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Marketplace literacy could boost
entrepreneurship and economic
development
LONDON,
ON, May 22, 2009 – Teaching
low-literate people living in poverty
skills such as bargaining and judging
deals may help improve business and
economic development in developing
countries, and is a key component
missing from current consumer policy, a
new study shows.
"Educating
people in developing countries about
marketplace exchanges is
transformational. It empowers them to
gain control over their role as
consumers or entrepreneurs," said
Srinivas Sridharan, study co-author,
Richard Ivey School of Business.
Research
involving an intensive marketplace
literacy project in low-literate,
low-income settings in South India shows
micro-enterprises can optimally benefit
from micro-financing and access to
markets by also gaining marketplace
literacy and learning to be effective
shoppers and entrepreneurs.
"Designing
Marketplace Literacy Education in
Resource-Constrained Contexts:
Implications for Public Policy and
Marketing", published in the Spring 2009
edition of the Journal of Public Policy
and Marketing, looks at the implications
of these findings for consumer policy,
marketing research and business
practice.
It is
authored by Madhubalan Viswanathan,
Associate Professor of Business
Administration, University of Illinois;
Srinivas Sridharan, Assistant Professor
of Marketing, Richard Ivey School of
Business, The University of Western
Ontario; Roland Gau, doctoral candidate
in Marketing, University of Illinois and
Robin Ritchie, Assistant Professor of
Marketing, Sprott School of Business,
Carleton University.
Their
research looked at the outcomes of a
marketplace literacy educational
program, and included an analysis of
in-depth interviews with 60 consumers
and sellers in communities in South
India to examine their marketplace
behaviours, challenges, strengths and
vulnerabilities.
Findings
show that, although low-literate,
low-income consumers display several
strengths, they are often unaware of
their rights, lack confidence to be
effective shoppers, and lack relevant
skills, for instance failing to plan or
make shopping lists or request bills.
They are also loyal to and willing to
pay high premiums to neighbourhood
vendors in exchange for credit in times
of need.
Similarly,
although low-literate, low-income
entrepreneurs are adaptive and
resourceful, the study shows that they
often do not analyze the marketplace or
consider alternatives before starting
new businesses, and often fail to
consider several costs of doing business
in their accounting.
However,
the study shows that marketplace
literacy education can prove vital for
improving marketplace experiences and
strategies. For instance, where
micro-financing can help a person start
a business, having strategic marketplace
knowledge can help the person to choose
the right business to start, to run it
effectively and to adapt and survive
with changing circumstances.
"Education
paves the way for their experiences and
behaviours to gain marketplace
legitimacy, and may spur increased
entrepreneurship and consequent economic
development in poor communities," said
Sridharan.
While
current consumer policy prescriptions
for developing countries focus on
consumer protection, the researchers
suggest they should also emphasize
marketplace education.
For more
information, please contact Srinivas
Sridharan at 519-850-2556 or
ssridharan@ivey.uwo.ca.
About the Richard Ivey School of
Business, The University of Western
Ontario
The Richard Ivey School of Business at
The University of Western Ontario (www.ivey.ca)
offers undergraduate (HBA)
and graduate degree programs (MBA,
Executive MBA and
PhD) in addition to non-degree
Executive Development programs. Ivey has
campuses in London (Ontario),
Toronto, and Hong Kong. Ivey
recently redesigned its curriculum to
focus on
Cross-Enterprise Leadership – a
holistic issues-based approach to
management education that meets the
demands of today's complex global
business world.
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For more
information, please contact:
Dawn Milne, Communications Specialist,
Richard Ivey School of Business,
519-850-2536,
dmilne@ivey.ca
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