After completing a number of field interviews and some competitive analysis for the water filter program, there were a couple of key takeaways that can be applied to the water kiosk initiative. The most valuable finding is that WaterGuard could be used to dramatically expand the capacity of each kiosk in a very cost-effective manner. At only .67 shillings per 20 liters purified plus 3 shillings for the water, the kiosk could sell purified water for 5 shillings and still make an acceptable profit. This assumes of course that at least 30 households in the serviceable area are interested in buying it daily, which I think is achievable with good marketing (says the marketing guy). In fact, given the density of Kibera, there’s tremendous upside potential if the market interest is high. The biggest advantage of WaterGuard is the low variable cost. Unlike adding another filter, doubling or even quadrupling the water purified from WaterGuard is extremely affordable to the kiosk owner.
There are some risks that come with this new product, though I’m not tremendously concerned. The first is that some people don’t like the taste when WaterGuard is used. Again, given the density of Kibera and the very attractive price point (especially compared to the risk of contracting typhoid), I think we’ll find enough people who don’ t mind the taste. For those people who really can’t tolerate it, we will still offer filtered water at the original 10 shilling price. The extra 5 shillings might seem excessive, but I’m assuming a relatively small number of filtered water sales in the pro forma.
The second concern is that WaterGuard is already available and people could just buy it to purify their own water. Honestly, I hope some do decide to do that. We’ll even sell them the bottle. However, I don’t believe everyone will take us up on the offer. One might think that in this area of exceptionally high unemployment (or underemployment), there would be no premium placed on the time savings or convenience of having someone else purify the water. It’s not purely a convenience issue, but people simply view purifying water as an errand they don’t enjoy. As such, they often just skip it altogether. With the kiosk model, they don’t have to spend 30 minutes on something they don’t enjoy. They can just get the clean water directly.
The other key takeaway from spending so much time wandering around the town was how effective the Safaricom / M Pesa (same company) marketing strategy is here. Kenya is seemingly sponsored by Safaricom. They’re more ubiquitous than Starbucks in Seattle. But instead of spending huge sums of money on television commercials, they simply paint their 11,000 agent stands bright green and have easily recognizable signs at every one. While that might sound obvious, they’re one of the only companies I’ve seen who do that here.
M Pesa Marketing
One of > 11,000 M Pesa Signs
I love the idea of replicating this approach for the water kiosks. It really won’t cost very much money per kiosk, but the cumulative effect will be very powerful. It compensates for the fact that no individual kiosk owner will earn enough to invest in serious advertising, and the likelihood that they would otherwise pool together funds for marketing is slim to none.
This model also mitigates one of the biggest weaknesses of projects launched by foreign aid groups. Often a foreign group will come in, do a huge promotional push, and then eventually move on to a new area or project. Things are going great when they’re there doing the promotion, but as soon as the group leaves, everyone forgets about it and goes back to their old habits. I think that’s probably one reason why so few people are using WaterGuard here. Nobody is promoting it. With the kiosk model, there’s an omnipresent, visible leave behind to keep the service top of mind.
The one negative development is that I’m struggling to find a micro-finance institution that will return my messages. I’ve been told from a trusted source in the industry that MFIs are constantly flooded with these types of proposals and that the likelihood of them meeting with me is low. I have two potential solutions to this problem, so hopefully at least one of them will work.
Overall, I’m still very excited about the potential for the water kiosks to seriously broaden access to clean water in the slums as well as other areas in Kenya. I will continue to write updates as new developments arise. I’ll keep asking for your comments, despite the fact that I receive very few. I’d love to hear your thoughts and suggestions.
Hi Jeremy,
Great updates on your project work.
What I find really interesting about this post is that the reaction of the locals to the proposed solutions to their water-related health issues remind me of US health issues.
When you wrote:
“Things are going great when they’re there doing the promotion [about clean water], but as soon as the group leaves, everyone forgets about it and goes back to their old habits.”
You could substitute “eating healthy” or “exercising” for “clean water” and this statement would be directly applicable to ongoing health challenges we’re facing in America.
Perhaps it’s human nature to not always do what’s in our best interest, but to do what we’re comfortable with despite associated risk?
Looking forward to your continued updates.
Megan
You have probably thought about this, but I would think that for some people, the choice is to either, (a) viligently drink only clean water, or (b) rarely drink it (i.e. at least once a day, drinking potentially dirty water). Cost and easy access (or lack thereof) probably both play into the decision-making…choosing (a) is a fairly big commitment (or so it might seem) and for people who’ve chosen the (b) path would think there’s a powerful incentive to rationalize the decision by underestimating the risks or simply deciding they don’t trust the chemicals or like the taste. Plus, if you have a family member or friend who chooses (b) and does that sort of rationalizing, it probably makes it even tougher for a person to adopt (a).
Thanks Megan and Ben for your comments.
Megan, I agree that it probably is human nature to do what’s easiest right now and worry about future problems if and when they happen. In this extreme case in Kenya especially, people are sometimes forced to choose between purchasing food and clean water. That’s a tough decision to make, but certainly nobody is going to give them a hard time in their community for putting food on the table. I think the strong use of marketing will help remind people of the very real risks they face, and hopefully keep some people focused on the long term.
Ben, I’d agree that generally people either treat their water or they don’t. The group that treats water usually experienced an illness themselves or through someone in their family (or they were brought up on treated water). Most people claimed cost as the #1 reason and inconvenience as the #2 reason for why they don’t treat.
Fortunately, the social pressure you refer to in your last sentence works in reverse as well. It’s like in Gladwell’s “The Tipping Point”. Once enough people around you start treating water, you feel like you should too. This is especially true here where some house guests / visitors will demand that the host treats their water (again, usually former typhoid victims).
It seems to me that the problem is really more about a lifestyle change than anything else. Once people have decided that they are not going to bother with drinking clean water, they will instinctively make up reasons to avoid it. At .67 shillings per 20 litres treated, everyone should be able to afford the WaterGuard tablets — especially if the shop owners are willing to break bulk and sell individual tablets to consumers. And the poor taste as an argument? I highly doubt that the dirty water people drink consistently taste crisp and fresh — I’m willing to bet that untreated water probably have various funky tastes as well. I think it’s critical to get to the root of why there is such an avoidance of consuming treated water. Perhaps you can segment your target market, then determine the reasons why members of each segment avoids the WaterGuard tablets. I know that the WaterGuard tablets aren’t your focal product, but given that these tablets are even cheaper than your filtered water — fully understanding why people avoid it might help you to come up with the marketing strategy that will really promote the life style change. The issue remains — even if you have a successful marketing campaign — how will you sustain the interests once the campaign is over? Will your message be strong enough to make a lasting change?
Perhaps the ultimate solution is to provide more education to the masses, which would help people make better decisions as well as empower them to do more. Maybe going after the educational infrastructure can be your next assignment? 🙂
By the way, on an unrelated note, I found this interesting (2 yr old) article from the BBC News website about the huge divide between what a Kenyan cabinet member makes versus the average wage in Kenya. I think you’ll find this interesting:
http://news.bbc.co.uk/2/hi/7352261.stm