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Essay / Emerging Markets: Direct Selling to the Base of the...
The article Emerging Markets: Direct Selling to the Base of the Pyramid by Jessica Chelekis and Susan M. Mudambi explains how companies like Avon have succeeded to create a market in rural areas, such as in poorer regions of Brazil, where there are very few ways for consumers to find and purchase global brands. The business model used by companies like Avon to achieve this is to sell their products directly through female representatives living in these areas. This form of business has certain advantages and disadvantages, and this article will delve into and analyze this in more depth. Specifically, the paper will identify some of the benefits of buying from direct representatives and explain how the “rules of the game” have had to be adapted in order to meet the needs of these low-income consumers. Additionally, the article will also contain some arguments to refute the idea that it is ethically incorrect to market non-essential products to low-income consumers who will spend approximately "one-third of their income" to purchase these products (Peng, 2014). ).The article points out that buying from a direct representative, rather than from a retail store, gives certain advantages to these consumers. One of the advantages these consumers enjoy is that they can pay for their products with informal credit, which is generally not allowed by multinational companies. Consumers living in remote areas of the Amazon see this as an advantage because most of their income comes from the agricultural season. So even when they don't make a lot of money, they can still get their non-essential products without having to pay for them up front. Another benefit is in the cross-border paper environment, where “more than $154 billion in sales” has been recorded through direct sales, as noted in the Direct Selling Association (“FAQ”). nd). These elements suggest that the role of direct selling is increasing around the world. This also leads us to believe that more and more companies will move towards a similar business model because of the effectiveness it has proven for other companies. For these reasons, we need to stop viewing direct selling as an ethical issue and start viewing it as a serious emerging market that can make or break a business. Works CitedMcLead, S. (2014). Simply psychology. Retrieved from http://www.simplypsychology.org/maslow.html FAQ. (nd). Direct Sales Association. Retrieved May 23, 2014 from http://www.dsa.org/about/faq/Peng, Michael. (2014), Global Business, 3rd ed., Cengage Publishing, NY, 28-31.