Can and should the marketplace be inclusive to all consumers?
The issue of market inclusivity has been debated over the past years and is becoming an increasingly important issue amongst marketers. An inclusive market is an opportunity for all consumers to have equal access to all the products or services available on the market, whereas market exclusiveness is the opposite, a market which is not accessible to all. Although in today's society the technology market is growing at an exponential rate, a large part of consumers still cannot afford to keep up with technology or even buy a smartphone (Saatcioglu & Ozanne, 2013). This essay will discuss the extent to which the market for smartphones is inclusive. The first part of the essay will compare the UK smartphone market to the ones in developing countries by pointing out the main differences of the markets. The second part of this essay will focus on whether the market should become more inclusive for the low-income consumers in developing countries from a business and ethical perspective.
The smartphone industry is evolving on a rapid scale in the UK. It has grown to the point that 7 in 10 people own a smartphone, and the number of smartphone owners has reached 72 per cent in the UK, growing by 14 per cent in the last year (Deloitte, 2016). Moreover, in developed countries such as the UK, phones are very differentiated products, not only by their price but also by their attributes, and they are selected by consumers based on how well they can satisfy a certain need (Valetti & Cave, 1998). This ease of access to mobile phones highly facilitates the use of the internet which can lead to a more transparent and better informed market (Lee & Talbot, 2016). What is more, if a consumer cannot find a product offline, he has the chance of finding it and eventually buying it online (Choi & Bell, 2011). Thus, taking advantage of mobile internet, consumers can make a more informed decision about what the ideal product would be for them, and eventually having the option to order it online (Baye, Morgan & Shcolten, 2002).
In addition, smartphone marketing exclusiveness has not been an issue in the UK, where the minimum wage is approximately 1350€ (Eurostat, 2016). Considering that the price of a smartphone such as the new iPhone 7 is 600€, it represents less than a half of the monthly minimum wage in the UK. In contrast, the national minimum wage in Romania is approximately 220€ monthly (Eurostat, 2016) which means that low income consumers need 3 monthly pay checks in order to acquire an iPhone 7. Although the main point of high end phones such as iPhones is to be exclusive, because in that way they will maintain their brand image, from a social equal rights perspective, they could be more accessible to low income consumers in developing countries, since they are still a large market and their purchase power will be much greater if they were provided easy access to the internet via their phones (Dobush, 2015).
Arguing the exclusiveness of the market in developing countries even further, the smartphone usage is much less common in India, where the smartphone ownership levels are 17% (Poushter, 2016). Although the population of India is well over 1 billion people, market exclusiveness may occur in this case because a large percentage of the population has low purchasing power, mainly due to underpayment or even unemployment. Moreover, even though smartphones have made a bigger difference in our lives than any other inventions in the last years, they are not just a status symbol as they used to be, but rather a technology that facilitates almost every interaction. Despite smartphone ownership and usage still showing low levels in developing countries, it has been growing, however at an exponentially lower rate than in developed countries.
One economic impact of the increase in mobile phone use in developing countries is the growth of ‘'m-commerce''. Since 13 billion adverts are being sent to mobile devices in India every month, they represent a steady income source for marketing organisations, with two-thirds of all Indian e-commerce coming from smartphones (Brazier, 2013). By enforcing m-commerce in developing countries through the increase of market inclusiveness, non-English websites will appear and improve web access for speakers of all the languages spoken in India. Eventually, the increasing use of smartphones may provide an exponential economic stimulus to the Indian economy. Additionally, Poushter's (2016) research on internet use and smartphone ownership shows that, as people in emerging and developing economies grow richer and become better educated, technology use is very likely to grow. He states that as in previous years, within every country surveyed, people with more education and higher incomes are more likely to use the internet on their smartphones than the less educated ones with lower income. However, this applies to both the developing and developed world. Moreover, providing poor people with electronic equipment may facilitate the development of new markets and even new customer relationships, which can result in the company increasing its market power (Hamilton & Catterall, 2005; Gradl, Sobhami, Bootsman & Gasnier, 2010).
However, it can be argued that these people have other priorities than acquiring a smartphone, such as feeding their families and that their desire for having a smartphone is being fed to them by marketing and advertising. Furthermore, since most of the low income consumers in developing countries such as Kenya live on less than 2$ a day, it may be hard or even impossible to afford a smartphone (Graham, 2010). Also, because of the lack of education, they may encounter problems while using the smartphones and trying to access the internet hence, they won't use the device at its full potential (Brazier, 2013). Additionally, Graham (2010) is stating that the smartphones inclusiveness should focus on apps optimized for data use, since data is as expensive in developing as in developed countries. As an example, if Samsung were to launch a cheaper version of a smartphone, they should focus on apps optimization. There will be demand for apps such as banking, weather, social and even market information apps, which, according to the market inclusiveness paradigm, need to be accessible to all owners. Hence, it is mandatory that they use as little bandwidth as possible.
Nevertheless, because of length constraints, this essay could not discuss all the barriers that low-income consumers face when they try to access and purchase smartphones. Also, it could not expand on important issues, such as the lack of infrastructure in developing countries which may be one of the main reasons for market exclusiveness (Gradl et al, 2010). Moreover, due to lack of relevant data, this essay could not argue the consumers' subjective perspective of exclusiveness.
To conclude, this essay has looked at the concept of market inclusiveness in the smartphone industry by contrasting the inclusive market of the UK with the limited one in developing countries. Both businesses and society would highly benefit from an inclusiveness of the market, by encouraging sales, transparency, as well as making people more informed about both the products they want and the world just by having access to the internet from their phone (Hickey, Davis & Kaiser, 2003). However, a large part of the population in countries such as India or Kenya cannot afford smartphones due to the exclusiveness of these markets. Thus, most of the smartphone manufacturers are neglecting the high potential market of low income consumers and they could highly benefit from targeting them by creating much cheaper products such as a new, more affordable model of Samsung with low specifications.
Lastly, this essay underlined the technological gap between the contrasted countries and pointed out the need for improvement in developing countries.
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