The study focuses on the relationship between marketing strategy elements and the social performance of Microfinance Institutions (MFIs). The MFI clients' perceptions of marketing strategy elements and the socio-economic outcomes of microfinance-based interventions were factored into the study. Latent constructs were developed based on the clients' perceptions of marketing strategy elements and social performance indicators. A field study was conducted, wherein 200 clients of four South Indian MFIs participated. The authors carried out a multivariate test to analyze the data. The authors determined to what extent MFIs' marketing strategies have impacted social performance. Necessary inferences were drawn from the findings to distinguish between marketing strategies, which have a stronger impact on specific socio-economic outcomes and those strategies, which have a marginal impact. The data, which have been obtained at a field level, would provide microfinance practitioners more insights into clients' perceptions of marketing tactics as well as social performance outcomes. MFIs can fine-tune their marketing strategies to be more responsive to clients' needs. Policy makers and practitioners in the development sector would find the socio-economic outcomes of microfinance relevant. The marketing strategies, which impact client behavior in the microfinance sector, would also be of interest to social marketers. Studies juxtaposing clients' perception of marketing strategy elements and social performance outcomes are rare in microfinance research. The authors hope that their field studies on microfinance would add value to the discipline of marketing.

Amid rising competition, microfinance practitioners and researchers are shifting their focus towards market-responsive product design and client retention. Woller (2002) called for a second microfinance revolution, wherein Microfinance Institutions (MFIs) meet clients' needs rather than institutional needs. In 1990s, clients were merely considered as statistics, measured in terms of repayment and repeat borrowing rates (Cohen, 2002). However, the current microfinance agenda has become client-focused and there is a growing thrust on the quality of microfinance services rendered (Chao-Beroff, 2001).

The Indian microfinance sector has matured considerably, with more venture capitalists and private equity players funding for-profit MFIs. With NGOs getting transformed into non-banking financial institutions and commercial banks downscaling their operations, the sector is characterized by organizational complexity and diversity (Nair, 2005). MFIs operating in competitive regions have begun revamping their strategies due to the entry of profit-oriented players (McIntosh and Wydick, 2005). Innovative loan contracts and management practices have emerged in microfinance markets in countries as diverse as Senegal and Bosnia (Cull et al., 2005). Given the above context, marketing strategies for MFIs assume significance. Marketing strategies targeting the bottom of the pyramid segment have captured the imagination of both the academicians and the business community. Researchers such as Prahalad and Hart (2002) and Viswanathan and Rosa (2007) have brought to light potential new consumer markets in low income contexts and subsistence marketplaces. Sridharan and Viswanathan (2008) have called for a deeper understanding of consumer psychology in subsistence marketplaces. Market researchers also have a strong thrust on the structure and psychological processes underlying customers' perception of service quality (Athanassopoulos, 1997). In this study, insights into the bottom of the pyramid segment are primarily drawn from clients' perceptions of marketing strategy elements of MFIs based in South India. Poverty alleviation can be catalyzed through behavioral change induced by social marketing programs (Dholakia and Dholakia, 2001; and Kotler et al., 2002). As social marketers, MFIs strive to bring about a behavioral change in their clients, which is measurable in terms of socio-economic outcomes such as increased access to healthcare, housing and greater levels of empowerment.

Marketing Management Journal, Marketing Strategies, Microfinance Institutions, Microfinance Sectors, Microfinance Services, Social Marketing Programs, Commercial Banks, Social Performance Management, Social Entrepreneurs, Social Business Enterprises, Financial Services Sector, Marketing Campaigns, Financial Literacy Campaigns, Social Marketing Interventions, Millennium Development Goals, Retail Banking Services, Financial Services Marketing.