Emerging Markets, Informal Economy and the Battle against Inequality
(A2024-119622)

AUTHORS

Sourindra Banerjee, University of Leeds

ABSTRACT

Most of our understanding of marketing strategy stems from organizations that operate in the formal economy. Yet, the informal economy serves the needs of more than 4 billion consumers (Prahalad and Hart 2002; Prahalad 2006) and employs 2 billion people (ILO 2018a). Understanding the informal economy is central to economic growth and to poverty and inequality alleviation (IMF 2021). The session will include four papers using a variety of data and methodologies. One of the unique characteristics of this session is that three of its papers are empirical papers using data from different emerging markets contexts representing the global south. The papers use data from India, Bangladesh, and Egypt. The methodologies used in this session range from a systematic literature review to the use of instrumental variables to address endogeneity and game theoretic modelling. The first paper is a systematic literature review establishes contributions of the field of marketing to improve the overall well-being of our society and eliminating existing inequalities. The systematic literature review confirms what has repeatedly been argued by marketing academics, namely, that the field of marketing is lagging in understanding the role marketing can play in reducing inequality and societal well-being. Building on these findings the session then presents three empirical papers that study the role of marketing strategy in informal markets and its impact on societal well-being. The second paper of the session will then dig deeper into the role of the formal and informal economy in eliminating access inequality. The paper looks specifically at strategic targeting decisions and shows that co-locating formal and informal market institutions could have a profound positive impact on reducing access inequality. The third paper is a paper that looks at market entry and expansion decisions made by social enterprises operating in an emerging market. The paper expands our current understanding of market entry decisions by showing that social enterprises tend to locate closer to poor markets and that their targeting decisions are quite dynamic and change with the organization’s exposure to risk. Finally, the session will conclude with a paper that looks at the interplay between age and gender and the effect this has on supplier dependency and, consequently, differentiation, innovation and performance in small grocery stores in an urban slum in Egypt.This session will discuss four papers that explore marketing strategy topics (e.g. marketing practice innovation and targeting decisions) in the informal economy and illustrate the potential of marketing in improving societal well-being. The special session aims to make the following contributions to the field: 1. We urge marketing academics, practitioners, and policy markets to rethink the role of the informal economy in improving societal wellbeing. In this special session we make the case that the formal sector should cooperate with the informal sector instead of ignoring and marginalizing it. 2. We show that marketing strategies could have a positive impact on reducing inequality. In this special session, we introduce a new measure for inequality that could be used by academics as well as practitioners. And we show how marketing strategies, especially market entry and targeting decisions, can contribute to reducing inequality. And finally, the special session discusses the marketing strategies used by two forms of businesses (i.e. social enterprises and micro-enterprises) that commonly operate in informal markets and their impact on performance.