Business at the Base of the Pyramid

Business at the Base of the Pyramid

By Kate Hawthorne Jeracki

Kelly martin’s office is in Rockwell Hall but she works at the base of the economic pyramid.

That’s a big place, inhabited by more than a billion people who live on less than $1.25 a day, without basic infrastructure for sanitation, clean water, roads or reliable nutrition. The United Nations wants to eliminate such extreme poverty by 2030.

The World Bank attributes the reduction in global poverty since 1990 to increased prosperity, but the rising tide has failed to lift 18 percent of the planet’s population out of dire need. Martin’s work focuses on a brighter future for the poorest of the poor.

As a Monfort Professor, the associate professor of marketing will use the $75,000 annual award to spend time in impoverished areas collecting firsthand data on consumption.

“My research emphasizes consumer well-being in base-of-the-pyramid countries, especially on how conditions of extreme poverty can significantly alter typical marketplace interactions,” Martin said.

The term “base of the pyramid” was used in the late 1990s to describe where multinational corporations could find tremendous potential profits – places such as Bangladesh, Nigeria and the Democratic Republic of Congo.

“Marketers assumed that people at the base of the pyramid were like middle-class Americans, just without money, so of course we could sell them flat-screen TVs and cellphones with the right strategies,” Martin said. “The marketplace reality is so much more complex than that.”

In 2012, she published one of the first data-intensive studies that showed an important consumer theory often used in the developed world did not hold in conditions of great poverty.

“We advanced the notion of a ‘consumption adequacy threshold’ wherein people need a basic minimum of goods and services for common consumption theories of well-being to hold,” Martin said. She sees the future of business in the passionate students in CSU’s Global Social and Sustainable Enterprise MBA program, where she teaches statistics.

“They try to understand the problem first, then devise solutions that allow the local population to take ownership,” Martin said. “They look for what’s really happening from the ground up, and believe profit doesn’t need to come at a detriment.”

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