Reference no: EM13918441

Colonialism is the domination of one society by another, so yes this is a clear example of a company from a rich society capitalizing on a poor society (Nowak & Laird, 2010). Most indigenous countries like Brazil were forced to switch to capitalist mode of production in order to control the economy. This switch was more than likely a collaboration between the government of Brazil and predatory merchant MNC's like McCann World Group that targeted the low-income consumers.

There are obvious negative effects direct marketing has on poor people and their economy. For example, the homemakers may have found a way to supplement their low income by making some of the products themselves and selling them or trading them for a fair price. But by the bigger companies mass producing cheaper products and putting them in visible markets this would cut their supplemental income. Another negative is the poor quality the product will now have as a result of the new cheaper price, causing them to have to repurchase the product multiple times because of its low quality.

However, there is a positive side to direct marketing it treats the low income consumer as a valued customer giving them a chance to buy similar products as upper class consumers at a price they can afford. Secondly, the retailer can restock the shelves with brands and products the low income consumer can identify with. This allows the low income merchant and consumer a better shopping experience that fits their income bracket.

The theory that explains this at best is the dependency and underdevelopment theories. The applicable point made by the Economic Commission for Latin America (ECLA), about the reversed control of the land and its natural resources had a direct effect on indigenous communities and the expansion of global markets to poor, low income people left with nothing (Nowak & Laird, Globalization, Development, and Native People: Dependency and Underdevelopment Theory, 2010). This forced them to be dependent and poor scrapping to buy products they used to grow and produce naturally.