WATER AND SANITATION PROGRAM: FIELD NOTE October 2012 73413 Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation The Water and Sanitation Program is a multi-donor partnership administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services Acknowledgments: This Field Note was prepared by Danielle Pedi, Phyrum Kov and Susanna Smets. The Note largely benefits from the Sanitation Marketing Project Review report prepared by Andy Robinson and the End of Project report prepared by iDE for WSP. This Note would have been impossible to put together without the active help and cooperation of WSP staff and iDE staff who not only provided the necessary data and information for the analysis, but also facilitated field visits that helped strengthen the cases reported in the Note. Sincere thanks also go to Dr. Chea Samnang, Director of Department of Rural Health Care, Ministry of Rural Development, Mr. Nep Chem, Deputy Director of Svay Rieng Provincial Department of Rural Development, Mr. Pen Minea, Deputy Director of Kandal Provincial Department of Rural Development, and commune council members who have provided frank reflections about the experience of the pilot project. The authors would like to acknowledge the following peer reviewers whose comments helped improve the quality of the Field Note significantly: Jan Willem Rosenboom (Bill and Melinda Gates Foundation), Andy Robinson (water and sanitation consultant), Geoff Revell and Lyn McLenan (WaterSHED), Eduardo Perez, Craig Kullmann and Jemima Sy (WSP), Dan Salter (consultant), Michael Roberts and Tamara Baker (iDE). Contact Us: For more information, please visit www.wsp.org or email wspeap@worldbank.org. The Water and Sanitation Program (WSP) is a multi-donor partnership created in 1978 and administered by the World Bank to support poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. WSP provides technical assistance, facilitates knowledge exchange, and promotes evidence-based advancements in sector dialogue. WSP has offices in 25 countries across Africa, East Asia and the Pacific, Latin America and the Caribbean, South Asia, and in Washington, DC. WSP’s donors include Australia, Austria, Canada, Denmark, Finland, France, the Bill and Melinda Gates Foundation, Ireland, Luxembourg, Netherlands, Norway, Sweden, Switzerland, United Kingdom, United States, and the World Bank. For more information, please visit www.wsp.org. WSP reports are published to communicate the results of WSP’s work to the development community. The boundaries, colors, denominations, and other information shown on the findings, interpretations, and conclusions expressed herein are entirely those of the author and should not be attributed to the World Bank or its affiliated organizations, or to members of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. © 2012 Water and Sanitation Program Contents Executive Summary . ................................................................................................................... 1 ................................................................................................................. 2 Not Business as Usual. Understanding the Market Potential . ........................................................................................... 2 The Sanitation Market Facilitation Process ................................................................................... 5 Designing an Affordable, Desirable Latrine ............................................................................ 5 Strengthening the Supply Chain: a New Model to Simplify Purchase ..................................... 6 Changing Behavior and Creating Consumer Demand . ........................................................... 9 Unlocking the Market Potential: Results and Lessons ................................................................. 11 Enterprise Engagement In the New Business Opportunity .................................................... 11 Market Penetration and Sales Strategies .............................................................................. 14 Accelerated Community Coverage ....................................................................................... 15 Household Latrine Ownership and Use ................................................................................ 17 Scaling Up and Reaching the Poor: What Will It Take? . .............................................................. 20 References ................................................................................................................................. 22 www.wsp.org Sanitation Marketing Lessons from Cambodia: A market-based approach to delivering sanitation EXECUTIVE SUMMARY coverage from a baseline of 24%, which is six times higher Sanitation Marketing is an approach that aims to increase than the background rate of increase. Thus, a significant demand for sanitation and to strengthen private sector and rapid increase in durable latrine coverage could be capacity to supply sanitation products and services. The achieved without the use of any hardware subsidies. focus on the private sector and a view of households as consumers rather than beneficiaries is what sets sanitation While these results are promising, there were also a marketing apart from conventional approaches to sanitation number of limitations to the pilot approach. Enterprises service provision. were able to sell the Easy Latrine to a first group of households with latent demand (the ‘early adopters’), but The WSP-supported Sanitation Marketing Pilot Project is showed little evidence of penetration beyond this market one of a range of sanitation marketing initiatives applying segment. Rather than developing more effective sales and the sanitation marketing approach to the rural Cambodian promotional strategies or complementary interventions to context. The project designed a new affordable pour-flush deepen market penetration, the project expanded its target latrine package (the ‘Easy Latrine’), trained local enterprises area to support enterprises in their sales effort. This ‘wide, to profitably produce and sell it, and developed sales and but shallow’ penetration left the majority without latrines. promotional strategies to increase consumer demand. In less The pilot highlights the need for more effective sales and than two years, households from four provinces purchased marketing strategies, complementary finance options a total of 10,621 unsubsidized Easy Latrines from local for households, and more attention to the role of local private enterprises. In 601 monitored villages, there was government in creating a supportive environment for the a 7.7 percentage point increase in improved sanitation market to flourish. www.wsp.org 1 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation NOT BUSINESS AS USUAL and promotion – sanitation marketing utilizes commercial Rural sanitation coverage is low in Cambodia, and progress and social marketing techniques to connect households to towards increasing access to sanitation is slow. An estimated sanitation products and services they want and can afford. 72% of the rural population currently practices open The sanitation marketing approach shows great potential defecation. Rural sanitation coverage increased by just 1% to help accelerate rural sanitation access in a sustainable, a year over the last decade (JMP 2012). Rural sanitation has cost-effective and scalable way. To understand how best generally not been prioritized in sector or program budgets to harness the potential of the market, WSP and MRD and decades of small-scale projects focused on household launched the Sanitation Marketing Pilot Project. This Field sanitation infrastructure provision have had only a marginal Note documents results and experience from the project, impact. highlighting how early lessons can inform the scale up of sanitation marketing approaches in Cambodia. But something is changing in Cambodia. Since 2006, under the leadership of the Ministry of Rural Development (MRD), UNDERSTANDING THE MARKET various sector stakeholders have been exploring alternative approaches to accelerating sanitation coverage. Frustrated POTENTIAL with the slow progress and the failure of conventional Cambodia’s sanitation marketing journey began in 2006, supply-side approaches, sanitation practitioners are using when WSP commissioned national sanitation demand and new strategies that shift the focus away from project-led supply chain assessments to assess the opportunities for a provision and construction of toilets. Within its Scaling market-based approach.1 The assessments found a strong Up Rural Sanitation business area, the World Bank’s Water latent demand for latrines among rural Cambodians and a and Sanitation Program (WSP) works with MRD to build functioning - though fragmented - supply chain for latrine the capacity of national and local governments in order to products and services. Critically, large numbers of non-poor strengthen the enabling environment for rural sanitation. rural households – including nearly 70% of households in In addition, WSP supports the creation of consumer the two highest income quintiles – did not have a latrine at demand for affordable, desirable sanitation products that home. can be accessed through market channels. Over 80% of installed latrines in rural Cambodia were Sanitation marketing is an approach that focuses on purchased by households directly from local private sector stimulating household demand for sanitation, while providers. Among non-owners, 77% stated they had simultaneously improving the private sector supply of considered or were considering purchasing or constructing sanitation products and services. Developing strategies to a latrine. However, the clear demand for latrines did not address the 4Ps of the marketing mix – product, price, place translate into actual construction, primarily due to a BOX 1: MARKET FACILITATION OPPORTUNITIES IDENTIFIED IN SUPPLY AND DEMAND ANALYSIS Demand-side Supply-side • Overcome the perception of an ‘ideal’ design by • Support and improve the private sector role in infor- encouraging users to choose options that can be mation provision, demand creation and sales strate- upgraded toward the ‘ideal’ designs, but with lower gies entry-level costs • Make affordable, aspirational, hygienic, and upgrad- • Encouraging latrine purchase through effective able latrines easily accessible through the market communications messages and channels Source: Salter, 2008 1 Salter, 2008 2 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation strong preference for expensive latrine designs. Households provinces, with a broader objective of developing a scalable, delayed purchase, unwilling to accept less than the ‘ideal’ replicable sanitation marketing approach. pour-flush latrine with solid walls and roof that typically cost around US$150. Lower-end dry pit latrines, costing as The project initially targeted six rural districts in Kandal little as US$5 -10 were considered unattractive and unlikely and Svay Rieng provinces, eventually expanding to cover to last long. There seemed to be no options available that 11 districts in both provinces. While project activities could fill the gap between the preferred ‘ideal’ latrine and were broadly the same in both provinces, there were the cheapest possible designs. significant differences in existing conditions in the two provinces (Table 1). Kandal has better market access, The private sector already provided the vast majority of higher population and population density, higher baseline latrines installed in Cambodia, over 80% of all latrines sanitation coverage and wealthier, less agriculture- installed in the country. However, the network of private dependent households compared to the poorer and more sector enterprises involved in sanitation was highly rural Svay Rieng province. Among latrine owners, Kandal fragmented. Latrines comprised only a small percentage of households tended to own the ‘ideal’ pour-flush latrine any enterprise’s total activity. Private enterprises had a very type, while in Svay Rieng there was a mix of pour-flush and passive sales approach and were not involved in promotional dry pit latrines, and a greater variety of lower-cost shelter activities. Households did not have access to information types. However, in both provinces, a large proportion of on available options and costs. The latrine construction households in even the highest wealth quintile did not process was complex and involved the purchase of a variety own latrines at the start of the project. of construction materials from different shops, which were brought together and assembled into a latrine by a hired mason and/or the household itself. Masons often provided poor quality construction and were not a particularly trusted source of information on sanitation. While numerous, the market constraints were clearly not insurmountable. A number of promising opportunities were identified that could help consumers better access the products they wanted and help the sanitation market to reach its full potential (Box 1). THE SANITATION MARKET FACILITATION PROCESS Drawing on findings from the assessments, a small number of pilot programs began developing sanitation marketing strategies to overcome market barriers. Launched in January 2009, the Sanitation Marketing Pilot Project was one such initiative. The project was implemented by the NGO International Development Enterprises (iDE), with technical and financial support from WSP and USAID‘s Cambodia Micro Small and Medium Enterprise Project. It aimed to improve the sanitation market in two pilot www.wsp.org 3 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation TABLE 1. KEY CHARACTERISTICS OF SVAY RIENG AND KANDAL PROVINCES Kandal Svay Rieng Population 1,265,280 482,788 Number of households 255,029 114,758 Population density 355 persons/sq. km 163 persons/sq. km Population growth rate 1.62% 0.09% Percentage urban 15% 3% Number of pilot project target districts 3 Original 3 Original 3 Expansion 2 Expansion Baseline Sanitation Coverage in original target districts, 2009* Total 40% 18% Poorest Quintile 47% 6% Richest Quintile 53% 32% Median cost of latrine at baseline in original target districts, 2009** US$157 US$69 Source: 2008 Population Census *Data from Sanitation Marketing Pilot Project Baseline Survey. ‘Total’ coverage is based on a village-level questionnaire of 50 villages (25 villages per province). Quintile data are based on a non-representative household-level questionnaire, N = 500 (250 per province), and therefore do not match exactly with totals from the village-level survey. Household income quintiles were determined by sorting households from lowest to highest income, based on response to survey question ‘estimated total cash income during the past year from all sources.’ Each quintile group contains 20% of the surveyed population within each province. ** These costs include shelter and underground structures FIGURE 1. ITERATIVE STEPS AND ACTIVITIES IN THE PROJECT CYCLE Understand the market context Market Assessments Supply Chain Assessment Demand Assessment 2006 - 2007 Design & Testing Design affordable latrine package • Qualitative design research • Iterative product prototyping & user testing • Final product & production design Product Design & Action Research Jan - Dec 2009 Design & Test Business Models Design & Test Promotional Activities • Develop business & supply chain model • Develop BCC strategies • Engage �rst two model businesses • Develop product brand and promotions • Test & re�ne production & distribution strategies • Test & re�ne tools & tactics Design & Testing Proof of Concept NGO-led Promotions • Identify and engage early market entrants • ‘CLTS-inspired’ village-level events Program Iteration One • Nurture & support early entrants conducted by NGO staff Jan - Aug 2010 • Test & re�ne business training strategies • Branded Easy Latrine promotions Expand and Replicate Enterprise-led Promotions • Engage new businesses • Village-level events conducted by sales agents Program Iteration Two • Support replication & Self-Starters • Project transition to sales facilitation role Sep 2010 - Apr 2011 • Foster competition • Easy latrine & Self-Starter latrines promoted 4 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation The project included a 12-month design and research phase ‘catchment box’, a PVC pipe, three concrete rings for the followed by a 16-month implementation phase. Drawing pit lining and a pit lid, eventually sold for US$35. The Easy on the finding of the sanitation demand and supply analysis, Latrine included only the ‘latrine core’ consisting of slab and project activities focused on three aspects: underground components (Figure 2). Households could choose a shelter design based on their resources, and start 1) Design of an affordable latrine package that could be with a lower cost entry-level shelter that could be upgraded produced and sold locally over time. The technical comparison between the Easy 2) Strengthening of the rural sanitation supply chain Latrine and standard latrine is also given in Table 2. 3) Design and delivery of communications and promo- tional activities to increase demand for a latrine The design offered consumers in Cambodia an entirely new sanitation experience. It gave people what they wanted The process of market facilitation involved a number of – a pour-flush latrine – and simplified the purchase and iterative steps and a flexible learning style that allowed key construction process by offering a ready-to-install latrine strategies and activities to evolve over time in response to package. The product could be purchased from a single new market information (Figure 1). This iterative learning enterprise and installed by consumers themselves, without led to a number of strategic changes that gradually shifted the need to hire a mason. Product refinements, new the approach from an NGO-led project intervention in the equipment and new production techniques enabled a shift early phases to a more hands-off market facilitation role. to a ‘high volume, low margin’ business model. With more efficient production, enterprises could sell more latrines, Designing an Affordable, Desirable Latrine faster and at a lower price. To develop a suitable new latrine design, the Human FIGURE 2. THE EASY LATRINE AND INSTALLATION GUIDE Centered Design approach (see www.ideo.com/work/ The Easy Latrine: human-centered-design-toolkit) was used to prototype, Easy to buy, test and refine latrine options. The design challenge was easy to build to make the product package more affordable, attractive and accessible to consumers, working with commercially available materials and existing enterprises. One-page sheet ‘Do It Yourself’ installation instructions The original design brief was to develop a US$10 latrine, as help simplify the willingness-to-pay data indicated 73% of rural households construction process. without a latrine would be willing to pay this price.2 However, the research indicated a very strong consumer preference for ‘permanent’ pour-flush options, which could not feasibly be produced and sold by local enterprises for this price. Assessing the trade-offs between product affordability and desirability, the design focuses on a lower cost pour- flush latrine that would give people the permanence and durability they desired, even though this would result in a more expensive product. The final product design, the Easy Latrine, was an offset pour-flush latrine package consisting of a concrete slab with integrated pour-flush ceramic pan, a pre-cast concrete 2 Roberts and Long, 2007 www.wsp.org 5 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation TABLE 2. COMPARISON OF KEY TECHNICAL FEATURES: STANDARD AND NEW LATRINE DESIGN Technical Standard Latrine (slab and Easy Latrine Benefits and trade-offs feature underground parts) Latrine slab • Standard available ceramic • Standard available ceramic • All ceramic pans available in and pan pan is cast into a pre- pan is cast into a pre- Cambodia are for direct, not cast concrete slab as an cast concrete slab as an off-set pits. They do not have a integrated unit. integrated unit. connection for the pipe. • Slab is typically tiled. • Optional slab-tiling to reduce • Households expressed a strong costs if desired. preference for ceramic pans and tiling, compared to plastic pan samples imported for testing during the design stage. Waste • Because available ceramic • A pre-cast concrete • Pre-cast catchment box collection pans do not have a pipe catchment box supports the enables households to install chamber connection, a mason is hired slab and pan, eliminating the the latrine without the need for to construct a collection need for bricks and masonry a skilled mason. chamber under the slab and work. • Substantial cost reductions pan, using bricks and mortar. • The catchment box includes achieved on materials and labor. • PVC pipe is connected to the a hole for pipe connection to • Material purchase simplified, as chamber and waste drains off-set pit. collection chamber now comes into off-set pit. in one piece. Pit lining • Conventional pre-cast • Concrete ring diameter • Thinner ring is lighter, easier to concrete rings of 100cm reduced to 80cm, thickness install and slightly cheaper to diameter and 5cm thickness. reduced to 3cm. produce. • Standard concrete mix. • Drier concrete mix with rice • Thinner ring is more porous and • Pre-cast concrete lid with husk ash additive. not as strong, and thus requires access hole and cover. • Pre-cast concrete lid with proper handling. • Single or double off-set pits access hole and cover. • Consumer acceptance of the of 3-6 rings each are typical. • Latrine sold with 3 rings. thinner ring has been a problem • Optional 2nd pit can be in some areas of Cambodia, as connected to catchment box it is perceived as not as strong to allow for alternating pit. and durable as conventional ring. Note: It is important to note that the main innovation of the Easy Latrine that got absorbed by the market is the packaging of the product and the waste collection chamber. Strengthening the Supply Chain: A New Model to ‘one-stop shop,’ procuring material inputs, manufacturing Simplify Purchase finished products, and coordinating sales and distribution of the new product package. Designing a New Supply Chain and Business Model The new model not only reduced the number of transactions To address supply chain fragmentation, the new supply during the purchase process, but also allowed for more chain model targeted existing producers of prefabricated transparent pricing information. Consumers could now concrete products as focal enterprises. Prefabricated be quoted one price and did not need to calculate and concrete producers were already producing most of the compare prices for individual components and labor. The concrete components for toilet construction, and could be new business model also included home delivery, bringing found in good numbers at provincial and district levels. In the product directly to the consumer’s doorstep and the new model, these enterprises would act as a kind of overcoming the distribution hurdle (Figure 3). 6 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation BOX 2. DEFINITION OF PROJECT PARTNER ENTERPRISE AND SELF-STARTER ENTERPRISE Project Partner Enterprise: An enterprise directly engaged by the project. Project Partner enterprises received intensive training and support from the project on production, promotion, and sale of the branded Easy Latrine. Project partners invested in new equipment to produce the catchment box and thinner concrete rings. Self-Starter Enterprise: An enterprise that purchased or learned how to make a catchment box mold on its own, prior to engagement with NGO project staff. Self-starters often replicated the sales and delivery model of project partners on their own. Once identified by NGO staff, self-starters were offered short training, but did not receive the same comprehensive support that the project partners received. They offer a similar latrine package at a similar price but typically do not adopt the thinner rings and application of rice husk. From ‘Proof of Concept’ to Replication Soon other enterprises began to emerge as self-starters in Svay At first, market facilitation activities focused on convincing Rieng (see Box 2 for the definition of project partner and self- enterprises that selling latrines was an investment-worthy starter enterprise). This was the first evidence of entrepreneurs business opportunity. Although a total of 50 concrete entering the sanitation market on their own, without producers (36 in Kandal and 14 in Svay Rieng) were initially recruitment by NGO project staff. These entrepreneurs identified in the target districts, the project had difficulty purchased or learned how to make a mold for the new engaging these enterprises. Barriers to market entry included ‘catchment box’ latrine component. They replicated the home the requirement to invest in new equipment and spend time delivery and direct sales model to compete with project partner learning new production techniques. Most enterprises were enterprises. Project staff offered shorter training, advice and simply uninterested in making such investments to ramp encouragement to the self-starters, but did not provide the up production of a slow-moving product like latrines and same level of support that the project partners received (Box did not have much upfront belief in the “high volume-low 3). From the outset, the self-starters were highly motivated margin� business model. and less dependent on NGO support. In the early Proof of Concept stage, the project began with only two enterprises, one in each province. The project provided loans and investment guarantees, a considerable amount of mentoring and training, and substantial marketing support, in return for an enterprise’s commitment and investment in new equipment (about US$440) and stock (about US$750 for a stock of 30 latrines). Over time, market facilitation activities transitioned to an Expand and Replicate stage. Exposure tours and site visits allowed potential enterprises to see for themselves the success of early project partners. Radio programs and Business Forums organized in coordination with local government advertised the business opportunity to engage new enterprises into the program, and as a result more enterprises were engaged. www.wsp.org 7 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation Nine months into implementation, project partner began to overlap geographically, the project started actively enterprises started to expand geographically to reach promoting competition. By the end of the pilot period, new consumers, since it was easy to achieve new sales in there were 16 project partner enterprises and eight self- previously untouched villages. As enterprises sales areas starters selling the new product package. FIGURE 3. SIMPLIFYING THE PATHWAY FROM PURCHASE DECISION TO CONSTRUCTION BEFORE AFTER The purchase process for the required materials and labor is complex The new model allows households to purchase all underground and confusing, requiring signi�cant investment in time and transport. components of the latrine by making a single phone call. Home delivery Households lack information on what to buy and how much it should is included in the retail price and the latrine package can be cost. self-constructed. Households can collect materials to start with a simple natural shelter, upgrading over time as resources become available. Decide to Consult mason/talk to Decide to purchase neighbors to get list of purchase needed materials Arrange (and pay for) transport Call enterprise or sales agent Concrete Retailer Retailer to place order Producer (ceramic pan, (bricks, sand, Enterprise arranges home delivery (concrete rings) others) other materials) Arrange (and pay for) transport Wait at house Collect materials on delivery day for simple shelter Assemble Hire mason, components agree on fee Follow instruction at house to construct yourself Construction support & mason Upgrade shelter supervision over time BOX 3. ENTERPRISE TRAINING AND LEARNING Formal training to Project Partner enterprises covered four main areas: • Sanitation and hygiene education. Understanding basic hygiene principles, why every household needs a la- trine, the health consequences of open defecation, and benefits of latrine ownership and how to install a latrine in a sanitary way. • Technical/production. Latrine manufacturing and stock and production management. • Business management. Sales force and labor management, order and delivery management, and basic re- cord keeping. • Sales and marketing. Pricing strategies, simple sales skills and tactics, use of promotional materials, customer service principles, working with local authorities in support of latrine adoption. In addition to receiving training, enterprises attend exposure tours to other enterprise sites to discuss specific problems and issues on a business-to-business level. Practical peer learning is an opportunity for enterprises to exchange tips and tools that can improve their business practices. 8 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation Changing Behavior and Creating Consumer De- ownership. Radio broadcasts were used to complement mand village-level activities to reach a wider audience. Developing Behavior Change Communication • Selling the Product: To help position the new prod- and Promotional Activities uct package as an aspirational consumer item, a product To address the most significant challenge – how to brand and tag line were developed. ‘Easy Latrine – Easy generate demand for improved sanitation and encourage to buy, easy to install, easy to use’ aimed to make the latrine purchase – the project developed a two-pronged new product more memorable and easier to be talked communications strategy: about. The project developed Easy Latrine promotional materials and sales tools, including a product banner, • Changing Behavior: Behavior Change Communication branded installation instructions, and a leaflet that could (BCC) activities centered on making latrine ownership a be cheaply reproduced by enterprises. To maximize con- purchase priority and helping the latrine compete with sumer exposure to the product, enterprises were encour- other potential household investments. The ‘Have a la- aged to display the Easy Latrine on the roadside and trine, have a good life’ campaign aimed to position latrine to bring truckloads of products to the village so people ownership as an achievable aspiration (Figure 4). BCC could see, touch, and directly experience them. activities drew on strategies and concepts from Commu- nity-Led Total Sanitation (CLTS)(Box 4). Messages bal- From NGO-led to Enterprise-led Promotions anced motivators of disgust, embarrassment and shock Strategies and tactics for delivering the ‘Have a latrine, with other drivers, including status and convenience. have a good life’ campaign focused on village-level direct The project developed promotional materials, including communications, since market research indicated word- a banner and leaflet, for village distribution. Village offi- of-mouth and other inter-personal communications were cials were engaged to help motivate and champion latrine the most effective channels. The project used community BOX 4. CLTS WITHIN THE SANITATION MARKETING PILOT PROJECT Community-Led Total Sanitation (CLTS) is a methodology for mobilizing communities to eliminate open defeca- tion. Communities are facilitated to conduct their own appraisal and analysis of open defecation and take their own action to become open defecation free (ODF). CLTS focuses on community-wide behavior change to create ‘ODF’ communities. The CLTS approach was introduced in Cambodia in 2005, and is currently a key element of the MRD’s strategic approach to improving rural sanitation. The Sanitation Marketing Pilot Project adopted several tools of the CLTS process in its village-level promotional events. The distinct differences from CLTS approach are as follows: • CLTS-type messages and steps (e.g. the use of disgust, the calculation of feces) were used primarily as tactics to motivate individual household latrine ownership and drive sale of the Easy Latrine. • The use of CLTS-inspired sales tactics were mostly undertaken simultaneously (e.g. at a single village event). The project did not attempt to ‘sequence’ CLTS triggering and promotional sales events. Although there was some limited CLTS work underway in the pilot provinces, the project did not make any formal pro- grammatic links with these CLTS efforts. Other sanitation marketing programs in Cambodia have experimented with more explicit sequencing between CLTS and sanitation marketing and more learning is needed to understand how the two approaches can complement each other, and the appropriate implementation strategies for cost-effective synergy. www.wsp.org 9 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation meetings as the main activity, blending modified steps by project partner enterprises, and received a commission from CLTS triggering with active Easy Latrine sales and of around US$1.25 – 1.75 per latrine sale. Eighty- order taking. At first, these ‘CLTS-inspired’ promotional three percent of these were village, commune, district or events were facilitated by full-time NGO project staff, who provincial officials. By September 2010, mid-way through planned and conducted the village meetings, took sales pilot implementation, NGO staff was no longer engaged in orders and coordinated directly with enterprises to arrange selling latrines directly to consumers. home delivery. While successful, it was clear that NGO-led promotions would not be sustainable in the long term, since enterprises were reliant on NGO project staff not only for promotions, but also to help coordinate product sales orders and deliveries. To address these concerns, the project adopted a modified version of the commission-based latrine sales agent model, developed by the WaterSHED WASH Marketing Program. The project encouraged enterprises to establish a network of commissioned sales agents to conduct village promotional events, arrange orders, and coordinate payments and deliveries (Box 5). Sales agents were trained in promotional tactics and by the end of the project, 164 sales agents were working across the two provinces. Sales agents were directly employed BOX 5. MOVING FROM A SOCIAL FRANCHISE MODEL TO ‘HANDS-OFF’ MARKET FACILITATION The first phase of the program implementation for the Easy Latrine had some elements of a ‘social franchise.’ Ini- tially, the NGO iDE acted as a kind of franchisor offering enterprises the opportunity to join a network of indepen- dent businesses. Network benefits included training, the use of the Easy Latrine brand, the new technical design and equipment, significant marketing and sales support and first-mover advantages through the small number of enterprises spaced over a wide geographic area. In return, enterprises were asked to invest in new equipment and stock, and guarantee a level of quality and commitment. Although the original social franchise model was useful in the Proof of Concept phase, it appeared that other enter- prises could gain most of the advantages of the new business model and product without significant support from NGO staff. The emergence of self-starters and the fact that other enterprises are able to sell non-branded latrines at least as well as project partners imply that the franchise benefits as introduced in the pilot are relatively low. Over time, the project adopted a more hands-off market facilitation approach, which was also used by the WASH marketing program of WaterSHED. With the hands-off approach, emphasis is on actively encouraging competition between existing enterprises, keeping barriers to market entry low and putting the responsibility for sales promo- tions with the enterprises. Self-starters that do not use the Easy Latrine brand are supported and encouraged. This approach would minimize the reliance on external support agencies such as NGOs. 10 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation FIGURE 4. PROMOTIONAL MATERIALS AND TOOLS ‘Easy Latrine – Easy to Buy, Easy to ‘Have Latrine, Have Good Life’ Install, Easy to Use’ Promotional materials and sales tools BCC materials depicting a happy family advertise the branded ‘Easy Latrine.’ promote the value of latrine ownership. UNLOCKING THE MARKET POTENTIAL: varied considerably, with the top performers generating far RESULTS AND LESSONS more sales than the rest. The top three enterprises (13% of all enterprises) accounted for 42% of total Easy Latrine Enterprise Engagement In the New Business Op- sales, with the leading enterprise accounting for 22% of portunity total sales (Figure 5). By the end of the project, 16 project partner enterprises Identifying and Supporting High-Potential Exist- and eight self-starters had recorded a total of 10,621 Easy ing Enterprises Latrines sales to households (Table 3). The new product and As the project’s starting point was not to “set up� new sales strategies enabled them to considerably increase their businesses, the key was to learn what characteristics to look for latrine sales volumes and sales revenue. Assuming a typical in businesses with a high potential for success. In part due to gross profit of about US$5 per latrine, enterprises needed the level of up-front investment required for new equipment to sell about 88 latrines to earn back their initial investment and stock, it was difficult at first to engage enterprises. Over in new equipment. Fifteen of the project partner enterprises time key characteristics of high performers began to emerge and four self-starters had reached this ‘break-even’ point and and the project learned what to look for. In general, the most were still selling latrines at project completion (the other successful enterprises were characterized by: four Self-Starters had begun selling less than four months before the end of the project). • Existing financial capacity and access to capital. • Willingness to make capital and stock investments, in- As in all markets, not all enterprises were equally successful in cluding taking on debt to expand. generating sales: about five enterprises were able to capitalize • Confidence to take risks and try new sales and market- on the business opportunity and grow, while many others ing techniques. included the new product in their product mix without • Entrepreneurship, enthusiasm and interest to actively aggressively pursuing new sales. Latrine sales by enterprise pursue latrine sales. www.wsp.org 11 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation FIGURE 5. EASY LATRINE SALES BY ENTERPRISE, JULY 2009 - APRIL 2011 150 2500 140 2197 Average Sale Per Enterprise Per Month 130 Cumulative Sale Per Enterprise 120 2000 110 100 1500 90 80 1061 70 1000 954 60 714 50 652 566 40 495 508 500 30 340 317 361 307 20 209 186 224 194 172 149 161 10 13 32 16 13 0 0 0 Kandal - Svay Rieng - Svay Rieng - Prey Veng - Kampong Project Partner Project Partner Self Starter Self Starter Thom - Self Starter cumulative sale per enterprise average sale per enterprise per month Average sales per month calculated as cumulative sales divided by number of months of engagement with the project. High-performing enterprises reinvested profits to increase from an NGO-led ‘social franchise’ model to a more hands- Easy Latrine production and used a range of strategies to off approach as it became clear that ongoing support to capture more sales. A key growth strategy was to expand enterprises would not be sustainable or scalable (or necessary Easy Latrine sales areas to cover more communes, primarily in the case of self-starters (see Box 6)). However, the intensive because enterprises found that it was getting harder to training and support given to enterprises at the start created sell within the original project areas. Five enterprises a dependency on the project that was difficult to break. significantly expanded their markets, establishing larger Over time, the project began to apply stricter parameters sales agent networks, buying more trucks for deliveries around enterprise support, including a ‘graduation date’ and setting up secondary production facilities and stock after three months of training and mentorship. Enterprises warehouses. Sources of finance for expansion included needed to be aware that engagement did not guarantee a microcredit, existing cash reserves and borrowing from monopoly, and competition was encouraged. Enterprises family members. Another key strategy of successful had to invest their own resources and take their own risk. enterprises was to offer informal consumer credit in the form of installment payment options or deferred payment, Supporting Enterprises to Overcome Barriers to a fairly common practice in rural Cambodia. Sustainability and Growth As is common for small businesses, cash flow proved to Developing a Clear Exit Strategy and Ensuring be a problem for some enterprises. Liquidity constraints Enterprise Risk prevented some enterprises from reinvesting in stock, The initial lack of a clear exit strategy for external NGO which meant they could not respond fast enough to support created challenges to develop a sustainable enterprise orders and suffered delivery delays that resulted in lost engagement model. Through learning and exchange with sales. Enterprises lacking good stock management proved other sanitation marketing projects, the project shifted unable to fully capture the demand generated by sales 12 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation promotions. A related constraint was transport, with identified the need for additional inventory financing or smaller enterprises unable to expand due to limitations in working capital for less financially capable enterprises. the size of their vehicles. Business management support Supply-side financing was not fully explored in the pilot, from the project helped some enterprises see the value of but is now being addressed as WSP scales up its support good stock and cash flow management. The project also to sanitation marketing. BOX 6. A MOTIVATED SELF-STARTER Mr. Chhay Saron is an example of a self-starter entrepreneur who was motivated to enter the latrine business with very minimal support from the project. Mr. Saron first heard of latrine promotions in his native Romeas Heak dis- trict, Svay Rieng, at a commune workshop conducted by the project. As a pre-cast concrete producer, he knew some of his concrete rings were used for latrine pit linings, but he offered no other latrine components. Like most concrete producers, Mr. Saron waited in his shop for consumers to come to him. Customers had to source other latrine parts from hardware shops in the nearby market. At the workshop, Mr. Saron heard Mr. Dourng Setha (the top-performing enterprise in the pilot project) talking about his thriving latrine selling enterprise. He went back to his shop and decided to offer a packaged product of his own. This included conventional concrete rings, bricks for the underground toilet chamber, transport and labor. In his first three months, Mr. Saron managed to sell five of these latrine packages. Then one day, project staff came to offer him technical advice. He learned about the pre-cast concrete chamber box and thinner ring technology. Mr. Saron purchased the new molds and equipment, investing about US$800. He received a one-day training, and also had a brief visit to a project partner’s enterprise. He quickly built up some stock. In the following month, he sold over 30 new latrine packages. Since then, Mr. Saron’s sales have been slow but steady. Mr. Saron has developed his own marketing materials. He manages his own promotions and does not rely on commissioned sales agents. He is confident the latrine-selling business line will grow, and that it will make a good complement to his core pig-raising enterprise. He has invested US$3,000 in a new truck to transport the latrine sets, and is already actively selling in three communes. TABLE 3. EASY LATRINE ENTERPRISE PROFILE Kandal Svay Rieng Total Number of Project Partners 8 8 16 Number of Self-Starters 0 5 8* Number of full-time and part-time employees per 1 - 12 3-9 -- enterprise Average sales per producer per month Project Partners 35 42 39 Self-Starters -- 11 28* Total 35 30 35* Number of communes covered per enterprise 1-6 2 - 11 -- Number of active sales agents 106 58 -- Average sales agents per enterprise 13 7 -- *Three other Self-Starters emerged in other provinces: two in Prey Veng, and one in Kampong Tom. Sales from these enterprises are included in average sales totals. www.wsp.org 13 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation Market Penetration and Sales Strategies partner enterprises lost interest as latrine sales became more difficult, simply decreasing their latrine production to focus Reaching beyond the early adopters on other more profitable opportunities. Others expanded Although Easy Latrine sales began strong, data indicate their markets geographically, happy to capture the first a general decline in recorded Easy Latrine sales over the wave of initial sales in new villages. pilot period and some seasonal fluctuations for individual enterprises (Figure 6). However, the data also imply a strong Rather than developing more effective sales and early sales push but a drop-off in intensity as demand slows promotional strategies or complementary interventions down. Enterprises could make an average of about nine to help households pay for latrines, the project expanded sales per village to ‘early adopters,’ that is, households that its target area as enterprises were ready to expand their purchase a product or service before the majority of their reach to previously untouched villages. Bearing in mind peers. the relatively short timeframe of marketing activities, this pattern of ‘wide but shallow’ market penetration left most Given the very low sanitation coverage in rural Cambodia, households in the target area without access to a latrine. there is a fairly large untapped market of early adopters willing to buy latrines if they are made more readily available A key lesson from the pilot model is that focusing on at a lower cost. Capturing sales beyond the early adopters the private sector alone may not be enough to achieve proved less attractive for enterprises. The costs of going back high community coverage. It is clear that enterprises can to the same villages with the same product package and be expected to actively promote sanitation only to the promotional messages probably outweighed the benefits to extent that it is profitable (and more profitable than other enterprises in terms of new sales generated. Some project activities) for them to do so. To improve on the pilot model, FIGURE 6. MONTHLY EASY LATRINE SALES, JULY 2009 – APRIL 2011 1500 150 Switch to Enterprise-led promotions 140 Easy Latrine Sales Per Active Enterprise 802 130 1200 120 Monthly Easy Latrine sales 110 Launch full promo activity 100 965 90 900 8 268 840 80 70 714 600 629 633 60 553 574 570 50 496 13 444 59 143 72 40 391 398 366 300 30 307 294 268 20 131 51 10 42 89 6 27 26 0 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 09 09 09 09 09 09 10 10 10 10 10 10 10 10 10 10 10 10 11 11 11 11* Wet Season Dry Season Wet Season Dry Season easy latrine sales by project partner easy latrine sales by self-starter easy latrine sales per active enterprise * Half Month An active enterprise is an enterprise recording sales in any given month. Enterprises that did not sell any latrines in a particular month were not included. Data includes Project Partners and Self-Starters. 14 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation interventions will need to be both more effective and promotions. In villages where NGO project staff conducted more comprehensive: combining other demand creation promotional events, there were 10% more latrine sales per approaches, improved evidence-based marketing strategies, village, more villages with sales, and 20% more sales overall. offering financing options to households to lift cash The fact that sale promotions by NGO staff were more constraints and more effectively engaging local government effective is not surprising, as NGOs are often able to generate champions will all have a role to play. Other sanitation a great deal of activity with short-term project inputs. The marketing programs in Cambodia are now making good young and dynamic teams of field staff conducting village- progress in some of these areas, developing models that level events were working full time and were paid a regular couple support to the private sector with training to local monthly salary plus monthly performance bonuses for high government in monitoring, behavior change, and linking sales achievement. private sector support to CLTS activities. Commission-based sales agents, by contrast, worked only In addition to a stronger focus on complementary demand part-time and relied only on their sales commission. Most creation and enabling environment interventions, it may sales agents were local government staff with limited time also be possible to improve market penetration by helping to spend on active selling, given their other public duties. enterprises offer a wider product and service mix. While At around US$1.25 per latrine sale, a high-achieving sales the single-product marketing strategy helped to simplify agent selling eight latrines per month could earn US$12, the purchase process for some households, a single latrine while the majority of sales agents sold 2-3 latrines per model may not have broad enough appeal or affordability to month, earning less than US$3 in monthly income. The be appropriate for all households and all market segments. lower financial incentives and geographical restrictions A small range of options at different price points, coupled (most sales agents sold only in their communes) most likely with financing options to lift household cash constraints contributed to lower sales by sales agents than by full-time or add-on services such as installation may help enterprises NGO sales staff covering a wider area. deepen their market penetration. Other issues that perhaps impacted on the limited Improving Sales Strategies to Sustain effectiveness and consistency of the pilot project’s sales Momentum model related to sales agent selection and training. A stronger The decline in Easy Latrine sales and limited market focus on identifying the most suitable and dynamic local penetration over the project period may also be related people and training and equipping these agents with the to the effectiveness of sales strategies and promotional tools and tactics they need could improve the effectiveness activities. Although willingness-to-pay data suggested and consistency of sales and marketing activities. roughly 30% of the rural market might be willing to pay US$30 for a latrine, the data indicate that on average Accelerated Community Coverage only 8% of households without toilets purchased a pour- flush latrine during the pilot (Figure 7). However, in 58 Increasing Sanitation Coverage Without External monitored villages (roughly 13% of villages in Kandal and Hardware Subsidy 8% in Svay Rieng), there were increases in coverage of 20% The project collected detailed monitoring data on or more. These high-performing villages provide evidence community coverage in the 601 villages where NGO-led that where marketing activities and context are supportive, promotional events took place. In these villages, a total high sales penetration is possible. of 11,422 households purchased unsubsidized pour-flush latrines during the project, and 47% of these (5,382 Although there were 164 sales agents recruited by the end latrines) were Easy Latrines. At the end of the project, 87% of the project, sales activities generally seemed to decline in of all purchased latrines were installed (94% in Kandal and quality and intensity with the shift away from NGO-led 76% in Svay Rieng) (Table 4). www.wsp.org 15 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation TABLE 4. GROWTH IN UNSUBSIDIZED HOUSEHOLD POUR-FLUSH LATRINES IN MONITORED VILLAGES* Kandal Svay Rieng Total (247 villages, (354 villages, (601 villages, 56,063 HH) 60,623 HH) 116,686 HH) New Household Purchases of Pour Flush Latrines Easy Latrines ** 1,719 3,663 5,382 Other Pour-flush Latrines 4,674 1,366 6,040 Total Pour-flush Latrines 6,393 5,029 11,422 Easy Latrines % of Total New Purchased Latrines 27% 73% 47% New Household Installations of Pour Flush Latrines Installed Pour-flush latrines 6,087 3,858 9,945 % New Purchased Latrines Installed at end-line 94% 76% 87% *Baseline latrine counts in project villages were conducted at the start of implementation in each village, just prior to an NGO-led promotional event, and thus occurred at different times covering a period of 16 months from Sep 2009 to Dec 2010. End-line latrine count was conducted in February 2011. ** An additional 481 Easy Latrines (and presumably some additional ‘other’ latrines) were sold in project villages from the time of the end-line latrine count in February until the end of the project in mid-April 2011. These are not included here. FIGURE 7. CHANGES IN UNSUBSIDIZED SANITATION Across the 601 monitored villages, there was a 7.7 COVERAGE IN MONITORED VILLAGES* percentage point increase in unsubsidized improved TOTAL household sanitation coverage from a baseline of 24.1% to Total Improved + 7.7% 31.8% (Figure 7). This is almost fully an increase in pour- flush latrines (Easy Latrines and other latrines). Expected Pour Flush + 8.0% background rates of coverage (i.e. the increase in sanitation Dry Pit - 1.0% coverage expected in the absence of the project) were estimated at 1.1% on average (Table 5). Factoring in this KANDAL expected growth, sanitation marketing activities resulted in Total Improved + 9.4% an increase in coverage of 6.6 percentage points, or six times the background rate. Pour Flush + 9.5% Dry Pit - 0.2% These results do not capture the full impact of the project. SVAY RIENG For example, the coverage monitoring data above do not capture the 5,239 Easy Latrine sales outside the 601 Total Improved + 5.8% monitored villages, where detailed monitoring data are Pour Flush + 6.3% unavailable and hence no coverage analysis can be made. Increases in sales and installation of other pour-flush latrines Dry Pit - 1.7% resulting from promotional activities and Easy Latrine sales 0 10 20 30 40 50 outside the monitored villages (a so-called “ripple effect�) baseline endline were not measured. Enterprises have also continued to Following the Cambodia Socio-Economic Survey 2007, only 29% of dry pit promote sanitation and sell latrine products after the initial latrines are counted as ‘improved’ sanitation facilities. All dry pit latrines are included in the ‘dry pit’ column above, but only 29% of these have been used pilot period. to calculate ‘total improved’ coverage column. Subsidized latrines installed over the project period were not included in coverage estimates. Baseline coverage calculations based on 2008 population census data. End line coverage calculations based on 2010 population estimates. 16 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation TABLE 5. ACCELERATED RATES OF INCREASE IN UNSUBSIDIZED IMPROVED LATRINE COVERAGE IN MONITORED VILLAGES Kandal Svay Rieng Total Estimated annual background rate of increase in 1.9% 0.6% 1.3% unsubsidized improved latrines* Average time from baseline to end-line survey (years)** 1.00 0.87 0.92 Background rate of increase in monitored villages 1.9% 0.5% 1.1% between endline and baseline Actual increases in unsubsidized improved sanitation 9.4% 5.8% 7.7% between end line and baseline Increase in improved unsubsidized latrine coverage 7.5% 5.3% 6.6% above expected background rate in monitored villages between endline and baseline *Estimates based on comparing latrine coverage from WSP Demand Assessment survey (conducted in 2006) with Sanitation Marketing Pilot Project Baseline Survey (conducted exactly 3 years later in 2009) in 12 villages (6 in Kandal, 6 in Svay Rieng) in original target districts. Following the Cambodia Socio-Economic Survey 2007, only 29% of dry pit latrines are counted as ‘improved’ sanitation facilities. Subsidized latrines are not included in estimates of coverage rate increase. **Baseline latrine counts in project villages were conducted at the start of implementation in each village, and thus occurred at different times covering a period of 16 months from Sep 2009 to Dec 2010. End-line latrine count was conducted in February 2011. Understanding Baseline Market Conditions During the pilot project a uniform set of market development evidence suggests that in more competitive environments strategies was applied in the two pilot provinces. However, with higher levels of baseline coverage, it may be possible results indicate that a greater focus on understanding to generate sales growth with less intensive support to baseline enabling market conditions can help develop more individual enterprises. In such areas, a stronger focus on targeted marketing strategies. Sanitation coverage in Kandal effective BCC and consumer demand creation coupled with was more than double that of Svay Rieng at baseline, and efforts to increase competition among a larger number of was naturally increasing at a much faster background rate existing enterprises may be enough to effectively stimulate (1.9%, compared to just 0.5% in Svay Rieng). Over the the market. project period, unsubsidized improved latrine ownership increased more rapidly in Kandal, growing by 7.5% above In any case, the data suggest that sanitation marketing background rates, compared to 5.3% in Svay Rieng. activities were able to increase consumer demand for sanitation in both provinces, creating positive ripple effects Although increase in coverage was higher in Kandal, for all enterprises (in terms of new sales) and consumers (in Easy Latrine market share was much lower. Easy Latrines terms of lower prices for underground latrine components). accounted for 27% of all new pour-flush household latrine sales in Kandal, compared to 73% of total sales in Svay Household Latrine Ownership and Use Rieng (Table 4). Higher baseline coverage of primarily high-end ‘ideal’ latrines in Kandal, greater access to a wider Motivating Households to Accept Less Than the range of options, and lower levels of Easy Latrine product ‘Ideal’ Latrine awareness (Box 7) may have led consumers to choose The Easy Latrine product and promotional activities were other pour-flush options. Kandal is also a much more designed to change perceptions around the ‘ideal’ latrine competitive environment than Svay Rieng with far more and increase demand at the household level, offering a concrete producers. Other enterprises were reportedly able lower cost product and an option to upgrade from a simple to lower the prices of latrine components to compete with low-cost shelter over time. Results from the end of project the Easy Latrine, indicating that the presence of the lower- household survey show great variability between the two cost design led to lower prices of conventional latrines. This provinces in this respect. www.wsp.org 17 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation BOX 7. EASY LATRINE BRAND AWARENESS The initial supply chain and marketing model included the development of the Easy Latrine product brand. Some testing of the brand took place, however, no professional branding or marketing advice was sought to develop and implement it. The main purpose of the brand was to make the product easier to be talked about and to help increase sales for project-supported enterprises as brand awareness increased. Although the Easy Latrine brand was used as an awareness raising tool, any increase in consumer demand – whether for the Easy Latrine or for other latrines – was considered a positive outcome. Results from the end-line household survey indicate that product branding efforts varied by province. Over 70% of all households in Svay Rieng could recall Easy Latrine messages, and a large majority of those planning to pur- chase a latrine indicated that they intended to buy an Easy Latrine. By contrast, just 40% of Kandal households could recall any Easy Latrine messages, and most of those planning to purchase did not plan to buy an Easy Latrine. Higher awareness of the Easy Latrine combined with the much lower density of enterprises likely contributed to the much higher market share of Easy Latrines in Svay Rieng compared to Kandal (73% vs. 27% of total pour-flush purchases). The difference in results could be associated with variability in the quality and extent of marketing across the two provinces. By the end of the pilot, as iDE and WSP considered how to sustainably scale up pilot work, the Easy Latrine product brand was dropped. In Svay Rieng, there is evidence that lower income household In general, the presence of the Easy Latrine product and consumers are adopting and using the product as a first step promotional efforts seemed to help motivate better-off towards the ‘ideal’ latrine. Easy Latrine owners tended to households to purchase a latrine, even though the latrine construct their latrines themselves. About 40% used lower- they chose to purchase was often not an Easy Latrine. end materials such as thatch and plastic sheets. The median cost was US$46 for a complete Easy Latrine with shelter. In Promoting Latrine Usage, Stopping Open household survey interviews, households stated the number Defecation one reason for purchasing an Easy Latrine was because ‘it In the monitored villages, most households do not have a could be delivered to my house,’ signaling that they are latrine and open defecation is still the norm. While reported responding to the easier purchase pathway enabled by the toilet usage is high (81 – 100%) among adult latrine owners, new home delivery distribution model. up to 32% of children in latrine owning households are not regularly using the toilet for defecation. These findings In Kandal, where household incomes are higher and access suggest the need for a more effective and broad-based to markets is greater, the majority of Easy Latrine owners in BCC campaign focused on stopping open defecation and Kandal constructed shelters of higher-end materials such as encouraging consistent usage and safe child feces disposal - concrete and bricks, and over half hired a mason to assist not just purchase and ownership - of a latrine. A lesson from with construction. The median cost for the Easy Latrine with the pilot is that more targeted support to address the local full shelter was US$102. Although this is substantially lower enabling environment can arguably open up opportunities than the US$164 typical ‘ideal’ latrines purchased by other to build on and strengthen local government initiatives households, it remains a substantial household investment. such as CLTS. 18 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation BOX 8. KEY SUCCESS FACTORS IN PILOT IMPLEMENTATION • Treating people as consumers, not beneficiaries: By approaching households as discerning consumer and not charity recipients, the sanitation marketing approach encouraged a change in mindset that allowed the project to think creatively, taking a fresh look at an existing problem and coming up with a novel set of solu- tions. • Market research and design thinking: Experience from the project highlights the importance of understand- ing consumers and the supply chain as a basis for designing market development strategies. The product package itself helped to stimulate changes on both the supply and the demand side, demonstrating the value of product development at the outset of sanitation marketing initiatives. The design process, with its focus on iterative learning, prototyping and refining solutions proved a useful tool for learning throughout the project. • Flexibility, adaptive management and the right skills: The project demonstrated the importance of viewing sanitation marketing as a process, not a blueprint. Markets do not fit into time- and area-bound project imple- mentation schedules. Markets grow naturally, enterprises cannot be confined geographically, and consumer and enterprise needs evolve over time. The project used regular, flexible feedback loops to closely monitor and revise strategies. • Collaboration and learning: Intensive collaboration between stakeholders working on sanitation marketing initiatives has helped create a community of practice in Cambodia. The project team was able to share lessons and also benefitted from mutual learning and adoption of successful approaches from other programs. BOX 9. FOSTERING CHANGE AT THE NATIONAL LEVEL The Cambodian Ministry of Rural Development has taken a strong leadership role in encouraging innovation and collaboration in the sanitation sector, helping to foster a dynamic community of practice in Cambodia. WSP, UNI- CEF and others helped MRD gain early experience with sanitation marketing, CLTS and other demand-driven ap- proaches through exposure to other countries, targeted training and high-level policy advocacy. This national-level support was critical to building interest and enthusiasm for approaches that strengthen demand and supply. MRD has led a national debate on household hardware subsidies, which is now reflected in the recently approved rural water supply and sanitation strategy. The growing body of evidence from a range of sanitation marketing pro- grams is also building sector consensus and government support for sanitation marketing. As a result, MRD has drafted a set of National Sanitation Marketing Guidelines for sub-national government, outlining potential market enabling roles at all levels. MRD has also formed a Rural Sanitation and Hygiene Sub-Working Group, with a spe- cific thematic focus on how to better coordinate and harmonize CLTS, sanitation marketing and behavior change approaches, and how to improve targeting and delivery of latrine subsidies. Despite these promising activities, the sector is now at a critical point where MRD needs to consolidate the expe- riences and learning of CLTS and sanitation marketing into a more cohesive programmatic approach to improve rural sanitation at scale. www.wsp.org 19 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation TABLE 6. PRICE OF EASY LATRINE VIS-À-VIS HOUSEHOLD MONTHLY INCOME BY WEALTH QUINTILE Wealth Quintile Poorest 2 3 4 Richest Mean monthly household consumption 138 204 268 360 621 (US$) Easy Latrine core (US$35) as % of 25.4% 17.2% 13.1% 9.7% 5.6% household monthly consumption Source: Cambodia Socio-Economic Survey 2009 Moving Households Closer to a Purchase The project resulted in increases in latrine coverage, more Decision enterprises selling latrines, lower latrine prices and a desirable Marketing and demand creation efforts can take time and latrine product. Evidence of private sector potential has do not always translate immediately into purchase. In the contributed to growing sector-wide enthusiasm for market- end-line household survey, over 75% of non-latrine owners based approaches to sanitation in Cambodia. But what will stated that they were planning to purchase a latrine within it take to scale up sanitation marketing and combine this the next six months. Almost 84% of Svay Rieng non- approach with other demand creation efforts? And how can owners stated an intention to purchase, compared to 69% the poor better access new products and services? There are in Kandal. Regardless of the type of latrine, the fact that numerous challenges on the horizon: such a large proportion of non-owners stated an intention to purchase is promising. • Optimizing and institutionalizing enterprise en- gagement: A major lesson from the project was that Understanding Affordability of Easy Latrine the support to the enterprises needs to be strategic and Although the price of Easy Latrine was lower than that contextualized to fit their needs. The right package of of the conventional latrine, many poorer households may enterprise engagement activities, including minimum still not be able to afford it. When asked why they had requirements for training and criteria for identifying not yet purchased a latrine, 93% of non-owner household high-potential enterprises will be essential. Given the respondents gave ‘no money/too poor’ as their number prominent role of private sector in sanitation business, it one reason. This finding points to the persistence of real or will be critical that support to these existing enterprises perceived cash constraints for households. The Easy Latrine is institutionalized, and that barriers such as access to core marketed at US$35 was already equivalent to 25% of finance are removed. the monthly consumption of the households in poorest quintile (Table 6). Thus, one-off payment to purchase a • Wider reach and leverage: In Cambodia, sanitation latrine would be difficult for poor households, and other coverage is low in every income quintile with more than mechanisms, such as softening payment term over time, half of those without improved sanitation facilities are need to be explored to increase the poor’s affordability to non-poor households. In terms of reaching the mass of get a toilet. these households, market-based approaches have a com- parative advantage. Within a wider package of at-scale sanitation interventions, leveraging that advantage may SCALING UP AND REACHING THE help to considerably accelerate sanitation coverage at a POOR: WHAT WILL IT TAKE? comparatively low cost. The Sanitation Marketing Pilot Project and other sanitation marketing programs have helped to demonstrate the viability • Deeper market penetration: A greater mix of prod- of a sanitation marketing approach in rural Cambodia ucts, services and financing options specifically targeting and some key success factors were also learned (Box 8). lower-income groups can help make sanitation market 20 www.wsp.org FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation development interventions more pro-poor. Market pen- strategies and more effective behavior change. Moti- etration can be improved through better market seg- vating toilet purchase and ownership should be one mentation and differentiated marketing strategies. In component of a broader campaign to improve sanita- Cambodia, experiments with a number of innovative fi- tion practice and eliminate open defecation. MRD is nancing mechanisms are underway, including consumer currently preparing a national sanitation and hygiene microfinance to ease up-front investment. BCC strategy. At local level the implementation of such BCC strategy would need to be seen as one of the ele- • Sustainable at-scale sales models: One of the keys to ments of successful sanitation marketing, and needs to the success in Cambodia has been the direct sales and be matched with CLTS implementation. home delivery distribution model: Households are mo- tivated to purchase a latrine through direct interpersonal • Supportive policies and institutions: MRD has now communications, and most decide to purchase because put in place a Rural Water Supply, Sanitation and Hy- it can be delivered directly to their home. While these giene sector strategy that recognizes the role of effective innovations show great potential, the experience of the demand creation and private sector provision of services pilot highlight the challenges and difficulties in setting- as critical elements of scaling up rural sanitation (Box 9). up an effective and sustainable direct sales network. Dif- To implement the strategy, a clear operational plan and ferent programs are experimenting with improvements support to sub-national government must be in place. to sales models, but none has yet been taken to scale in WSP and other stakeholder are working with MRD to Cambodia. build political will and develop institutional capacity to carry out sector reforms. In addition, the government • Appropriate roles for sub-national government and could play an important role in sanitation policy align- NGOs: Broad questions around appropriate roles for ment, through encouraging other sanitation programs the government in scale-up and replication must be ad- to adopt less disruptive latrine subsidy policies and co- dressed. To date, NGOs played the key role in catalyz- herent program methodologies. ing early sanitation markets. At scale, they will need to develop clearer exit strategies that enable private sector • More evidence of what works: A number of large sani- markets to sustain and grow without continued exter- tation marketing programs have gained experience in nal project intervention. In the long term, market sup- rural Cambodia. While sharing and borrowing strategies port roles must be taken up by local government, which has been a key feature of these programs, a more rigor- requires the development of sustainable mechanisms ous comparative review of different sanitation marketing to train, finance and backstop local government to fa- approaches can help determine what might work best at cilitate and monitor sanitation marketing activities and scale. Programs and models should be reviewed in terms progress. of relative cost-effectiveness, supply chain engagement approaches, sales and marketing models, evidence of • National behavior change campaign focused on total reaching the poor, support to the enabling environment, sanitation: The pilot highlighted the need for a more and success with linking to CLTS and other demand comprehensive approach, including other demand cre- creation strategies. Better understanding of what works ation approaches, improved evidence-based marketing can inform national-level policy and program decisions. www.wsp.org 21 FIELD NOTE: Sanitation Marketing Lessons from Cambodia: A Market-Based Approach to Delivering Sanitation REFERENCES Chapin, J. (2009) Final Report Design Project: Sanitation Marketing Pilot Project, May 2009. IDE (2011) Sanitation Marketing Pilot Project End of Project Report. Report prepared for WSP by iDE Cambodia. IDEO (2009) Human Centered Design: An Introduction. Human Centered Design Toolkit. Available at www.ideo.com/work/human-centered-design- toolkit. Pedi, D., Jenkins, M., Aun, H., McLennan, L. & Revell, G. (2011) The ‘Hands-Off’ sanitation marketing model: Emerging lessons from rural Cambodia. 35th WEDC International Conference, Loughborough, UK. Roberts, M. and Long, A. (2007) Demand assessment for sanitary latrines in rural and urban areas of Cambodia Phnom Penh. Report prepared for WSP by iDE Cambodia. Salter, D. (2008) Sanitation Demand and Supply in Cambodia. WSP-EAP Field Note. Robinson, A. (2011) iDE Cambodia Sanitation Marketing Project Review. Final Report prepared for WSP. Robinson, A.(2012) Sanitation Finance in Rural Cambodia. WSP-EAP Guidance Note. Rosenboom, J., Jacks, C., Kov, P., Roberts, M. & Baker, T. (2010) Sanitation Marketing in Cambodia. Waterlines, vol 30, no 1. 22 www.wsp.org