Emergin Markets: Direct Selling at the Base of the Pyramid by Jessica Chelekis and Susan M. Mudambi

The article Emerging Markets: Direct Selling at the Base of the Pyramid by Jessica Chelekis and Susan M. Mudambi talks about how companies such as Avon were able to successfully create a market in rural locations, such as in the poorest areas of Brazil, where there are very few ways consumers are able to find and purchase global brands. The business model that companies like Avon use to achieve this is by selling their products directly through women representatives that live around these areas. There are certain advantages and disadvantages that this form of business brings, and this paper will elaborate and analyze more deeply into that. In specific, the paper will pinpoint some of the advantages of buying from direct representatives as well as explaining how the “rules of the game” had to be tailored in order to fit the needs of these lower-income consumers. Moreover, the paper will also contain some arguments to refute the idea that it is ethically incorrect to market non-essentials to lower-income consumers who will spend about “one-third of their income” in order to buy these products (Peng, 2014).

The article underlines that buying from a direct representative, rather than a retail store, gives some advantages to these consumers. One of the benefits that these consumers receive is that they can pay their products on informal credit, which is not commonly allowed by multinational companies. The consumers living in the remote Amazon areas see this as an advantage because of the fact that most of their income comes from the agricultural season. Therefore, even when they aren’t earning much income, they are still able to get their non-essentials without having to pay for them upfront. Another advantage has to do with the trans...

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...tionally where “more than $154 billion in sales” were recorded from direct sales as stated in the Direct Selling Association (“FAQ,” n.d.). This evidence suggests that the role of direct selling is increasing throughout the world. It also leads us to believe that more and more companies will diverge into a similar business model because of the effectiveness that it has shown for other companies. For these reasons, we need to stop looking at direct selling as an ethical issue and start taking into account as a serious emerging market that can either make or break a company.

Works Cited

McLead, S. (2014). Simply Psychology. Retrieved from http://www.simplypsychology.org/ maslow.html FAQs. (n.d.). Direct Selling Association. Retrieved May 23, 2014, from http://www.dsa.org/about/faq/

Peng, Michael. (2014), Global Business, 3rd ed., Cengage Publishing, NY, 28-31.