A report out today from the World Bank says
businesses should be marketing to the poor.
Ashley Milne-Tyte has more on why some say this
could be beneficial.
TESS VIGELAND: How do you market to
the world's poorest populations? The 4 billion
people who earn less than $3,000 a year? Might sound
a tad mercenary. But a report out today from an arm
of the World Bank says businesses should be doing
just that. And not just for their own benefit.
Ashley Milne-Tyte has more.
ASHLEY MILNE-TYTE: The report found
the 4 billion poorest people have $5 trillion worth
of purchasing power. And that sits largely untapped.
Still, it's less about marketing to the poor, says
Alan Hammond of the World Resources Institute, and
more about letting the market work for them.
ALAN HAMMOND: The poor are
victimized by having uncompetitive, inefficient
markets. And if we made them more efficient and
more competitive, the prices they'd pay for
basic services would go down, not up.
says when the poorest peoples' incomes increase, the
percentage of income they spend on food drops. What
shoots up, he says, is how much they spend on
transportation and communication, like bikes and
HAMMOND: And that's sort of
fascinating. Because it says they're actually
being very smart consumers, they're voting with
their pocket books, and they're picking those
things that really improve either their quality
of life or their ability to earn income.
if more businesses courted this group, prices would
get more competitive. That would help improve
everybody's bottom line.
Michael Klein is the World Bank's vice president for
financial and private sector development. He says it
really wouldn't take much to make a big difference.
MICHAEL KLEIN: If by more
innovation, more competition, you could just
lower costs by 1 percent, or having quality
improvements in that order, you actually
transfer as much value to poor people as the
whole of official aid together.
Official development aid will never reach 4 billion
people, he says, so the sooner business steps up to
the plate, the better.
In New York, I'm Ashley Milne-Tyte for