Brand Adoption by BoP Retailers

Abstract

The article brings out the major factors that bottom-of-the-pyramid (BoP) retailers consider when adopting brands. It suggests that, besides the known variables of profitability, relationship and merchandise, these retailers attach importance to efforts that lead to reduced perceived risk. These include replacement and buyback facilities besides credit. They define the relationship with distributors/wholesalers not just as firm-firm business-based, but also as stemming from familial, social and ethnic dimensions. Based on 472 responses of acceptance or rejection from BoP retailers from rural India, the findings show a positive, significant relationship with brand characteristics. On the other hand, product-related factors showed a significant but negative relationship. The study found a significant but negative association between distributor relationship and probability of adoption, which should be considered in conjunction with credit, replacement and buyback facilities. The authors suggest that, while brand demand is a significant factor, strategies based on service-dominant logic would be more effective in sustained adoption of brands among small retailers.