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Through the Pyramid: Implications of interconnectedness in Africa
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).ORCID iD: 0000-0001-6117-4408
GIBS, University of Pretoria.
GIBS, University of Pretoria.ORCID iD: 0000-0002-1270-3462
2019 (English)In: European Business Review, ISSN 0955-534X, E-ISSN 1758-7107, Vol. 31, no 3, p. 289-303, article id EBR-01-2018-0006Article in journal (Refereed) Published
Abstract [en]

Purpose: Many markets are conceptualized as a stratified low- and middle-income “pyramid” of consumers. Emerging markets are sites of rapid consumer mobility, and thus the middle class there is connected to, and often supports, low-income relatives and employees. Therefore, this paper aims to establish that African income groups are not insular, but rather interrelated and have strong social ties reinforced with longstanding communal values, such as ubuntu.

Design/methodology/approach: Using a between-subjects experimental vignette design, the propensity of the middle class to cover low-income individuals on an insurance product was assessed.

Findings: Income strata are interrelated and can inform value propositions, which is demonstrated in this paper with insurance, where the middle class are willing to include others, depending on their social proximity, on their insurance cover.

Research limitations/implications: The context for this study was personal home insurance; hence, the generalisability of the results is circumscribed. Other more tangible forms of cover, such as medical, funeral or educational insurance, may engender far stronger effects.

Practical implications: Marketers tend to view low- and middle-income consumers as independent. A view of their interrelation will change the design of many products and services, such as a service catered to the poor but targeted at their support networks. An example of such a service is insurance, which is traditionally hard to sell to the poor. A less atomistic approach to income strata could have implications for vicarious consumption, as well as a reconsideration of the disposable income of both groups.

Originality/value: The pyramid is an interconnected network of social and economic ties.

Place, publisher, year, edition, pages
Bingley: Emerald Group Publishing Limited, 2019. Vol. 31, no 3, p. 289-303, article id EBR-01-2018-0006
Keywords [en]
Social networks, Bottom of the pyramid, Emerging markets, Insurance, Low-income, Middle income
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:kth:diva-259981DOI: 10.1108/EBR-01-2018-0006ISI: 000484273300002Scopus ID: 2-s2.0-85067050717OAI: oai:DiVA.org:kth-259981DiVA, id: diva2:1354015
Note

QC 20190926

Available from: 2019-09-24 Created: 2019-09-24 Last updated: 2019-12-09Bibliographically approved
In thesis
1. Deconstructing value: The role of resource access in determining value processes and value outcomes at different stages of the consumption journey
Open this publication in new window or tab >>Deconstructing value: The role of resource access in determining value processes and value outcomes at different stages of the consumption journey
2019 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Defining value has been an ongoing task for marketing scholars. Some researchers assert that the difficulty of gaining consensus on value is because value is multidimensional while the discipline attempts to view it holistically. Value has been deconstructed into a three spheres and occasions, namely the provider sphere, the joint sphere and the customer sphere. The current research sought to build on their model. Here it is posited that different value outcomes occur at different stages of the consumption process. The central question is therefore: is value better understood as a series of outcomes across the consumption journey than one holistic evaluation?

Extant literature has increasingly sought to formalise how context shapes value. Value is created by integrating resources, and resources are not evenly distributed in any society. The current research has incorporated resource access and individual agency as the processes of value creation that shape value outcomes. The following research questions emerged:

 

RQ1: How does resource access affect consumer agency and power?

RQ2: How can resource networks be used to design a value proposition?

RQ3: How does differential access to resources impact value during the acquisition process?

RQ4: How can active resource destruction provide value outcomes?

 

The empirical part of this research covered four papers, one of which was a conceptual paper. Two followed the interpretivist paradigm and a qualitative approach. Such an approach is strongly advocated in the literature on value. A fourth utilised the objective paradigm and followed a quantitative approach. Each approach was deemed best to suit the research question.

The contribution to the body of knowledge is to establish how resources influence value creation processes and outcomes in three separate stages of the consumption lifecycle: value proposition development, value-in-acquisition and value-in-disposal. An additional sphere, termed the consumer sphere, was added to Grönroos and Voima’s existing three spheres (producer, joint and customer).

The document is organised as an overall introduction to the research narrative of four related published papers. The document opens with a chapter providing an overview, followed by a chapter on the literature review, a methods chapter and a chapter of findings. The four papers follow under Chapter 5 at the end. Three of these papers have been published; one is being revised to be resubmitted.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2019. p. 169
Series
TRITA-ITM-AVL ; 31
Keywords
Consumer value journey, institutional arrangements, resource access, value creation outcomes, value creation processes, value deconstruction, value-in-acquisition, value-in-destruction.
National Category
Economics and Business
Research subject
Business Studies; Industrial Economics and Management
Identifiers
urn:nbn:se:kth:diva-261210 (URN)978-91-7873-327-9 (ISBN)
Public defence
2019-11-25, F3, Lindstedtsvägen 26, Stockholm, 08:30 (English)
Opponent
Supervisors
Available from: 2019-10-30 Created: 2019-10-03 Last updated: 2019-12-09Bibliographically approved

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