A quick recap: C.K. Prahalad, an economist at the Ross Business School at the University of Michigan, is the chief popularizer of the "bottom of the pyramid" -- the notion that there is an underserved market in the world's poor, and that corporations that target that market can not only profit, but at the same time help improve the living standards of the poor. Prahalad's Michigan colleague, Aneel Karnani, is a leading critic of Prahalad's ideas, and recently released a case study examining whether the Fair & Lovely skin whitener cream, promoted by Prahalad as proof of BoP success, was indeed a case in which a corporation could "do well by doing good." Fair & Lovely skin whitener has been marketed in India via what many critics consider racially discriminatory advertising, and Prahalad is a member of the board of directors of Hindustan Lever Limited, which sells the product in India.
NextBillion.net bills itself as "the flagship Web site" of Development Through Enterprise, a program run by the World Resources Institute (WRI). C.K. Prahalad also sits on the board of the WRI. Allen Hammond, Prahalad's co-author on the influential Foreign Policy article "Selling to the Poor," also works for WRI as its vice president for innovation.
Last Friday, the NextBillion.net blog published a response to Karnani and How the World Works, co-authored by Hammond. Of particular interest, I think, are the following two paragraphs:
Hindustan Lever and its Fair & Lovely product did not create skin-color bias in India. Indeed, HLL simply responded in a rational manner to the demand for a product that effectively lightens skin. We do not have sufficient information to pass judgment on the way HLL has marketed this product, nor is it our remit. Of course, we condemn discrimination in all its forms, for what that is worth. However, as a Salon commenter notes, when a BOP customer chooses to buy skin cream, it is an aspirational purchase that she would not have had the wherewithal to make in the past. The consumer is making a rational choice, based on the circumstances.
Fair & Lovely would not be a commercial success if it did not work as advertised. Clearly, HLL understands the BOP market better than its competitors and has created a product that is very much in demand. At the same time, when HLL engaged in discriminatory advertising for Fair & Lovely, there was public pressure on them to cease the ad campaign, and backlash against the company in general. The market, in other words, was working.
I think it would be more accurate to say "Fair & Lovely would not be a commercial success if it was not advertised." NextBillion's defense of HLL's actions understates the role that corporations play in the manufacturing of desire that is not rational. To say that the market "worked" because after years of struggle two advertisements were banned, long after HLL had generated considerable revenue by pushing the message that lighter skin equals happiness, seems a bit disingenuous.
One of the crucial points of Karnani's critique was to demonstrate that just because there may be opportunities for profit in the poorest sectors of global society does not necessarily mean that corporations are improving the circumstances of the very poor by successfully marketing products to them. The success of an advertising campaign does not equate to rational behavior on the part of a consumer -- it is, instead, a successful seduction of the consumer. And I would think most people who have been around the block once or twice would agree: Allowing oneself to be seduced isn't always an exercise in good sense.