Sanitation Marketing in Rural Vietnam IDE’s Experience Quang Van Nguyen Country Director IDE|VIETNAM Brussels, July 5- 7, 2010
Sanitation Marketingin Rural VietnamIDE’s Experience
Quang Van NguyenCountry Director
IDE|VIETNAM
Brussels, July 5-7, 2010
About IDE
• An international NGO: Asia, Africa, Latin America• Best known for disseminating low-cost appropriate
products and services (treadle pumps, drip irrigation…)• Market-based approach:
– Treat poor people as potential customers, rather than recipients of charity No material subsidy or handout
– Use business principles to facilitate unsubsidized market systems in which the poor can participate Project to be implemented through profitable private sector
The case• ? – 2002: A DANIDA-funded sanitation project
implemented by government in Vietnam, with subsidy, didn’t meet targets
• 2003 – mid 2006: A DANIDA-funded sanitation project implemented by IDE without subsidy– 54,000 HHs (19% poor) in 6 coastal districts, 2 provinces– (1) Rural HHs would invest in latrines when a range of low-
cost options are available? (2) Promotional campaigns can influence rural HHs’ decisions to invest in latrines?
• 2009: WB WSP’s ‘Three-year-after-the-fact’ study done by IRC to find out about project sustainability
Conventional vs. market-based approaches
Conventional Approaches Market-based ApproachesHeavy subsidies for capital cost Subsidies for market
development. Full capital cost recovery from users
Standardization of models A range of affordable optionsDecision making by external agencies
Users decide what and how to buy
Focus on infrastructure target Focus on behavioral targetsFocus on centralized service provision
Focus on diversified local service provision
Conventional Approaches Market-based ApproachesHeavy subsidies for capital cost Subsidies for market
development. Full capital cost recovery from users
Standardization of models A range of affordable optionsDecision making by external agencies
Users decide what and how to buy
Focus on infrastructure target Focus on behavioral targetsFocus on centralized service provision
Focus on diversified local service provision
What is Sanitation Marketing• Marketing: Not about selling things they don’t want,
but finding what they want, then making it available• Sanitation Marketing: Public investment to create
poor households’ demand for improved sanitation and simultaneously catalyze private sector market-based supply of sanitation products/services to satisfy that demand at scale
Sanitation Marketing approach
Paying full costs, no subsidy
Building latrines for profit
Private sector masons
Poor households as customers
SUPPLY DEMAND
MARKET
1. Find out what they would want
2. Design / choose latrine options
3. Build market-based supplying capacity for private masons 4. Create demand
thru marketing5. Facilitate market
transactions
Sanitation Marketing processesPerform situational analysis
Perform market assessments
Formulate marketable solutions
Develop an advertising and promotion campaign
Build local supply network of low-cost sanitation
Implement promotion activities
Link supply and demand
Broadcast communication
campaign
Supply development• Select/design
latrine options• Select masons• Train on low-cost
latrine construction• Train on how to do
business• Get endorsement
from local government
Demand creation• Selling dreams, not latrines –
Emotional triggers, rather than functional
• Person-to-person communication – Local promoters (Women Union members, Community Health workers, Village Heads)
“Mr. Latrine” representing “Hygiene, Civilization, and Health”Slogan: “Be an exemplary person”
Supply
MasonMason
MasonMason
MasonMasonDemandHHHH
HHHH
HHHH
HHHH
HHHH
HHHH
HHHH
HHHH Household without a hygienic latrine
Implementation structureDistrict Steer. Com.
Commune Steer. Com.
Commune Steer. Com.
VP VPVP
VPVP
VP Village Promoter
• Rural HHs do demand and purchase latrines
• Private sector masons do respond to HHs’ demand
Project results
Under government Under IDE pilot
Latrine coverage increase from 16% (2003) to 46% (mid 2006) ■ 16,000 latrines (per year: ~4 times compared w/ avg previous 4 years) ■ >$1M invested by households (leverage Donor : HH = 1:2, Marketing cost : HH pay = 1:5) ■ 90 masons making $250,000 profit
WB WSP’s “3-Year-Later” study• Latrine coverage sustained• Rural marketing and promotion continued• Supply services further developed• “Spillover” effect: nearby areas
Scale-up – in progress
Coastal pilot
2003 2004 2005 2006 2007 2008 2009
District
District
Upland pilot
Provincial
Scale-up
Regional
Scale-up
2010
The further from peri-urban areas, the more challenging
Scale-up – challenges
• High degree of segmentation requiring tailored strategies and designs
• Limited buy-in from highest level government• Limited ground level implementing capacity
Lessons learned
• Sanitation Marketing effectively stimulates unsubsidized demand• Never underestimate the poor’s willingness to pay• Sanitation Marketing could be sustainable with local promoters