Published: 10/03/2011

Updated: 18/04/2012

What is The Providence Paradox

The Providence Paradox Interview
The Providence Paradox Interview

Welcome in another video review about the “Providence Paradox”! Today’s video is pretty interesting as it is represents an interview between Scott Bernardo (the interviewer) and Rohit Deshpandé, Harvard Business School professor where the last describes ways that emerging market
companies can overcome consumer bias against their products.

Mr. Rohit Deshpandé explains how is The Providence Paradox is a relatively new term in the business world.
It refers to products and services manufactured by developing countries that have a difficult time establishing a profit margin due to where they
are from. On the one hand consumers want authenticity, but on the other, they do not feel like paying a high price for a ‘third world’ product, generally by answering the following questions:

  • Can you explain to us what the business paradox is? Mr. Deshpandé answers this question saying that the providence paradox is meant to emerge markets and to simplify the ways the marketers of the products to manufacture them and give them a chance to provide their products with a fair price without looking at the place they come from. He also discuses the problems that 3rd worlds marketers can face while selling their products since people won’t buy their products with a high price even if it is a high qualtity merchandise.
  • Can we take the examples of the chocolat from a developing country and wine from Chilli: He gives us an example : Vinziuala chocolate company; this company produces the best cocoa in the world and the finest but they cant get themselves well known and they can’t command a good price as people know the product is good but they are not willing to pay a good price for it. Specific example wine producing company it produces wide range of quality wines some of them very high and some are low ,this company offers wine that is rated by 90% which allows them to sell the  one bottle with 300$ but in reality they can’t command a price over 49$ because the distributor’s tell them that no one in his stores will pay more than 50$ for a bottle of wine coming from Chilly.
  • Shall we talk about some strategies within the Providence Paradox: Mr. Deshpandé Talks about how the lG electronics (formerly known as luck gold star) established their own name in the marketing world. And how Honda and Toyota entered back in the 1970 in the  u.s market , they didn’t do very well at that time and people laughed at these product and it took Toyota from 20 to 30 years to establish their name. It takes lots of time and money if you real small company to establish your own product or in a developing country. Then he explains the process of taking short cuts instead of beginning a company from the scratch like acquiring a company which is already out there i.e.Volvo that was acquired by ford but it got sold to a Chinese company.

And thanks to this great Professor Rohit Deshpandé who is Sebastian S. Kresge Professor of Marketing at Harvard Business School where he currently teaches in the Owner/President Management Program and in other executive education offerings, learn more about him who was able to deliver a good explanation to the providence Paradox and has made it closer to our understanding. Thanks for reading and i will leave you with the interviaw now:


Author: Ortwin Oberhauser

BSc Applied Computer Science
SEM / SEO & Conversion Optimization Geek

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Co Founder of International Film & Digital Solution Agency
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