Exploiting Markets in the Informal Sector

People generally view the informal sector as a marginal activity at the peripheral of the formal sector, a labor reservoir that is basically a potential source of workers to supplement the other sectors. They see its importance in terms of providing job opportunities for the lower income groups whose output is associated with cheap and poor quality subsistence goods.

There are others who see the informal sector not as a problem that needs to be solved but rather as a vast investment destination with huge market potential that needs to be exploited.

These views do not necessarily reflect any conflict of opinion but rather, different stages in the continuum of discovery. People’s experiences shape their thinking about markets and ultimately this is what forms the foundations for their marketing decisions and strategies.

Although most people agree that there is huge market potential, they concede that this population is unpredictable, risky and in some instances unviable for commercial engagement primarily because of the high level of informality associated with the sector.

The question remains, how do we exploit markets in the informal sector?

A basic requirement for unlocking the market potential in the informal sector is an appreciation of how marketing infrastructure inter-phases with established relationship structures that in general determines the quantity and quantity of interaction among people in a selected population.

But this is only foundational as actual penetration is best pursued by applying innovative marketing strategies that blends social and economic empowerment of the target group (through information, advice, linkages, etc) with product promotion that recognizes local cultural context and places the highest value in the participation of the target audience in order to maximize absorption.