Market Development Approaches in Social Marketing Programs

1. Market Development Approaches in Social Marketing Programs Claire Stokes Population Services International October 2nd, 2007

2. PSI RH programs • Not-for-profit, subsidized interventions focused on private sector channels • Condom social marketing & health communications in 60 countries • Family planning programs in 25 countries marketing OC, IC, EC, IUDs • VCT, PMTCT, Adolescent RH, FP networks

3. Most SM Programs do… • Build private distribution channels • Growth of private sector as a source of supply in many countries where PSI intervenes • Active role of PSI detailing team in re-supplying places / outlets not served by wholesalers • Increase access • Distribution by wider cadre of “providers” e.g. drugstores, CBDAs, doctors (Mad.) • Build demand for specific products and services through health communications

4. Most SM Programs do… • Create value through brand marketing and improved product offer • Time and $$ spent on understanding and meeting consumer needs • Relevant / consumer-friendly packaging and format • Educate and train various levels of “providers” • Detailing team visiting drugstores, pharmacies, private practices • Distribution of IEC material for providers, checklists, etc • Light training

5. Advanced SM Programs do… • Segment their markets by introducing various products at various price points • e.g. studded & flavored condoms, Nigeria EC, Zambia OC • Target subsidized products better • Myanmar subsidized products restricted to SF network, other products sold at higher prices in pharmacies

6. Advanced SM Programs do… • Enter partnerships with suppliers to encourage their participation into the market • Ansell in Nigeria, Net production in Tanzania • Secure access to cheap, reliable supplies • MOU with generic manufacturer • Work on alleviating barriers for commercial sector • Haiti condom SM program

7. Link to RHSC Strategic Goals • Mobilizing consumer resources at country-level • Targeting subsidies for more equity • Market priming in countries with fledgling private sector • Strengthening / expanding private sector systems for RH commodities & services

8. Tools • Market assessment studies • Business Plans • Qualitative surveys with trade / consumers • Tracking Results Continuously: behavior driven segmentation • Measuring Access and Performance: coverage and quality of coverage for various sectors • Willingness To Pay

9. Example 1: Zambia Context: • “High” Pill CPR - 8.1% in 2002 (11.9 % among MWRA) • Steady market growth (6% per year average in 2000-2005) • PSI sales 1.2 Million subsidized cycles in 2006 – about 25% of market share (DHS 2001/02) • Possible shortfall in subsidized product – capped at 1M cycles • No mid-range product on market • Brand loyalty to old public sector product (Microgynon)

10. Market Assessment • Opportunity: Public sector switch to Indian supplier (Famycare) with new brand Oralcon-F • Former Microgynon users looking for their product in pharmacies • Demonstrated willingness to pay for Microgynon (up to Kw. 2,500-3,000 ie $0.65-0.75 per cycle) • Consumer Profile Research: 56% of public sector users urban, about 40% middle to upper income • Existing platform minimizes costs/consumer price

11. Approach • Decision: Re-introduce Microgynon in the private sector at “mid-market” price • Negotiation with manufacturer led to deal on price to allow for cost-recovery level II (COGS + A&P) • Channels: Pharmacies and drugstores in urban and peri-urban centers • Price positioning: Kw. 2,000 per cycle • Limited amount of Advertising and Promotion (less than $30,000 per year); leveraging strong brand equity

12. Manufacturer partnership Added-Value to BS • Opportunity to maintain Microgynon in Zambia and continue building consumer loyalty to the brand • Established distribution network • Building a more sustainable market Added-Value to SFH • Increased cost-recovery for FP products • Opportunity to target subsidized Pilplan to lower income women • High equity brand at very low price

13. Expected Results • Volumes to reach 500,000 cycles by year 3 of project (vs. current Pilplan volumes 1.2 M cycles) • Self-sustainable project after year 3 • Growth of private sector as a source of supply for pills • Will “free up” some resources in the public sector & SM that could be used to serve other users more in need

14. Example 2: Nigeria Context: • High demand for EC in Nigeria – (ever used 2.8% in NARHS 2003) • SFH and Gedeon Richter have an exclusive agreement for Postinor-2 • Postinor-2 sales growing steadily since launch in 2001 and reaching 600,000 in 2006 • Little competition

15. Manufacturer partnership Added-Value to SFH • Access to N.1 global EC brand • Exclusive distribution rights • QA and supply assurance • Reasonable price Added-Value to GR • Opportunity to break into highly complex Nigerian market with limited risk • Expertise in registration and regulatory affairs • Trusted by Nigerian government and consumers • Expertise in distribution, marketing and pharmaceutical detailing in difficult environment

16. Research: Willingness to Pay • Conducted in 3 states, with 316 Postinor users, random sampling cluster design by high, medium and low income SES groups • Profile of respondents: 77% are unmarried, 52% students, 63% literate • Levels of increase accepted • None (N100) 18% • Low (N110) 2% • Medium (N120) 35% • High (N150) 45%

17. Nigeria: Maximum WTP for EC by SES

18. Approach • Increase consumer price from N100 to N180 over 18 months for Postinor-2 • Launch new EC brand with subsidized price to lowest SES to capture consumers lost to new price • Increased cost recovery on Postinor from $0.01 per dose to $0.43 per dose allows to cross-subsidize the second EC brand

19. Results

20. Conclusions • PSI programs operate in challenging environments where opportunities to develop sustainable markets / products are limited • However, various interventions are possible in these markets to increase the role of the commercial sector • Market development in these countries will take longer and will require more sustained efforts especially in terms of demand creation & better targeting