The BOP Debate: Aneel Karnani Responds
The debate between C.K. Prahalad and Aneel Karnani regarding the BOP proposition continues. As we reported earlier this week, Professor Karnani has published a new case study critical of Hindustan Lever Limited’s Fair & Lovely Whitening Cream, a product identified by Prahalad and NextBillion.net’s Allen Hammond as “formulated for [BOP] needs” in a 2004 Foreign Policy article.
Karnani’s criticism of the BOP proposition first surfaced in August, when he posted another working paper, The Mirage at the Bottom of the Pyramid, and blogged about it on this site. In response, C.K. Prahalad drafted a 5-page rebuttal to Karnani, which was also posted on NextBillion.net. The controversy has received attention in Andrew Leonard’s How the World Works column on Salon.com; many readers have weighed in at Salon with their thoughts as well.
As the debate took shape online, I received an e-mail directly from Professor Karnani, who asked me to share his words with the NextBillion.net community:
A criticism of the BOP proposition is that targeting the poor as consumers could lead to their making bad consumption choices not in their own self-interest. Thus the firms could end up exploiting the poor. The BOP proponents dismiss such arguments as arrogant and patronizing and assert that the poor are value-conscious consumers.
My recent paper focuses on this debate by examining the case of Fair & Lovely, a skin whitening cream marketed by Unilever. I chose this case study because Hammond and Prahalad, two leading proponents of the BOP proposition, mentioned this example in one of their early articles. Also, Unilever is frequently mentioned in the literature as a socially responsible company that markets to the BOP. Fair & Lovely is indeed doing well; it is a profitable and fast growing brand. It is, however, not doing good, and I demonstrate its negative implications for public welfare. I conclude with thoughts on how to reconcile this divergence between private profits and public welfare.