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WILLINGNESS TO PAY: A PRACTITIONER’S PERSPECTIVE

WILLINGNESS TO PAY: A PRACTITIONER’S PERSPECTIVE. Alex Banful, GSMF International. BACKGROUND. OBJECTIVES FOR USING THE WTP SURVEY. The original objective was to use WTP as a pricing mechanism tool

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WILLINGNESS TO PAY: A PRACTITIONER’S PERSPECTIVE

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  1. WILLINGNESS TO PAY: A PRACTITIONER’S PERSPECTIVE Alex Banful, GSMF International

  2. BACKGROUND

  3. OBJECTIVES FOR USING THE WTP SURVEY • The original objective was to use WTP as a pricing mechanism tool • However, when the study was ready, we used results as a Strategic Marketing Tool not just to increases prices but to; • Balance improved cost recovery vrs Increased CYPs, and • Differentiate between Protector and Panther condoms in the various market segments • Re-position brands for sustainability • Move Protector & Panther towards commercial market brands

  4. PRODUCTS • Condoms • Champion • Panther • Protector • Oral Contraceptive Pills • Secure

  5. JUSTIFICATION FOR PRICE CHANGE • Inflation was high • Prices had stagnated for a long time • Leakage of low cost condoms (MOH) into commercial market • Need for increased cost recovery

  6. ACTION TAKEN • WTP conducted for Commercial Market Strategies by Bill Winfrey in 2002 • Main Partners • Commercial Market Strategies • Research International • GSMF International • Ministry of Health • PPAG

  7. SURVEY DETAILS • Client intercept survey • 2,670 clients were interviewed • 147 outlets were sampled including; • Chemical Shops 105 [1,845 clients] • Pharmacies 23 [504 clients] • MOH Clinics 15 [260 clients] • PPAG Clinics 4 [61 clients]

  8. SURVEY RESULTS

  9. WILLINGNESS TO PAY FOR 50% PRICE INCREASES • Champion - - 83.3% • (90.4% WTP for 25% increase) • Panther - - 79.1% • (49.4% WTP for 100% increase) • Protector - - 73.3% • (40% WTP for 100% increase) • Secure - - 81.6%

  10. If price increases too much..

  11. IMPLEMENTATION

  12. PRICE CHANGES

  13. Champion Condom Price Increment

  14. Panther Condoms Price Increment

  15. Protector Condoms Price Increment

  16. LESSONS LEARNT

  17. LESSONS LEARNT • For brands that increased prices within the more acceptable limits (Champion) • Sales volumes continued to increase after prices were increased • For brands that did otherwise (Panther, Protector) • Sales volumes dipped after price were increased

  18. CONCLUSION • By using the WTP report as a strategic marketing tool, GSMF was able to; • Balance Improved cost recovery and Increased CYP • Re-position Panther and Protector condoms, and • Differentiate between Panther and Protector condoms in the various market segments

  19. THANK YOU

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