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Igniting Markets for Sanitation

Igniting Markets for Sanitation. Created by: Tamara Baker Cordell Jacks Danielle Pedi. What is Sanitation Marketing?. Sanitation Marketing develops sustainable businesses that create demand for sanitation products and services AND

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Igniting Markets for Sanitation

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  1. Igniting Markets for Sanitation Created by: Tamara Baker Cordell Jacks Danielle Pedi

  2. What is Sanitation Marketing? Sanitation Marketing develops sustainable businesses that create demand for sanitation products and services AND supplies those products and services to better serve the needs of low-income households.

  3. What is Sanitation Marketing? Sanitation Marketing = Market development Sanitation Marketing ≠ ensuring there is supply after a CLTS intervention Sanitation Marketing ≠ simply training masons

  4. What are Supply & Demand? Supply: The products or services available for sale. Demand: The desire and willingness of customers to pay for a good or service.

  5. Sustainable Businesses • Profitable: Provides sufficient income for the business owner. • Enduring: Has the opportunity for continued sales over time. • Independent: Functions without continued subsidies or support from outside organizations.

  6. How is this achieved? The 4 Ps of Marketing A business creates and supplies demand through: Product: The product or service that is for sale. Price: The amount a customer pays for the product. Place: How a product or service gets to the end consumer  the Supply Chain Promotion: All of the communications used to promote a product or service

  7. How is this achieved? +2 More Ps Policy: The related policies, laws, and bylaws Partners: The different roles and incentives of private sector, government and NGOs

  8. What is a Supply Chain? • A supply chain is a network of businesses that participate in the production, delivery, and sale of a product to the consumer. • Three key parts: • Raw materials: supplied to manufacturing, including how, when, and from what location. E.g.: sand and cement suppliers • Manufacturing: converting these raw materials into finished products. E.g.: Concrete ring producers • Distribution: ensuring these products reach the consumers. E.g.: retailers, transporters, sales agents.

  9. Why Sanitation Marketing? • In most cases sanitation marketsalready exist but they aren’t effectively connecting supply and demand • Sanitation markets can work in governance challenged regions • Sanitation Marketing supports local governments to create an enabling environment for local businesses to flourish

  10. Why Sanitation Marketing? • Once demand is ‘triggered’, people need access to affordable, durable sanitation options • It doesn’t end at ODF – There will be an ongoing need for sanitation products and services • Sanitation Marking includes the poor

  11. Why Sanitation Marketing? • Knowledge and desire are not enough for sustainable behavior change • Supply side actors will not always spontaneously respond to new demand • Enterprises will create demand for sanitation

  12. Sanitation Marketing is PART of the solution… …to achieve scaled, sustainable sanitation goals

  13. Where will Sanitation Market work? • Where direct hardware subsidies are not a large part of government or donor policy • Where low cost technologies can be developed and made available • Where there is some basic market infrastructure/understanding

  14. Program Design Principles What to consider when planning to do Sanitation Marketing

  15. Principle: Scale Plan for 100s of villages: this is not a village-by-village approach Sanitation Marketing focuses not on individual villages but on the enterprises who service the villages. Enterprises look to grow their businesses by selling more products to more people their market potential is not limited to NGO program geographical scope E.g. Cambodia : Easy Latrine sales recorded in 1060 villages, 207 outside target provinces

  16. Principle: Timing • Plan beyond 1-2 year funding cycles • Market research and strategy design: Expect at least 6 months before launch • Market penetration: After launch, expect that sales will start slow, but grow exponentially

  17. Principle: Know What Counts Plan achievable goals Latrine targets vs. sustainability ‘Too ambitious’ project targets may lead to decisions that will hinder long-term market growth Commit to modest targets in the first year

  18. Principle: Investment • Plan for up-front costs • Sanitation Marking frontloads program costs: research, strategy design, testing, training • Program costs reduce as latrine uptake increases • ‘Program cost per latrine’ metrics do not capture the full impact of market-based interventions

  19. Principle: Resources • Plan to recruit the skills you need • Sanitation Marketing requires an interdisciplinary team: marketing, business development, advertising, product design, etc • Engineers and public health experts are not enough

  20. Principle: Understand roles and context • Plan to clarify roles and functions • Who are you as implementer  • Government? NGO? Enterprise? • What needs to be done? • Who is in the best position to do what?

  21. Principle: Consider the poorest • Plan to address those who can not afford to pay • Alternative financing (savings groups, MFI loans, installment plans), voucher systems, well-targeted subsidies can all support a well-functioning market

  22. Principle: Understand the market • Plan to research differently • Sanitation Marketing invests time to research the needs, wants, and desires of consumers AND suppliers • Gain a deep understanding (listening) • Surveys won’t give you what you are looking for

  23. Principle: Understand the market • Plan to find the gaps • What is working and what isn’t working? • Barriers to purchase • Barriers to entry • Explores the opportunities and possibilities • E.g. Cambodia no marketable latrine options between $0 and $100

  24. Principle: Create proof of concept • Plan to prove the opportunity • For a business to become engaged in sanitation markets there must be a clear profit opportunity. • Understand the constraints that cause supply and demand to be ineffectively connected • Develop and test a profitable business model proof of concept

  25. Principle: You Don’t Have Control • Plan to let go • What a business chooses to do or not do is up to them. • Sanitation Marking nurtures an environment for businesses to grow • Let enterprises take the risk & make the investment: it is not your business • Failure is an option In the end success is dependent on the entrepreneur, it is not up to the supporting NGO to ensure they succeed

  26. Principle: Enable Competition Plan to engage many enterprises Enable many businesses to self-select Many businesses = competition Competition drives five key aspects of sustainable market development: Aggressive demand creation Innovation Quality Price Collaboration

  27. Principle: Listen Markets are constantly evolving – developing markets for sanitation is an iterative process

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