A methodology for marketing differentiated water and sanitation options in urban areas in developing countries, is being developed and is described in outline below. It is based on a commercial methodology set out in a key text entitled: Strategic Marketing Management by Wilson and Gilligan, 1997. The methodology will be tested and refined in cities in both Africa and India. The approach has already reported to have been successfully applied in Durban, South Africa.

Literature review continued (from Kayaga, 1996) and extended to relate known marketing techniques to the particular needs of water and sanitation and then to those services in low-income countries, particularly to ensure service to the lowest income groups

Postal survey: Initial survey questionnaire prepared and piloted and undertaken to find out which institutions are actually using marketing as a management tool and with what degree of commitment, and existing utility customer orientation; also to stimulate interest in the research area

Preparatory Fieldwork

Initial fieldwork (IHE - Bhattarai and Gupta) to undertake first attempts at investigating utilities and the perceptions and willingness to pay of their customers (now completed).

Main Fieldwork - using 'Pre-Draft, overly comprehensive' Methodology

MARKETING AUDITING (see Wilson, Gilligan, 1997)

Environmental analysis

Survey of existing political, economic, socio-cultural and institutional environment
Data from the Central Statistics department on national and regional demographic and economic indicators; political system and general stability; the water sector and the utility legal framework
Utility institutional analysis: SWOT, performance indicators, subjective and objective etc
Organisational structure, chain of command, power distance, objective and subjective performance indicators; SWOT analysis

Market segmentation:

Survey of present and potential customers, income distributions, a real distributions of income groups etc Customers as individuals/groups?
Domestic/Government/Commercial/Industrial
Information from the customer data base to be collaborated with data from representative samples of households according to housing zoning
Geographical Boundaries (how far out to go? City boundaries? Population density boundaries?)
Income Boundaries (how inclusive to be? 99%? 95%?)

Product/Place

Survey of existing provision - by ALL suppliers Vendor/alternative supplier surveys
To be incorporated in the field study

Price

Survey of existing tariff structures
Survey of alternative supplier prices
Survey of costs of householder's support to utility provision (storage, queuing, treatment etc)
Utility financial analysis
Costing analysis and profitability of existing and possible service options

Service

Survey of existing customer service
As seen through: Customer perceptions of utility service
internal staff perceptions about customers and their needs; perceptions of customer/commercial orientation.

Promotion

Survey of existing external promotion, advertising, public relations - Information Education Communication practises.
Survey of internal promotion practises
Intra- and inter- department communication dissemination on customer data

STRATEGIC GAP

Missions and objectives, environmental development, marketing strategy.

Market Segmentation and Product Differentiation

Selection of appropriate range of products/places
WTP surveys on different products/places; 2nd preferences and 3rd preferences
Ensure clarity on who owns what, who pays for what. What is included in WTP price
Hierarchical WTP Surveys or Survey chosen option to 'sell'
Visuals important to market concepts
Cross-subsidisation potential
Distribution Plan

Assessment Report

Results of the questionnaire and the fieldwork will be analysed. Assessment Report of existing orientation & perceptions about customers and their needs; Assessment of how Products, Price, Service and Promotion interact - for all customers with particular focus on low income and women consumers;

Draft Methodology

Following the fieldwork, the development of the [simplified] pricing and service differentiation methodology will be undertaken.

Based on the 80:20 principle - we want a simplified methodology that will deliver 80% of the benefits of a marketing strategy (80% accuracy?) with 20% of the inputs (knowledge, expertise, time etc

Development, production and testing of methodology for utilities to apply techniques for structuring service delivery & tariffs to serve low-income customers and ensure financial sustainability

Final testing taking place at Loughborough [and IHE?], through consultation with interested parties and at workshops in India and Uganda. The feedback received will be incorporated into the proposed Guidelines.

Dissemination 1

Guidelines produced & disseminated.
Ten page review for policy makers included in report and available separately - to be published in water journal

Dissemination 2

Two workshops, one in Uganda and one in India;
Seminar for consultants in UK;

A streamlined marketing methodology for watsan services to the urban poor, set out in clear guidelines, offers the potential both for improved services to those customers and providing much needed increased revenue to the utility. Guidelines targeted at specific audiences are a key output of this research.

Tel: +44 1509 222617 or 222885
Fax: +44 1509 211079
Email: K.R.Sansom@lboro.ac.uk

Tel: +31 15 215 17 83
Fax: +31 15 212 29 21
Email: rwf@ihe.nl