different characteristics from the middle and high income consumer market because of different constraints faced by BOP consumers in their day to day life. Pro-poor innovations must, therefore, be developed that are tailored for this market and its unique surroundings (e.g., economic constraints, unreliable electricity etc.), to overcome these constraints. There are examples in the BOP market, where very useful pro-poor innovations (e.g., pure drinking water) with clear social benefits were unsuccessful in this market. Therefore, it is important to understand the complex array of antecedents to pro-poor innovation adoption in the BOP context so that practitioners and policy makers can maximise their chances of success in this large and socially important market.

To understand the antecedents of innovation adoption, a range of theoretical models were developed (e.g., Value based Adoption Model, Consumer Acceptance of Technology model) but these have typically been validated within western, developed contexts. However, there is little research, which has investigated pro-poor innovation adoption in the BOP context. This research seeks to understand consumers’ pro-poor innovation adoption in the BOP context through:

1) empirically comparing seven innovation adoption models,

2) conceptually and empirically formulating an integrated pro-poor innovation adoption model, and

3) validating the newly developed model for the BOP.

This research investigated these three objectives by conducting two studies. Study 1 was carried out to empirically compare the validity of seven consumer based innovation adoption models in the BOP. Following the procedure of Venkatesh et al. (2003), the empirical results of this comparison were coupled with theory in the area to conceptualise and develop a new model of innovation adoption for the BOP, coined here as the Integrated Theory of Pro-poor Innovation Adoption (ITPIA). Later, Study 2 was conducted to validate the newly developed ITPIA model in the BOP market. Consequently, this research contributes significantly to our understanding of the antecedents to consumer innovation adoption in this market through integrating elements of seven well-established consumer based innovation adoption models. The ITPIA model explains innovation adoption better than these existing seven models, which were mainly developed to explain innovation adoption by wealthier consumers in western contexts. This thesis also contributes by taking account of consumer heterogeneity such as urban and rural BOP area and different age groups.

Although it may be common to assume that the BOP market want cheap products to suit their needs, the ITPIA model developed here shows that successful pro-poor innovations should address more than the lack of money of the BOP segment. It appears from this research that BOP consumers are not just rationally motivated. This research contributes by showing that BOP consumers don’t just look for functional, utilitarian benefits but are more likely to adopt a new product if it provides some degree of affective and hedonic gratifications. Interestingly, whereas consumer innovation adoption related research (Venkatesh et al., 2012) in developed country contexts suggests that intention is the strongest predictor of usage behaviour, this research contributes by providing the fact that supporting environment, which reduces external and internal constraints related to adoption of pro-poor innovations, is the strongest determinant of intention and usage behaviour of BOP consumers. Therefore, this research provides valuable theoretical and practical guidance about key antecedents, which influence the consumer adoption of pro-poor innovations in the BOP context, and this is of relevance to academics and policy makers with an interest in these markets.