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Boiling Point 30: Sales and Subsidies - April 1993

Boiling Point
Front cover of Boiling Point issue 30
Issue 30 (1993) Sales and Subsidies


One of the aims of any improved stoves programme must be to maximise the number of stoves in use, in order that benefits can be enjoyed as widely as possible. In the initial stages of a project, stoves are often given away or sold at greatly reduced prices in order both to test the acceptability and to raise public awareness of a particular type of stove. Distributing stoves in their thousands calls for a very different approach. The success or failures of a stoves programme can often be dictated by the distribution method which is adopted. Some programmes continue to distribute subsidised stoves through NGOs or government networks; others turn completely to commercial channels, while many use a combination of the two approaches. Different types of stove lend themselves more readily to one approach or another. Portable, one-pot stoves are easy to sell in the market place; larger "built in" stoves require the services of trained artisans and cannot be sold on the open market.

A commercial market for stoves is governed by the laws of supply and demand and so has the potential to expand and become self-sustaining. However, the people who afford to buy stoves may not be those who most need them. Subsidised distribution, on the other hand, can be directed to benefit funding from institutional sources, which can lead to bureaucratic inertia and inefficiency. This edition of Boiling Point reports the experiences and lessons learnt from several different stove programmes. We hope that it will help stove programme planners to determine the dissemination methods most suitable for them to achieve widespread impact.


ACTIVITY
IMPLICATIONS OF COMMERCIALISATION FOR STOVE AGENCIES

INTERNAL ORGANISATION
1. Get used to a completely different role for the agency
2. Need different staff skills (few extension workers) for new role

ORGANISATION OBJECTIVES
examine agency objectives and assess their compatibility with the likely impact of commercial appraoch (eg. target group, type of benefits etc);
commercialization is likely to occur at a time when objectives arebroadening for:
- rapid expansion
- reducing dependency on donors
- planning eventual agency withdrawal and sustainability

RESEARCH AND DEVELOPMENT
Re-orient R&D to design Marketable stoves: attractive, transportable, easy to install, range of sizes/types, competetive with other marketed stoves;
market research: stove market, purchasing power, distribution networks etc.

PRODUCTION
identify producers willing to take initiative and risk, not just meet orders;
develop effective quality control mechanism;
producers provide repair and maintenance system;
continued access to training, information, machines and tools needed at project end;
coordinate production with marketing networks.

DISSEMINATION
develop a marketing and advertising strategy;
recognize new system of target setting;
work with profit-seeking retailers and wholesalers;
Ioss of extension workers role;
greater influence of external factors on achieving targets;
Ioss of direct contact with users;
Ioss of direct control over quality, price, location of sales.

PROMOTION
promotion is impersonal, not face-to-face with users;
commercial techniques: eg posters, adverts etc and related promotional skills needed;
find a marketable and credible message and agency image.

MONlTORlNG & EVALUATION
need to monitor activities you don't control (ea. dissemination), people you no longer meet (users); and unanticipated impacts ea. social and employment;
need market research and monitoring staff and skills.

FUNDRAISING
explain to donors that they need to risk more in order to achieve more;
need high initial investment: R&D, Market research, production set-up, advertising;
convince donors that considerable institutional involvement and long term funding may be needed for R&D, training, promotion, M&E, and business management.

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