Posts Tagged ‘ghana’

What marketing 101 can teach development practitioners and academics

The entire universe of people with an unmet need that you expect your solution to fulfill is not your target audience.

The fundamentals of market analysis include the basic calculations that allow marketing managers of all stripes to calculate (guesstimate) their potential market size, and thus a realistic assessment of its value. That is their marketing universe, within which they will set targets for the acquisition of customers. That potential customer base is the targetted audience for their marketing efforts, in order to get them onto the customer journey ladder to “loyal advocates” your brand or service.

This simple yet powerful understanding is known even to Ghana’s market queens, the ladies who trade. They don’t imagine that they can serve the 100 million people without tomatoes that day. Yet these are the kinds of grand targets that development, and its little cousin once removed, social enterprises announce day in and day out in press releases.

I was lucky. Yepeka Yeebo reached out to me before a trip to Accra, where she had been commissioned to write a profile of such an entrepreneur.She has permitted me to use her photographs and to write this story of Auntie Matilda, the tomato trader of Accra, Ghana.

Yeebo_Market_01The market mummies, the market queens – the informal retail sector across most of West Africa is dominated by women. Women inherit their mother’s social and commercial networks, the goodwill of her mother’s trading relationships and thus, her social capital and repute. As Yeppi writes, there was a time when the intricate webs of economic power wielded by these ladies took the full might of the Ghanaian army to dismantle.

Gerry van Dyke has studied the customer experience design strategies the ladies use to distinguish themselves, though selling the exact same unbranded commidity. Even Unilever comes to learn at their feet, and Maggi Cubes know they can’t win if the mummies are unhappy at the margins for breaking bulk of one of those long boxes we all have at home.

Yeebo_Market_08

Break bulk is visible across the developing world’s informal economies. Just like the prepaid business model, the irregular income streams of the vast majority of the informal sector, even those who would the upper middle class of their milieu, mean that wherever one can negotiate some flexibility of time and money, their business is assured. It is a mark of trust to be able to agree to accept a payment over time.

This extends then to the way the products are sold. There is no concept of discounting for bulk purchase, simply because you’re unlikely to sink  your daily working capital into a huge bag of toilet paper. Liquidity is the real king, cash is only the manifestation in the real world. Flexibility is one of the ways to mitigate the risk of uncertainty that small business owners face daily.

Auntie Matilda’s business choices, marketing and customer development strategies, and the health of her cash flow, all depend upon her ability to build a network of working relationships predicated on trust, references, and thus, proof of performance. One wonders if the only reason she might not be formal is that there isn’t any particular segment or category in the current forms of registered businesses that apply to her kind of business.

Its time we overturned the ivory tower’s disdain of filthy lucre and trade in the city center and gave these ladies their due.

The business model of drinking water in urban Ghana

In Accra, Ghana, packaging potable water into single serve sachets for the mass market (the prepaid economy) is a business model that has evolved extremely rapidly in response to customer demand and purchasing power.

Bottled mineral water for the elite trickled down in quantity and form until the man on the street can buy a glassful for pennies. From the article The cost of pure water:

“I think we’ve seen almost an entire product life cycle in just a decade,” Stoler said. “Initially it was more of the autocrats drinking sachets. Very quickly, within a few years, it seems to have shifted to lower income and the poorest of the poor… You don’t go to a conference or symposium and get served sachet water.”

Stoler believes the “warp-speed evolution” of the industry has quickly made the product better and cleaner. Due to the enormous demand, bigger producers like Voltic have stepped in and are using the same water they put in bottles, sold to the rich, in the sachets sold to the lower and middle classes. And with lots of competition in most areas, and billions of bags being consumed each year, the customer base is quickly becoming more discerning about what they buy.

“This is one of those weirder examples of almost pure capitalism,” Stoler said. “You have this gap in supply, so the private sector steps in and fills the demand. Customers start to understand that there’s differentiation in product quality. Better quality producers rise to the top, the market incentives produce better quality products, and without tons of over-regulation, the market has ended up with a pretty good product.”

His work shows that the intelligent Ghanaian customer base has helped evolve the experimental, and perhaps unhealthy, product that Osei sampled into a cleaner one. In a recent study focusing on two poorer neighbourhoods of Accra, Old Fadama and Old Tulaku, Stoler found no faecal contamination in any sachet sample.

Reading the article further, you’ll note that this service is typical of the way the informal sector quickly senses an opportunity to be satisfied.