LA IMPORTANCIA DEL DESARROLLO DE LA DEMANDA (Caso iDE)

International Development Enterprises (iDE)
PANEL 3. THE IMPORTANCE OF DEVELOPING DEMAND
Images iDE.

Copyright © 2014 por Fundación CODESPA. Todos los derechos reservados
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

INTERNATIONAL DEVELOPMENT ENTERPRISES (iDE) in BANGLADESH
242 fulltime staff 14 active projects 25 active districts Partnerships across development, public, and commercial sectors

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.

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 Needs
Desires
Adapted from McLeod, S. A. (2007). Maslow's Hierarchy of Needs. www.simplypsychology.org

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

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

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

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

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

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

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)

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…

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

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…
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

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

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.

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.

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.

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
Figure iDE, 2013.

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/

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

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…

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 richard.rose@ide-bangladesh.org
Images iDE.

LA IMPORTANCIA DEL DESARROLLO DE LA DEMANDA (Caso iDE)

Recommended

Recommended

More Related Content

Similar to LA IMPORTANCIA DEL DESARROLLO DE LA DEMANDA (Caso iDE)

Similar to LA IMPORTANCIA DEL DESARROLLO DE LA DEMANDA (Caso iDE) (20)

More from Fundación CODESPA

More from Fundación CODESPA (20)

Recently uploaded

Recently uploaded (20)

LA IMPORTANCIA DEL DESARROLLO DE LA DEMANDA (Caso iDE)