iDE’s Sanitation Marketing Model

Posted in — Global Learning > Methodology
January 31, 2019
411 Idecam Vis Bug
iDE Global WASH

iDE uses Sanitation Marketing to identify and fill market gaps by influencing both supply and demand for sanitation products.

Finding Sustainable Solutions Through Human-Centered Design

Human-centered design (HCD) methodology allows iDE to understand the needs and motivations of key stakeholders, including end users, private sector actors, and enabling environment professionals. Rather than focusing on poor households as beneficiaries of charity deprived of agency, we engage with them as business owners, sales agents, producers, employees, and customers with their own unique aspirations and needs. Once we develop a deep understanding of local consumer behavior and market opportunities, then we design affordable, aspirational products that can be sold through local businesses. We don't replicate these products in different countries, but we replicate the process that creates the best products to meet the local context, filtering solutions through the HCD lenses of desirability, feasibility, and viability.

Diagnosing Markets

Market conditions, stakeholder participation, regulatory environments, and density of other development activity vary across our WASH portfolio. In some countries, the government is highly invested in promoting sanitation, weighing in on latrine technology designs, and regulating how the private sector and NGOs engage in WASH. In others, the government takes a more hands-off approach, and NGOs, donors, and the private sector more strongly influence sanitation program designs. As a result, iDE prioritizes identifying and understanding sector stakeholders in each context to be able to effectively involve them in market-based sanitation work.

Designing Successful Business Models

Business models are tailored to meet the needs of local customers and market actors, and adapted as customer preferences and market conditions evolve. Design research informs this work in three areas:

  • Product and service design. ​Stakeholders from across the value chain provide input on product prototypes, directly influencing the final design of the sanitation business model. The result is an affordable, desirable product that can be manufactured locally to meet the needs of rural households.
  • Demand creation. ​To generate demand for sanitation, iDE coaches independent sales agents to speak with households about their sanitation needs. These agents receive professional sales training from iDE including promotional messages tailored to resonate with local customers. Their commissions are built into the selling price of the product, making the model sustainable for businesses and sales agents alike.
  • Supply chain strengthening. ​iDE identifies and trains local entrepreneurs to meet the growing demand for sanitation products. Training focuses on technical skills (production and installation techniques) and business practices (such as inventory and sales tracking). iDE staff provides ongoing support and coaching to both sales agents and businesses to accelerate sanitation uptake. In designing the business model, iDE also works with entrepreneurs to set sustainable product prices and profit margins, balancing customers’ willingness to pay with the fact that entrepreneurs need a minimum profit margin to remain invested in sanitation over other lines of business.

Segmenting the Market

iDE thinks about implementing Sanitation Marketing in three “sweeps” to efficiently allocate resources by first targeting those who are most willing and able to purchase a WASH solution, and then ensuring that financial resources such as loans and subsidies go to the people who really need them—the poorest of the poor. The following is an overview of the sweeps model:

3154 Hero WASH San Sweeps
  • The first sweep targets those who are willing and able to pay cash — “early adopters” and
    some of the “early majority” market segment. This primarily includes households that have enough available cash and are willing to invest in a relatively new and unfamiliar product.
  • The second sweep focuses on reaching the early and “late majority” households, including
    poorer households, through targeted marketing, professionalized sales, product innovations, and the use of sanitation financing. This wave of purchasers includes households that have less cash on hand and/or a desire to see their neighbors using a product before they are willing to invest themselves.
  • Sweep three targets the remaining “late majority” and “laggard” households without improved latrines (presumed to overlap significantly with the the poorest households). Targeted subsidies are deployed only to those households who can demonstrate their poverty status, minimizing market distortions.

A Spectrum of Strategies

Each country’s strategy is determined by the combination of market dynamics in place. For example, in Cambodia, iDE plays a hands-on role managing sales teams and supply chain teams that work with local latrine producers. This concentrated effort achieves accelerated impact whereby iDE can play a finite role with a clear end in sight: universal coverage.

In other countries iDE acts as a facilitator, providing R&D and business strategy to local lead firms. This strategy is useful for market contexts where there are strong existing private sector players who just need a bit more support or evidence to join the sanitation market.

Where government has a strong involvement in implementation and their networks can be leveraged as a valuable resource, we play a “Train the Trainer” role in building government capacity to engage WASH market actors and apply market-based approaches.

As market conditions evolve over time, iDE adapts the marketing mix for harder to reach market segments. An emphasis on continuous learning and designing to the local context enables programs to adapt, scale, and increase adoption rates.