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LIGHTING DEVICES TEST RESULTS. Ethiopia Results June 2009. Report Overview. LIGHTING AFRICA OVERVIEW / MARKET INTELLIGENCE PROGRAM. What is Lighting Africa?.
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LIGHTING DEVICES TEST RESULTS Ethiopia Results June 2009
What is Lighting Africa? Lighting Africais a World Bank – IFC initiative aimed at supporting the global lighting industry to catalyze a robust market for off-grid lighting products tailored to the needs of African consumers. The Program’s mission is to make affordable, environmentally sustainable, durable, and safe lighting available to the masses, who currently depend on kerosene lanterns and candles to satisfy their lighting needs.
How does Lighting Africa support the development the lighting market? The Lighting Africa program is a market-based approach, grounded in the recognition that: There is a considerable commercial market opportunity and willingness to pay for off-grid lighting, substantiated by annual expenditures on kerosene amounting to $38 billion and $17 billion, globally and in Sub-Saharan Africa, respectively Recent technological advancements in lighting, particularly in the area of Light-Emitting Diodes (LED), demonstrate increased promise to deliver affordable technological solutions tailored to the African marketplace and beyond The most expedient and sustainable way to bring affordable, reliable lighting to Africa is by supporting the industry to design and deliver an array of products tailored to the needs of African consumers
How do we ensure Lighting Africa program activities respond to industry need? All Lighting Africa program activities are designed withand for the industry and other stakeholders Through ongoing consultation with a wide array of stakeholders (including private companies, NGOs, financiers, governments and other key players along the supply chain) opportunities are identified where Lighting Africa can play an appropriate role in accelerating the off-grid lighting market in Africa
Lighting Africa: Program Areas Policy: Addressing policy and regulatory barriers Financing: Improving access to finance along the distribution chain- for example through partnership with financial institutions Product Quality Assurance: Addressing issues of quality with lighting products to help consumers make informed purchase decisions and prevent market spoilage Business-to-Business Linkages: Creating opportunities for different players along international supply chain to meet, exchange information and create business partnerships Market Intelligence: Collecting & disseminating key market information to support successful market penetration Business Environment: Facilitating market entry through the provision of relevant information, such as country-specific policy and regulatory information
What has the market research provided? Key Market Information on consumer needs, preferences and finances. The information has: Informed on the desired functionality and design attributes of different types of lighting products within several product classes (Torch, Floodlight, Task Light, Lantern, Spot Light) Enabled the industry to overcome potential challenges that are likely to accompany market entry in the African off-grid lighting market Created a baseline to quantify the size of potential market segments in volume and value terms
Lighting Africa: Why Market Research? • While anecdotal evidence shows a substantial opportunity in the off-grid lighting market in Africa, much of the industry lacks the information needed to develop and market products appropriate to meet the needs of African consumers • This is the result of a premature and undeveloped market, but one with demonstrable potential – the fuel-based lighting market in Africa is currently worth more than $17 billion per year – yet is still largely undefined, untapped, and unrealized • In response to the industry’s call to provide greater comprehension to the scope of this emergent market opportunity, Lighting Africa developed a Market Research program
Research International: Background and Related Experience The research was conducted by Research International East Africa, a subsidiary of the global market research firm: Research International is one of the world's largest custom market research agencies, with offices in 50 countries worldwide and over 30 years of expertise.
Research Methodology • Currently, the Lighting Africa market research program covers 5 countries: Ghana, Kenya, Zambia, Ethiopia and Tanzania • Two key market segments: households & micro-businesses in rural and urban areas • The market study involves studies of the market in Africa to provide insights that form the basis for innovative product ideas; and is comprised of three research methods: • An exploratory phaseinvolving a qualitative product testing element • A quantitative Habits and Attitudes survey of the population • Quantitative Lighting Devices Testing, using the proprietary eValuateTMmethodology, to quantify the acceptance and likely uptake of existing, new and revised product ideas for the market in Africa
Lighting Devices Testing Context • The purpose of the lighting devices research is to: • Assess consumer acceptance and potential for each of the lighting devices tested within the context of norms • Prioritise and provide guidance as to which products to take forward to the next stage of development
Ethiopia Sample structure • Twenty interviews were conducted per country • Main purchasing decision makers were interviewed both prior to use and after recall. Consumers also filled out a questionnaire during usage of the test lights. • Interviews were conducted in peoples’ homes to ensure that observations were made about the space lit and the kind of lighting used
Key Questions Asked To Qualitatively Evaluate Lighting Devices Would you buy it? Is the idea genuinely new and unique? Is the idea clearto you? Is it relevant to you? Do you find it exciting? Do you actuallylike the idea? Do you think it would offervaluefor money? How oftenwould you buy it? Do you believe it? Supported by spontaneous likes and dislikes
Key qualitative questions Interviews focused on answering these questions: Who is the consumer? • Consumer demographics and characteristics of households How does the consumer use light? • Current lighting habits, attitudes, preferences and needs How do consumers perceive the products? • Assessment of the new products versus product characteristics, features, learning and marketing approach What does the consumer want? • Assessment of needs for current lighting in and around the home Which products do consumers prefer? • Product preferences (performance and design features) and developing a quality standard for lighting How much is the consumer willing to pay? • Consumer economics (intent and capacity to pay for lighting)
Predicting the likelihood of successful product launch • What we know about successful product launches is that there is a lot more at stake than merely identifying which products should be launched versus which shouldn’t. In predicting the likelihood of a successful product launch we must also identify key drivers that will ensure long term success • Within developing markets, measures of new product success are slightly different from other parts of the world. In developing markets consumers have little disposable income which means their behaviour with regards to new purchases will be quite conservative – they will not take chances buying into new products if they are not sure whether the product will work for them or not • In order to predict the likelihood of successful product launch, it is important to understand 3 critical measures: the “WHAT?”, the “WHY?” and the “WOW?”. These will be discussed in further detail in the next slides • Additional to these three measures, it must be kept in mind that the cost of the new product, in this case the lighting device, will undoubtedly remain a main driver in creating purchase intent amongst consumers with low levels of disposable income
The product must have a recognisable point of difference The WHAT? Test • The WHAT test involves a check of the consumers’ understanding of the various lighting devices under consideration • For the lighting devices to be successful in the market, consumers need to be sure that the lighting devices: • Have a recognisable point of difference, i.e. that it is better than what they are using currently or that it could impact and improve their life in a significant manner • Are understood – it has to be clear how the devices will work
This point of difference has to be perceived as a benefit The WHY? Test • The WHY test involves a check of the consumers’ need for the various lighting devices under consideration • For the lighting devices to be successful in the market, consumers need to be convinced that they will berelevant to their lifestyle • If the lighting device is perceived to be technologically ‘too advanced’ or too difficult to operate, consumers will feel alienated– it will be perceived as a device for ‘them’- i.e. those people who have more money, and not for ‘me’
This benefit must be exciting enough to overcome barriers to trial and usage The WOW? Test • The WOW test involves a check of the consumers’ excitement for the various lighting devices under consideration • For the lighting devices to be successful in the market, consumers need to be convinced that the devices will be innovative and creative • If the devices do not stand out from what is in the market currently, they won’t generate sufficient interest from consumers to encourage purchase and substitution away from other product types
Traffic light rating system • A traffic light system has been used to report the overall rating provided by the respondents for the features and characteristics of each of the lighting devices: + Overall, the respondents were positive about the specific feature/characteristic Overall, the respondents were positive about the specific feature/characteristic, however some respondents had remarks that require attention +/- - Overall, the respondents were negative about the specific feature/characteristic
Ethiopia BRIEF COUNTRY OVERVIEW
Brief Country Overview: Ethiopia Ethiopia Interesting facts: Ethiopia’s economy is poverty stricken; with agriculture accounting for almost 50% of the GDP. Existing legislature prohibits outright land ownership and prevents the use of land as collateral, which stifles budding entrepreneurs. Eight out of ten Ethiopians are engaged in agriculture. Therefore the seasons in Ethiopia greatly influence their lifestyle. Kiremt, which falls between June and Septemberis the main rainy season in which most of the food crop of the country is produced.
Electricity supply Water/ tap water Better roads Opportunities for business/ income generation Telephone line Electricity Clean water Modern toilet Better housing/ building materials Good furniture Increased productivity in farming Suggestions for improvement living standards Surrounding In-home Electricity and water are top on the list of suggestions for living standards improvement among most of the respondents interviewed.Accessibility is also a major concern as many people mentioned better roads as a suggestion for improvement. • We want to have electricity, we already paid the municipality…..but they are yet to connect the line Male, Urban, Lower LSM
Likes and dislikes of not having electricity My daughter cannot study at night Male, Urban, Lower LSM Primarily because we lack electricity we are forced to live in the dark, secondly we can’t follow television programs which are essential to our life Male, Rural, Higher LSM
Electricity connection usage & attitudes Ranging from = few respondents to = many respondents Most of the respondents felt that they were not likely to get connected to the national grid soon. Others felt that since they had paid for the electricity connection at the municipality a while ago, it was likely that they would be connected within 6 months to one year.
Current lighting situation • I have a good lighting device which uses batteries. So far it is suitable for my life. I have given up using the kerosene lamp I used to have Male, Rural, Higher LSM • We have light which we get from the kerosene lamp. It is not bright and it doesn’t work when there is not enough kerosene left, it also produces very dark smoke Male, Rural, Higher LSM • Currently, we get light from the kerosene lamp. It is not bright and it produces black smoke which is harmful to our eyes. The light that we get from this lamp does not allow us to see all the places in the house… Male, Rural. Higher LSM
Current Lighting Product- Usage Kerosene and home made lamps (bulbs connected to dry cells) are the most commonly used lighting devices in Ethiopia. Torches are especially used for going out at night for example to check on the livestock.
Brightness of the light Safety Ease of use One that does not produce smoke Running cost per month/affordability Durability Husband Wife Children (their need to study is prioritized) Children (are perceived to have knowledge about best products currently available) Choice determinants & influencers of current lighting product Key influencers Usage determinants In general, husbands -who are the breadwinners in most of the cases - decide which lighting product is used in the house. However, some wives and children also have a say.
Current lighting productsdifferent settings • We use our kerosene lamp from 1800hrs to 0000hrs, we use it in our main room because most of the time our families stay in the main room Male, rural, higher LSM • I only use candles at night after 1900hrs and I use a torch when I want to go out of the house to control the cattle or to go to the lavatories Male, urban, lower LSM • I use the candles in the dining or sitting room where we spend most of our time, and I use the torch when I cook because it is easy to move it around Female, urban, lower LSM • We place our lighting product on the wall because it is safe from any danger Male, urban, lower LSM • You cannot take the kerosene lamp outside the house because of the wind, so you should use the hand torch Female, urban, lower LSM • I just use one lighting device for different settings, I move it carefully from one room to another Male, rural, higher LSM
Current Lighting Products-satisfaction rating Not satisfied Very satisfied
Electricity/Electric light bulb Not very big; so easy to carry it from one place to another Powerful bright light Healthier (does not produce smoke) Portable so that it can be used in different settings Affordable Current lighting productsideal lighting Key features Ideal product All the respondents felt that connection to electricity would solve their lighting problems. Nevertheless, their ideal product should be portable, bright and should not produce smoke.
Test Product evaluation TM41 This product is perceived to be different especially because it operates on solar energy. However this is not a new concept in Ethiopia as most of the respondents use a similar home made device which consists of light bulbs powered by dry cells. TM41 is nevertheless considered very relevant because it produces bright light without smoke and does not have running costs. none very 43
Test product association TM41 It does not have any electricity cost or smoke It has a unique shape, I have never seen such a thing before Batteries look strong and heavy What comes to mind when you see this product ? It is convenient, it looks like vehicle lights The shape, the colour, the power of the light One of the most striking things about the product is the brightness of the light, it is actually likened to a vehicle lights.
Test product evaluation likes TM41 I like everything I see from the device such as the design Male, urban, lower LSM I like the brightness of the light, the shape, the charging system and the colour of the product Male, urban, lower LSM I like the brightness of the light, the shape, and the size of the device Male, rural, higher LSM I like this product, you can illuminate the house without any monthly expense because it works on solar energy Male, urban, lower LSM • Design • Brightness • Shape • Solar charging system
Test Product Evaluation – Dislikes TM41 I dislike the sensitivity of the product, it looks a little bit sensitive, that it may burn while we are trying to put it outside to absorb sunlight Male, rural, higher LSM • It appears to be fragile
Test Product features evaluation TM41 The product features received a good rating, especially on the aesthetic value which was highly appreciated.
Test Product characteristics TM41 Respondents are very satisfied with the characteristics of TM41, apart from battery availability and uniqueness of the device
Purchase Intent & Price TM41 US$ 9.1 – 13.6 The purchase intent of this product is very high as it produces bright light. However the purchase intent is directly linked to the retail price of the product. It is also perceived to be worth much more than other products again because of the quality of its light.
Test productsummary before testing TM41 • This product meets the two most important needs of consumers in Ethiopia; it is a product with no health risk (no smoke) and without running costs. In addition, respondents like the brightness of this product as well as the convenient design. • There is only one suggestion for improvement which involves prolonging the battery life to last for a month when fully charged. This may be arising from the fact that even though respondents are excited about the solar charging aspect, they are concerned about the long rainy season between June and September (Kiremt). • The purchase intent of this product is very high because of the quality of the light. However this is only on condition that the price will be affordable.
