Introduction

Four million people worldwide belong to the Bottom of the economic pyramid [BOP market], mainly in less developed countries and emerging economies (Nagy, 2019; Prahalad, 2005; Sheth, 2011). Only Africa, Western Europe, Asia, Latin America, and the Caribbean have a large proportion of their inhabitants who live on low income (Hammond et al., 2007). The BOP market is characterized by low literacy, poor health conditions, limited access to media, struggle to meet basic needs, and geographic isolation (Prahalad, 2005). They are consumers who are socially isolated from other segments, which causes them to increase the consumption of aspirational products, reducing the feeling of isolation (Baishya & Samalia, 2020). Therefore, they are rapidly growing economies that provide companies with business opportunities (Govindarajan & Ramamurti, 2011; Hanssens, 2018; Hanssens & Pauwels, 2016). For the year 2012 only, the large corporations invested more in the emerging markets than in the central economies of the United States, Europe, and Japan (United Nations Conference on Trade and Development, 2013).

Studies have revealed that the BOP market represents an important market share at a global extent, generating higher sales volumes for multinational companies. Even though these consumers spend a long time in choosing a brand, after acquiring could become loyal (Baishya & Samalia, 2020; Hammond et al., 2007; Kashyap, 2016; Knizkov & Arlinghaus, 2019). Other researches have shown the importance of adopting innovations in brands aimed at the BOP market that meet their expectations of low prices (Ernst et al., 2015; Govindarajan & Ramamurti, 2011; Johnson, 2002; Prahalad, 2005; Von-Janda et al., 2021). Furthermore, it has been found that changes in the BOP consumer behavior could help high-quality products and services (Singh et al., 2022).

For this reason, the emerging markets have become a platform for a new generation of multinational companies since many of them, such as Haier from China, Tata from India, and Vale from Brazil, have not only become global competitors, but they are also making investments in the developed markets (Subramaniam et al., 2015). Knizkov and Arlinghaus (2019) found that this market generates economic value for organizations and social value for the communities located in this segment. Including the BOP consumers will help the companies improve their economic, social, and ecological performance (Howell et al., 2020; Rosca & Bendul, 2019).

However, very few studies are known to identify the specific needs and lifestyles of the BOP market. Previous studies have many limitations and are formal investigations that have not been able to analyze the differences in the tendencies of BOP consumers. Furthermore, in today’s rapidly changing market environment, the sorts of products and services are diversified, and lifestyles are changing too. Subramaniam, Ernst, and Dubiel (2015) suggest that markets in regions such as Latin America and Africa have only conducted a few studies that required a greater research focus because they are not homogeneous and follow different development patterns.

BOP consumers’ lifestyles vary according to their ethnic origins (Hoon, 2016), and they may have a stronger orientation towards a low-priced brands or generic products. Meanwhile, although consumers satisfy their needs based on their lifestyles (Genç et al., 2020; Hee-Young et al., 2017; Jin-Jeong et al., 2017), it is not yet clear whether these needs are similar in the BOP market or may have different meanings and be influenced by regions or cultures, with multiple motivations versus simultaneous needs (Bridgman et al., 2019; Eisenberger et al., 2003; Kenrick et al., 2010; MacDonald & Leary, 2005; Van Lenthe et al., 2015). Furthermore, since consumer behavior may depend on regional characteristics, each ethnic group could display a different lifestyle (Hoon, 2016). The lifestyles of BOP consumers would reflect their brand identities and be distinctive in terms of consumption habits (Bakewell & Mitchell, 2006; Chernev et al., 2011; Mitchell, 1983).

Therefore, this study presents a first approximation of the needs and lifestyles of the BOP consumer in an Ecuadorian population, given that it is a country with a high potential for market growth and ethnic diversity with a distinctive culture. The research seeks to identify that BOP consumers: (1) can become loyal to brands that are perceived as high quality, regardless of their consumption needs and lifestyles; (2) they prefer not only brands that satisfy lower-level needs, but also higher-level needs; and (3) they are heterogeneous and encompass a variety of lifestyles, which influences their brand preferences. Accurately understanding the behavior of today’s BOP consumers is vital for companies in order to effectively target emerging economies, one of the world’s largest and most promising markets. This research adds value by identifying VALS and Maslow’s need metrics and determines relationships between lifestyle types and their needs in the BOP market.

The article begins by reviewing the theoretical contributions of the proposal of this study. The methodology describes the population, sample, instruments, techniques, and procedures for gathering data. An explanation follows about how much data was coded and the validity and reliability of this research. It continues with the analysis of results, discussion, conclusions, limitations, and recommendations for future research.

Bottom of the Economic Pyramid

The term Bottom of the economic pyramid (BOP) is used by Prahalad (2005) to refer to people who live with less than two dollars a day. For this group of consumers, the income level is below the subsistence level. The pyramid comprises four socioeconomic segments, classified by per capita income (assessed between different countries). Prahalad (2005) identified that more than four billion people in the world might belong to the BOP market. Populations such as Africa, Eastern Europe, Asia, Latin America, and the Caribbean live with low income (Hammond et al., 2007). In Latin America alone, this market represents 509 billion dollars, including 360 million people (World Resources Institute, 2018). Most of the BOP market is rural, due to the specific characteristics that make it more attractive for businesses (Govindarajan & Ramamurti, 2011; Hammond et al., 2007). Even though studies establish that companies that capture the BOP market are only oriented towards alleviating poverty (London et al., 2010, 2014). Prahalad (2005) identified that this market wants a different quality of life, just like the other economic segments.

However, they are consumers looking for good quality based on affordable prices. Lee and Kim (2018) found that for BOP consumers, products and services should be provided at prices proportionate to what they can afford, but it is also important to consider other factors such as level of education, culture, and religion. The purchasing behavior of these consumers is affected because they have limited income and low levels of education (Baishya & Samalia, 2020; D’Andrea, 2006; Jagtap et al., 2014; Viswanathan & Sridharan, 2012).

The term BOP is also applied in marketing to low-income consumers (Von-Janda et al., 2021). BOP consumers have substantially different requirements and are very sensitive to prices; therefore, innovating for these segments differs significantly from traditional markets, requiring the development of new products that meet expectations of low prices, and at the same time, offer value to customers (Baishya & Samalia, 2020; Bandi et al., 2020; Ernst et al., 2015; Von-Janda et al., 2021). Govindarajan and Ramamurti (2011) found that companies must innovate in these segments before reaching rich countries since BOP consumers adapt quickly. Singh et al. (2022) identified that changing in BOP consumer behavior could be help promote high-quality products and services.

Sheth (2011), states that most competition in emerging markets comes from generic products or services. Therefore, consumption decisions are not made after an analysis of which brand they purchase but rather from products that satisfy the needs of the lower level. Nagy (2019), on the other hand, defended the hypothesis that BOP consumers are not so different from those with higher incomes or modern economies. Even explained that the growth of brands could originate from the preference of poorer consumers at the base of the economic pyramid. When these consumers faced with a brand choice for the first time, their loyalty is low (Chikweche, 2013; Chikweche & Fletcher, 2011; Hillemann & Verbeke, 2014; Nakata & Weidner, 2012), but their brand experiences are perceived as quality products, which increases their loyalty (D’Andrea, 2006; Howell et al., 2020; Prahalad, 2005). According to Kashyap (2016), rural consumers in developing countries take more time to buy a brand, but once bought and convinced of its value; they generate high loyalty rates, a higher percentage than urban consumers

Maslow’s Hierarchy of Needs Pyramid

The theory of human needs by Maslow (1943), according to Gratton (1980), is one of the complete ways to refer to the needs of individuals, mainly concerning the quality of life. They are classified into two types: (a) lower-order —physiological, security, and belongingness—and (b) higher-order —esteem and self-actualization— (Maslow, 1954, 1970, 1987). Its pyramidal structure means these must be progressively satisfied, from the lowest to the highest.

The physiological needs are denominated as homeostatic, i.e., to satisfy survival needs such as hunger and thirst. It is followed by security needs, which implies that human beings have a motivation system to face threats based on stimuli inherited by ancestors, such as danger and fear (Ackerman et al., 2006; Haselton & Nettle, 2006; Öhman & Mineka, 2001; Rozin & Royzman, 2001). The belongingness need refers to people that require affection and are not extremely necessary for the survival of individuals. The esteem needs refer to willpower —self-esteem— and reputation and status —esteem projected in society—. Finally, self-actualization refers to the desire to accomplish a unique potential.

Gratton (1980), found that individuals of a similar social class have similar notions of needs that are more important to them. The middle social class, for example, is related to esteem needs, and the lower social class to the physiological. However, critics like Kenrick, Griskevicius, Neuberg & Schaller (2010), debated the principle of Maslow (1943), which states that self-actualization needs only become a priority after all other needs are met. These authors considered that these needs might have different meanings in the individual. They could even be influenced by regions and cultures they belong to. Also, studies like Eisenberger, Lieberman, and Williams (2003) or MacDonald and Leary (2005), referring to esteem needs, pointed out that human beings are sensitive to and responsive to social rejection employing neural circuits similar to those used to express physical pain. Therefore, these needs could be part of physiological and security.

Although the study by Van Lenthe, Jansen, and Kamphuis (2015), on the behavior of social classes in food choices showed that people who are satisfied with higher-level needs make more healthy food decisions, the findings were not entirely conclusive in the needs classification. Also, Bridgman, Cummings, and Ballard (2019), explained that although a level of need may be a priority in a determined situation, an individual may be motivated by several needs simultaneously. Furthermore, if a need has been satisfied, it may be required if it is subsequently threatened.

VALS (Values and Lifestyles)

Lifestyle is related to those activities that people do daily (Lee & Kim, 2018). Mitchell (1983) explains that lifestyles are distinctive regarding consumption habits. Segmenting by lifestyle is essential for understanding the consumer, especially when analyzing global markets (Kavak & Gumusluoglu, 2007). Changes in the environment have made consumers reflect on their identities in brands. Therefore, companies have gone from highlighting the functional attributes of their products to focusing on consumers’ lifestyles, leading to a a repositioning of their brands, then exposing them to greater competition (Chernev et al., 2011).

VALS is referred to by Mitchell (1983) as the group of beliefs and principles that indicate the importance that consumers attach to the different elements in their life and environment giving. As a result, an influence on decision-making, behavior, attitude toward objects, and the behavior of others. It was developed by Stanford Research Institute [SRI], based on the theory of motivations of Maslow (1943). Initially, it was classified into nine groups, from survivors to integrated.

Subsequently, new studies determined the classification of eight typologies (VALS-2): (a) innovators (active consumers with high self-esteem and abundant resources, interested in self-development), (b) ideals (appreciate comfort, most have professional training, seek the peace of mind and security), (c) achievement (they seek stability, do not like to take risks, are dedicated to working and family and are conservative), (d) experiencers (enthusiastic and impulsive and seek to be different from other people), (e) believers (have firm convictions and base their beliefs on codes established by society), (f) strivers (struggle to find a place in society and are concerned about other people’s opinions), (g) makers (resistant to new ideas, are practical with constructive skills and have the willpower to complete projects), and (h) survivors (they have a life of restrictions, their level of education is low and their immediate concern is survival) (Us Framework and VALS Types, 2020).

According to Jin-Jeong et al. (2017) and Queiroz et al. (2019), the VALS-2 model is the most appropriate concerning applicability and suitability and provides results that can be used universally. Graciano et al. (2022) found that cosmetic consumers’ values can help companies develop retail strategies appropriate to the expected demands. In addition, Hoon (2016) identified that lifestyles differ by ethnic group.

Consumers in the southeast coast of China have a strong brand orientation and self-determination, while consumers in the western and eastern parts are more inclined to stick to their traditions and inexpensive purchases. Likewise, Jin-Jeong et al. (2017) identified differences in the degree of comfort, security, versatility, and satisfaction according to the lifestyle of users of mobile payment services. Also, Hee-Young et al. (2017), found that the benefit of buying mobile internet in shopping malls mediated the relationship between customer loyalty and price, as well as the relationship between customer loyalty and product variety and product information. Genç et al. (2020), explored how VALS2 lifestyles has affected expectations of a restaurant atmosphere, aesthetics, and locality. For this reason, the environmental changes are causing transformations in social, cultural, and individual behavior patterns, becoming relevant to analyze the lifestyles in small cultural groups as in the BOP market.

Subramaniam, Ernst, and Dubiel (2015), explained that emerging markets in regions such as Latin America are not homogeneous and have different development patterns. This way, the study proposes that:

• Proposition 1: BOP consumers satisfy lower-level and higher-level needs, generating simultaneous needs from the different links in the pyramid.

• Proposition 2: BOP consumers are heterogeneous and classified into different lifestyles, influencing their consumption preferences.

• Proposition 3: BOP consumers can become loyal to brands perceived as quality products.

Figure 1 represents the proposed research model, which suggests a relationship between consumption needs according to Maslow and VALS2 lifestyles. It proposes that BOP consumers, regardless of their socioeconomic level, can become loyal to brands that generate trust, equal to or better than a traditional consumer. The proposal put forward is:

Methodology

An inductive approach was used to generate theoretical understanding of the phenomenon under study (Blaikiel & Priest, 2019). A detailed investigation was carried out in situ over 15 months to obtain an empirical explanation based on the behavior of BOP consumers. A multiple case study was applied to identify motivating factors for BOP consumers’ brand preferences. The study identified 75 cases. Eight of them were excluded because they did not meet the characteristics of the sample, 10 did not agree to participate, and seven were unavailable —they were not at home—. In this way, there were 50 effective cases attributed to a total sample of 218 participants, who were necessary to meet the theoretical saturation (Creswell & Creswell, 2018; Patton, 2014). Ethnographic tree models, descriptive statistics, and the Kruskal Wallis test were applied. The study used purposeful sampling (Patton, 2014), to determine the relevant factors that influence the motivation of the BOP market. The participants were intentionally selected, allowing the selection of cases rich in information.

Population and Sampling

Latin America has 641,934,046 inhabitants (ECLAC, 2020) who are related by historical, cultural, and economic ties. Along with the Caribbean, it ranks third among the largest economies in the world. The rural population comprises around 123,000,000 people, of which 50,000,000 work –one in five people– (International Labour Organization, 2016). Ecuador occupies one of the most important panoramas of the region, as it has 59,775,747 rural inhabitants (CELADE, Population Division of ECLAC, 2019 Revision and United Nations, & Department of Economic and Social Affairs, 2019).

In that sense, the population of analysis is the parish Julio Moreno, denominated as a montubio town. Geographically is in Santa Elena province in the Republic of Ecuador. It is a rural population of 3226 inhabitants, distributed among 1757 men and 1539 women (Instituto Nacional de Estadísticas y Censos, 2010a). It is dedicated to agriculture and cattle raising on a small scale. Among the central beliefs is the catholic religion and the official language is Spanish. It has historical, archeological, and tourist importance for the monolith findings, being precursors of the actual populations of Santa Elena province (Prefectura de Los Rios, 2015).

The United Nations Industrial Development Organization (2014), defines poverty as living on less than $2.50 per day, mainly in developing or emerging economies. According to the Instituto Nacional de Estadísticas y Censos (2010a), the poverty index for unsatisfied basic needs shows that Santa Elena province’s capital owns 67.7% of poor and 33.3% of non-poor people. Only the parish Julio Moreno presents a dramatic situation that reaches a rate of 99.8%.

Therefore, they have essential characteristics concerning to BOP market. Fifty families were taken as a sample (three to six family members). The study applied purposeful sampling (Patton, 2014) to determine the relevant factors that influenced the motivation of the BOP market, so the participants were intentionally selected, allowing the selection of cases rich in information.

Measurement Instrument

The study was structured using two techniques: (a) in-depth interviews and (b) direct observations in the community. Instruments were validated in past research, based on what was proposed by Beard (2008), who identified that brands targeted the BOP market segment by social indicators, consumer needs, and lifestyles.

For the social indicator, it was necessary to include the poverty index of the study population, which to the Instituto Nacional de Estadísticas y Censos (2010b), was 67.7%. It was considered to classify consumption needs, Maslow’s Pyramid of needs (1943), using an instrument by Leidy (1994) that measures these needs in 27 items on a Likert scale from 1 to 7 (1 = terrible - 7 = delighted). Finally, for lifestyles, the VALS-2 theory was used (Mitchell, 1983; Us Framework and VALS Types, 2020) through the Strategic Business Insights (2015), which consists of 42 items, 35 on a Likert scale from 1 to 4 (1 = Mostly disagree - 4 = Mostly agree) and the others that answer demographic questions.

Investigation Techniques and Procedures

In-depth interviews

Given the research time of fifteen months, the in-depth interviews lasted around an hour and a half for each participant (between three and six members per family). They were carried out at different times and days according to their geographical location and available time, the distances in rural areas, and the mobility carried out, sometimes in conventional means. The interviews were recorded and transcribed. A general list of questions was used according to the suggestions of Mertens (2005) with the staggering and hidden theme technique (Malhotra et al., 2013). These questions were validated by academic experts with knowledge of the BOP market, lifestyles, and types of needs.

The questionnaire included the stepping technique and hidden theme that consists of asking questions oriented from product characteristics to user characteristics, investigating psychological and emotional reasons with deep-seated interests (Malhotra et al., 2013). The Leidy (1994) questionnaire was also included to classify the interviewees in one or more of the different links of the Maslow Pyramid (1943). Likewise Strategic Business Insights (2015) was included to classify the participants in the typology of consumption of lifestyles (Mitchell, 1983). Finally, a cupboard inventory observation recorded product brands, quantities, and sizes of products in consumers’ homes.

Observation

A natural observation was made for six months to explore consumer behavior in their native environment (Malhotra, 1993; Malhotra et al., 2013). It consisted of observing the participants in their homes with different income levels based on the BOP economic pyramid. The purpose was to evince consumption trends through the lifestyle and products/brands of daily use, and to corroborate the data obtained in the interviews. The estimated time fluctuated between six to ten hours because the observation for each participant and family was in situ. Impoverished households with serious socioeconomic problems were evident.

Coding, validity, and reliability

Ethnographic Decision Tree Modeling [EDTM] (Gladwin, 1989) was used for data coding using the ATLAS. ti 8.0 software (Muhr, 2019). Allowed to identify patterns of decision logic based on real-life criteria, create preliminary models and test them (Bailey & Ngwenyama, 2013; Braun & Clarke, 2006). On the other hand, a triangulation of data was performed, which combined research tools within each instrument, thus improving the effectiveness and validity of the data obtained and the credibility of the findings (Bailey & Ngwenyama, 2013; Begley, 1996; Strauss & Corbin, 2002; Wolcott, 1994).

The ensuring the study’s validity and reliability, regular peer-to-peer meetings were held and extended time with participants in the community (Creswell & Creswell, 2018; Strauss & Corbin, 2002). The data found in the literature review was also analyzed to improve the accuracy of the findings.

The data collection approach followed the recommendation of Creswell and Creswell (2018), because the experiences of the participants could be identified. The case analysis included three phases: a) interview typing (Strauss & Corbin, 2002); b) reduction of information from the main paragraphs in each case; c) assignment of codes for the identification of categories in the selected factors.

Analysis of Results

Categories and Relationships

Two hundred eighteen in-depth interviews —one per participant— were analyzed and coded in the ATLAS.ti 8.0 software (Muhr, 2019). Followed an open, axial, and selective coding sequence (some criteria applied in Vivo codes) to segregate and scrutinize the data. They had to be compared to find similarities or differences between them. For its part, the pantry inventory helped verify the products most representative of the participants’ homes. Table 1 presents only the generic names of these products with their quantities and sizes. Due to the confidentiality of the manufacturing companies, the names of the brands are not included. It should be noted that the purchase of these products is mostly daily; therefore, small amounts of consumption are shown.

Below are excerpts from the in-depth interviews in the participants’ original language and their respective analyses. They have been selected because their dialogues show the representativeness of the sample. In addition, the initial codes with which the descriptive information was labeled are placed.

“…Por ejemplo, si está en tres dólares, está muy bonito, todo bonito, pero yo primero lo reviso, si está todo como quiera por dentro, no lo voy a comprar. Voy a buscar en otro lado, así mismo, de bajo precio [‘low prices’], pero que esté terminado, que esté al alcance de mi bolsillo [‘accessible prices’]. El hecho de que sea pobre no significa que voy a comprar un producto en mal estado [‘quality and security’]. El hecho de que no tenga mucho dinero en mi cartera no quiere decir que compre cosas al azar [‘negative connotation’ of ‘poverty’] [‘security’]. Porque sí hay personas de bajos recursos que se visten bien [‘take care of your appearance’].” (Interview, Woman, 50 years old, lives with her two daughters, 28 and 23)

The purchase depends on the texture and finish of the product. Affordable prices are sought. The economic situation is not related to low prices.

Si me gustaría ir a una clínica muy buena [‘aspiration to other services’] pero mis recursos no me dan para eso [‘negative connotation’ of ‘poverty’]. ¿Entonces? ¿a qué tengo que irme? A una clínica pública donde puedo pagar mis honorarios [‘accessible prices’]. Mi anhelo es irme a un hospital bueno que me va a dar mejor atención [‘aspiration to other services’]. Hay dos medicinas, la genérica y la otra. Me gustaría comprar la efectiva, la que es buena [‘aspiration to other services’], pero mi situación no me da para comprar otra medicina [‘negative connotation’ of ‘poverty’], entonces tengo que estar con la medicina que cuesta menos [‘low prices’]. Que mi anhelo sería comprar la buena [‘aspiration to other services’], pero si yo estuviera en otra situación mejor [‘negative connotation’ of ‘poverty’], ahí no esperaría eso, pero mis recursos no me dan [‘low prices’]. Si tuviera dinero, si tuviera una fuente de trabajo rentable, ahí sí [‘aspiration to other services’]. Porque en estos momentos no hay trabajo para esto [‘complex environment situation’], así y si tú vas a uno lo que tú encuentras es un trabajo de quehaceres domésticos que están dando el básico, ese básico tú lo divides para luz, agua y alimentos, entonces no te da eso, pero si tú tuvieras otro ingreso, entonces ahí sí, bienvenido sea [‘aspiration to other services’]. Toda persona desearía estar en un hospital muy bueno, porque eso es lo que uno quiere, que te atiendan buenos doctores [‘aspiration to other services’], pero te irías a uno público que también hay buenos doctores, pero así es la situación que se da, que se vive. (Interview, Woman, 56 years old, lives with her son of 23 years old)

Although there is an evident situation of low economic resources, there is also, an aspiration to acquire of better services and products. There is a negative belief about the generic drug and a poor perception of public health services. Also, when there is an aspiration for a job, it is believed that this will improve the current economic condition.

(…) En la vida, haber conseguido todas mis metas, mis propósitos. Si yo tengo una hija, entonces, lo que ha alcanzado lo máximo, que ya mi hija haya culminado sus estudios, esté ahora como en un trabajo seguro, tenga su casa, tenga sus cosas y decir, ¡ay, Dios mío!, gracias porque mijita ya se realizó [‘importance in beliefs’], todo lo que yo quise ya está realizado, ahora sí, gracias, Señor [‘importance in beliefs’]. Eso es lo principal. Ahora sí señor, gracias porque ya todos mis anhelos, mis propósitos, mis metas que tuve, se hicieron [‘importance in beliefs’]. Ahora sí, hasta ahí, lo otro bienvenido sea, porque ahora sí ya la formé, ya todo, ahora si ya viene mi recompensa [‘aspiration to an improvement in the quality of life’], ahora si mi hija, de mi esfuerzo, de todas mis metas y anhelos ya está el triunfo, ahora sí vengan los frutos [‘aspiration to an improvement in the quality of life’]. Los frutos serian haberla formado y criado, recto el pilar, ahora sí sé que los frutos se van a abrir. Estoy contenta. Por ejemplo, si mi hija ya trabaja me dará la medicina que es principal, alimento [‘aspiration to other services’] (…) (Interview, Woman, 57 years old, lives with her daughter of 23 years old)

It shows a dependency on the new generations of professionals. They are expected to give financial back financially to the people in their immediate environment who helped in their academic training. This remuneration will improve living conditions. The need for self-actualization does not depend on everyone, as it is linked to the professional success of other people in the family nucleus. There are intense and marked beliefs in God, who helps fulfill life goals.

Cuando consumo por ejemplo una gaseosa, consumo las de color negro [‘recognized brand’]. Yo la prefiero porque es la que me gusta y la compro siempre [‘tradition and customs’]. La compran mis amigos, mi familia, es como la tradición, pero más es porque el sabor es bueno y me quita la sed [‘tradition and customs’]. Bueno, yo he probado otras gaseosas, pero esas no son iguales [‘tradition and customs’] [‘brand loyalty’], son muy dulces y no quitan tanto la sed [‘brand positioning’] [‘negative connotation’ of ‘other brands’], me hacen dar más sed. Son más baratas, pero no son tan buenas [‘accessible prices’]. Pues… no sé. Yo creo que el precio es importante pero también depende de cómo es el producto [‘accessible prices’]. Debe ser una bebida que sea buena [‘recognized brand’], de calidad [‘quality’] y yo pienso que un precio ni tan barato ni tan caro [‘accessible prices’]. (Interview, Man, 47 years old, lives with his wife of 38 years old and his three children of 25, 23, and 22)

Brand positioning, not by name but by product characteristics (shape, color, taste, etc.). The positioning by name has been as reference brands in the categories. They are brands that have become generic names to refer to a specific product. Thus, these products are consumed as traditional brands at a family level. Low price is not related to quality. Affordable prices are sought.

(…) Bueno, eso también es algo que uno compra siempre [‘tradition and customs’]. Sí hay unos productos que son baratos que no alcanzan [‘negative connotation’ of ‘other brands’], o sea, sale poco [‘brand positioning’]. Ahí uno compra en la tienda de aquí cerca o vamos al mercado a comprar [‘traditional channel’]. Lo importante es que el producto sea fresco [‘quality and security’]. (Interview, Man, 37 years old, lives with his wife and three children of 21, 28, and 10)

The traditional channel is still very important. Neighborhood stores or markets are the priority channel. Low prices do not give a good perception of the products. There is family integration in the purchase of mass consumer products.

El teléfono que tengo es un teléfono inteligente [‘innovation’]. Es necesario para poder comunicarme [‘quality, safety and comfort’]. Aquí en la casa como puedes ver, tenemos el televisor plasma, mi esposa y mi hijo tienen sus celulares también [‘quality, safety and family comfort’], y tenemos una computadora que la usa más mi hijo para sus deberes y para sus juegos [‘quality, safety and comfort’]. Tenemos esos dispositivos porque son importantes. No son lujo, es necesario [‘security’]. Sobre la vestimenta, sí me gusta vestirme a la moda [‘innovation’]. Principalmente por el trabajo debo vestirme bien [‘taking care of your appearance’]. No tengo mucha ropa de marca, pero una amiga de mi esposa que viene de Guayaquil a veces nos trae a vender ropa de marca. Nos deja que le paguemos en cuotas. (Interview, Man, 35 years old, lives with his wife of 30 and his son of 16.)

Personal appearance is significant. For this reason, certain products that denote status are acquired. Technology is an essential part of daily activities that not only helps one person but all those who make up the family nucleus. There is a need for an exclusive distribution channel for luxury items and clothing.

After coding, categories such as a) low prices, b) improved quality of life, c) innovation, d) quality, and e) security.

Regarding the data obtained from the observation, help was created through memorandums, which improved the understanding of the participant’s behavior and removed the research’s subjectivity (Strauss & Corbin, 2002). The information in table 1 was confirmed, and other types of sporadic purchase products were added. This detail is shown in table 2, in addition technology, clothing, personal care, medicine, and construction products.

Subsequently, like with the interviews, the data was entered into the ATLAS.ti 8.0 software (Muhr, 2019) following the same coding dynamics. The resulting categories, in this case, were: a) quality, b) prices based on quality, c) confidence, d) accessibility, and e) sense of belonging. The final categories that combined in-depth interviews and observation, according to the highest number of absolute frequencies, were ranked in the following order: a) sense of belonging, b) improved quality of life, c) innovation, d) prices based on quality, e) security, f) quality, and g) accessibility. The category of “low prices” was eliminated due to not providing significant values in the data and being contained within the category “prices based on quality” identified from the verification with the observation. The selected categories are described below:

1. Sense of belonging: Valuing of beliefs, customs, and traditions. There are established brands that, being positioned as benchmarks in the categories, are consumed without an extensive purchase decision process.

2. Improve the quality of life: It seeks family well-being. Consume familiar brands. There is an aspiration for new products and services once current economic conditions improve, which will depend on subsequent generations.

3. Innovation: Technology is important because it helps to develop the daily activities of the family in a better way. Take care of their appearance. Include products that help look good and project a better social status.

4. Prices based on quality: Prices based on textures and finishes. It does not matter if they are priced slightly more than what is usually paid. In some instances, low prices are classified as products in poor condition. Prices are received based on high and medium quality.

5. Security: Any product or service in good condition that generates trust. It creates functional and emotional usefulness.

6. Quality: Certain consumption is related to products and services that exceed economic conditions.

7. Accessibility: Products and services that are easily found. The traditional channel is the most used.

Consumption Needs and Lifestyles

After analyzing the instrument’s results of the classification of consumption needs and lifestyles (Leidy, 1994; Strategic Business Insights, 2015), both as a function of the analysis of the in-depth interviews and the observation, the averages of each of them were grouped. A Kruskal Wallis test was performed, a non-parametric technique that verifies the extraction of different samples from the same population (Daniel, 1990) to analyze the differences in their ranges, considering the type of tool used as treatment.

The test statistics was calculated with the formula:

Where, [] is the number of observations in groups [] is the range of observations j from the group i is the total of observations in the groups. [] is the average of all r_ij As seen in table 3, the statistic was 0.053. This way, the result of classifying by consumption needs and lifestyles was the same, verifying reliability in its structure.

Once the Kruskal Wallis test was carried out, figure 3 showed that lower-order needs stood out, and some higher-order ones were also evident. Thus, not all participants met a single link of needs. Also, it was found that more than one consumer group has needs simultaneously. Thus, although self-actualization is important, the needs for esteem and security are also relevant.

For this reason, it is shown that satisfying one level of needs is not necessary. In addition, it was evidenced that the need for self-fulfillment is related to a family member’s professional or personal achievement, mainly in the first degree of kinship. It means that for consumers, it is not only important to satisfy their own needs, but the satisfaction of the needs of other people in their family nucleus is also classified as personal satisfaction.

Figure 4 shows a summary of needs established in order of importance, where it is evident that the needs of most significant: (a) self-actualization, (b) esteem, (c) belongingness, and (d) security.

Table 4 shows that BOP’s consumers span a variety of lifestyles. Although one type of lifestyle is prevalent in some instances, the trend is towards various. For example, although a consumer is classified in a lifestyle of believers since there are strivers and innovators in their family, they are consumers who influence purchase decisions and, therefore, individual consumer preferences.

Figure 5 shows that the most relevant lifestyles were five of the eight established in the VALS-2 framework: (a) innovators, (b) survivors, (c) strivers, (d) makers, and (e) believers. For this reason, the document will only refer to the five groups below.

On the other hand, although the VALS-2 lifestyles were formed based on the motivational theory of Maslow (1943), consumer needs and lifestyles are assumed as independent variables in this study. As shown in figure 6, lower-order needs do not correspond to the lifestyles of survivors, makers, strivers, and believers, and higher-order needs do not correspond to the lifestyles of experiencers, achievement, ideals, and innovators. The BOP consumer is classified into different links of the pyramid of needs, even having simultaneous needs, and their lifestyles are also variable and moldable, depending on the influence of people in their family environment. Being at the base of the economic pyramid does not imply that they only satisfy primary needs and have restricted lifestyles, and their immediate concern is survival and security.

Relationship Between Bottom of the Economic Pyramid, Consumer Needs, and Lifestyles

This study presents an important integration between the lifestyles and the needs of the BOP market based on the categories previously analyzed. For this reason, figure 7 has been evaluated using connectors whose own needs are adjusted to the lifestyles and in what way these needs classify them as BOP consumers.

With these results, new characteristics are proposed to be considered for the BOP market and are detailed below:

Striver consumers are people motivated by achievement. They satisfy the needs of esteem, belongingness, and security. Unlike other consumers, they take care of their interests. They prefer brands that show to have more significant financial resources. They choose to show themselves to the community as people with incredible wealth. Despite belonging to the BOP market, this group of consumers seeks innovation and quality. The purpose is to be at the forefront of technologies that resemble a position of social status. The sense of belonging is not related to acquiring indigenous products but to products that make them feel and look different from others. They seek to dress in fashion and are imitators of those they regard as their idols.

Innovators, for their part, maintain high self-esteem. They are consumers of the BOP market with more economic resources than the others. They face self-actualization needs. Among the important functions, altruism, and philanthropy towards the population of their community stand out. They also look for innovative and quality brands, they like technology, but unlike strivers, they do not pretend to demonstrate that they have more goods and resources than others.

Survivors are consumers who have fewer resources than other BOP consumers. They are the most loyal to brands and liked sales promotions. These consumers are searching for brands that support the sense of belonging to the community, preferably white brands. Despite representing a modest market in most products and services, are more loyal consumers of their favorite brands.

The maker’s group, despite having low resources are people who value practical activities. They are oriented to satisfy the needs of belonging and esteem. Therefore, they require stronger emotional bonds, not only between family members but also between friends. Certain products stand out for their relationships to socioeconomic status. They are not easily impressed with products and brands that do not demonstrate a practical or functional purpose.

Finally, the believer’s consumers are motivated by ideals, are conservative, have low-income and primary education levels, and maintain a high tendency towards family brands. These consumers seek to supply physiological and security needs with products that benefit and protect the home and satisfy shared needs. Highlights include convenience and emergency goods: a) personal care and b) food consumption. These products create a sense of belonging over the place of origin. Furthermore, there is a strong preference for both national brands and traditional brands. They are motivated by brands from their community and country, and sometimes, they resolve a need for self-actualization.

Discussion

Quantitative data on frequent consumer goods, especially for households, are essential to understan market penetration, the number of buyers, and brand loyalty. However, qualitative mechanisms are required to confirm these assumptions, even more so when it comes to understand consumer behavior. Thus, the results of this study confirm the importance of the BOP consumer in their consumption preferences. In particular, Latin America is one of the little-studied regions, but it has a growing, heterogeneous market with different development patterns, which demands a greater research focus (Govindarajan & Ramamurti, 2011; Hammond et al., 2007; Subramaniam et al., 2015).

This study shows new findings regarding the relationship between innovation with low prices and customer value in emerging markets. The revealed findings evince that the BOP market requires specialized products. This market has been found to satisfy not only physiological needs but also esteem and self-actualization needs. In addition, their lifestyles do not conform to the exclusive typologies of survivors, as described in the VALS-2 conceptual framework. If not, on the contrary, they have other characteristics that make them different from seeking only survival and security.

Although the BOP market is consumers who do not seek high prices, prices are in line with their economy. It implies that low prices are unrelated to their social or economic conditions. They could pay more than usual if the purchased product justifies its emotional and functional usefulness. Thus, quality is perceived as “textures and finishes that make you feel good.” Also, a high preference for products with innovative components is evidenced. If the brand builds trust, the consumer will be loyal to the product. Unlike mainstream segments, this market can be loyal to brands that promote quality as a synonym for well-being.

On the other hand, Lee and Kim (2018), established that this group of consumers should be evaluated: the level of education, culture, and religion. In this sense, the study revealed a high incidence of these factors, mainly in culture and religion. It was found that the BOP market must adapt to ethnic groups. Having products that highlight the area’s origin, beliefs, customs, traditions, and values generates a high sense of belonging in them.

Therefore, the findings demonstrated in the BOP market that people consume, given the perception that leading brands represent the montubio culture. They provide a lifestyle about their roots and how society sees them before highlighting the need for belongingness.

Consumers, rooted in their culture, are encouraged to accept or reject brands, in most cases, depending on the social context where they operate (McCracken, 2007). They can see the trends in products that consider images of idols created by a society that meet the demand of their followers. The BOP market also uses regional or global brands. Most of these satisfy lower-order needs —physiological, security, and belongingness—, but there is also loyalty for brands to satisfy higher-order needs —esteem and self-actualization—. There were few variations between levels of loyalty for competing brands in the same product categories; despite this, the market consumes a variety of brands.

The fact that survivor consumers only aim to satisfy physiological needs is not generalizable because these also prioritize the demand for self-actualization and esteem goods. The same scenario is for the other typologies of lifestyles. However, it was interesting to identify that contrary to beliefs that BOP consumers prefer only low prices (Ernst et al., 2015; Jagtap et al., 2014; Lee & Kim, 2018; London et al., 2010, 2014; Prahalad, 2005; Sheth, 2011; Viswanathan & Sridharan, 2012), a specific group (innovators and strivers) does not mind paying high prices for brands that represent a different social status. Primarily, technological products are associated with them, confirming that technology for the BOP market is fundamental (Dey & Binsardi, 2016; Irugalbandara & Fernando, 2019; Prahalad, 2005).

High price strategies can be considered for survivors’ customers as high quality to satisfy lower order needs since they are products that improve living conditions in their families. Also, this study revealed that these consumers tend to be more loyal to brands. Although according to the suggestion of Wood, Pitta, and Franzak (2008), global brands strategically position themselves with low prices to capture the BOP market’s attention, it is evidence that depends on the type of product, satisfying needs, and the most prevalent lifestyles.

Innovation in consumer products is also an element to be considered by multinationals and other companies in general, mainly in the generation of new brands that meet the needs of families. It was evident that the BOP market seeks quality standards, which result in social well-being and, therefore, a feeling of family well-being. Corporations must organize and control their operations to deliver an added-differentiating value, ready to satisfy the needs of the BOP market, thus achieving their loyalty. Well, innovation should not only refer to significant investments in infrastructure and technology, but it is also possible to make incremental innovations in products, involving marketing strategies according to the demands of the BOP market.

This way, and given the research results, the growth of brands, as mentioned by Nagy (2019), may come from the BOP market since their behavior patterns are not so different from those of advanced economies. Hammond, Kramer, Katz, Tran, and Walker (2007) explained that companies could generate high sales volumes in these markets. This study ratifies these findings, besides what Subramaniam et al. (2015) highlighted, explaining that emerging markets a precise scenario for a new generation of multinational companies.

Ecuador in 2020 had an increase of 3.8% in the rural population. In these areas, it has a masculinity index of 103.3% and aging of 40.3%, which by 2050, projects rates of 100.7% and 110.3% (CELADE et al., 2019). Its Gini coefficient, at the end of 2019, was 0.478 at the national level, 0.462 in the urban area, and 0.432 in the rural area (Instituto Nacional de Estadísticas y Censos, 2020). Despite this, the human development index between 1990 and 2018 increased by 18% (from 0.642 to 0.758), ranking 85 as China (United Nations Development Programme, 2019), which is attractive for companies by being able to enter this market through the diversification of products and services that adjust to the needs and lifestyles evaluated in the study. Latin America and the Caribbean are also attractive since these populations are the third-largest economies in the world. Only Latin America projects a masculinity rate to 2050 of 106.8% and aging of 120.9% (CELADE et al., 2019).

In a Forbes report, it is mentioned that companies have taken it upon themselves to serve the richest and healthiest consumers, overlooking a potentially large market: “the poor who can’t afford healthy food, expensive medical services, and lifestyles that the more fortunate take for granted”. Therefore, this study shows that there is an economic opportunity for multinationals to invest in developing and commercializing products and services that satisfy each link of needs in the BOP market and simultaneously at different levels of the pyramid. It is evident, for example, that those who buy the most brand clothing in this market are men, particularly lifestyle innovators, and strivers.

Therefore, a more effective segmentation of the BOP market is required, proposed in this study, incorporating new consumer characteristics. While companies such as CVS Health, Dollar General, Fresh EBT, Philadelphia Brown’s Super Stores, and Daily Table are trying to capture these segments in the United States (Cardello, 2019), they have only focused on moving lower-order health-oriented needs. Therefore, more outstanding efforts are still required in other categories of products and services and venturing into regions such as Latin America and the Caribbean.

That said, this study reveals an opportunity for pharmaceutical companies and health services, which could create strategic alliances with national or international clinics and develop medical products or packages that benefit the BOP segment, satisfying all the needs of the pyramid. In addition, it also demonstrates an appeal to other industries, such as beverage companies, which could create product categories and strengthen their soluble lines. Although mass consumption companies have devised strategies to expand their coverage and offer personal care products for families, umbrella brands or brands aimed at children, youth, adults, and the elderly in the BOP market could still be created and classified in the new characteristic’s lifestyle VALS -2.

The construction sector is another market of interest when developing housing plans for rural areas, as a brand positioning mechanism, under the concept of social responsibility, differentiating itself from other companies that only offer their services to consumers in commercial or urban areas. Advancement in brand innovations also becomes attractive for telecommunications and technology services, with neuromarketing strategies that impact the emotions and feelings of the BOP segment. Likewise, clothing brands could adapt a product line for this market and develop an effective chain of intermediaries focusing on this area. Consequently, multinationals and local companies should consider these findings, mainly because the BOP market consumes various brands under a confusing positioning based on generic names of product categories, which would be hurting market share.

The public sector is also vital to invest in the BOP market. Creating services that encourage joint work among community members could be a strategy aimed at improving living conditions and reducing poverty margins, in addition to contributing to better financial performance in the consumption of local brands. Finally, new actors could enter this market, from localized approaches, such as food, fruits, and vegetables, to generalized approaches, such as traditional companies that in addition to improving their brand visibility and merchandising strategies, could emphasize the incursion of channels of traditional distribution.

Recently, the study by Bandi, Sahrakorpi, Paatero, and Lahdelma (2020), on conventional network extensions in access to energy demonstrates that the initiatives outlined above are achievable in emerging markets and emphasizes that community participation reinforces social trust, leading to customized solutions for the end user. Baishya and Samalia (2020) also highlighted that the BOP market generates a business opportunity for companies that produce smartphones, which should improve their pricing strategies and implement services based on Information and Communication Technologies (ICTs). The findings by Howell et al. (2020) also confirm the results of this research, finding that bottled water companies may only be reaching middle-class consumers and not low-income ones, demonstrating that the BOP market can buy more than one commodity rather than other factors sociodemographic, subject only to income.

Furthermore, although the study presented ages ranging from 30 to 60, it also identified a market niche for subsequent younger generations. Many rural-urban migrants whose relocation is mainly looking for access to higher education. This type of migration affects behavior and is associated with attitudes and attachment to the urban host society without neglecting the rural origin (Tang et al., 2020). Also, young people are driven by fashion, which leads them to buy luxury items whose purpose is to emulate the host culture (Das & Jebarajakirthy, 2020), becoming a benefit for industries that wish to invest in these segments since companies migrate to a transnational image with changes in their geographical identities (Basu & Majumdar, 2018).

Another relevant factor in this research is that the BOP market can satisfy various levels of needs at the same time. Moreover, reaching the top of the pyramid is even more interesting, in many cases, related to the self-actualization of other people, mainly those close to their family circle. As explained by Kumar & Srivastava (2020), companies entering emerging markets must take advantage of their innovative potential in developed markets and optimize their innovation strategies. This study motivates them to take advantage of their competitive advantages and adopt strategies in a broad growth market. Since the traditional market segments are light buyers, the BOP consumer can generate brand loyalty and reward companies’ strategic efforts. These findings provide new insights for brand management, market structure, and performance evaluation of realistic strategies to benefit market penetration.

Conclusions

While true that many global companies have begun to develop specific solutions for the BOP market, their marketing strategies are still incipient in the face of various segments that can be opened in these markets, even more so if their needs and lifestyles are analyzed.

This study provides a first approach to the needs of BOP consumers and their lifestyles in a population of Ecuador. It states that, despite belonging to an emerging economy, these consumers have different needs that are even considered in the upper links of Maslow’s Pyramid (1943), as well as, together with their lifestyles, they could generate loyalty in various categories of products, services, and brands. Although the study shows a strong preference for national and traditional brands, it also reveals that these types of consumers can be loyal to brands that provide a different social value. It was found that these consumers want to access the same products as other consumers with more affordability, without distinction of brands.

Therefore, companies should better understand the BOP market and establish appropriate value propositions, which fit the context and their resources, instead of focusing on the simple creation of low-price products and basic quality standards, even more so when they are rapidly growing economies that would provide significant business opportunities.

The study also incorporates new features to the original VALS-2 lifestyle classification combined with Maslow’s needs, revealing that lower and higher-level needs may also be considered in some lifestyles and provides further findings starting from the fact that individual self-actualization can be determined by the self-actualization of another member of the family.

Although this study has deep methodological rigor, its results must be taken carefully. The reality of each culture, social context, and economic development of the towns requires further studies to identify similarities in the behavior of BOP consumers. Despite this fact, there is crucial empirical evidence in investigations that have elapsed over the time, supporting this investigation’s findings. Particularly in Latin America and the Caribbean, new studies are needed to help deepen the characteristics of the BOP market based on their new lifestyles, needs, and consumer decisions.

Future research should focus on the field in similar populations to obtain results that imply generalizing and reinforcing this study, such as research on specific brands or product categories that are interesting to the BOP market. Along the same lines, specific groups of these consumers could be analyzed, and classified into a specific lifestyle typology, including demographic characteristics such as sex, age, and level of education. Other studies could broaden these findings through quantitative cross-sectional and longitudinal research, allowing the public and private sectors to focus on consumer of goods and services in depressed populations.

References

Notes

* Research article.

Author notes

^a Corresponding author. E-mail: iliana.aguilar@udla.edu.ec

Additional information

How to cite this article: Aguilar Rodríguez, I. E., Artieda Cajilema, C. H., & Tapia Andino, G. F. (2022). Influence of needs and lifestyles on the bop consumer: A perspective in Ecuador. Cuadernos de Desarrollo Rural, 19. https://doi.org/10.11144/Javeriana.cdr19.inlb

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