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IREX Social Enterprise Orientation Training

IREX Social Enterprise Orientation Training . Gbanga, Liberia Kim Alter Virtue Ventures LLC. Part 6: Market Research Example. Haiti Example Impetus for social enterprise: Poverty alleviation . Greyston, “bake brownies to create jobs” . Social Problems . Many poor people

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IREX Social Enterprise Orientation Training

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  1. IREX Social Enterprise Orientation Training Gbanga, Liberia Kim Alter Virtue Ventures LLC

  2. Part 6: Market Research Example

  3. Haiti Example Impetus for social enterprise:Poverty alleviation Greyston, “bake brownies to create jobs”

  4. SKOLL CENTRE FOR SOCIAL ENTREPRENEURSHIP Social Problems • Many poor people • Few economic opportunities in rural areas • Urban flight • High population of women single heads of household • Low skilled/illiterate population • No local market for client-made products • Socio-economic situation has negative impact on children’s health, education & quality of life

  5. Mamba Market Study Results Market Port au Prince Bottleneck Rural Clients Market Access Demand Limited Local Market

  6. Design Assumptions • Women in rural Haiti make peanut butter • Demand exists for peanut butter • Clients source raw materials • Market access is a major constraint • Clients are entrepreneurs • Can be a viable business • Social enterprise will not impact the product or production process • Marketing strategy focuses on distribution and competitive promotion for “mature product”

  7. TOPLA Marketing Social Enterprise Services: Branding Marketing Inventory management Distribution Sales Revenue: Product mark ups

  8. Sourcing Production Marketing Distribution Sales TOLPA’s Value Chain Social Enterprise Clients Private Sector Decentralized Centralized

  9. 1. Clients Already Make Peanut Butter Yes, but … • No standard recipe • Can make only small quantities • Never used technology in production • Quality/consistency variable • Hygiene a problem

  10. 2. Demand for Peanut Butter / Business viability TRUE, but... • Very price sensitive / Low profit margin • Lots of competition • “Mature product” • Undeveloped consumer taste for “natural peanut butter” product • Demand-supply gaps • sales depends on constant supply • complementary product can help sell • need better product mix to secure commercial contracts and increase margins

  11. 3. Clients Source Raw Materials True, but… • Raw materials are seasonal • storage is required for year-round production • technology needed to avoid spoilage • Capital is a constraint • Cannot realize cost savings of bulk purchase • Coordination/management required • increases overhead

  12. 4. Accessing Markets is a Constraint TRUE, clients lack… • Marketingknow how • Transportation • Knowledge of markets • Sales acumen • Contacts

  13. 5. Clients are Entrepreneurs True but… • Entrepreneurs out of necessity not choice • Would prefer a job • Risk averse • Clients lack capital & access to capital • Purchase assets • Buy bulk materials • Finance working capital

  14. 6. No Impact on Production/Product FALSE ... • Food products require stringent quality control to sell commercially • product consistency /quality /reliability • Sales volume/output • Technology inputs required • increase profitability • achieve economies • Inventory management • Raw materials (purchase, store, maintain) • Finished products (freshness/shelf life… ) • Long time to consumer causes product to change

  15. 7. Implications on Marketing • New product strategy • Different “perceived” benefits • Introductory product • Requires educational marketing to penetrate market • Need to differentiate vis-à-vis competitive positioning • Additional new products are needed to cross-sell and increase margins

  16. Entrepreneur Model Entrepreneur focused Impact focused Decentralized Entrepreneur assumes risk Not market oriented Clients are entrepreneurs Threat - not viable Enterprise Model Enterprise focused Viability focused Centralized Partner assumes risk Market oriented Clients employees Threat - clients become laborers Shift in Model

  17. New SE Model TOPLA Sales Force Product Mix Entrepreneur Groups Sourcing Production Storage Centralized Functions

  18. Design • Viability and social impact • May require phasing and trade-offs • Realistic for client • Social criteria & role of the client in SE • Understand nature of demand • Based on market realities • Thoroughly test your assumptions • Know your deal breakers

  19. Best way to learn about markets? Start selling Test market Pilots

  20. Vision Mission Business Plan Structure Objectives Target Market External / internal factors Competitors/Industry Operations Marketing Plan Plan Human Resource Plan Financial Plan Financial Plan Contingency

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