Woman to Woman Selling in Nigeria - · PDF file•Undergraduate major in marketing ... mix of water tablets, salt, condoms, and ... Grameen Phone, Street vendors

A Global STAR Project – April 27, 2011

Woman to Woman Selling in Nigeria A Model for Procter & Gamble

Agenda

Overview and Orientation

Recommendations

Questions

2

Meghan Roecklein Project Lead

•2nd year MBA

•3 years management experience in Sierra Leone

Ashley King Project Team

•Undergraduate major in marketing

•Recent marketing intern at American Greetings Corp.

Shotaro Fujimoto Project Team

•1st year MBA

•4 years of project management experience in Tokyo, Japan

Frank Walker Project Team

•Undergraduate major in finance / minor in Chinese

•Worked as guest relations intern at a hotel in western China (Guiyang)

Natalie Gill Project Team

•MSPH/MBA candidate

•5 years nonprofit mgmt experience

•3+ years working sub-Saharan markets

STAR Team

Vibhuti Bhushan Project Team

•1st year MBA with focus in consulting and emerging market

•8 years of technology implementation and business development experience in Germany, India and US

Wes Melville Project Team

•1st year MBA focused in sustainability and social enterprise

•4 years Account Management experience for a sports marketing agency in Shanghai, China

Dr. Lynne Gerber, PhD/MBA Project Advisor

•Director-Action Learning at UNC’s Kenan-Flagler Business School

•Faculty director of Student Teams Achieving Results and the CIBER Global Business Project

•Co- founder of the MBA Enterprise Corps

Lisa Jones Christensen Project Advisor

•Assistant Professor of Strategy and Entrepreneurship

•Focus on microenterprise development including innovations in microfinance, micro-insurance and microfranchising

3

2/2 Kick-Off Meeting

3/5 - 12 On-Site Research

Late April Final Presentation

January • Frame and Organize

• Identify Key Question

• Fix scope of work

• Formulate initial hypotheses

• Collect

• Gather data

• Intensive research

• Collect & Understand

• Field research

• Verify hypotheses

• Synthesize

• Develop model

• Present final recommendation

February

March

April

Current Stage: Synthesizing

2/25 Preliminary Findings Meeting

4

P&G wants to expand reach to cloth users

Sources: Euromonitor, “Nappies/diapers/pants – Nigeria”, 2010

26.3 30.8

36.0 42.3

49.1 56.8

65.5

75.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2008 2009 2010 2011 2012 2013 2014 2015

NG

N (

bill

ion

s)

“The growing number of working mothers continues

to drive the demand for products as babies are

spending longer periods of time between getting attention” - Euromonitor

Diaper market in Nigeria is expected to grow at 16% CAGR to 75.2 billion NGN by 2015

“Having a diaper for my baby at night has helped both of us to sleep better and keeps the bed clean”

– Mother in Nigeria

5

P&G can implement their mission

in emerging markets

To provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for

generations to come, with the purpose to “grow by touching and improving more consumers’ lives in more parts of the world…more

completely” – P&G’s Mission

Benefits Increased

revenues and growth in

Nigeria

Sustainable and positively impacts

community

Barriers Insufficient distribution

network

Conversion to disposable

diaper

Costs of disposable vs.

cloth

Possible cultural barriers

6

Agenda


Recommendations

Questions

7

Executive Summary

To increase access and acceptance in developing markets, P&G should:

Implement a woman to woman

sales model

• Women are more receptive to women

• Women value “giving back”

• Provide benefits to make model sustainable

Use a basket of goods

•Offer variety of products

•Products should have varying margins

•Products should have a social component

Expand existing distribution capability

•Implement Ambassador system

•Recruit women

•Develop training •Give marketing support

•Provide start-up

Ensure success through

evaluation

• Launch test pilot when entering new regions

• Monitor and evaluate on a specific set of criteria

8

Current Method: Pull

• Mobile clinics are effective in urban areas, however they have limited reach and do not effectively educate women in more rural locations

Suggested Course: Push

• Train women to be Ambassadors who can educate consumers in their homes on the benefits of Pampers and other health and social goods

Women sellers can drive acceptance

deep in their communities

9

P&G’s mobile clinics cannot

reach all consumers

• Effectively educates urban consumers

Clinics and Ads

• Located in more rural areas

• Need someone else to reach them

C2 & D Consumers • Women more

receptive to other women


Women ambassadors


sales model

10

Executive Summary



sales model










•Recruit women


•Provide start-up


evaluation



11

We recommend

that P&G products

are a component

of a basket of

goods

Women may not be able to sustain profit with

limited P&G products and low margins

Women sellers will

make margins of

between 15%-20%

on P&G products

Sources: P&G office in Nigeria, margins based on HFS margins 12

A basket of goods is essential to success

Other models utilize a basket of goods to sell for the

following reasons:

Product variety drives consumer acceptance

Higher margin products motivate sellers

Social/health value products build loyalty with consumers & partners

13 Sources: HealthKeepers and Living Goods interviews and websites

Organizations offer differing takes on variety of products

Product variety drives consumer acceptance

High margin products motivate sellers

Social/health value products build loyalty

HealthKeepers Complement core mix of water tablets, salt, condoms, and mosquito nets

Personal care goods offered, but incentives in place to encourage selling of core products

In addition to health products, HK also trains to offer medical referrals for customers

Mix of health and personal care products (80 SKUs)

Personal care goods are fast moving; Clean delivery kits & anti-malarials = high margin

Preventative health products – malaria, clean water, nutrition, and contraception

Society for Family Health Mix of over-the-counter and prescription goods

Products subsidized by donors and USAID enable higher margin

Focusing on malaria treatment drugs, ACTs, but also offers health and education advice

Examples offer insights for product mix

14 Sources: Interviews with HealthKeepers, Living Goods, SFH

Examples: • Phones • Hair cream • Vitamins • Food supplements

Examples: • Aspirin • Toothpaste, bar soap • Phone cards • Sugar, iodized salt, fortified oil

We recommend including

Non-P&G products in the basket of goods

15

Maximize the potential of the model by offering opportunity to earn higher margins

Low Margin / High Volume

increases sales for sellers and drives customer traffic

High Margin / Low Volume

generates greater income for women sellers

Sources: HealthKeepers and CARE Bangladesh models

Including Non-P&G Products in the basket also

allows for inclusion of goods with social impact

16

Examples: Mosquito Nets ▪ Condoms ▪ Birthing Kits ▪ Books ▪ Child Development Advice ▪ Savings

Offering products with social and health benefits in the basket is integral to the success of the model

Builds long-term trust &

credibility

Benefits motivate women sellers

Build CSR and employee retention

at P&G

Sources: HealtherKeepers and Living Goods models

Manufacturer

Distributor

Sub-Distributor

MVDs

Merchant Ambassadors

Manufacturer

Distributor

Sub-Distributor

MVDs

HFS

P&G should supply social goods to MVDs for

Merchant Ambassadors to access

17

Other Products

Social Goods

Executive Summary



sales model










•Recruit women


•Provide start-up


evaluation



18

P&G can use three methods to address

Access and Acceptance

Women will act as product ambassadors and/or

merchants of the products, depending on need

Do consumers have access? Do they understand and

accept the products?

P&G must determine penetration

Identify the market

situation

Access & Acceptance

Use current method

No Access, No

Acceptance

Use Merchant

Ambassadors

Access, No Acceptance

Use Ambassadors

19

Several positions are needed in order to

implement this model

20

Product

MVD Training Agent

Ambassador Merchant

Ambassador

Monitoring Agent

P&G Nigeria

Each position has an important role

21

Training Agent:

• Recruit/Select/Train Ambassadors

• Recommend Ambassadors to MVDs

• Launch other pilots across the country

• Provides product giveaways & demos

Monitoring Agent:

• Measures performance metrics

• Evaluates model effectiveness

• Recommends model adjustments

Ambassador (Acceptance):

• Responsible for product demos, HFS visits, ‘Avon talks’

Merchant Ambassador (Access & Acceptance):

• Sells basket of goods door-to-door

• Educates consumers on P&G products

MVD:

• Supplies product to Ambassadors upon recommendation by Training Agent

Good recruiting practices will reduce

training and turnover costs

Target women who:

• Are geographically located where access and acceptance of P&G products is limited

• Have another job or experience

• Are comfortable with entrepreneurial risk-taking

Sources: Living Goods, Focus Groups 22

Candidates should:

Be respected in their communities

Have previous experience in selling/trading

Have basic math and literacy skills

Be able to create a selling strategy and client list

Business Skills

Product Education

Training Merchant Ambassadors is essential

P&G offers training for Golden Store owners and selected marketers, but merchants and ambassadors will require

more intensive training.

23

Sample P&G Training

Training helps women sellers

achieve success

24

Offerings Capacity Costs Duration

• Financial Management

• Product Education • Pricing Rules • Inventory

Management

Trained ASPIRE sellers and experience with SWAP Baby & Family Care Centers in other countries

5,000 (ambassadors) to 25,000 (merchant ambassadors) NGN each

2-week

Inventory management Selling strategies Pricing/margins

Source: Living Goods model; based on multiplier of minimum wage from http://www.nigerdeltacongress.com

P&G should provide training in business skills and product knowledge

P&G can enable and incentivize

merchant ambassadors with tools

Sources: FanMilk, Living Goods, and focus groups 25

Asset Purpose Example

Bicycles and backpacks

Provide mobility for women sellers

FanMilk, VisionSpring

Uniforms Shows credibility and completion of training

FanMilk, Living Goods

Mobile phones Can be used as tool to support selling Can also sell minutes to increase profit

Grameen Phone, Street vendors

P&G has options for training

Merchant Ambassadors

P&G-Developed and Implemented Training:

Training

# of Training Agents 3.1

Total Cost of Training Agents $15,000

Training materials development 2,000.0

Travel & accommodation 8,000.0

Admin. Expenses 3,000

Sub-Total: 28,000

Supporting Tangible Assets

Uniform total cost 250.0

Bike total cost 4,250.0

Backpack total cost 250.0

Mobile phone total cost 1,250.0

Sub-Total: 6,000

Total $34,000

Entrepreneurial Development Center (EDC) - Nigeria

[see appendix for information on CARE]

Cost (per woman) for training $ 200

Number of Women 40

Sub-Total $ 6,700

Cost to develop and train in-house

Cost to sub-contract training

Costs vary depending on who does the training:

26

Marketing products will further

drive acceptance

27

Type of Good

Product Education Materials

Social Good

Mosquito Nets Anti-Malarial properties/ proper use

Assistance in set-up

Condoms Disease prevention and family planning

Demonstrations, pamphlets

Vitamins and Food Supplements

Nutrition for baby Pamphlets

Traditional P&G

Product

Pampers Benefit of Dry Nights, healthier baby

Trials, demonstrations

Always Ability to be active, confident

Trials, pamphlets

Sources: FanMilk, Living Goods, and focus groups

Women sellers have a requirement

for start-up Capital

28

$75

$100 - $150

$200 - $250

$300 - $350

LAPO

Living Goods

Our Recommendation

Women Entrepreneurs

Estimated Need for Capital

P&G does not finance their distributors, however field research and data from HealthKeepers and Living Goods shows that women require initial

capital to become entrepreneurs.

Sources: HealthKeepers, Living Goods, and focus groups

Use microconsignment to provide startup

products to Merchant Ambassadors

29

Initial Basket Voucher Initial Selling Consignment Continued

Selling

•Filled with $75 worth of P&G products •Provided free at completion of training

•P&G provides voucher worth $75 to purchase non-P&G products from MVDs

•Merchant Ambassador returns to MVDs to replenish inventory

•Merchant Ambassador sells initial inventory over 2 – 4 weeks

•Merchant Ambassador continues to drive access and acceptance

Executive Summary



sales model










•Recruit women


•Provide start-up


evaluation



30

Incentive Innovation: Provide women with a head start by matching deposits up to $10 in a

newly opened bank account.

Ensure mutually beneficial success by providing

sellers with health and social incentives

Healthcare: Health

screenings

Permanet

Social Incentives:

Personal Savings

Financial life skills

Can sustain, motivate, and

maintain women sellers, and by

extension benefit consumers.

P&G can provide the support to ensure a mutually beneficial

model for the women sellers.

31

P&G should measure success by monitoring

Sales, Profit & Retention of Women

• MVDs record and monitor volume of sales to women sellers

• Women sellers record and monitor volume of sales to the final consumer

Sales

• MVDs record the amount of profit they receive on goods sold to women sellers

• Women sellers record the amount of profit they receive on goods sold to the final consumer

Profit

• Monitor the number of sellers who continue to work for MVDs after 3 months, 6 months and 9 months

Retention of

Women

32

A Pilot is Key to the Implementation Strategy

Creating Capacity for Implementation & Scale

33

Launch two (2) pilot groups in Nigeria Group 1 in the North (20 women) Group 2 in the South (20 women)

Each pilot group consists of two (2) divisions Merchant Ambassadors (10) sell and teach

to drive access Ambassadors (10) teach

to drive acceptance

Pilot Program to launch total 40 P&G Ambassadors to drive access and acceptance in semi-urban and rural areas in Nigeria. P&G Women Ambassadors to receive product from Multi-Village Distributors (MVDs) and training from P&G Training Agents

The costs of the Ambassador program are

justified by its expected impact

• We estimate a total cost of $34,000 to train 40 Merchant Ambassadors and provide them with supporting assets.

Initial Start-Up Cost

Projected 4-Year Revenue for P&G ($ Thousands)

34

$56.5 $55.7 $221.5

$999.6

$45.3 $240.8

$758.6

$3,186.1

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

$3,500.0

2011 2012 2013 2014

in t

ho

usa

nd

s

Total Costs Total Increase in Revenue for P&G

Year # of Women Sellers

2011 64

2012 128

2013 384

2014 1,536

Timeline for pilot implementation

35

Consideration for regional differences will

be necessary when scaling the model

Considerations Types Effects on the model

Our recommended solution

Cultural Ethnicity, Religious

affiliation

Resistance to acceptance of women

sellers

Nigeria has night markets where women

might be able to sell

Population Density Sprawling metropolitan

cities vs. rural towns

Demand for women sellers fluctuates

depending on number

Allow MVDs to facilitate number women sellers

to market demand

Landscape/environment Mountainous terrain,

rainy season

Distribution impairment in supply chain as well

for women sellers

Provide rain gear and bicycles to enable women to travel

Per Capita Income Disposable Income consumers vs. price sensitive consumers

High margin products more difficult to sell

Provide a diversified basket of goods for

women sellers

36 Sources: HealthKeepers, Living Goods, Fan Milk, VisionSpring, LAPO

Emerging markets have unique risks that can be

mitigated

Risk Rating Mitigation Strategy

Backlashes over issues like exploitation (or appearance of) can be highly

damaging

Demonstrate that commercial returns further community development rather than

come at the expense of the poor

Underestimating the competition (overlooking the tough competitors

operating within the informal economy)

Keep local competitors involved by

employing them, giving them a role in the value chain, or even sourcing from them

Some countries may have cultural barriers for women sellers

Understand each region’s cultural norms so

that products are accepted and no one is alienated

Probability

Impact

x

x

x

Sources: Harvard Business Review, March 2011 37

Executive Summary



sales model









•Single supplier

•Use MVDs

•Recruit women

•Develop training

•Give marketing support

•Provide start-up


evaluation



38

Agenda


Recommendations

Questions

39

Appendix

Terms explained

• Microfinance, Microfranchise, MicroConsignment

Potential Partners

• MFI (like LAPO)

• Access Bank

• CARE

Financial model

• Financial documents

40

We use elements from three models

for BoP business development

Access to capital for the poor

Providing range of financial services to the poor

Savings and insurances can be included

Small loans offered at favorable rates

Proven ready-made business model

Key components: Scalable and replicable

Business in a bag model vs. Conversion model

Supplier lends product to the poor for a time period

Seller keeps commission and returns wholesale value to supplier

Allows women to build capital without initial investment

Microfinance/Microcredit

Microfranchising

MicroConsignment

41 Appendix Summary

Combining two models reduces

risks for stakeholders

Microcredit Microfranchising

Source: Linda Scott, Qualitative research, p. 4 ; www.dfid.gov.uk

“The ability to purchase inventory is the main prerequisite” for success in micro-franchising activity

Providing credit to a proven model decreases financial risk for lender

Microconsignment

Microfranchising

Reduces risk for women sellers and allows them to make immediate profit

Provides structure to ensure successful

selling of products

42

Benefits for Lenders Benefits for Clients

Appendix Summary

P&G could use a set of criteria to

evaluate potential MFI’s

43

Best MFI

Geographical Coverage

Low Interest Rates

Focus on Social

Development

Appendix Summary

Financial planning education will provide

value to sellers and consumers

Source: Focus groups

P&G

• Teach women sellers about savings

• Provide bank accounts

Women Sellers

• Teach end consumers about savings

• Open accounts from LAPO

End Consumers

• Save money for child’s education

• Can be used to buy inventory and grow business

44 Appendix Summary

Partnership with Access Bank can provide

additional resources to LAPO

45

• Funding from IFC for projects targeting low-income women and FMCG companies.

• Scalability • Open to partnership • Significant experience • Customized software

P&G can also provide some part of start-up loan to LAPO or pay LAPO for training the women entrepreneurs

Appendix Summary

CARE Inc. can expedite implementation process

by training agents and ambassadors

Context

• CARE Bangladesh successfully rolled out a women selling program in BOP markets making $1MM in revenue 2009 with 3000 women sellers

• CARE, Inc. roll-out will allow entity to consult independently

Capacity

• Specializes in: enterprise and business development

• BOP Marketing

• Public private partnership

• Women’s economic development

• Can deliver 1000 sellers each year after implementation

Cost

• Training materials & development: $2000

• Consultants fee $10000 (10 day period)

• Travel & Admin $10,000

• Training 25-30 $5,200

46 Appendix Summary

Data for implementation timeline

Tasks Start Date Duration (days) End date

Develop Training curriculum for agents and ambassadors 1-Jul 30 30-Jul

Hiring two training agents and two monitoring agents for north and south 1-Aug 30 30-Aug

Recruiting, selecting and training P&G Ambassadors 1-Sep 30 30-Sep

Ambassadors begin selling and increasing acceptance 1-Oct 90 1-Jan

Monitoring agent produces ambassador reports 1-Jan 7 7-Jan

Central office conducts site visits 10-Jan 14 24-Jan

Monitoring report produced and model updated 15-Feb 43 30-Apr

Scale to other areas 1-May 90 1-Aug

47 Appendix Summary

48

Initial start-up cost analysis

Appendix Summary

• Please see the P&G Financials document for more information

Only some products in the Basket of Goods

will require education

Requires Education

• Pampers

• Always

• Aspirin

• Vitamins

• Food Supplements

• Books

• Condoms

• Birthing Kits

• Mosquito Nets

• Vitamins

• Food Supplements

Education Unnecessary

• Ariel

• Duracell

• Gillette

• Bonux

• Aspirin

• Toothpaste

• Phone cards

• Iodized salt

• Bar soap

• Fortified oil

• Sugar

• Phones

• Hair Cream

• Books

49

Documents

Woman to Woman Selling in Nigeria - · PDF file•Undergraduate major in marketing ... mix of water tablets, salt, condoms, and ... Grameen Phone, Street vendors