LA IMPORTANCIA DEL DESARROLLO DE LA DEMANDA (Caso iDE)
-
Upload
fundacion-codespa -
Category
Government & Nonprofit
-
view
97 -
download
1
description
Transcript of LA IMPORTANCIA DEL DESARROLLO DE LA DEMANDA (Caso iDE)
International Development Enterprises (iDE)
PANEL 3. THE IMPORTANCE OF DEVELOPING DEMAND
Images iDE.
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
INTERNATIONAL DEVELOPMENT ENTERPRISES (iDE)
Mission to create income and livelihood
opportunities for poor rural households.
iDE delivers Market Systems Development
through:
- Technology commercialization
- Institutional commercialization
- Product design and innovation
Focused on:
- Agricultural Markets
- Food Security & Nutrition
- Water, Sanitation & Hygiene (WaSH)
- Technology & Innovation
• Founded in 1982
• iDE currently operates 12 country
programs in Asia, Africa, and Latin
America
• Delivered more than 250 projects in
market and private sector developed
valued at over $150 million in over 20
countries worldwide
• Funding from more than 90 donors,
including USAID, the Bill and Melinda
Gates Foundation, DFID, CIDA, and the
World Bank
• Recipient of over 10 international
development and design awards since
2004
• Employs over 500 staff worldwide
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
INTERNATIONAL DEVELOPMENT ENTERPRISES (iDE) in BANGLADESH
242 fulltime staff
14 active projects
25 active districts
Partnerships across development,
public, and commercial sectors
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
UNDERSTANDING NEED AND DEMAND (1)
Big numbers do not necessarily mean
a market – sometimes these are assumed to
represent demand but in reality they represent
need…
In the case of emerging economies it is not
straightforward to sell products and services to
this need as…
‘… the lives of low-income people are […] full
of priorities and boundaries that must be
renegotiated to adopt a new product’
‘… a company must first create a new
consumer market, a new lifestyle. It must
transform the need into a value proposition
worth valuing, and it must embed that
product into people’s lives’.
www.unwater.org
Quotation from Simanis, Erik Needs, Needs, Everywhere, but not a BOP market to Tap, in Next Generation Business Strategies for the Base of the Pyramid, London and Hart eds. FT Press, 2010
This need can be more accurately
considered as latent demand.
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
Maselow’s Hierarchy of Needs (1943) – meta-
motivation to strive for the highest needs…
Demand can be understood as what the BoP
will invest in based upon how a product or
service meets these needs/ desires.
‘The most effective way [to commercialize
products] to get someone to desire a new
value proposition and consumer offering
and to then invest the time and effort to
learn new routines and behaviors is to have
him or her feel a sense of ownership for it’
We need to understand BoP desires and
purchasing behaviours…
UNDERSTANDING NEED AND DEMAND (2)
Quotation from Simanis, Erik Needs, Needs, Everywhere, but not a BOP market to Tap, in Next Generation Business Strategies for the Base of the Pyramid, London and Hart eds. FT Press, 2010
Belonging-Love
Friends, Family, Spouse
Safety
Security, Stability, Freedom from Fear
Physiological
Food, Water, Shelter, Warmth
Self-Actualization Pursue Inner Talent, Creativity, Fulfillment
Self-Esteem Achievement Mastery, Recognition,
Respect
Basic
Nee
ds
Des
ires
Adapted from McLeod, S. A. (2007). Maslow's Hierarchy of Needs. www.simplypsychology.org
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
DEMAND CREATION AS VALUE PROPOSITION
Belonging-Love
Friends, Family, Spouse
Safety
Security, Stability, Freedom from Fear
Physiological
Food, Water, Shelter, Warmth
Self-Actualization Pursue Inner Talent, Creativity, Fulfillment
Self-Esteem Achievement Mastery, Recognition,
Respect
www.saverscart.com
www.wonderfulengineering.com
www.coolspotters.com
Adapted from McLeod, S. A. (2007). Maslow's Hierarchy of Needs. www.simplypsychology.org
www.examiner.com/
Developed consumer
markets – clear
understanding purchasing
behaviours
BoP Consumer Markets
– purchasing hierarchies
and drivers often no
reference points for
market creation
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
iDE believes that to embed products you need scale-able
and sustainable means to develop consumer markets
amongst the BoP
CREATING MARKETS AT THE BOP – CONNECTING NEED AND DEMAND
Government/
Development
activities
typically focus
on needs of BOP
populations in
technology/
product
development and
deployment
activities
Commercial sector
focuses on what is
already demanded
by existing
consumers at all
socio-economic
levels. Tend not to
invest in demand/
market creation
Consumer market not
developed for the
technology/ product
Figure adapted from World Bank Working Paper No: 138: Accelerating Clean Energy Technology Research,
Development, and Deployment: Lessons from Non‐Energy Sectors. World Bank, 2008.
Projects, R&D,
Government provision
Marketing and promotional
activities, R&D
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
HOW CAN WE DO THIS? (1) BUILD DESIREABILITY INTO THE SOLUTION…
Approaches such as HCD enable us to
understand the perception of a
community towards a product or
service so it can be adapted/
contextualised.
These approaches help us to understand
the demand dynamics, customer
segmentation and the aspirations of these
segments in the community.
Enabling us to conceptually arrive at the
right solution for both the product design
and the business model...
Understanding desirability
increases the market
readiness of the product or service
solution
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
HOW CAN WE DO THIS? (2) ANALYSE AND DEVELOP THE MARKET SYSTEM…
Ongoing analysis of the market
system ensures that weaknesses are
identified and interventions designed
This is the operational lens – how you
are going deliver the conceptual solution… Springfield Centre: www.springfieldcentre.com
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
HOW CAN WE DO THIS? (3) DRAW INVESTMENT INTO DEMAND CREATION…
Investment is required to drive
demand creation activities to
develop the consumer market for
the product or service
Who will invest continually in
demand creation activities?
Sources of investment ROI/ SROI
funding can be leveraged through
making deals (JVAs).
This is to support the
sustainability of
investment into the consumer
market created…
Stock image from http://iap.esa.int/c/sme/news/183; others iDE, 2013
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
Increase Market Readiness
of the technology
Draw investment into
the system
Analysis to overcome
systemic constraints
COMPLEMENTARY STRATEGIES TO SUPPORT A CONSUMER MARKET FOR BOP TECHNOLOGIES
Figure adapted from World Bank Working Paper No: 138: Accelerating Clean Energy Technology Research,
Development, and Deployment: Lessons from Non‐Energy Sectors. World Bank, 2008.
Consumer market can be
developed for the
technology/ product
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
TWO EXAMPLES OF IDE’S WORK IN BANGLADESH
Building Consumer markets amongst the
BoP for…
Micro-irrigation equipment
(Treadle Pumps)
Hygienic latrines
(using the SaTo® Pan)
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
EXAMPLE 1: CREATING DEMAND: DEVELOPING A MICRO-IRRIGATION MARKET IN BANGLADESH
iDE identified a need – that affordable
small plot irrigation could reduce poverty
and hunger for small farm families in
Bangladesh.
iDE had the right product: when farmers
reported a strong preference for the
Treadle Pump over the Rower Pump
(cheaper, easier to operate and produced
more water) – iDE chose to refine this for
mass-manufacturing and distribution.
iDE was committed to developing a BoP
consumer market for the product…
Gunnar Barnes, a Norwegian engineer who developed the Treadle Pump. It took several years, and contributions from many individuals, like Mr. Dev from Kurigram and Dan Jenkins from USAID, before the design work could be completed.
Adapted and images reproduced from Heierli, Urs., Polak, Paul, 2000. How iDE Installed 1.5 Million Treadle Pumps in Bangladesh by Activating the Private Sector: The Practical Steps. In Poverty Alleviation as a Business by Swiss Development Co-operation, Berne, Switzerland 2000
In small-scale micro-irrigation…
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
EXAMPLE 1: CREATING DEMAND: DEVELOPING A MICRO-IRRIGATION MARKET IN BANGLADESH
iDE branded the product ‘Krishak
Bandhu’ (Farmers’ Friend) with a
brand linked to a quality control
mechanism…
Branded the product to provide a quality marker
Adapted and image (right) reproduced from Heierli, Urs., Polak, Paul, 2000. How iDE Installed 1.5 Million Treadle Pumps in Bangladesh by Activating the
Private Sector: The Practical Steps. In Poverty Alleviation as a Business by Swiss Development Co-operation, Berne, Switzerland 2000; image (left) from iDE
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
iDE focused marketing on
promoting an aspirational
value proposition… the life
changing value of the Treadle
Pump
Supported demand-creation
through mass-marketing
campaigns and product
demonstrations to support
local dealers…
EXAMPLE 1: CREATING DEMAND: DEVELOPING A MICRO-IRRIGATION MARKET IN BANGLADESH
Image (below) shows a village drama about an ugly moneylender who wants to marry the beautiful daughter of a small farmer. The treadle pump allows a “happy
end”. 200 performances were attended by 5’000 farmers each: more than a million farmers were “entertained”. Reproduced from Heierli, Urs., Polak, Paul, 2000.
How iDE Installed 1.5 Million Treadle Pumps in Bangladesh by Activating the Private Sector: The Practical Steps. In Poverty Alleviation as a Business
Marketed the pumps through an ‘open’ value proposition
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
EXAMPLE 1: CREATING DEMAND: DEVELOPING A MICRO-IRRIGATION MARKET IN BANGLADESH
iDE developed the skills of mistris
(masons) in order to develop the
installation services for treadle pumps
– played a vital role for market promotion
(farmers trusted them)
iDE built an effective private sector
distribution service by selecting
dealers based upon criteria including
how respected they are locally…
Moved from enterprise model (iDE sold
the pumps) to facilitation model
developing private sector distributors
over time…
Strengthened key services in the market system
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
EXAMPLE 1: CREATING DEMAND: DEVELOPING A MICRO-IRRIGATION MARKET IN BANGLADESH
1.5 Million Treadle Pumps
adopted… (2003 figure)
Around 1200 dealers sold treadle pumps
through 3800 mistris.
Sales peaked in 1995 at around
180,000/ year.
Around 4-5000 sold in 2013.
Images iDE. Figures from Final Evaluation Study of The Marketing
Appropriate Technology Program for Treadle Pumps in Bangladesh 1984-
2003, Mehta, Roda for iDE and SDC, 2004.
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
EXAMPLE 2: HCD AND DIVERSIFICATION OF PRODUCT LINES FOR ASPIRATIONAL DEMAND PURCHASING
iDE identified a need – that CLTS
has led to high incidence of fixed
point defecation but often latrines
being used are unhygienic.
People need hygienic latrines…
iDE sought to develop a hygienic
latrine that BoP customers would
want to buy. Extending this
means creating a consumer
market for improved latrines…
Developing a consumer market for improved Sanitation Products…
Images iDE, 2012-3.
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
EXAMPLE 2: HCD AND DIVERSIFICATION OF PRODUCT LINES FOR ASPIRATIONAL DEMAND PURCHASING
HCD in Product Design and Marketing Package
Simple hygienic design in the key component –
the SaTo® Pan (developed with American
Standard Brands)
Packaged product into aspirational and
upgradable product range – the Family Friend
Toilet (built upon the same core product)
Selected price points to engage ALL local
consumer levels USD $10-$50
Through HCD iDE developed a desirable product offering with a basic needs focus
Images and figures iDE, 2013-4.
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
Sales representatives
worked in conjunction with
Local Government on
commission from the
latrine producers to engage
consumers in demand
creation sessions
Harnessed local
government subsidy
program of the and
focused it upon FFT sales.
Generated active demand
creation that can be
driven by the lead firm…
Through the lead firm iDE is building strategic demand creation into the value chain
EXAMPLE 2: HCD AND DIVERSIFICATION OF PRODUCT LINES FOR ASPIRATIONAL DEMAND PURCHASING
Figure iDE, 2013.
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
Harnessed the power of a private firm
RFL Group
• Leading manufacturer of cast iron,
PVC, and plastic products.
Agreement with RFL Plastics Ltd.
• 12,000 employees, 17 associated
companies (including agro-
dealerships, tubewells and plastics).
• ≈$300m revenue (2012). Dealer
network and distribution channels.
Partnership adds value
Strong brand identify and
recognition
Well known with BoP consumers in
Bangladesh
Can drive investment into demand
creation
Images: http://www.rflplastics.com/
EXAMPLE 2: HCD AND DIVERSIFICATION OF PRODUCT LINES FOR ASPIRATIONAL DEMAND PURCHASING
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
EXAMPLE 1: CREATING DEMAND: DEVELOPING A MICRO-IRRIGATION MARKET IN BANGLADESH
20,695 beneficiaries have access to
an improved, upgradeable latrine –
this represents 206% achievement
of the key end of project (EOP)
target
Budget of BDT 12.7 million/ USD
164,000 spent across 3 Upazilas in
Rajshahi district and two fulltime,
field-based staff… USD8/
beneficiary…
Pilot resulted in 4,139
households directly purchasing
an improved latrine in nine
months…
Images iDE, 2014
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
1. Diversity of approaches often
being employed in the field
2. Engaging private investment can
be tricky – requires negotiation
and deal-making skills
3. The development sector role must
be clearly defined (Enterprise,
facilitator, designers etc.)
4. Garage (small-scale) thinking will
not create viable solutions in the
long term.
KEY LEARNING AND CHALLENGES
Some challenges in developing demand…
Copyri
ght ©
2014 p
or
Fundació
n C
OD
ESPA. Todos los d
ere
chos r
eserv
ados
Richard Rose, iDE Bangladesh. The Importance of Creating Demand, Challenges and Learning. CODESPA Conference: Technologies
and services for the Base of the Pyramid. Challenges and keys to maximize its social impact, Madrid, Spain, 6th November, 2014
1. Understand the contextual role of
development organization
2. Brand recognition cannot be
understated
3. Value propositions must match
latent needs with desirable aspects
4. Marketing must target the upper
portion of the ‘pyramid’
5. Demand creation must be delivered
with market systems analysis and
private sector engagement
KEY LEARNING AND CHALLENGES
Some learning from our work…
GRACIAS
Richard Rose Technical Director – Programs International Development Enterprises – Bangladesh [email protected]
Images iDE.