This presentation provides a high level overview of PATH’s ongoing evaluation of Market Based Solution strategies for improving low income household access to effective household water treatment and safe storage (HWTS) products. PATH is 3 years into a 5 year project. This presentation captures PATH’s learning, its method of learning, how PATH has applied its learning to date, and anticipated next steps.
SWP = 5 year Gates learning initiative to Catalyze the commercial market to serve low income consumers Analyze the gaps in the value chain and opportunities for scale and sustainability . Improve HWTS products, provision, and promotion. Recognize that we will only achieve health impact if we make it possible and desirable for people with contaminated water to consistently use these treatment methods. As we consider products and how they get from a concept to the consumer, and the desired health impact, it is helpful to think about the various roles and activities required Market mechanisms have the potential to be efficient, scalable and possibly sustainable as long as everyone gets what they need from the process of bringing products to market. Role for public sector to prevent abuses and ensure equity so the needs of the poorest of the poor get met. What we are trying to learn from commercial efforts in India, Cambodia, Vietnam, Uganda, Kenya, and Malawi is what approaches stimulate the greatest uptake and sustained use of effective products, which business models are profitable, and what are the complementary roles to be played between public and private sector actors to drive access and use to lower income populations.
In India our initial market analysis and formative consumer research identified distribution as a primary gap. There were a range of products available on the market but they were not reaching our target consumers who lived on less than $5 per day. The more effective products that could be used in households without electricity or water were not affordable. Our formative research suggested that installment plans were more acceptable to consumers than loans. We have established partnerships with two different manufactures and two different MFIs based on an affinity model for sales. The manufacturer distributes the products and promotes them to women who belong to joint liability groups for income generation loans. The MFI provides a means to make payments over time. The first of these pilots is still underway so we do not have the final results but the partners have agreed to scale up the model to a target population of 100,000 members in a next round speaking to their confidence in the possibility of it being commercially viable. A limitation be overcome in future iterations is expanding access beyond MFIs member that are already stepping out of poverty.
Medentech entered India about the same time as our project was getting started. They started pilots with AED and another with PATH. The model we tested was a mobile salesperson to conduct direct sales in the settings that our formative research suggested were the more likely places for a new product to gain consumer interest. Although our baseline indicated a high intention to try the product, the actual rates of adoption were not as high. The qualitative interiews conducted at the end of the pilot suggested that people were mistrustful of a brand new product from a unknown manufacturer. Without brand recognition people or endorsement of local authorities people were reluctant to try a product. They were particularly fearful that it might affect their fertility and virility. Although the posters produced for the products featured photos of local leaders, health workers, the salesmen thought they would have been more successful if they had worked more closely with the local leaders to introduce the product. These results made us very interested in a project implemented by PSI in Malawi. We funded CDC to conduct a follow up evaluation of a pilot program for distributing free hygiene kits to pregnant women. During the free give away period 61% of the women had confirmed use of Waterguard. After the give away period, CDC found that 25% of women were still treating their water even though they had to purchase the product. Two years later the CDC team returned to find that 25% of the women who originally participated had confirmed use of Waterguard and 45% of women were using Waterguard or a free chlorine powder from the MOH. We working with PSI and CDC to conduct follow up qualitative work to figure out what drove such high sustained use results so we can apply that further, but we think it has to do with the credibility of the promoter, the sustain promotion by the health workers, the free product and safe storage container.
Central to our method of addressing gaps is gaining indepth understanding of user or consumer needs. In India we conducted an informal user assessment to get a first impression from interviews and focus groups what people thought about an array of products. One key finding was that a highly asprirational product such as the some of the gravity fed filters were appealing but lower income consumers did not necessarily see them as appropriate for their homes. We followed up by placing 1 of 5 different filter products in 20 households for 4 months. We documented their experience from their first encounter with the product and took extensive videos of how people figured out how to use the devices. While initially the people who receive ceramic water pots were disappointed that they got what looked like a poor man’s product, in the end they were the ones that were most resistant to giving us their products for further testing.
Based on this information we have a new partnership with a start up commercial entity in Cambodia to improve on the ceramic water pot to make it more durable during shipment and more appealing. We are in the iterative process of taking feedback from consumers and our commercial partners and translating that into design concepts that then get vetted for durability and commercial viability, before going back out for field testing and refinement.
Consumer feedback gathered from residents of the Korgocho slum of Nairobi lead us to work with Cascade Design to modify a proven technology for local production of chlorine. The smart electrochlorinator takes a solution of salt and water and converts it to chlorine by adding a jolt of electricity from a 12 volt battery. We are aiming for the device to cost less than $200 dollars and a single car battery should be able to make 40000 doses without recharge. With the touch of a button the device produces highly active chlorine doses for 20 or 200 liters of water. Currently we are field testing the device with several partners. Once we have the product finalized we will work local entrepreneurs to make this a sustainable business venture for producing highly effective low cost chlorine.
PATH's Approach to HWTs and Community Water Solutions
PATH’s Approach to HWTS and Community Water Solutions Lorelei Goodyear, Sr. Program Officer PATH Safe Water Project
A total market approach to safer water: Examining the Value Chain Consumer demand and consistent use Product or service design Research and development Production Marketing Sales and distribution Customer service Health Impact
Sales and Distribution Using microfinance institutions (MFIs) to extend the channel of HWTS products to the BOP consumer Sales and distribution <ul><li>Baseline research indicated <1% uptake in midrange HWTS products </li></ul><ul><li>PATH forged a partnership between India’s 2 nd largest MFI, Spandana , and HWTS manufacturer, Hindustan Unilever (HUL) </li></ul><ul><li>HUL expected up to a 7% uptake </li></ul><ul><li>Actual uptake was in the double digits </li></ul>
Marketing Lessons learned from selling fast moving consumer goods <ul><li>PATH introduced Aquatabs water purification tablets into Uttar Pradesh, India </li></ul><ul><li>The product has little brand recognition </li></ul><ul><li>Market penetration was extremely low </li></ul><ul><li>Consumers were fearful </li></ul><ul><li>Needed to engage the public sector in an education campaign </li></ul>Marketing
Hybrid Marketing Models <ul><li>PSI Malawi Social Marketing </li></ul><ul><li>ANC Hygiene Kits & education </li></ul><ul><li>2007 results – 61% use free WG </li></ul><ul><li>2008 results – 30% use purchased WG </li></ul><ul><li>2010 results – 25% use WG </li></ul><ul><li>45% use WG or free product </li></ul>
Product Design Product or service design <ul><li>A more attractive, aspirational product, but still effective and easy to assemble </li></ul><ul><li>Stable form factor with improved user-friendly features for refilling, cleaning, and dispensing </li></ul><ul><li>Stackable pieces for efficient storage and transport </li></ul>Household Water Treatment and Safe Storage: Ceramic Pot
Product Design Product or service design <ul><li>200-L batch dosing, and 20-L unit dose </li></ul><ul><li>Simple, push-button operation </li></ul><ul><li>Low-cost core system (under $200) </li></ul><ul><li>Design and operating model field trials with partners in 2010 </li></ul><ul><li>Flexible implementation (community-based orgs or micro-entrepreneurs ) </li></ul>Community Water: Smart Electrochlorinator