regarding colonialism and the expansion of capitalism in modern industrial societies to the article, “Marketers Pursue the Shallow Pocketed.”
Is the information being discussed in this article another example of colonialism? Why or why not? Identify two potential positives and two negatives direct marketing of the poor has on people and their economies. What theory of development is most applicable to the expansion of global markets to poor, low income, and indigenous communities?
Your initial response should be 150-200 words in length. Please support your claims with examples from the required material, and/or scholarly articles.
Below is the article:
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Sao Paulo, Brazil -- Shortly after adman Luca Lindner took over Latin American operations for Interpublic Group's McCann World Group in 2005, he polled 15 of its major advertising clients. What did they see as their biggest marketing opportunities?
One surprising answer: people with low incomes.
While many advertisers lavish dollars targeting well-off consumers, in Latin America the vast majority of people have far less money. According to the World Bank, 25% live on less than $2 a day, and many millions of others earn only a few hundred dollars a month. Increasingly, big brands are deciding that people once thought too poor to buy their products may be their biggest growth market.
Now McCann is launching a $2 million research project to seek clues to tapping demand among Latin America's less-well-off. Starting in March, staffers will spend a week to two weeks living with 100 low- income families in a half-dozen countries, including Colombia, Chile and Mexico, looking to understand how they are influenced by brands, what symbols and celebrities motivate them, and to find innovative ways to influence what they buy.
"The income is low, but they are still eating and bathing, and some cases driving. They are still consuming. They have a life," Mr. Lindner says.
In recent years, marketing to the poor has become a hot subject. University of Michigan economist C.K. Prahalad helped popularize the idea with his 2004 book "The Fortune at the Bottom of the Pyramid," which argued big companies could profit and help the world's four billion poor or low-income people by finding innovative ways to sell them soap and refrigerators.
Despite huge income disparities in Latin America, low-income groups wield substantial -- and growing -- purchasing power. In Brazil, the region's biggest market, low-income groups make up 87% of the population and account for about 53% of income -- 512 billion reals, or about $240 billion, annually. That compares with 454 billion reals for well-off groups, which make up just 13% of Brazilians, according to DATA Popular, a consulting firm based in Sao Paulo that has worked with clients such as Wal-Mart and Unilever.
Some companies have already been tackling low-income markets by revamping distribution systems, or tweaking products so that they are simpler or less expensive. For instance, Nestle Brazil saw sales of its Bono cookies jump 40% last year after it shrank the package to 140 grams from 200 grams and dropped the price.
But communicating with low-income groups remains something of a mystery for multinational firms. Marketers and ad agencies are full of well-educated and well-off employees who know little about how the other half lives. A trip into slums or lower-class neighborhoods is frequently a "mind-blowing" experience, says Johnny Wei, Nestle Brazil's director of regionalization and low income.
McCann plans to study 100 families that make less than $500 a month and have at least two children, says research director Josafat Solis, who will spend a week with a family in Panama City, Panama. Workers will study language use, cultural references, as well as symbols and images, that can be used in campaigns. "We are going . . . to learn their values, their antivalues, how they are educating their children, their nutrition habits, how they spend their leisure time," Mr. Solis says.
Illiteracy is one big challenge. In Brazil's northeast, Unilever solved that problem by launching a brand of soap called Ala. "It's three letters, and two are the same," says Fabio Prado, Unilever's vice president of marketing for Brazil.
The strong role that community plays in poor neighborhoods is of particular interest. Families sometimes band together to pay for construction materials or other costly purchases. Mr. Solis says if McCann can learn the extent of, and triggers for, such behavior, it could help clients sell costly items like washing machines or used automobiles. Such situations could benefit both marketers and the people on tight budgets. In Mexico, cement company Cemex got kudos for helping improve housing in poor areas after it introduced a pay-as-you-go system for buying build supplies.