Location-based marketing in low-income markets

Abstract

This study explored the use of location-based marketing to minimize the effect of poverty penalty often experienced by the low-income consumers. Poverty penalty is a phenomenon that explains why the low-income consumer pay relatively more than middle- an upper-income consumers. The low-income consumer is normally situated in areas that are far from retailers, thus has to incur a considerable amount on transport costs, which in effect leads to an increased cost to acquire goods and services, and means that this consumer is restricted by location. Location-based marketing is the use of location to broadcast marketing information to the consumer relevant to their location and preferences. Low-income consumers can use this location-specific information to optimize their location by taking advantage of the goods and services around them to save on further travel costs. The study was a quantitative survey that asked low-income consumers about their perceptions on what location-based marketing could offer them. The key findings of the study were that consumers value personalisation of the content, access to information would lead to access to more goods and services, and finally that access to information optimise the location of the consumer and lead to reduced transport costs. The study contributed academically by establishing that for the low-income consumer, mobile marketing needs to be focused at optimising the current location, and not transacting anywhere and anytime as the existing literature suggests.