Download - IREX Social Enterprise Orientation Training
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IREX Social Enterprise IREX Social Enterprise Orientation Training Orientation Training
Gbanga, Liberia Kim Alter
Virtue Ventures LLC
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Part 6: Market Research Example
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Haiti Example Haiti Example Impetus for social enterprise:Impetus for social enterprise:
Poverty alleviation Poverty alleviation
Greyston, “bake brownies to create jobs”
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SKOLL CENTRE FOR SOCIAL ENTREPRENEURSHIP
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Social Problems Social Problems • Many poor people • Few economic opportunities in rural areas• Urban flight • High population of women single heads of
household• Low skilled/illiterate population• No local market for client-made products• Socio-economic situation has negative
impact on children’s health, education & quality of life
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Rural Clients MarketPort au Prince
Limited Local Market
Bottleneck
Demand
Mamba
Market Study ResultsMarket Study Results
Market Access
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Design Assumptions Design Assumptions 1. Women in rural Haiti make peanut butter 2. Demand exists for peanut butter3. Clients source raw materials4. Market access is a major constraint5. Clients are entrepreneurs6. Can be a viable business 7. Social enterprise will not impact the
product or production process8. Marketing strategy focuses on distribution
and competitive promotion for “mature product”
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Services:BrandingMarketingInventory management DistributionSales
Revenue:Product mark ups
Marketing Social EnterpriseMarketing Social Enterprise
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CentralizedDecentralized
TOLPA’s Value Chain TOLPA’s Value Chain
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1. Clients Already Make Peanut Butter 1. Clients Already Make Peanut Butter Yes, but …•No standard recipe•Can make only small quantities •Never used technology in
production•Quality/consistency variable•Hygiene a problem
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2. Demand for Peanut Butter2. Demand for Peanut Butter/ Business viability/ Business viability
TRUE, but... • Very price sensitive / Low profit margin• Lots of competition • “Mature product” • Undeveloped consumer taste for
“natural peanut butter” product• Demand-supply gaps
sales depends on constant supply complementary product can help sell need better product mix to secure commercial
contracts and increase margins
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3. Clients Source Raw Materials3. Clients Source Raw Materials
True, but…• Raw materials are seasonal
storage is required for year-round production technology needed to avoid spoilage
• Capital is a constraint Cannot realize cost savings of bulk
purchase• Coordination/management required
increases overhead
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4. Accessing Markets is a Constraint4. Accessing Markets is a Constraint
TRUE, clients lack…•Marketing know how •Transportation •Knowledge of markets•Sales acumen•Contacts
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5. Clients are Entrepreneurs 5. Clients are Entrepreneurs True but… Entrepreneurs out of necessity not choice
Would prefer a job Risk averseClients lack capital & access to capital
Purchase assetsBuy bulk materialsFinance working capital
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6. No Impact on Production/Product6. No Impact on Production/ProductFALSE ...• Food products require stringent quality
control to sell commercially product consistency /quality /reliability Sales volume/output
• Technology inputs required increase profitability achieve economies
• Inventory management Raw materials (purchase, store, maintain) Finished products (freshness/shelf life… )
Long time to consumer causes product to change
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7. Implications on Marketing7. Implications on Marketing• New product strategy
Different “perceived” benefits• Introductory product
Requires educational marketing to penetrate market
• Need to differentiate vis-à-vis competitive positioning
• Additional new products are needed to cross-sell and increase margins
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Shift in Model Shift in Model • Entrepreneur Model
Entrepreneur focused Impact focused Decentralized Entrepreneur assumes
risk Not market oriented Clients are
entrepreneurs Threat - not viable
• Enterprise Model Enterprise focused Viability focused Centralized Partner assumes risk Market oriented Clients employees Threat - clients
become laborers
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New SE ModelNew SE Model
Product Mix
TOPLASalesForce
EntrepreneurGroups
SourcingProduction Storage
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Design Design •Viability and social impact
May require phasing and trade-offs•Realistic for client
Social criteria & role of the client in SE
•Understand nature of demand•Based on market realities
Thoroughly test your assumptions Know your deal breakers
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Best way to learn about markets? Best way to learn about markets?
Start sellingTest market
Pilots
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Business Plan Business Plan StructureStructure Objectives
Target Market
External / internal factors Competitors/Industry
MarketingPlan
OperationsPlan
FinancialPlan
HumanResource
Plan
FinancialPlan
VisionMission
Contingency