Social marketing - the next chapter
The enterprise model at DKT country offices
More than 100 million women wish to avoid pregnancy but are not using contraception, and an additional 75 million rely on less effective traditional methods. Ensuring women and families have access to a full range of methods is part of ensuring contraceptive security. But what if couples aren't aware of available contraceptive methods, or fear side effects?
Enter DKT International. DKT products served 22 million couples in 2010, making DKT the largest private provider of family planning services in the developing world. Its social franchises are running in Philippines, Indonesia, India and Mozambique, with huge impact. DKT Indonesia, the largest social marketing program in the world, served 5.7 million couples in 2010, including with an estimated 2.5 million through the Andalan midwife social franchise (watch a video ad here ).
Yet if you asked someone in Indonesia—or Sudan, Ethiopia, the DRC or any of the 18 countries where DKT works—about their view of DKT, chances are they would look at you blankly. In classic social marketing, the products are sold under various brands that are finely calibrated to appeal to target consumer groups.
The honed marketing strategy is a chief approach toward providing high quality and affordable products, increasing contraceptive method choice and improving healthy behavior. We asked Executive Vice President Christopher Purdy to talk about best practices and their unique cross-subsidization model between country offices.
How do you develop your products in a new market?
Everything we do is consumer driven. We seek to learn what the consumer issues are and how consumers see the world, through focus group discussions, formal quantitative interviews, anecdotal information, research and information in the public domain. We develop campaigns using local expertise.
Sometimes we do this in-house; for example, in Ethiopia in the late 90s, there weren’t too many ad agencies. In the Philippines on the other hand, there is a pretty sophisticated marketplace where we can find really good outside talent to build marketing campaigns. In this predominantly Catholic country, we took an aggressive and even controversial approach to safe sex advertising together with local partners like Maxim magazine.
Did you create the Fiesta brand in the Philippines?
Actually, this youth-friendly brand was created in Indonesia where I worked for 10 years before coming to Turkey. In Indonesia, we started after the government cut off funds for family planning in 1998 during the economic crisis.
The Fiesta brand was a solution to reaching young people with safe sex messages and the idea that safety could be 'fun.' We also started the large family planning program during that time.
Today, some 25% of Indonesian women get their contraceptive products and services from DKT – including a lot of women in rural areas. The products are more affordable and higher quality than a lot of what’s available in existing markets.
Fiesta has evolved as well - it is now being marketed in countries like Mozambique, Ghana, and Sudan. The marketing is calibrated somewhat differently in each marketplace.
Where are you running social franchises?
We have four such programs actively running - including Janani, the well-documented program that uses vouchers in India. In Indonesia, we have trained 40,000 midwives in insertion and removal of IUDs and implants (long-lasting contraceptive methods).
In the Philippines, we run PopShops--bright, consumer-friendly spaces hosted within government clinics. We sign a contract with a clinic, then update the skills of the health personnel and people pay to use these well-advertised products.
In Mozambique, we are contracting out with existing clinics to provide family planning services and looking at coupons and voucher systems so when poor women come to our franchised clinics they don’t have to pay out of pocket. Vouchers will bridge what providers would normally charge and what customers want to pay—we are researching price elasticity now. We hope this area of expertise can be expanded.
Although not exactly a franchise, we are also training government nurses and doctor in Sudan, where we help re-furnish clinics to include family planning corners that provide services and products.
Where are you opening your next office?
A new office was just opened in Ghana in the last three months. We started up here because there was a need. Ghana has a very low contraceptive prevalence rate and high maternal mortality rates.
There have been problems with contraceptive security—shortages and stockouts. The method mix (choice in contraceptives) is fairly limited. Now we are registering our brands and expect to be launching this year, focusing on the North.
We also just opened offices in Morocco in 2011 and are in the process of establishing a presence in Western China.
How do you source contraceptives? Is it from a central office?
We have a large range of pre-qualified manufacturers that we work with, mostly generics in Asia and some in Europe. We have strict quality assurance procedures – most products have typical WHO or FDA assurances.
We also look at getting the best bang for our buck and ensuring a diverse mix of products. Overall, DKT as an organization is highly decentralized and so are our procurement procedures. Our head office in Washington has only 6 people. As a result, decision making and strategy is really developed in countries by local teams.
It makes us nimble and fast, and drives cross-fertilization among programs. We often travel to each others’ programs to learn what’s happening, and when we need information, we’ll call the person, say, in Addis Ababa rather than in DC.
When I started working for DKT in 1996, programs focused largely on condoms and pills. The markets have become more dynamic now, and social marketing has also evolved to emphasize longer term and permanent methods. For example implants are a highly effective, long-lasting method that we source in China at a low cost from Shanghai Dahua Medical.
How are you able to open these new offices so frequently?
We look where there is both need and opportunity and also emphasize social entrepreneurship. Currently we are 70% funded by sales revenue and 30% funded by donors or government subsidies.
Some offices cross-subsidize within programs; for example, in Ethiopia, a very poor country, we have 2-3 condom brands, some priced higher and subsidizing others.
Similarly we have programs like Brazil and Mexico which are no longer donor funded. They are self-sustaining and actually spin off revenue. Revenue helps pay for programs in Sudan and Mozambique.
Similarly, the additional revenue from Indonesia helped us start a new office in Ghana and our Philippines program is financially fronting an expansion into Thailand. We hope it ensures a higher probability of long term viability.
Turkey, as a middle income country, will eventually be a social enterprise, say, in five years. The goal is to generate enough funds to use money to pay for programs in lower income countries. But in all countries there are areas of need. We are glad to be in Mexico and Turkey to serve those needs and address marginalized people such as in the HIV-positive people living in barrios of Brazil.
For more information on DKT click here.