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.
