Sanitation Marketing in Rural Vietnam IDE s Experience Quang

Sanitation Marketing in Rural Vietnam IDE’s Experience Quang Van Nguyen Country 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 lowcost 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 Approaches Heavy subsidies for capital cost Subsidies for market development. Full capital cost recovery from users Standardization of models Decision making by external agencies Focus on infrastructure target Focus on centralized service provision A range of affordable options Users decide what and how to buy Focus on behavioral targets 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 marketbased supply of sanitation products/services to satisfy that demand at scale

Sanitation Marketing approach 3. Build marketbased supplying capacity for private masons 2. Design / choose latrine options 1. Find out what they would want 5. Facilitate market transactions 4. Create demand thru marketing SUPPLY DEMAND Building latrines for profit Paying full costs, no subsidy Private sector masons MARKET Poor households as customers

Sanitation Marketing processes Perform situational analysis Perform market assessments Formulate marketable solutions Build local supply network of lowcost sanitation Link supply and demand Develop an advertising and promotion campaign Implement promotion activities 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”

Implementation structure District Steer. Commune Steer. Com. VP VP HH Mason VP Mason Village Promoter VP HH Mason Supply Commune Steer. Com. VP HH HH Demand Household without a hygienic latrine

Project results • Rural HHs do demand purchase latrines • Private sector masons do respond to HHs’ demand 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) ■ >$1 M 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 2003 2004 2005 2006 2007 2008 2009 2010 Coastal pilot District Upland pilot District Scale-up Provincial Scale-up Regional 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