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Introduction
Over four billion people constitute the “bottom of the pyramid” (BoP). This population segment is usually cited as those living on less than US$2.50 per day, although scholars have widely debated poverty benchmarking (Prahalad and Hart, 2004; London et al., 2010; Simanis, 2012; Chen and Ravallion, 2013). While BoP research has grown in the twenty-first century (Kolk et al., 2014), Chikweche et al. (2012) correctly stated that the study of BoP consumer behaviour is in its infancy, and most studies have focused on Latin America and Asia – largely ignoring 800 million BoP consumers in Africa. This omission is significant, as Africa is expected to home most of the world’s working age population by 2050 (Melorose et al., 2015).
The significance of the African consumer market has grown over the last decade – with sub-Saharan Africa boasting four to seven of the world’s 10 fastest growing economies (Mol et al., 2017; Campbell, 2017; Akokpari, 2017; Odusola, 2017). The economic growth in Africa has magnified the potential for business growth, especially when the global economic recession in 2008-2009 focused multinational corporations’ (MNCs’) attention on emerging markets (IMF, 2011; Ahmed and Zlate, 2013). Although the BoP constitutes more than half of all people on the earth, the study of this segment has focused on human development and MNC strategy (Kolk et al., 2014). Empirical studies on BoP consumer behaviour have been notably scarce.
Although BoP segments around the world will have different characteristics, the relevance of building the knowledge base in Africa was affirmed by McKinsey and Company (2016). The firm’s research report stated that the spending potential in Africa was close to US$4tn and is projected to grow at 3.5 per cent until 2025. In South Africa, the BoP forms the majority (approximately 70-75 per cent) of the consumer population (Chipp et al., 2013; Simpson and Lappeman, 2017b). The importance of the market is further emphasised when considering that the BoP has an aggregate recorded expenditure of approximately R300bn – or about a third of South Africa’s spending power (Chipp et al., 2013; Simpson and Lappeman, 2017b).
To date, no research has explored monthly BoP share-of-wallet (SoW) trade-offs. This is particularly revealing, because, in BoP markets, scarcity is...