Reproductive Health Supplies Market Development Approaches Presentation to the Coalition

Reproductive Health SuppliesReproductive Health SuppliesMarket Development ApproachesMarket Development Approaches

Presentation to the Coalition

What MDAs should achieveWhat MDAs should achieve

• Efficiency – MDA interventions will serve to move people up the value chain from heavily subsidized products to wholly commercial and non-subsidized products

• Effectiveness – MDA interventions will result in overall market growth

• Equity – The success of MDA interventions relies on a better targeting of subsidies

MDA interventions are worthwhile only if the moneysaved is reinvested to the benefit of the poorest

Market Development Approaches – Ends and meansMarket Development Approaches – Ends and meansE

Peripheral MDAe.g. public sector introducingcharging for some segments,

or outsourcing part ofsupply chain to private sector

Core MDAe.g. introducing new commercial player to

attract users frompublic sector

Not MDAe.g. public sector expanding

scope of free distributionprogram

Peripheral MDAe.g. introducing new commercial player to

add to method mix

Means/ Approaches

Non-Commercial Commercial

Improved RH effici-ency

Improved RH effec-tiveness

•Initiatives to grow supply or demand in the commercial market (I.e. some/ full cost recovery, commercial channels)

•Initiatives to grow supply or demand in the non-commercial market (I.e. little or no cost-recovery, non-commercial distribution)

•Lowering cost/ increasing sustainability of achieving a given RH outcome

•Achieving a better RH outcome

Example of MDAsExample of MDAs

• Shift costs from public sector purse to private pockets so that poor and vulnerable can be better served:

– Targeting subsidies– Transitioning consumers to higher priced

products– Alternative financing mechanisms– Reduce commodity costs for procurers and

consumers

• Reduce the costs of and increase the effectiveness of distribution

– Public to private distribution– Private provider training– Partnership for commercial distribution (with

FMCG companies)– Effective distribution– Social franchising

• Create a policy/enabling environment tat encourages competition and choice

– Registration facilitation– Taxation and duty reduction– Increased number of products / offer

(crowding in)– Authorize new distribution channels / type of

outlets for hormonals

• Marketing and demand creation– Category demand creation (vs branded)– Greater freedom with advertising / distribution– Better communications (effectiveness of BCC)

Priorities and GapsPriorities and Gaps

• Define success – what programme aims to achieve: health impact, sustainability, cost to donor/government, targeting of subsidy, availability/choice for consumer, enabling environment

• Take a Total Market Approach – requires recognition of market dynamics and collaboration across projects

• Understand Markets – including consumer segmentation, before programmes are designed

RecommendationsRecommendations

• Develop more tools (and pay for them to be used!)– Market assessment– Targeting mechanisms– Market segmentation– Willingness to pay surveys– 4 Ps: Product, Price, Place, Promotion– Post-project evaluation

• Try out more and various approaches, evaluate them & share results quickly

Creating a Country Typology for Creating a Country Typology for Market Development ApproachesMarket Development Approaches

RHSC MDA Subgroup

Proposed CriteriaProposed Criteria

Market Potential

• CPR levels x Population of Women of Reproductive Age

• Competitive environment – esp. efficiency, affordability and targeting of public sector vs private sector

Financial Potential

• Ability to Pay • Willingness to Pay• Business environment

(regulations, taxes, distribution, promotion)

High CPR and/or favorable High CPR and/or favorable competitive environmentcompetitive environment

Little ATP and/or WTP and/or Little ATP and/or WTP and/or unfavorable business unfavorable business environmentenvironment

Ex: KenyaEx: Kenya

Characterizing country environmentCharacterizing country environment

Market Market

PotentialPotential

Financial Financial

PotentialPotential

LowLow

HighHigh

LowLow HighHigh

Low CPR and/or competitive Low CPR and/or competitive environment unfavorableenvironment unfavorable

Ex: Benin, CongoEx: Benin, Congo

High ability to pay and/or High ability to pay and/or WTP and/or favorable WTP and/or favorable business environmentbusiness environment

Ex: Morocco, VenezuelaEx: Morocco, Venezuela

Ex: UkraineEx: Ukraine

Market Market

PotentialPotential

Financial Financial

PotentialPotential

LowLow

HighHigh

LowLow HighHigh

Ex: KenyaEx: Kenya

Market Market

PotentialPotential

Financial Financial

PotentialPotential

LowLow

HighHigh

LowLow HighHigh

Ex: KenyaEx: Kenya

Market Market

PotentialPotential

Financial Financial

PotentialPotential

LowLow

HighHigh

LowLow HighHigh

Market Market

PotentialPotential

Financial Financial

PotentialPotential

LowLow

HighHigh

LowLow HighHigh

• Demand creation / Demand creation / BCC BCC

• Target subsidiesTarget subsidies

• Improve policy Improve policy environment for environment for private sectorprivate sector

• Offer low cost Offer low cost products in private products in private sectorsector

Matching MDAs and country environmentMatching MDAs and country environment

Market Market

PotentialPotential

Financial Financial

PotentialPotential

LowLow

HighHigh

LowLow HighHigh

• Value creation (new products, Value creation (new products, advertising, marketing)advertising, marketing)

• Segmentation strategiesSegmentation strategies• More targeted public sectorMore targeted public sector

• Extend offer / outreach of private Extend offer / outreach of private sectorsector

Matching MDAs and country environmentMatching MDAs and country environment

Next StepsNext Steps

• Finalize a country typology tool with clear source of data identified and a methodology for classifying countries

• Make tool available (RHSC website)

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