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CHALLENGES IN MARKETING SOCIALLY USEFUL GOODS TO THE POOR
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This work is concerned with the administration and carrying out of regulatory acts pertaining to the marketing of various commodities (such as perishable fruits and vegetables, seeds, livestock, meat, poultry, etc.). Included are such matters as (1) the education of various elements, of the trade in the legal requirements of licensing, registration, and bonding; (2) investigation of complaints, trade practices, and violations of regulatory acts; (3) the settling of complaints of unfair trade practices; 4) the investigation of fraudulent or discriminatory practices; (5) the preparation of investigative reports and assistance in legal actions in violation. | Challenges in Marketing Socially Useful Goods to the Poor Bernard Garrette Aneel Karnani Market-based solutions to alleviate poverty have become increasingly popular in recent years. In his much acclaimed book Fortune at the Bottom of the Pyramid C.K. Prahalad argues that private companies especially large multinational companies can make significant profits by marketing to the people living at the bottom of the pyramid BOP and can simultaneously help eradicate poverty.1 The BOP proposition of doing well by doing good is of course very appealing and has attracted much attention. At the same time this proposition is controversial in the current management literature. Karnani argues that the BOP opportunity is a mirage and that its logic is riddled with fallacies. 2 Jaiswal contends that the accounts of corporations succeeding at the BOP sometimes strain credulity. 3 Based on the very examples used by Prahalad Karnani posits that the so-called BOP activities are either profitable but not socially beneficial or socially virtuous but not profitable.4 Unfortunately there are very few examples of profitable businesses that market socially useful goods in low-income markets and operate at a large scale.5 There are of course many examples of businesses that profit by exploiting the poor. The poor are vulnerable by virtue of lack of education often they are illiterate or lack of information and by virtue of economic cultural and social deprivations. For example Banerjee and Duflo show that the poor spend a surprisingly large fraction of their income on alcohol and tobacco.6 Many companies exploit this tendency and make significant profits from the sale of alcohol and tobacco to the poor.7 Products such as tobacco are easy to analyze they are profitable businesses that are socially bad for the poor and they clearly do not fit the BOP proposition. There are other BOP examples that while not as socially egregious as tobacco are still of dubious social value. The problem with .