JM Insights in the Classroom
Teaching Insight:
In this paper we investigate how rural consumers in India shift their expenditure towards branded products with exposure to urban areas through migrant family members. Studying 434 rural families across 30 villages in India, we found that migration affects brand expenditure through both economic and social remittances. For example, migration has a greater impact for those households with cell phones (that enable communication with migrants) and a much smaller impact for households that own televisions (which substitute for migrant communications). Marketers can significantly improve their salesforce effort allocation by using migration data when predicting brand expenditure.
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Marketing Strategy
Full Citation:
Narayan, Vishal & Shreya Kankanhalli (2021), “The Economic and Social Impacts of Migration on Brand Expenditure: Evidence from Rural India,” Journal of Marketing.
Article Abstract:
Households sending members to work away from home often receive information about lifestyles and consumption behaviors in those migration destinations (i.e., social remittances) along with economic remittances. We investigate the effect of having a migrant household member on household brand expenditures in rural India—a market characterized by substantial consumption of unbranded products. We collect and analyze household-level survey data from 434 households across 30 villages using an instrumental variable strategy. Economic remittances result in greater brand expenditure and this level is higher for poorer households. After controlling for economic remittances, the effect of migration on brand expenditures is more positive for households residing in more populous villages, with greater access to mobile phones, lower viewership of television media, and with less recently departed migrants. We demonstrate how marketing resource allocation across villages can be improved by incorporating migration data and provide insights for household targeting in the context of door-to-door selling in villages. Our results are robust to alternate, public policy-based instruments, and can be generalized to expenditure on private schools. Using additional survey data from 300 households in 62 new villages, we replicate our results by comparing within-household brand expenditures before and after the migration event.
Special thanks to Holly Howe (Ph.D. candidate at Duke University) and Demi Oba (Ph.D. candidate at Duke University), for their support in working with authors on submissions to this program.
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