The roles of exploration and exploitation in the export market integration of Beninese producers at the base of the pyramid

Keywords: Base of the pyramid, Bottom of the pyramid, Supply chains, Export market integration, Market learning, Developing and Emerging countries, Exploitation and Exploration, Institutional arrangements, Transaction cost economics, Livelihood performance, BoP producers

Abstract

Organizing supply chains that are based in producer groups that live in conditions of widespread poverty and weak institutional support (sometimes referred to as the Base of the Pyramid [BoP] producers) is challenging. These challenges have predominantly been studied in the development literature, while the marketing perspective has received less attention. Drawing on both transaction cost and market learning theories, the thesis integrates producers’ opportunity exploitation and exploration processes with the institutional framework adopted in the development literature to understand producers’ integration with export markets. Overall, the findings show that exploitation mediates between drivers investigated by development economists (quality of infrastructure, microcredit, and community culture) and integration with export markets. The results show that BoP producers’ export market integration also depends on the institutional arrangements that exporting companies offer. The results indicate that contrary to more-developed settings like those in Western Europe and Northern America, there is no need to develop both opportunity exploration and exploitation in environments characterized by scarce opportunities with relatively high purchasing powers. The findings imply that developing competencies that enable to produce the demanded quality are crucial in seizing export market integration opportunities.