Bottom of the Pyramid : profit versus welfare – metrics that matter

Abstract

The research project investigated the trade-off between profit and social welfare objectives and whether metrics existed to measure the social welfare objectives set and the impact made. The study was conducted with leading brands within their respective categories and that are currently active in the South African BoP consumer market. The BoP market is widely recognised as an opportunity for business in developing markets to gain penetration of their brands and grow profits. How much of this ambition is married with social welfare objectives that aim to give back rather than just take out of the communities that they operate in? The challenge has been on what social impact to target and how to measure this. The research project was done using a quantitative research method, sampling brands that are within the top three sellers of their respective categories for LSM 1-4 consumers as measured by AMPS. This was supported by a thorough literature review to highlight the gaps that exist in the current way of interacting with BoP markets. The main finding is that profit is still the primary objective for most brands operating within this space and goals and associated social welfare metrics are still a distant third to marketing and business metrics measured within a business. The study ends with some recommendations for brand and business leaders to consider as they continue their incursions into BoP markets.