A recent Wall Street Journal article, titled “Companies Court The Poor’s Loyal Pennies”, discusses how large, global corporations are finding that the poor in underdeveloped and developing countries are willing to consistently spend on food, clothing, and other basic items, as long as those items remain cheap for them to purchase.
According to the article, chocolate company Nestle sells a particular chocolate drink for children in Indonesia for ten cents. Sales of this drink have remained high in Indonesia, even during times of a weak or rough economy. This may be surprising to some, but not to the large multinational companies, who have realized this strong, new market of consumers.
However, what are the repercussions of multinationals purposefully marketing their products at a very cheap cost to the poor in underdeveloped countries, in order to bring in large sales? One possible consequence may be that if those in underdeveloped countries consume large amounts of these cheap products (which are not necessarily healthy), health problems may emerge.
For example, if Nestle makes sure to sell their children’s chocolate drink for a low price, to ensure that the people of Indonesia buy this drink over a possibly healthier version at a higher cost, the company is manipulating the poor to choose low prices over healthier (though costlier) options. Is this fair to do to the people of underdeveloped countries, who do not necessarily have a choice when it comes to purchasing products, as their relatively small income forces them to purchase products at the cheapest price?
Explore the WSJ article for more discussion on how multinationals are finding the poor of underdeveloped countries a very steady and reliable consumer market to sell their products and services to…
“Companies Court The Poor’s Loyal Pennies”: http://online.wsj.com/article/SB10001424052702303612804577530821179213842.html