Access-Based Services for the Base of the Pyramid

Area of Science:

• Consumer Behavior
• Marketing Strategy
• Development Economics

Background:

• Consumers at the base of the pyramid (BoP) face significant challenges accessing essential products, often leading to widespread nonconsumption.
• Previous research suggests that access-based services, which offer goods without ownership, could mitigate this issue.

Purpose of the Study:

• To empirically investigate whether access-based services reduce nonconsumption among BoP consumers.
• To explore the underlying mechanisms, specifically expected utility assessment, driving this effect.
• To examine the role of access temporality (short-term vs. long-term) in the effectiveness of access-based services.

Main Methods:

• Two experimental studies were conducted in rural India.
• Expected utility theory guided the experimental design and analysis.
• Consumer perceptions of affordability, financial risk, and ownership were measured.

Main Results:

• The availability of access-based services significantly reduces nonconsumption at the BoP.
• This reduction is driven by BoP consumers perceiving access as more affordable and less financially risky than ownership.
• Short-term access is more effective than long-term access in decreasing nonconsumption, as long-term access is perceived similarly to ownership.

Conclusions:

• Access-based services offer a viable strategy to address nonconsumption among BoP consumers.
• Service providers must carefully consider access temporality, favoring short-term options to enhance consumer acceptance.
• Understanding BoP consumers' utility assessments is crucial for designing effective access-based service models.