Go-To-Market Strategy for

PackH2O™ in Kenya The Ohio State University GAP Program

The Ohio State University Team:

Kerri Klidas

Travis Nevels

John Petersen

Andrew Rudman

Alison Schwalbe

Seth Wagner

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Table of Contents

TABLE OF CONTENTS 1

EXECUTIVE SUMMARY 2

INTRODUCTION 4

OVERVIEW 4

CHALLENGE 5

SCOPE 5

MARKET OPPORTUNITIES 5

GOVERNMENTS 7 PRICING 7

RECOMMENDED MARKETING CAMPAIGN FOR COUNTY GOVERNMENTS IN KENYA 12

RECOMMENDED MARKETING CAMPAIGN FOR KENYA: 12

RECOMMENDED DISTRIBUTION WITHIN KENYA: 13

KENYAN NON-GOVERNMENTAL ORGANIZATIONS (NGOS) 13 FORMS OF WATER TREATMENT: 14

MARKETING STRATEGY 16

PRICING 16

MESSAGING 18

DISTRIBUTION PLAN/RECOMMENDATION 18

RETAIL 19 PRICING OBJECTIVES 19

SUBSTITUTE CONSUMER PRODUCTS FOR THE PACKH2O™ 19

DETERMINING PRICE ELASTICITY & WILLINGNESS TO PAY 20

THE FINANCIAL LIVES OF LOW-INCOME KENYANS 21

METHODOLOGIES FOR SETTING PRICE 22

PAYING FOR THE PACKH2O™ 23

SALES AND DISTRIBUTION – A PILOT IN ISIOLO 24

BUDGET AND MEASUREMENT 26

MEASURES 26

LINER REPLACEMENT 28

ADDITIONAL RECOMMENDATIONS 30

CONCLUSION 34

APPENDIX 36

ADDITIONAL REFERENCES 36

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Executive Summary

Greif: Go-To-Market

Kenya

Team Members: Kyriaki (Kerri) Klidas, Travis Nevels, John Petersen, Andrew Rudman, Alison

Schwalbe, & Seth Wagner

Client Team: Scott Griffin – Greif, Tony Somers – Impact Economics (IE), & Connie Cheren –

Partners for Care (PFC)

Over 1 billion people around the world lack access to safe water and often must walk great

distances, an average of 3.5 miles in total, to the nearest source of water, safe or otherwise. To

address this problem Greif, Inc. developed the PackH2O™, a health and transportation tool that

makes it easy and safe for people to meet their daily water consumption needs. In this consulting

report, the Greif Go-To-Market (GTM) Team put together a comprehensive marketing strategy,

including recommendations on segmentation, pricing, promotion, and distribution specific to

selling and distributing the PackH2O™ in Kenya.

The Government segment consists of both the national government of Kenya as well as county

(district) governments. Based on a value-based pricing model, the GTM Team recommends a

price of KSh650 in order to maximize distribution of the PackH2O™. The focus of promotion in

county governments should consist of direct presentation to senior county health officials and the

county governor. For the national government of Kenya, the marketing campaign should focus

on the Ministry of Health (MOH) and messaging should focus on how the PackH2O™ can help

the MOH reach their policy objectives as outlined in the Kenya Vision 2030 plan. To increase

distribution capabilities, it is recommended to focus on the relationship between PFC and

purchasing government entities and ensure that extensive training is provided in order to ensure

proper use of the packs.

The Kenyan Non-Governmental Organizations (NGOs) segment encompasses hundreds of

organizations that all share the common goal of improving the lives of the people of Kenya;

many of which align with the mission of safe water consumption. There are two options for

pricing with regards to NGOs: sell at cost to maximize impact or segment by NGO type. In the

segmentation scenario, multinational NGOs could be charged the US price of $10 while smaller

local NGOs and church organizations would pay KSh685. In order to reach NGOs, specific and

personalized sections of partner websites should be created as well as targeted marketing

pamphlets. Promoting the shared vision of helping the people of Kenya eliminate waterborne

illness should be the focus of these channels. NGOs will be educated on and encouraged to get

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buy-in from community leaders and church pastors as it is integral to successfully foster

behavioral changes. Training will also be provided to the NGOs to ensure proper usage of the

packs by the end consumers. Implementing health outcome measures is an important part of

attracting and retaining NGOs to adopt and promote PackH2O™. NGOs will be able to purchase

packs strictly through the IE, PFC, and PackH2O™ websites with distribution channels being IE,

G4S, or PFC hand-delivery.

The Retail segment focuses on the pack as a water transportation and storage device which also

has an added benefit of being a tool for preserving health and safety. The end-consumer (the

person most in need of the product) is often the least able and likely to pay a premium for the

pack and therefore retail sales to individual end consumers requires a subsidy in the form of

donations to cover productions and distribution costs. Without a subsidy, these consumers will

choose the cheaper jerrycan over the clean and safe PackH2O™ due to financial constraints.

Education and exposure are the two biggest tools to increase consumers’ willingness to pay and a

pilot program to study both has just begun in Isiolo through drugstore owner, James Karani. The

MSRP in the pilot is KSh300. The recommended wholesale cost to the retailer is KSh200. This

type of pilot requires a high-touch sales force in order to demonstrate proper use and various

point of sale flyers and pamphlets. A combination of Micro Distribution Channels (MDC) and

community influencers is recommended to maximize reach and minimize overhead.

Other recommendations include utilizing mobile technology to collect future survey data and

partnering with Kenya Medical Research Institute (KEMRI) to strengthen and monitor pack

usage. Liner replacement options were discussed and a proactive approach to liner replacement

or supplying merchants with extra liners is recommended, although pros and cons were listed for

each liner option. Product specific recommendations are to remove or redesign the Chlorine

Tablet pouch, add a fill line, add fold arrows and add instructions on the pack itself. A final

recommendation was to create signs/posters with instructions and reminders on them to assist in

teaching and promoting the pack both in retail locations and at water sources themselves.

4

Introduction

Overview

Over 1 billion people around the world lack access to safe water and often must walk great

distances, an average of 3.5 miles in total, to the nearest source of water, safe or otherwise.1 To

address this situation, Greif Inc. developed PackH2O™ to provide an easier-to-use and safer

means of water transportation and storage for these people facing safe water insecurity.

The PackH2O™ consists of a polyethylene outer-shell and a

clean plastic liner and holds 5 gallons (20 liters, or

approximately 42 lbs.) of water and replaces commonly used

water transportation solutions such as jerrycans and buckets.

Having never been intended to be used primarily for water

transportation, repurposed jerrycans, buckets, and similar

secondhand resources are difficult to carry by hand long

distances, frequently resulting in spinal and neck injuries. In

addition, these resources are difficult, if not impossible, to

clean or keep clean, making water contamination highly

likely and increasing the rate of preventable water borne

illnesses such as diarrhea, cholera, typhoid, and E. Coli.

PackH2O™ is designed specifically to be carried on the back;

it ergonomically conforms to the wearer’s body, and

facilitates a significantly easier and less physically straining

mode of water transportation. Furthermore, with its wide

opening, removable liner, secured closing, and attached

dispenser, it is easier to fill, clean, and secure, ensuring that as long as safe water, or non-turbid

water that has been treated with a water treatment solution, enters the pack, the water will remain

safe and uncontaminated. Specifically, since the pack is sealed and water is accessed only

through the dispenser, there is no risk of water contamination within the pack from exterior

contaminants such as dirty cups, spoons, hands, or animals.

In a joint venture with PackH2O™ LLC, Impact Economics, and Partners for Care, over 7,500

packs were distributed in Kenya in early 2013. The results of distributing the packs were

outstanding. Monitoring their use in communities such as Machakos and Embu, Partners for

1 Via Greif PackH2O™ website, citing United Nations Development Programme (UNDP).

(2006). http://hdr.undp.org/en/media/HDR06-complete.pdf

5

Care reported a nearly 95% adoption rate for those given a pack, and among them a 100%

preference for storing water versus alternatives.2 Upon introduction of the pack, use of jerrycans

decreased by 78%.3 Over 60% reported a decrease in or elimination of diseases or health issues,

personally or for a family member.2 Incontrovertibly, the demand for PackH2O™ water

backpacks presents an attractive market in Kenya, with over 20,000 being distributed to date.

Challenge

The packs distributed throughout Kenya by Partners for Care were donated through collections

raised by PackH2O™ LLC and Impact Economics. All costs, including manufacturing and

shipping, were covered by the donations. No packs were purchased by end-consumers or by any

organization or retailer for resale or distribution. Greif Inc. seeks to move the distribution of

PackH2O™ away from a strictly humanitarian effort and into an economically viable business

model.

As part of the Global Applied Project program at the Fisher College of Business at The Ohio

State University, Greif commissioned two teams of six MBA candidates to research the

feasibility of selling PackH2O™ water backpacks in Kenya, one team to research product

development and one team to recommend a go-to-market strategy.

Scope

The primary objective of this report is to determine a marketing a strategy for selling

PackH2O™ water backpacks to support a self-sustaining and long-term business model in

Kenya. In-scope for this report includes high-level recommendations for effective marketing

strategies - including segmentation, pricing, promotion, and distribution - based on an analysis of

the Kenyan market.

Market Opportunities

In Kenya, drinking water is sourced in four main ways. Consumers in densely populated areas,

including major cities like Nairobi and Mombasa, often enjoy government-treated water piped

directly to their house. In slums, consumers travel to a shared tap supplied by government water

pipelines to fill jerrycans and buckets. In less densely populated areas, individuals or groups of

consumers such as a small village or school community purchase water tanks and contract to

have those tanks filled by private companies. Water from these tanks may be piped into the home

2 PackH2O™: Machakos, Kenya Executive Summary of Findings. Nairobi: Partners for Care,

2013. Print. 3 Behavior change study on the acceptability of PackH2O™ in a rural community of Embu

County, Kenya. Nairobi: Habitat for Humanity International, Partners for Care, Mount Kenya

University, April 2015. Print.

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or accessed via a spigot on the tank. Particularly in remote areas with limited access and

resources, residents are forced to travel to water sources such as rivers, springs, man-made

reservoirs, wells, or concrete or sand dams and carry containers of water by hand to their homes.

PackH2O™, as a consumer product, addresses two general consumer needs in regards to

sourcing water: (1) transportation and storage, and (2) public health. An evaluation of the market

potential of PackH2O™ is expressed in the “SWOT” analysis below.

Figure 1

Strengths Weaknesses

Success in combating or reducing

waterborne illness

Greater ease of use when filling,

transporting, and storing water

Easier to clean than jerrycans

Seal and sprout prevents contamination

Pack does not filter or treat water

Uncertainty regarding liner longevity

Distribution has generally occurred

through donations

Liner top difficult to seal, leading to

complaints of spillage when bending

over

Opportunities Threats

Excellent adoption rates

Recognition at high profile events (Clinton

Global Initiative)

Interest from governments in preventing or

reducing impact of chronic waterborne

illnesses

Aligns with NGO initiatives

Job creation through local sewing and

production

Potential for limited follow up after

pack distribution

Mass distribution without proper

education on pack use

Competing health care products

saturating target areas

Heaving competition for limited

government budgets

High variance in end consumer’s

disposable income

Based on this analysis, three segments were identified as potential customers of PackH2O™.

Note that labeling these segments as potential customers does not suggest they are the end

consumers. These segments have the resources, capital, and impetus to act on behalf of the end

consumer. The segments are:

Government

Non-government organizations (NGOs)

Retailers

The following section discusses each segment in further detail and outlines pricing, marketing,

and distribution for each segment. These considerations can then be combined in a SWOT matrix

to generate a broad array of strategic options.

7

This matrix gives a selection of short and long-term strategies to pursue in marketing the

PackH2O™.

Governments

Governments make up an ideal segment for the PackH2O™ because they have an interest in

public health and often have sufficient budget allocations to purchase large quantities of the pack

without the need for subsidization. It’s important to realize that the government segment is

composed of two subsets, national governments and county (district) governments. Both can be

targeted through similar strategies and benefit from internal distribution channels but willingness

to pay and price sensitivity can vary greatly when it comes to county governments, even within

the same nation because of budgeting concerns and varying population demographics.

The government market should be looked at in terms of pricing options, marketing strategies,

and distribution channels to better understand the entire situation.

Pricing

There are a number of pricing options available when selling to governments. The pack can be

sold at the US market price, the local market price, at cost, or priced for a specific county

Figure 2

Opportunities Threats

Strengths Utilize studies on pack

effectiveness to establish

economic value through value-

pricing model to move beyond

donation based distribution

Highlight additional benefits of

the pack and how it can

improve the quality of life of

users beyond reduction of

waterborne illness

Community health workers (in

Kenya) have been crucial to high

adoption rates, utilize community

leaders and pack proponents to ensure

education is reinforced

Cite the value of high adoption rate,

packs put in households will actually

be used and can be considered an

effective use of government resources

Weaknesses Leverage in-country

organizations such as, Partners

for Care, to sell to local

governments where

relationships have already been

established

Conduct messaging at high profile

events to establish how the pack can

be used in conjunction with other

health care products to improve

quality of life

Leverage benefits of job creation

through local pack production when

buyers cite budget constraints

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through the value-based pricing approach. While selling at the US market price is the easiest

approach and viable for state governments it may also reduce the overall quantity purchased due

to cost and limits the ability of county and local governments to make purchases due to their

smaller budgets. Selling at the local market price creates a homogeneous market within in the

county and avoids differentiated pricing but it may result in a significant loss of value for the

seller. (Refer to the retail market section of this paper for information on the local market price

in Kenya.) Selling at cost avoids the problem of selling below the local market price, often

below cost of production, and is easily quantified to the buyer but it does not lend itself to

sustainability. It is strongly recommended to pursue a value-based pricing approach because an

abstract model can quickly be used to quantify the actual value of the pack to government buyers

and allows both buyers and sellers to capture value.

An abstract value-based pricing model has been built for Kenya to demonstrate this

approach. The first step is to calculate the objective value of the pack. Kenya has an

approximate population of 46.749 million 4 people and the approximate prevalence rate of

diarrhea is 38.8%5. This is reasonable number to use to estimate the population that would

benefit from the pack since about 39.1%5 of the population does not use improved water

sources. The Partners for Care (PFC) medical staff report that the average cost to the Kenyan

government to treat mild diarrhea is about KSh350 due for subsidized medication. Using this in

conjunction with the survey results from Partners for Care in Machakos, which indicated a

61.7% 6 reduction in disease, the savings based on pack usage can be estimated. Another

important consideration is that the optimal distribution of packs per household, this model

approximates one pack per infected household for calculations7. See Figure 3 for an estimation

of objective value for the treatment of diarrhea.

4 "World Population Prospects." Population Division of the Department of Economic and Social

Affairs of the United Nations Secretariat, 2012. 5 "Kenya Statistics." UNICEF, 29 Dec. 2013. Web. 15 May 2015.

<http://www.unicef.org/infobycountry/kenya_statistics.html>. 6 PackH2O™: Machakos, Kenya Executive Summary of Findings. Nairobi: Partners for Care,

2013. Print. 7 Average household size is 5.1 people per: Kenya. Bureau of Statistics. Ministry of Planning and

National Development. Kenya Integrated Household Budget Survey (KIHBS). Nairobi: 2006.

Print. p.16

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Figure 3

2015 population Estimated prevalence

of diarrhea

46,749,000 18,138,612

Number of

households

Infected households

9,166,471 3,556,591

Estimated

treatment cost

Reduction in disease

with PackH2O™

KSh6,348,514,200 11,191,524

Estimated savings Value per pack

KSh3,917,033,261 KSh1,101.35

This gives an objective value of KSh1,101.35 per pack. This objective value, or true economic

value, is based on limited data and can be refined to include prevalence rates for additional

diseases and higher treatment costs. See the Appendix A for the Excel model with tables built

for counties within Kenya.

The second step is to identify the perceived value of the PackH2O™ to a government buyer.

Perceived value is often based on a comparison against substitutes and the performance

differential in order to establish the value a customer would perceive the product to have. This is

slightly more difficult to quantify since governments do not purchase large quantities of

jerrycans, the nearest substitute product, for health care uses. In order to better establish a

perceived value we can estimate the additional costs incurred to effectively utilize packs and

subtract those from the objective value. For the pack to prevent waterborne illness, the

government would have to potentially provide a base supply of WaterGuard™ (or other water

treatment product), distribute the packs, and forgo the purchase of an equivalent product

(jerrycan). These costs are quantified below in Figure 4.

Figure 4

WaterGuard™

cost

Estimated

distribution cost

Opportunity Cost Final perceived

value

KSh20 KSh100 KSh250 KSh731.35

The final consideration for value-based pricing is the cost of goods sold. In this case it costs

KSh600 to import the pack and approximately KSh538 for kits to be delivered and assembled in

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Kenya8. In order to capture value the final price should sit below the customer’s perceived value

but above the cost of goods sold, KSh650 being a recommended price point. In the case of PFC

the final price may be closer to cost of goods sold since the greater incentive is to allow entry to

more packs into the marketplace rather than capturing additional value.

This pricing model can be applied to other countries and also refined for counties within

Kenya. The more refined data available of disease infection rates and treatment costs the more

accurate the objective price will be. It is also important to note that not all infected persons seek

medical treatment and some cases are more or less expensive to treat because of the severity of

the illness. The model also only includes cases of mild diarrhea, not cholera and typhoid, which

are more expensive to treat. This model provides an abstract value that can be easily explained

for the purpose of marketing. A full study on actual costs of treating waterborne illness for a

specific region would be ideal for calculating a more accurate true economic value.

On 15 May 2015, the Governor of Marsabit

County, Kenya placed an order for 6,400

water packs during a meeting with senior

PFC leaders and Mount Kenya University

staff. The driving point of this sale was the

strong relationship PFC had built in

Marsabit by working to build up and

develop the county hospital and supporting

efforts to treat children infected with chigoe

fleas (jiggers) throughout the country

side. In regions where strong relationships

have not been established the value-based pricing model can be combined with messaging aimed

at county health officials and governors to establish pilot programs. Messaging is important but

ultimately county officials will be hesitant to make large purchases where a strong relationship

does not exist. So pilot programs are an important step to driving sales. By allowing the

counties to test out pack usage on a small scale they can see the benefit for themselves and gauge

the level of resources needed to roll out a larger distribution of water packs to communities in

need.

At a national level, key messaging should include the desire to establish a production site in

Kenya for job creation and support of HIV infected women. Looking outside of Kenya at other

East African nations, it is important to take advantage of high profile events like the Clinton

Global Initiative Summit, Africa Healthcare Summit, and East Africa Environmental Risk &

Opportunities Summit to build awareness for the PackH2O™.

8 Cost of production determined by GAP Product Development team in US dollars; exchange

rate at the time of publication was $1-KSh100.

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Ultimately the pack is a solution to a problem that does not affect entire populations. It is

important to capitalize on moments when this problem is at the forefront of discussion and a

solution seems most relevant. As unfortunate as they are, cholera outbreaks and other

flashpoints of waterborne disease are another ideal point for driving sales. At these incidents,

health officials are looking for ways to curb the current epidemic and prevent the next

one. While it may seem morbid and unethical to take advantage of a health epidemic the end

goal is not to simply make sales, it is to limit suffering and prevent the next epidemic by

providing the right product. Options generated from the SWOT matrix can be further refined into

a marketing campaign through use of the 6Ms of marketing communication, see Figure 5 for an

outline of the 6Ms and operational focus areas.

Figure 5

Market StrategicMission

MessageExecutional Media

Measure-ment FinancialMoney

1. Mission: Overall campaign objective 2. Market: Target of the communication campaign 3. Message: Specific elements to be communicated 4. Media: Delivery methods for the messaging 5. Money: Budget for the campaign 6. Measurement: Method of assessing the impact

12

Recommended Marketing Campaign for County Governments in Kenya

Homa Bay and Isiolo Counties are ideal candidates for a marketing campaign because of recent

medical issues, prior pack distribution, and established awareness of the pack with government

officials. The pack’s potential savings to the counties is the primary message to convey with the

secondary message being the health benefits and improved quality of life for end users. Both

counties have already had packs distributed within them so this eliminates the need for a pilot

program. Rather than using social media, television, or radio to convey this messaging the ideal

media is direct presentation to senior county health officials and then the governor. Without the

need for a pilot program the allocation of budgeting for this campaign is simplified and includes

fuel cost for transporting PFC staff members to and from the counties. Measurement should be

focused on how effective the campaign was in achieving its mission. The number of packs sold

is certainly important but other measures include: the number of meetings necessary to make the

sale, other products in the county’s consideration set, the county’s intended distribution plan i.e.

number of households or schools to be reached, and time between initial meeting and

sale. These factors are not only to indicate how effective the campaign was, but also provide

information to refine and improve future marketing campaigns to other counties.

Recommended Marketing Campaign for Kenya

For a marketing campaign aimed at the Kenya government the key market is the Ministry of

Health (MOH). They are responsible for establishing the strategic health care plan for the

country and have a budget allocated for the purchase of health care products. The final mission

should be the sale of 2000 packs for initial distribution and to develop a relationship with the

Ministry of Health. Messaging should be heavily focused on how the pack can help reach policy

objectives outlined in the Kenya Vision 2030 plan. The MOH outlines diarrhea at one of the top

five health related deaths in Kenya, contributing to 6% of annual deaths9 and unsafe water,

sanitation, and hygiene contributing to 5.3% of total deaths10. Another policy objective is the

reduction of communicable disease deaths per 1000 persons from 6.8 to 2.611. Again, media

should come in the form of direct communication to convey the pack’s value and how it can be

used to meet national health care objectives. The allocation of money and measurements for this

campaign are very similar to the above recommendation for approaching county governments. A

key difference for measurements is the identification of which procurement division would make

pack purchases and what percentage of their annual budget could be dedicated to additional

health care products.

9 Kenya. Ministry of Health. Health Sector. Human Resource Strategy 2014-2018. Nairobi:

Ministry of Health, 2014. Print. p 3. 10 Kenya. Ministry of Health. Kenya Health Policy 2014–2030. Nairobi: Ministry of Health,

2014. Print. p 23

11 Kenya. Ministry of Health. Kenya Health Policy 2014–2030. Nairobi: Ministry of Health,

2014. Print. pp 25 and 31

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Recommended Distribution within Kenya

Distribution is the final aspect to discuss in marketing the PackH2O™ to governments. Since an

extensive distribution systems already exists between Greif, PackH2O™, Impact Economics, and

PFC (and other NGOs) the focus here is on the link between PFC and government entities

purchasing the pack. In Homa Bay, for example, they have internal resources to distribute the

packs out to end-users. Where PFC needs to step in and provide additional service is in training

and designing a system for following up with end users to ensure the pack is being effectively

utilized. Ensuring that training occurs with county officials and makes its way down to end users

can be as simple as providing literature and materials or as complex as setting up a training

program. PFC’s involvement will ultimately depend on how much the county government is

willing to commit to the project. Tracking the distribution of the packs is also critical so that a

simple random sample can be selected for follow up surveys. The ideal situation is that the

government buyer handles all training and surveying themselves but this is not a realistic

assumption given the competing demands for resources and time. This highlights the importance

of organizations like PFC in the distribution channel from Greif all the way to end users of the

pack. Without PFC to drive education on pack use and ensure continued proper use the pack is

not functional and does not serve the original intent.

Kenyan Non-Governmental Organizations (NGOs)

Kenya is home to hundreds of NGOs with varying initiatives centered on helping the people in

Kenya live a better life. Water is a human necessity and a focus of many of the NGOs in one

form or another. Based on conversations in-country, below is a list of some of the big players in

Kenya and how their current initiatives directly relate to what can be achieved with the

PackH2O™. (ref interview with James Karani)

Kenya Red Cross (http://www.kenyaredcross.org/):

According to the KRC, 60% of Kenyans don’t have access to clean water and they have

currently funneled $20 million USD to reach 1.5 million people ($13/person). This has helped

with access to water and ability to make that water safe for drinking.

Adeso (http://adesoafrica.org/):

Adeso understands that there is poor sanitation and not enough safe water. Some of their projects

include building berkads (water tanks for collecting rain water), training community leaders on

the importance of hygiene and sanitation, de-silting water pans, installing hand-pumps and

trucking water to areas affected by drought.

World Vision (http://www.wvi.org/kenya/):

World Vision’s mission is to reduce “under 5 child” mortality. They’ve supported projects to

increase access to drinking water and educate community members on sanitation and hygiene.

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Action Aid (http://www.actionaid.org.uk/where-we-work/kenya):

Action Aid works with the people in Kenya to improve their livelihoods and their access to

water, health services and education. They help provide safe water supplies and educate health

workers.

When considering NGOs as a channel for selling the pack, it’s important that they connect with

the product and have the same passion regarding the health outcomes that can be

achieved. NGOs all over Kenya are working to help provide safe water to the millions of

residents without access and are educating people on how they can avoid waterborne illnesses.

While it is a consumer product, the PackH2O™ is also a health product with the goal of

reducing/eliminating waterborne illnesses that affect millions of people in Kenya. Many NGOs

in Kenya share this goal, will emotionally connect with the mission, and will in turn have a high

willingness to purchase and distribute the PackH2O™.

Forms of Water Treatment

In the goal of eradicating usage of the jerrycan and making water safe to consume, NGOs have

used five processes to educate the people on how they can treat their water:12

Ceramic Filtration

Ceramic filters are treated with colloidal silver to ensure complete removal of bacteria and to

prevent future growth of bacteria. They typically hold 8-10L of water and filter into a plastic or

ceramic container. Flow rates can be as slow as 1-3 liters/hour and recontamination can occur

without behavior change.

12 http://www.cdc.gov/safewater/household-water.html

http://www.technologyexchangelab.org/find-solutions/water-sanitation/water-purification/

http://www.filterpurefilters.org/how_we_do_it.htm

15

Slow Sand Filtration

Sand is placed in a bucket on top of a layer of gravel. A shallow layer

of water on top of the sand forms a bioactive layer that reduces

disease-causing organisms. A diffuser plate protects the bioactive layer

and water can be filtered through.

Chlorination

Diluted sodium hypochlorite can be added to unsafe water.

This helps to remove bacterial pathogens and make water

safe for drinking. One of the most commonly used products

is WaterGuard™ by Procter & Gamble. Behavioral change is

required in the storage of water to prevent contamination

after treatment.

Solar Disinfection (SODIS)

By filling plastic bottles with water of low turbidity

and sitting in direct sunlight for 6 hours, water will

become sanitized. On the downside, water must be

treated for a long period of time.

Flocculant/Disinfectant Powder

Procter & Gamble produced a powder

containing ferric sulfate and calcium

hypochlorite called PUR™, which

costs 3.5 US cents. When added to

10L of water, the sediments will fall to

the bottom of the container. The water

should then be strained with a cloth and

let sit so the bacteria can be deactivated

by the chemicals. Behavioral change is

16

required in the storage of water to prevent contamination after treatment.

Marketing Strategy

Many NGOs in Kenya share the same mission of eradicating waterborne illnesses and providing

the Kenyan people with solutions for sourcing safe drinking water. PackH2O™’s value

proposition for the NGOs is:

The PackH2O™, when paired with flocculant/disinfectant powder or chlorination, is the only

product that eases the transportation and storage of water, and is proven to result in consumer

behavioral changes that decrease the incidence of waterborne illnesses. The pack bridges the

gap between what the NGOs are currently doing and what they are missing in terms of changing

the behaviors of the people and preventing the contamination of treated and safe water.

Some NGOs are more focused on access to water, which is also very important, but once access

is gained they need to continue to provide support on how to transport, store, make their water

safe and prevent contamination. The PackH2O™ provides additional value to the NGO in

alignment with their mission and will increase their willingness to purchase and distribute in

Kenya. The PackH2O™ is differentiated from other products on the market because of its ease in

transporting water, and ability to change people’s behavior and ultimately decrease or eliminate

water borne illnesses. The design of the pack paired with the education that comes with it upon

purchase helps assure there is always “safe water in, safe water out.” The value created by that

product differentiation can be captured by charging a price premium over the current cost for

ceramic filtration, slow sand filtration or their other water initiatives.

Pricing

When determining the price for NGOs, there is a lot of information missing that would help aid

in the calculation. Value-based pricing is the most logical method because it would compare

what the NGOs are currently spending their funds on, and weigh the cost and outcome of that

versus the cost and outcome of PackH2O™. The outcome would be a measurement of impact:

how many people saw a decrease in physical over-exertion from the transport of water and a

decrease in symptoms as a result of drinking safe water. The calculation would be different for

each NGO and would require data that may not be readily accessible. From the available

information, the impact of the PackH2O™ can be quantified.

As mentioned above, Kenya has an approximate population of 46.749 million people4 and the

approximate prevalence rate of diarrhea is 38.8%.5 In low-middle income countries, 95% of

diarrhea cases are mild, 4.95% are moderate and 0.05% are severe13

13 Lamberti, Laura M., Christa L. Fischer-Walker, and Robert E. Black. "Systematic Review of

Diarrhea Duration and Severity in Children and Adults in Low- and Middle-income Countries."

BMC Public Health 12.1 (2012): 276. Web. 28 May 2015

17

In an interview with Dr. Dennis Masita, Director of the PFC Medical Center, it was found that

Kenyans suffering from symptoms of diarrhea most often seek treatment at state-run hospitals.

Furthermore, a typical hospital patient in Kenya with mild diarrhea will pay about KSh300 for

medication; a patient with moderate diarrhea will pay KSh1100 for medication, IV fluids and 1

night of hospitalization; and a patient with severe diarrhea will pay KSh1700 for medication, IV

fluids and a 3-day hospitalization (and experience 8.4 days of active symptoms, on average).14

Consider a village of 1000 with an average household size of 5.1 people; using the above

statistics, 388 of the 1000 would be suffering from diarrhea. Figure 6 shows the cost to treat

these 388 patients:

Figure 6

Cost (KSh)

367 mild cases 110100

19 moderate cases 20900

2 severe cases 3400

Total 134400

If one PackH2O™ per household in the village (196 total packs per village assuming 5.1 people

per household) could eliminate all symptoms with proper use, the cost savings per pack would be

KSh685.7. From the Machakos survey conducted March-August 2013, of the 35 people

surveyed, 61.7% saw a decrease/elimination in symptoms of any disease. Considering this

statistic, of the 388 people suffering from diarrhea only 239 would see a decrease in symptoms.

Figure 7 shows the cost to treat these 239 patients:

Figure 7

Cost (KSh)

227 mild cases 68100

11 moderate cases 12100

1 severe case 1700

Total 81900

If we assume that one PackH2O™ per household (196 packs) is able to eliminate 61.7% of these

symptoms with proper use, the cost savings per pack would be KSh417.9.

With these consumer-oriented valuations, PackH2O™ can easily be aligned with the missions of

many Kenyan NGOs seeking to improve the livelihood of the Kenyan people. In particular, the

14 Masita, Dennis, M.D.. “Costs of treating waterborne illness in Kenya.” Personal Interview. 18

May 2015

18

pack can be used as a prevention tool, and a vital resource in which NGOs can invest to help

improve the lives of Kenyans living in impoverished conditions.

From this information, PackH2O™ can take two different directions when pricing the pack. The

first is focused on market penetration while the second is focused on creating revenue.

Scenario 1: Sell the PackH2O™ at cost. This aligns with the goal of getting a pack in as many

households as possible and eliminating waterborne illnesses. This will also ease the fundraising

efforts required for Partners for Care or other NGOs investing in the pack.

Scenario 2: Segment by NGO type. For large multinational NGOs, sell the PackH2O™ at the US

price of $10 and for small local NGOs and church organizations sell the PackH2O™ for

KSh685. From the PFC perspective, this will create additional funding to be used towards the

PackH2O™ initiatives or other PFC operations funding.

Messaging

Specialized marketing media such as pamphlets, flyers, and brochures must be created and

geared towards the value proposition for NGOs specifically. The PackH2O™, Partners for Care,

and Greif Inc. websites need to include an NGO tab or section that speaks to NGOs and allows

them to place orders or contact IE or PFC for more information. NGOs should also be reached

through emails, mail, and direct/in-person connections with personalized marketing materials

that speak to the value proposition and their personal mission.

Distribution Plan/Recommendation

The PFC and PackH2O™ websites should be updated to better foster large orders of the pack

and facilitate a more seamless user experience when navigating through the website. Large Fonts

with colorful texts or textboxes will catch the eyes best when drawing attention to where to click

to place an order. Move ordering links to the top of the page so buyers do not have to scroll to

the bottom to place an order.

Packs can be purchased through Impact Economics, Partners for Care or the PackH2O™

website. Packs can be sent by IE, G4S (Kenya shipping company) or delivered in person by the

Partners for Care staff (depending on location). Upon delivery the NGOs will be educated on

proper usage of the packs so they can educate the end-consumer. It is also important to connect

with clergy and community leaders such as pastors and community health workers, who can be

utilized as powerful influencers in local adoption of the pack and proper usage thereafter. Getting

trust and buy-in from these leaders will create a valuable access point to reach other people in the

community.

After purchase and usage of the pack, there should be a measurement of the health

outcomes/benefits of the pack. This can be done through identifying a decrease in hospital visits

19

due to diarrhea in that area, or a consumer survey. These outcomes are a key value builder for the

NGO segment and the data can be used to help retain and capture future sales.

Retail

Pricing Objectives

There are two main pricing objectives for the PackH2O™ at retail: market share/market

penetration, and sustainability in terms of covering costs of production and distribution.

Substitute Consumer Products for the PackH2O™

From a consumer point of view, the PackH2O™ is most likely to be viewed as a water

transportation and storage device that provides the added benefits of improving water safety.

Therefore, in terms of consumer perception and the intended use and product specifications of

the PackH2O™, the three main substitutes for the PackH2O™ are buckets with or without lids,

repurposed jerrycans, and jerrycans made specifically for drinking water.

Buckets can be common in some regions; especially where water doesn’t need to be transported

over long distances (as in some slums, or in villages with rivers, wells, or tanks very nearby).

Consumers can purchase lidded buckets for between KSh50 and KSh200. It is less common to

find repurposed buckets being used for water carrying and storage, in part because jerrycans are

ubiquitous and at least as inexpensive, and also because buckets are often more valuable to users

as a vehicle for carrying things other than water, like produce.

Repurposed jerrycans that originally held cooking oil, petrol, or chemicals can be purchased

from dealers around the country for as low as KSh20, whereas new jerrycans for drinking water

can be sold by retailers for between KSh180 and KSh200, depending on product quality.

Occasionally, new or repurposed jerrycans can be purchased from retailers or dealers already

filled with water, but the source of this water is sometimes unknown, especially in the cases of

repurposed jerrycans and travelling water dealers.

Under normal usage conditions, the lifespan of plastic jerrycans in most parts of Kenya usually

averages around one year.15 The lifespan of a jerrycan can be several years if used with extreme

care, but the chance of water contamination increases with time due to the difficulty associated

with properly cleaning and sanitizing jerrycans – even those that have only ever contained

drinking water. In Isiolo, Kenya, drugstore owner James Karani explains that the flat terrain

allows users to roll or “kick” their jerrycans to avoid having to awkwardly carry them, but this

shortens the lifespan of the jerrycan to an average as low as 6 months because it causes the

plastic to crack.15

15 Karani, James. “The PackH2O™ in a retail environment.” Personal Interview. 16 May 2015

20

Determining Price Elasticity & Willingness to Pay

Partners for Care conducted a pre- and post-distribution study in Machakos, Kenya, in which

randomly selected participants indicated how much they would be willing to pay for a

PackH2O™, those findings are listed below in Figure 8.6 In Isiolo, drugstore owner James

Karani suggested that he would charge KSh300 per pack retail price, based on his own informal

queries of women to whom he showed the pack.15

Figure 8

While this information is useful, it should be noted, that there are limitations inherent in using

these findings as determinants of willingness to pay. The biggest limitation in the PFC study,

acknowledged by PFC staff who conducted the survey, was the risk that participants would

overstate their willingness to pay because they were grateful to have received a free PackH2O™

and wanted to show PFC staff their appreciation by outwardly valuing the pack very highly.16

The fact that 17.1% of respondents said that they would pay any price - “whatever [the pack]

costs”- is indicative of a problem, because these respondents do not have the disposable income

to support that assertion.

The journal, Water, published a study in 2014 exploring willingness to pay for WaterGuard™ in

rural Kenya17. The study found that price sensitivity was high, and willingness to pay for the

product was about 80% of the market price (market price was KSh20 for a one-month supply).

The study further explained that experimental marketing of WaterGuard™ as an important

product to protect childrens’ health was ineffective. The study noted other research that indicated

that in families with limited numbers of bed nets, it was more likely that adults would be using

the nets as opposed to giving them to their children, even when the adults had been educated

about the unique and increased health risks posed to children without nets. This suggests that

perhaps adults weigh the importance of their own health, as providers for the family, more highly

than that of their children. Notably, the study found no significant association between health or

water quality variables and participants’ decision to purchase WaterGuard™ in the experiment.

The results of this study, and others cited within the study, should be considered in the

16 Okello, George. “History of marketing and outreach for the PackH2O™.” Personal

Interview. 18 May 2015 17 Blum, Annalise, Clair Null, and Vivian Hoffmann. "Marketing Household Water Treatment:

Willingness to Pay Results from an Experiment in Rural Kenya." Water 6.7 (2014): 1873-886.

Web. 8 May 2015.

Price KSh500-300 KSh200-150 KSh150 KSh150-100 Any Price

% Willing to

Pay

11.5% 40% 14.3% 17.1% 17.1%

21

development of a marketing plan, messaging, and marketing materials for PackH2O™,

especially in its capacity as a health product. Additional research, outlined below, will be

required to determine price sensitivity and willingness to pay for the PackH2O™ as a

combination water transportation device and health product.

Experimentation is the most reliable method for determining price elasticity, price sensitivity,

and willingness to pay. The best option in this case is the use of a retail pilot program. An initial

pilot would be invaluable to evaluate an effective marketing strategy and to test consumers’ price

sensitivity (and by extension, price elasticity). The model could be rolled out to other regions,

with oversight from PFC, and with local shopkeepers’ assistance in determining any local and

regional constraints on willingness to pay.

The Financial Lives of Low-Income Kenyans

The target market for the PackH2O™ is low-income Kenyans. A national study in 2005 found

that 67.2% of Kenyans fell below the poverty line of USD2 per day18. Kenyans with higher

spending power often have the ability to purchase 5-gallon jugs of water for use in standalone in-

home water coolers, or a large outdoor water tank and contract to have it filled as needed via a

water truck. This tank water can then be piped into the home, or retrieved from a spigot on the

tank. There are some Kenyans with higher spending power who cannot utilize a water delivery

contractor due to limited road access for water trucks (such as those living in slums where roads

aren’t wide enough for trucks, or mountainous regions inaccessible for trucks of that size or

weight). A marketing plan aimed at the lowest income Kenyans will be expandable to Kenyans

with higher spending power, but not the inverse.

The publication Kenya Financial Diaries provides an enlightening, large, and in-depth

longitudinal study of the financial lives of 300 representative low-income Kenyan

households. Median monthly income for households in the study was KSh2,167. Seventy-two

percent of study households live on less than KSh119 (US$2 at the time of that study’s

publication) per day. According to the study, national poverty levels were last studied in Kenya

in 2005, when 67.2% of the overall population lived below the poverty line (based on adjusted

2005 prices) equal to US$2 or KSh119 per day at the time of the study’s publication. The study

found that the average participating household has about 10 income sources, half of the sources

are employment-based, while the other half are classified as “resources received” (like gifts from

friends, family, or church, or government assistance). In rural areas, these resources received

accounted for 25% of income for the median household, and 33% of income for the median

woman. Most households faced volatility in both income and consumption during the course of

the study: “for the median household, income fluctuated ± 55% from month to month and

18 Zollman, Julie. "Kenya Financial Diaries: Shilingi Kwa Shilingi - The Financial Lives of the

Poor." Fsdkenya.org. Financial Sector Deepening, August 2014. Web. 19 May 2015.

<http://www.fsdkenya.org/pdf_documents/14-08-08_Financial_Diaries_report.pdf>

22

consumption fluctuated ± 43%19. Income in most of the households was consumption-driven,

where new sources of income were sought in response to need driven by imminent expenses.

In terms of savings versus liabilities, the study found that these low income Kenyans favored

saving (in many forms) to incurring liabilities/debt. This is useful information for marketing the

pack because it indicates that offering a purchase on credit may be a less fruitful use of

marketing resources than capitalizing on one of the many community-centered formal and

informal savings methods in which low-income Kenyans typically participate. Kenyans in the

study preferred to invest in “active” savings methods, where the money was immediately put to

use to provide benefits, “whether that is in buying consumption goods or physical assets,

producing immediate returns, enabling them to borrow, or enabling a friend or relative to make

an investment today”19.

A chama is an investment or saving group in Kenya. These chamas take three major forms. A

“rotating savings and credit association” (ROSCA), is a form of savings where members deposit

money regularly, and each member takes a turn using the entire pot, often to fund a project like

starting up a business. Accumulating savings and credit organizations (ASCAs), sometimes

known colloquially as “round table banking,” collect contributions from and distribute loans to

members. Finally, “welfares” act as informal insurance for members. Welfares usually have their

own rules for membership and contributions, but most usually act as group emergency savings

funds.18

One other means of group investment, savings, and disbursement exists in Kenya. Larger sums

are often used to purchase shares in “savings and credit cooperative organizations” (SACCO),

and shareholders are eligible to borrow from the pot for larger investments like land. SACCOs

are most visible in the transportation industry, where shareholders use funds to purchase buses

and matatus and then return a portion of revenue earned as premiums to the SACCO fund.18

Methodologies for Setting Price

In terms of pricing, there are several methodologies that can be followed to determine a retail

price for the PackH2O™, but most fall far short of the objective of self-sustaining. In short, retail

sales to individual end consumers, taken on its own, require subsidy in the form of donations,

pulling revenue from other streams to cover production and distribution costs, or resource

pooling by consumers.

Cost-based pricing is the only method whereby the price of the PackH2O™ can cover the costs

in full, but willingness and ability to pay in Kenya is unlikely to support that price. A cost-based

price for a PackH2O™ produced in Kenya would fall somewhere around KSh538 (excluding

19 Kenya Financial Diaries, page iv

23

domestic shipping and overhead expenses like marketing, other costs incurred by PFC or

distributors, and any margin for the distributors or retailers). This is far above the stated

willingness to pay of survey respondents, 269% more expensive than even the highest quality

jerrycan, and about four and a half times the average daily income of almost 70% of Kenyans.

To give some context in terms of spending power, 2013 median US income of US$52,250

equates to US$143.15 per day 20 . Compare this to a representative sample of low-income

Kenyans from the Financial Diaries study, where the median household income for families in

the study was KSh72 per day17. In this case, setting a price of KSh538 for these low-income

Kenyans would equate to pricing a pack at US$1069.33 for the median US household. These

low-income Kenyans would have to dedicate 7.47 days of income to purchase a pack at that

price.

Because packs with an original liner have an observed lifespan of at least 2.5 years, competition-

based pricing could support a price around 2.5 times that of a high quality jerrycan, or at around

KSh500. However, the pack requires education in terms of usage and product benefits versus the

competition that can limit early adoption rates, especially at such a premium. As noted

previously, consumers can be very price sensitive for water health products.

Value-based pricing poses difficulties for retail due to the dramatic variation in benefits seen by

different potential users of the pack. For example, it would be very difficult to quantify the

physical ease-of-use benefit seen by a user over the typical ways that jerrycans are carried, not to

mention the variation in value of this benefit seen by users in varied geographies (i.e. a user

travelling one mile each way deep into a steep river valley could value the ease of carrying a

pack over a jerrycan more highly than a user kicking their jerrycan across flat terrain). The

medical savings provided by a pack are more easily quantified, but a model quantifying those

savings would still produce a price far outside of the target consumer’s ability to pay.

Paying for the PackH2O™

The consumers in Kenya most in need of a PackH2O™ are often the least able and least likely to

pay a premium price for the pack. The WaterGuard™ study in the journal Water indicated that

wealth and membership in a savings club were associated with purchase decision for

WaterGuard, but that health and water variables were not. At KSh20, repurposed jerrycans are

the most affordable option for those least able to pay, but they are also the most dangerous in

terms of contamination.

The community-oriented culture in Kenya can provide some unique solutions to the challenges

posed by a low ability to pay among those in the target segment for the pack. Consumers could

20 Noss, Amanda. “Household Income: 2013.” American Community Survey Briefs, census.gov.

Web. 27 May, 2015.

<https://www.census.gov/content/dam/Census/library/publications/2014/acs/acsbr13-02.pdf>

24

utilize funds from a ROSCA or ASCA to fund the investment in inventory for a pack distribution

operation, purchase of their own pack, or to start a small business selling the pack. SACCOs

provide another means of providing the initial investment for starting a small business selling

packs locally and regionally. Use of a SACCO for this purpose seems less likely as they tend to

rely on more tried-and-true revenue generators, and focus on larger capital expenditures like

busses. Micro-finance operations like ROSCAs and ASCAs could provide a great opportunity

for community influencers or distributors to fund their initial investment.

Sales and Distribution – A Pilot in Isiolo

Education and exposure are the two biggest tools to increase consumers’ willingness to pay for

the pack at a premium over less-expensive substitutes. Messaging focused on educating

consumers of the costs and risks of waterborne illness can help to overcome objections to a price

premium. According to interviews with the PFC staff physician, average costs to the patient for

consultation, diagnoses, and medical treatment for waterborne illnesses run from KSh350 for

outpatient treatment of mild dysentery, up to KSh6770 for diagnosis and treatment of typhoid or

cholera. Hospitalization may be required for between 5 and 14 days or more, imposing

challenges on families when the sick individual misses income-earning opportunities. Kenya has

a social services system for assisting patients who would have difficulty paying the hospital fees,

but the expectation is that the patient will still cover half of the bill. Similarly, health insurance is

available in Kenya, but the consumers most likely to purchase and use a pack are those least

likely to purchase and maintain health insurance.21

A high-touch sales force, or an equivalent

team of advocates/educators, is required to

educate consumers on the benefits and

proper usage of the pack, to increase

adoption and willingness to pay, and to

promote the behavior change necessary for

the successful performance of the pack as

a health product combating waterborne

illness. PFC currently utilizes an

“influencer” in villages where they

distribute packs. In Machakos, these

“influencers” are Pastor Amos and

Francisca. Pastor Amos is the driving force

behind adoption, giving legitimacy to PFC

and the pack among his congregation. Francisca (pictured here demonstrating how to properly

treat the water in the pack at the water access site) is a Community Health Worker (CHW), an

21 Masita, Dennis, M.D.. “Costs of treating waterborne illness in Kenya.” Personal Interview. 18

May 2015

25

unpaid volunteer trained by the Kenyan government to be a community resource on health

issues. Francisca has helped to normalize usage of the pack, and she instructs village women on

how to properly use and maintain the pack as a health product for safe drinking water. Many

retailers can adopt PFC’s influencer strategy to encourage adoption and proper use in remote

villages.

Coca-Cola in Kenya uses a model for “last mile” distribution called Micro Distribution Channels

(MDC) to ease the burden of serving consumers in difficult-to-access areas. MDC’s are run by

local businesspeople that contract with Coke to regularly purchase wholesale quantities of Coke

products. Each MDC is responsible for supplying around 120 independent retailers (or kiosks) in

their geographic area with product. Coke monitors the MDCs directly, and indirectly through

weekly visits to every kiosk the MDC services to check inventory levels and inquire about the

kiosk’s relationship with the MDC.22

PFC should utilize a model that combines their “influencer” method with the MDC model to

maximize reach and minimize overhead. PFC can sell packs wholesale to local business owners,

like James Karani in Isiolo, and use their outreach relationships with community leaders like

Pastor Amos to supplement James’ own local connections. James has offered to conduct a pilot

program marketing the packs via his drugstore in Isiolo, and through his connections made

contracting on water supplies and large-scale water tanks.15

James can supplement sales at his own storefront with sales via representatives in more remote

areas. He can seek salespeople/influencers who are inherently incentivized to promote the pack

because they have concern for the wellbeing of others in their village, CHW’s like Francisca,

church leaders like Pastor Amos, leaders of

local women’s groups, or representatives of

other NGO’s operating in that region.

Alternatively, he can offer a small portion of

his own margin to a local entrepreneur to

increase sales of the pack (or use a

combination of the two). Reliance on those

who are inherently incentivized would be

the preferred option in this case both due to

low room for profit margin at retail, and

because consumers may be more distrusting

of the educational information provided by

the influencer if they know that profit may

be an ulterior motive for promotion.

22 Okello, Bob. “Coca-Cola in Kenya.” Personal Interview. 11 May 2015

26

With assistance from PFC, retailers like James would provide the local influencer or salesperson

with training on the pack, and with marketing materials like pictorial brochures, signs and

posters, free PackH2O™ samples, or even incentive gifts for purchase like free bottles of

WaterGuard™. Local influencers using free PackH2O™ samples will generate interest in the

community and increase adoption rates.

Money and Measurement

The outlay for the pilot would include marketing materials, and time and staff for education of

James and his participating influencers. James has agreed to purchase 100 packs for the pilot,

and the recommendation is to price those at KSh200 each to afford him room for some margin

and variation in pricing to determine an effective price level. PFC has offered to host a “launch

party” to increase awareness of the pack, and increase opportunities to directly distribute

educational information about the need for, and proper use of the pack.

Measures for the pilot will include outlay for the launch party and other support for the retailer,

number of packs distributed, and the number and nature of influencers or local distributors and

the costs related to those roles. The most important measure will be the average successful sales

price to end users, which will be monitored via James and via PFC contact with users. Changes

in health outcomes will also be a crucial measurement to evaluate the effectiveness of the pack as

a health product, and the effectiveness of messaging encouraging proper use. Because all

conventional pricing methodologies result in a price far above the target segment’s ability to pay,

the best recommendation for the pilot is to utilize a price based upon the insight of the retailer.

James is confident with an initial price of KSh300 for each pack, so the pilot should use that

price as a baseline, allowing for fluctuations above and below to evaluate an average willingness

to pay.

Measures

Right now 20,000 packs have been distributed by Partners for Care (PFC), per Connie Cheren, in

Kenya. To track the usage and to assist in collecting future survey data, mobile technology

needs to be utilized. At the end of 2014, statistics showed that mobile phone usage was at 79.2%

in Kenya23. Incorporating mobile applications will allow for easier communication with pack

users and their satisfaction level. Having a wider collection of survey data will refine the results

of some of the earlier studies that were conducted.

23 Linington, Darryl. "Kenya: Mobile Subscriptions on the Rise." IT News Africa. 31 Oct. 2014.

Web. 19 May 2015. <http://www.itnewsafrica.com/2014/10/kenya-mobile-subscriptions-on-the-

rise/>

27

For example, in 2013, during March-August, PFC staff conducted a survey of 35 PackH2O™

users in Machakos, Kenya. Some of the more significant findings from this survey were that

94.3% continued using the pack and that 61.7% of the users said that there was a

decrease/elimination of diseases in their household. Although these are very encouraging results,

stricter analysis may show some weaknesses. The survey collection was not done by an

independent third party, but by PFC staff. Another area of weakness is that the survey was taken

from only one remote area in Kenya. At the time of the survey there had been over 7,500 packs

distributed by PFC within Kenya. Kenya’s terrain and water collecting practices differ from

village to village, so focusing on one village provides a limited scope. Only collecting surveys

from one area is not a simple random sample of the 7,500 packs that were distributed in all of

Kenya and provide biased results.

To help strengthen the monitoring of pack usage Greif should seek for a partnership with the

Kenya Medical Research Institute (KEMRI). KEMRI is a state corporation whose vision,

mission, and core values align with what PackH2O™ is trying to accomplish. They are seeking

to improve human health and quality of life, and have a focus on innovation and teamwork. The

following is KEMRI’s list of mandates:24

· To carry out research in human health

· To cooperate with the other research organizations and institutions of higher learning on

matters of relevant research and training

· To work with other research bodies within and outside of Kenya carrying out similar

research

· To cooperate with the Ministry of Public Health and Sanitation, the Ministry of Medical

Services, the National Council for Science and Technology (NCST) and the Medical

Sciences Advisory Research Committee in matters pertaining to research policies and

priorities

· To do all things as appear to be necessary, describe or expedient to carry out its functions

Having a partnership with KEMRI will provide greater visibility for PackH2O™. KEMRI is a

state corporation and may assist in making connections with county governors. Their resources

and connections will help in developing mobile surveys, because they have experience with

collecting medical information within Kenya. Mobile health can be utilized at a greater extent

due to the percentage of mobile users within Kenya and KEMRI can help in developing a mobile

app on Safaricom to maintain a connection with PackH2O™ users.

By partnering with KEMRI this may be a way to have access to different media connections

within Kenya. Since they are a state corporation the studies and research conducted by them may

24 http://www.kemri.org/index.php/about-kemri/background

28

have a greater probability to be reported in local Kenyan newspapers, radio and TV news

stations. This will create greater awareness in Kenya about PackH2O™. The resources of

KEMRI will help in monitoring PackH2O™ usage across Kenya and help alleviate some of

PFC’s monitoring responsibilities.

Liner Replacement The liner replacement is something that has not be needed up to this point due to the durability of

the liners that are in use. The outer shell will have a longer life when compared with a liner and

will thus require some type of strategy that can effectively provide a new liner with minimal

interruption of pack use. Some of the high level issues that are involved with liner replacement

deal with distribution of new liners, whether to charge for a new liner, tracking when liners need

to be replaced, and how customers communicate if a liner gets damaged and needs to be

replaced. The following experience helps highlight some the challenges to consider for liner

replacement strategies.

During a recent visit to Machakos, the PFC team discovered that two of the packs had holes in

the liners. After inspecting the packs and talking with villagers, PFC realized that these liners

had holes in them due to a manufacturing defect in a specific batch of packs. Greif Inc.

discovered this manufacturing error before the packs were sent and replacement liners were

delivered with the packs to correct the error. PFC did not replace the liners in these packs before

distributing them to different users, because the packs with the manufacturing defect were mixed

with the packs that did not have the manufacturing error. The people in the village knew the

issue of the leaking packs before the visit, but they did not contact PFC regarding the liners that

had holes. It was not clear as to the reason why the people in Machakos did not contact the PFC

staff. Some of the reasons could have been that the villagers did not want to appear that they

were ungrateful and thought that somehow informing PFC about the leaking packs would have

been a sign of disrespect.

As a result of this experience, a more proactive approach in liner replacement may be a more

effective. The rate of how often to replace a liner has been estimated at three years based on

research conducted by Battelle in 2012. The villagers in Machakos have been using some of their

packs for 2½ years and the packs are still operational25. Connie Cheren from PFC has collected

two packs from Machakos to be tested to verify that there are no bacteria after actual use in

Kenya over a 2½-year period. The results of the tests will provide clarity of the durability,

effectiveness of bacteria prevention of the pack liner, and how often a liner needs to be replaced.

25 Residents of Machakos, Kenya (Primarily Pastor Amos). “Customer satisfaction with the performance of the PackH2O™.” Personal Interviews, 9 May 2015.

29

A possible option for a liner replacement strategy could be to provide an extra liner when a pack

is received. This would lessen the distribution challenge in providing access to new liners. There

are risks associated with implementing this strategy. The customer will need to store a liner for

around three years and this may lead to a liner being lost, contaminated, or possibly damaged

during storage. Another possible risk would be that a person might find other alternate uses with

the liner that would cause the liner to be useless after a three-year period.

Another option would be to have extra liners kept at a merchant that is close to the proximity of

the customer’s location. A new liner could be purchased if an old liner is returned. The new

liners would not be for sale on their own, but would require an old liner to be returned. This

would discourage the liners being purchased by people who do not have a pack and help

encourage proper use of PackH2O™. To help provide an incentive to the merchant to collect the

old liners, a commission could be paid for each old liner returned or the merchant agreement can

be contingent on rules that need to be followed in order to remain a merchant for PackH2O™

with old liners being returned being one of those rules. Some of the risks that come with this

strategy could be that a customer may not be aware of the where a merchant is located or a

merchant could change before a customer needs a liner replacement.

The following table helps identify possible options that may be pursued:

Liner Replacement Strategy Pros Cons

Provide extra liner with

PackH2O™ purchase

◦ Lessen distribution challenge to

provide access to a new liner

◦ Helps educate users that a liner

will need to be replaced

◦ Customer will need to store

liner, which may become

damaged or get lost

◦ Other alternate uses with

liner may be found, which

may cause the liner not to be

used for its intended purpose

Extra liners kept at

merchant for purchase

with return of old liner

◦ Liners will be closer to

customer’s proximity

◦ Merchants can be incentivized to

help reach out to users of

PackH2O™

◦ Customer may be less

inclined to get replacement

liner if it costs them more

money

◦ Merchants may change and

older customers may not

know where new merchant

is located

Community health

worker (or some type of

liaison) reaches out to

PFC when a new liner is

needed

◦ Having a connection within a

community provides greater insight

into how PackH2O™ is being used

and when liners need to be

replaced

◦ Have not witnessed a

liaison reach out to PFC

when a liner needs to be

replaced

◦ PFC needs to deliver new

30

liners, which covers a vast

area

Scheduled routine visits

to villages by PFC staff to

determine if new liners

are needed

◦ Maintains a connection with

communities and provides

encouragement to keep using

PackH2O™

◦ Personal inspection by PFC will

help determine the need for liner

replacement

◦ PFC staff are limited in

their resources to visit all the

communities where

PackH2O™ has been

distributed

◦ Greater distribution of

PackH2O™ will stretch

PFC’s resources even further

Each strategy provides unique challenges when replacing liners. A monitoring and tracking

system of customers would help mitigate risks with each particular option. Greif Inc. should

blend some of the strategies listed above. Having the help of community health workers and

using them, as a contact liaison for a group of users would make tracking more possible. To

lessen the travel by PFC, the primary way to stay in touch with the community health work

would be via mobile phone. This will help in keeping the connection with the end user and will

be easier to notify customers of liner replacement. To assist in distributing new liners there needs

to be relationships with merchants, hospitals, or other NGOs where a community health worker

may go or direct customers to receive new liners.

Additional Recommendations

There are additional recommendations that work in conjunction with the various marketing

strategies outlined above to increase perceived value and proper use of the PackH2O™.

The first recommendation is to remove or redesign the Chlorine Tablet pouch currently on the

strap (see Figure 9 below). Most of the PackH2O™ users do not carry water tablets with them

and instead carry WaterGuard™ (sodium hypochlorite solution, sold in 250 ml bottles) and/or

PUR™ (Flocculant/Disinfectant Powder) with them, rendering this pocket inoperative and

useless. These packs were designed to be hands-free in order to help the women using them carry

their babies. It would be ideal to design a functional pouch to hold their preferred method of

water treatment or to work with the makers of WaterGuard™ and PUR™ to come up with a

solution together such as having WaterGuard™ be packaged to easily clip to one of the straps

making it hands-free again.

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Figure 9

Figure 9: The Back Side of PackH2O™ pointing out where the current Chlorine Tablet pouch is

located

The next set of recommendations covers a set of visual cues to be printed directly on the pack

that provides instructions and other important information.

The first visual cue should be a fill line, either on the outside or inside of the pack. Since most

women fill the pack by looking inside it as they fill it with water and the pack itself is not

32

translucent, this fill line may be more beneficial if it were drawn on the inside of the pack or

even on the liner itself. One downside of either location is that that even with a fill line the

women are eager to get as much water in their pack as possible so the effect of this visual cue is

currently unknown. An example of this fill line is displayed below in Figure 10 both on the outer

shell of the pack as well as on the liner itself.

The next visual cue to be displayed on the pack should be arrows serving as a reminder of which

direction to fold the pack. Without arrows on the front someone could easily fold the pack

incorrectly. The pack is only useful in keeping the water safe if it is used properly each and every

time. Figure 10 below shows an example of the placement of these arrows on the outer shell of a

pack.

Figure 10

Figure 10: Arrow and Fill line examples on PackH2O™ outer shell (left) and liner (right)

Another visual cue recommendation is to include instructions for use on the pack itself to

minimize user error. In the village of Machakos, Francisca, the Community Health Worker

(CHW), constantly watches and corrects women while filling and using their packs. When she is

not around it would be useful to have a visual reminder directly on the pack so that the users can

reference it if a reminder is needed. Just like the fill line, one downside to this is that some

33

women may disregard it and not reference it if they happen to forget how to fold or tie the pack,

however, it is more beneficial to have the instructions on the pack. A visual representation of

what this may look like is displayed below in Figure 11. These are just suggestions as there is

limited space on the pack that may be used for further branding/sponsorship and these additional

diagrams may impact the manufacturing process and cost (additional printing and paint),

however ensuring proper use of the pack should be the number one priority.

Figure 11

Figure 11: Example of what a PackH2O™ outer shell would look like with Fold Arrows and

Usage Instructions

34

The next recommendation is the creation of poster/signs to assist in the educational aspects

needed to properly use and sell the PackH2O™. In addition to having instructions on the pack

itself, it would be beneficial if these educational posters/signs could be created and distributed

not only to retail locations but also to Community Health Workers to assist in teaching and

displaying the proper steps to use the pack. These posters should also include reminders, for

example, cueing users to be cautious of dropping the pack and of puncturing the pack when they

are close to sharp objects.

An additional location that these signs would be beneficial is at the water source itself. The

CHW could be in charge of installing them at each water source. This poster would not only

serve as an educational tool but promotional as well; users of that water source that don’t have a

pack will see it and will become more aware of the product and will also have a daily reminder

when they are using their jerrycan that the PackH2O™ exists and is easier to use and better for

their health.

Conclusion

In this consulting report, the Greif Go-To-Market (GTM) Team put together a comprehensive

marketing strategy, including recommendations on segmentation, pricing, promotion, and

distribution specific to selling and distributing the PackH2O™ in Kenya.

The three segments outlined in this report present many opportunities to develop a self-

sustaining business model for PackH2O™. Based on these findings, priority should be placed on

targeting national and local government offices. Government officials have the financial

resources to purchase the packs at prices at or above cost, and have the incentive to provide their

communities with the health benefits PackH2O™ provides. NGO’s have similar interests as

government officials and should be targeted given the shared humanitarian goals, but compared

to government entities, they may face more budget constraints, decreasing the likelihood that the

packs could be sold without the use of subsidization.

Retailers present an opportunity to gather more data on consumers’ willingness to pay and

develop more concrete pricing strategies specific to various locations. However, because of

current costs of production, it is highly improbable to sell packs to retailers without subsidizing

the cost. Despite this, retailers should be considered for pilot programs in order to better gauge

the market and analyze the consumption habits of end consumers.

35

The Government segment:

- Top Priority

- Price: KSh650 based on a value-based pricing model in order to maximize distribution.

- Promotion: Direct presentation to senior county health officials and county governors.

For national government focus on the Ministry of Health (MOH) and how the

PackH2O™ can help them reach their policy objectives as outlined in the Kenya Vision

2030 plan.

- Distribution: Focus on the relationship between PFC and purchasing government

entities. Ensure that extensive training is provided in order to ensure proper use of the

packs.

The Kenyan Non-Governmental Organizations (NGOs) segment:

- Price: The two pricing options are to sell at cost to maximize impact or segment by NGO

type (charge $10USD to multinational NGOs and KSh685 to small local NGOs and

church organizations).

- Promotion: Create specific and personalized sections of partner websites and targeted

marketing pamphlets. Focus on the shared vision of helping eliminate waterborne illness

in Kenya. Educate NGOs on how ensure proper pack usage and to get buy-in from

community leaders and church pastors. Implement health outcome measures in order to

quantify the impact of the PackH2O™ and use it as another means of attracting NGOs.

- Distribution: Use IE, G4S, or PFC hand-delivery to distribute and IE, PFC, and

PackH2O™ websites to purchase.

The Retail segment:

- Price: A subsidy is required to cover production and distribution costs because the end-

consumer is least able and likely to pay. A pilot project is currently underway with

drugstore owner, James Karani in Isiolo, Kenya. The initial MSRP in the pilot is KSh300.

The recommended wholesale cost to the retailer is KSh200.

- Promotion: Focus on the pack as a water transportation and storage device that has the

added benefit of being a tool for preserving health and safety. Increase consumer

willingness to pay through education and exposure. In-store sales require a high-touch

sales force to demonstrate proper use and point of sale flyers and pamphlets.

- Distribution: Implementing a combination of Micro Distribution Channels (MDC) and

community influencers is recommended to maximize reach and minimize overhead

Miscellaneous recommendations:

- Utilize mobile technology to collect future survey data.

- Partner with the Kenya Medical Research Institute (KEMRI) to strengthen and monitor

pack usage.

- Take a proactive approach to liner replacement or supply merchants with extra liners

- Remove or redesign the Chlorine Tablet pouch

36

- Add a fill line

- Add fold arrows

- Add instructions on the pack itself

- Create signs/posters with instructions and reminders on them to assist in teaching and

promoting the pack

- Install signs/posters in retail locations and at water sources themselves

Appendix

- Appendix A: Kenya Government Pricing Model

Additional References

In-Country Interviews

1. “Interviews with Connie Cheren, President and Founder of Partners for Care.” In person, 8-17

May 2015

2. “Interviews with people of Machakos, Kenya.” In person, 9 May 2015

3. “Interview with Vicki Winkler RN, President and Founder of HEART.” In person, 10 May 2015

4. “Interview with Robert Karanga, Partners for Care Board Member.” In person, 10 May 2015

5. “Interview with Bob Okello, Group Execution Manager for EKOCENTER, The Coca-Cola

Company.” In person, 11 May 2015

6. “Interviews with Mount Kenya University students.” In person, 11 May 2015

7. “Interview with Dr. Linus Ndegwa, Partners for Care Board Chairman.” In person, 11 May 2015

8. “Interview with Wycliffe Osoo, Operations Coordinator at MEBS International.” In person, 12

May 2015

9. “Interviews with people of Marsabit, Kenya.” In person, 14-15 May 2015

10. “Interview with H. E. Ukur Kanacho Yatani Governor of Marsabit, Kenya.” In person, 15, May

2015

11. “Interview with James Karani, Retail Business Owner in Isiolo, Kenya.” In person, 16 May 2015

12. “Interview with Dr. Dennis Masita, Director of Partners for Care Medical Team” In person, 18

May 2015

13. “Interview with George Okello, Partners for Care Director for Outreach.” In person, 18 May

2015