Sustainability Marketing for the Poorest of the Poor Manfred Kirchgeorg1* and Monika I. Winn2 1 HHL���Leipzig Graduate School of Management, Leipzig, Germany 2 Faculty of Business, University of Victoria, BC, Canada ABSTRACT Recent work is reconceptualizing global poverty as an attractive growth opportunity for firms, that can simultaneously alleviate the problem of poverty. This notion has major implications for the sustainability of global society in general, and for the con- cepts and practice of marketing in particular. It is the purpose of this paper to explore, and bring attention to, these important implications, and to offer conceptual and prac- tical suggestions for a sustainability marketing for the poor. Copyright �� 2006 John Wiley & Sons, Ltd and ERP Environment. Received 11 October 2004 revised 21 October 2005 accepted 7 December 2005 Keywords: sustainability marketing marketing for the poor sustainable development global poverty empowerment of the poor developing countries Iaid-based N RECENT YEARS, GLOBAL POVERTY AND ITS DRAMATIC REDUCTION HAS BECOME A HIGH PRIORITY for diverse sectors and organizations (see, e.g., UN Millennium Goals). Abject poverty and world- wide inequity are increasingly seen as antithetical to notions of sustainable development. Traditional, development approaches (���donor models���) have proven largely ineffective in alleviating poverty, and expectations are shifting instead to market-based models which advocate that multinational corporations treat the poor as a lucrative market segment (Prahalad and Hart, 2002 WBCSD, 2004a). Current notions of marketing (including work on ���green marketing���, e.g. Charter and Polonsky, 1999) tend to be based on the premise of already functioning markets. Markets for the very poor, however, must first be created. How applicable then are current concepts of marketing to market models of poverty alleviation? And what modifications can be made to current marketing practice to address the challenges of global poverty sustainably? The paper is structured around these two questions. Global Poverty and Sustainable Development Defining Poverty There are many approaches to defining and measuring poverty. Over four of the world���s more than six billion people have an income of less than $1500 a year. Almost three billion people live on less than Copyright �� 2006 John Wiley & Sons, Ltd and ERP Environment * Correspondence to: Manfred Kirchgeorg, Chair, Marketing Management, HHL���Leipzig Graduate School of Management, Jahnallee 59, D-04109 Leipzig, Germany. Email: kirchgeorg@marketing.hhl.de Business Strategy and the Environment Bus. Strat. Env. 15, 171���184 (2006) Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/bse.523

172 M. Kirchgeorg and M. I. Winn Copyright �� 2006 John Wiley & Sons, Ltd and ERP Environment Bus. Strat. Env. 15, 171���184 (2006) DOI: 10.1002/bse $2 per day, and over one billion on less than $1 per day (Prahalad and Hart, 2002 World Bank, 2003a). During the Conference on Hunger and Poverty it was stated that ���poverty is a multi-faceted phenomenon, defined (and explained) as a situation in which a person lacks the necessary capabilities and entitlements to satisfy his or her basic needs and aspirations. From this point of view, the fight against poverty must consist in establishing entitlements that will allow the poor access to the material, social, and spiritual means to develop their capabilities��� (International Fund for Agricultural Development, 1995). Poverty Alleviation: a New Priority for Business Two recent market approaches to poverty alleviation, in particular, have drawn corporate attention to poverty: the ���fortune at the bottom of the pyramid��� (BoP) approach (Prahalad and Hart, 2002 Prahalad and Hammond, 2002 Prahalad, 2004a) and the ���sustainable livelihoods business��� (SLB) promoted by the World Business Council for Sustainable Development (WBCSD, 2002, 2004b). Such approaches are beginning to fill an important gap in the emergent practice and scholarship of sustainability man- agement (see, e.g., Sharma and Starik, 2004) having grown largely out of environmental management, and focusing on the greening of business (Winn and Kirchgeorg, 2005), less attention was paid to the social issue of global poverty. Along with resurgent interest by firms and scholars in corporate social responsibility, however, global poverty is becoming a strategic priority of large corporations (Prahalad and Hart, 2002 Hart and Milstein, 2003 WBCSD, 2004a, 2004b). Sustainable Development From a sustainability perspective, there are many reasons to alleviate poverty beyond its moral imperative. Most agree that sustainability can only be attained when each subsystem, economic, social and environ- mental, is vital and resilient individually and jointly (Bartelmus, 1994 Rademacher, 2004). By contrast, poverty is detrimental socially and environmentally, and it is the antithesis of economic viability and of social equity: growing disparity in wealth violates a moral right, cultivates social unrest and destabilizes increasingly interdependent societies, and the struggle for daily survival associated with poverty often causes rapid environmental degradation. Thus, poverty runs directly counter to the social, economic and environmental aspirations of sustainable development. The call to assist the poor in economic develop- ment then appears to serve social, environmental and economic goals of sustainable development. The effect of economic growth, however, is not always desirable. The ecological footprint of rapidly growing economies such as India and China, fuelled by a seemingly insatiable appetite for energy and resources, indicates that economic development can indeed have potentially devastating consequences for global ecological carrying capacity (Rademacher, 2004). One of the most critical, as yet largely over- looked, challenges of sustainable poverty alleviation is to find ways to enable the world���s very poor to become participant consumers and producers in the market economy and to raise their standard of living without, however, causing a net increase in the global ecological footprint. We argue that economic growth and the reduction of poverty can only be sustainable if it serves to both distribute wealth equi- tably, and does not further strain global ecological systems. Poverty���s Persistence To understand how different approaches to alleviate poverty might work, we first need to understand the nature of poverty���s stubborn persistence in less developed countries. Building on prior work (e.g. Prahalad and Hart, 2002 World Bank, 2003a, 2003b WBCSD, 2002, 2004a), we develop a simple triad of actors (government, providers, poor citizens) and briefly describe the effect of each of four blocked relationships on poverty���s persistence (see Figure 1).