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I’d like to take a minute and thank everyone who donated to these fantastic water projects in Kenya.  I have many friends back home who contributed money.  Outdoor Research contributed a number of weatherproof jackets, shirts, pants, and hats, which I gave out at various slums and schools throughout Kenya.  I have also received a generous donation from an organization who asked to remain anonymous.

Outdoor Research donated jackets

Outdoor Research donated jackets

The Kibera water kiosk project has great momentum and I’m very optimistic that we’ll receive government approval.  I’ll then need to raise approximately $20,000 for the initial infrastructure including four 10,000 liter water tanks, the smaller 500 liter containers for all the kiosks, educational signs and materials, and more.  Once the initial costs are paid for, the business is set up to be financially self-sustaining.  If you would like to support this amazing project that will both reduce disease and create jobs in one of the largest slums of the world, please click on the following link:

http://www.villagevolunteers.org/donation/donate-info.php

When asked to specify the purpose, just type “Jeremy Farkas”.  The donation is tax deductible and will go towards supporting a fantastic cause.  I’d also like to note that all my time is donated so your donation will go directly towards project expenses.  Thank you so much for your support.

Woman in slums enjoying her new jacket

Woman in slums enjoying her new jacket

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The Common Ground Family

The Common Ground Family

Due to a minor scheduling change, it turns out I’m leaving Kiminini tomorrow morning.  I’ll be traveling to the Masai Mara for four days before heading back to Nairobi for several days.  I likely won’t have internet access until Wednesday or Thursday, but make sure to check back in to see pictures of the Masai village and my short photo safari.  I will also have some very interesting updates to share on the water kiosk project.

I want to thank Joshua, Mama Sandra, and the entire family here at Common Ground of Africa for making this an incredible experience.  I’m excited to continue on with the rest of the trip, but I’m incredibly sad to leave.  I look forward to working with the water filter team as they prepare to launch the filters in the market, and I very much look forward to visiting Kiminini and Common Ground again soon. To learn more about Common Ground for Africa, check out http://www.villagevolunteers.org/common_ground/common_ground.php.

I’ll be posting some additional pictures to Flickr later today, so be sure to check back soon.

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I wanted to post a short update on the water kiosk project.  I met with Steve, my Kenyan colleague, last evening to discuss several details about the business and things are looking very good.  I’ll be heading back to Kibera around May 28 to conduct additional market research in the community and hopefully meet with a couple of organizations currently working there to improve health and the general standard of living.  I’m also hoping that I can begin flushing out a detailed action plan of steps that must be completed to launch the business.  I’m very excited that Steve is on board and it looks like we won’t lose much momentum when I leave Kenya.

I’ll actually be leaving Kiminini in a few days to head to the Masai Mara area before returning to Nairobi.  It’s strange to think that things are wrapping up for me on this part of the water filter project, but I do not think it will be the end of my involvement with this incredibly passionate team.  I intend to help them in any way I can to ensure the filters are successfully marketed and adopted by the community.

Make sure you check in over the weekend to see several new pictures.

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Yesterday I conducted my last set of field interviews in the Kitale region.  This time I spoke with several people in one of the slums right outside Kitale.  While the living conditions are quite poor, the level of sanitation is fortunately far better than Kibera.  In the Kitale slums, most people are getting their drinking water from a tapped stream, which costs 1 shilling per 20 liters.

Kitale slum water

Kitale slum water

Interestingly, many of the residents here do boil their water at an average cost of 50 shillings per 20 liters.  Once I heard that, I had little doubt that people in this area would be interested in the water kiosk model.  This was confirmed with the overwhelmingly positive response to the idea by the majority of the residents.  Several tried to haggle on the price of the water, which I said would be 10 shillings per 20 liters.  I was actually quite excited to see them trying to negotiate the price, as I don’t think they would have spent the time and energy to do so if they weren’t legitimately interested in the idea.  In reality, I hope to charge closer to 5 shillings per 20 liters, but it would be nice to be able to charge up to 10 if needed for financial viability.  Of course the goal is to charge as low a rate as possible while operating profitably.

Kitale interviews

Kitale interviews

I still have additional interviews to conduct in Kibera, but it looks promising that the kiosk model may work in poor, urban areas where people already pay for water and treatment.  The next step is to determine the best business model for the kiosk.  My original thought was that that each kiosk owner would get a micro-finance loan and operate fairly independently.  When I had difficulty getting in touch with MFI to help with a pilot, it made my consider alternatives which may be even better.  My revised concept is more of a franchise model, where a centralized management team would be responsible for purchasing equipment in bulk, conducting community marketing, and providing training and quality control for the kiosk operators.  Rather than paying interest to an MFI, they would instead make payments back to the company that would be used to pay the overhead costs.

Kitale interviews

Kitale interviews

I see multiple advantages to the franchise model.  If kiosk owners all worked independently, nobody’s profit would be large enough to invest in things like marketing.  Together, they can raise awareness that benefits the whole kiosk network and the community in general.  Further, most kiosk owners don’t have the business training to properly perform activities like marketing, process improvements, and new product development.  They also don’t have enough power as individuals to get advantageous terms for funding and purchasing.  A centralized management structure can also help ensure that kiosk operators don’t run scams and sell untreated water through random water testing and process audits.  Lastly, instead of leaking a relatively large percentage of the profits to an MFI, it is  reinvested in the business which promotes growth. Obviously not every person has the skill set and motivation to be the CEO of a company, but in Kenya that is often your only choice if you want to work.  This model properly aligns different skill sets with the work that needs to be done.

Women getting water in Kitale slum

Women getting water in Kitale slum

There are a few distinct disadvantages of the franchise model compared to operating independently.  The largest by far is the involvement of the Kenyan government.  It’s relatively easy to sell fruit (or water) out of your home or in a small individual kiosk.  When you’re talking about a larger company, suddenly you have to factor in government approvals and “fees”.  The second problem is that the margins in this business are necessarily slim, and therefore a large network of kiosks must be established before the overhead costs of management salaries can be supported.  Even paying for just one Kenyan manager, which is what I would anticipate in the early stages, would be nearly impossible without initial subsidies.  The third problem is regarding capital.  We would need some.  For the model to have any chance at success, initial capital will likely have to come in the form of donations since there wouldn’t be enough profit to cover overhead expenses plus principle and interest payments.  Fortunately I don’t think the business would need a huge amount to get off the ground.  It depends largely on the size of the community and how many kiosk partners we take on initially.  My estimates show a cost of about $120 per vendor for equipment, $2,400 for the manager’s annual salary, plus unexpected costs such as government fees and other random start-up expenses.  I’m sure there are other costs I haven’t yet thought of as well.

Steve Mumbwani

Steve Mumbwani

I’m very happy to have met a potential candidate to serve as the manager of the clean water kiosk franchise.  Steve Mumbwani is one of several college students that has been interning here at Common Ground with a focus on community development.  After Steve finished high school, he worked for six years to save up enough money to put himself through college.  I’ve found him to be charismatic, intelligent, and a strong leader.  Steve was one of my interpreters in the field interviews, and it was always fun to watch him convince people on the need for clean water after the interviews were completed.  On multiple occasions, people that previously had never treated their water asked if they could buy a filter right then and there after speaking with Steve.

Stay tuned for further updates as we hash out the kiosk model.  As always, I welcome your feedback and suggestions.

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We were walking through the village where I’m staying last night and came across the stream where many locals get their drinking water.  As you can see in the pictures below, the stream contains a makeshift dam with a pipe in it that acts as a faucet.  This is known as an “improved” water source because in theory it prevents animals and people from contaminating the water.  However, as we stopped to look at the stream, we noticed several frogs (along with quite a few bugs) happily swimming in the water.  Not more than two minutes later did a little boy come by to take water from that stream.  Not that I had any doubts about why this program was necessary before, but times like this really reinforce how truly important it is.

Frogs in the drinking water

Frogs in the drinking water

Frogs in the drinking water

Frogs in the drinking water

Boy getting drinking water in Kenya

Boy getting drinking water in Kenya

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Trying to craft an advertising strategy has been an interesting experience in Kenya.  The marketing channels are far more limited than in the US.  E-mail, direct mail, search engine marketing, magazine ads, and event sponsorship are all unavailable.  Television ads are both prohibitively expensive and not terribly useful to reach a large population that doesn’t own a television (or certainly doesn’t watch it as much as Americans).  After spending a lot of time observing what works in Kenya, it seems one of our best options is plastering the area with signs.

We’ll likely use a combination of large road side signs placed on the main road, along with hundreds of small signs that we’ll provide to shops that sell our filters.  Here are some mock ups of potential road side signs.  If they seem very simplistic, it’s because they are.  Advertising here is generally very basic and to the point.  In fact, the most common way to produce a sign around Kiminini / Kitale is to have it painted by hand.

Road side sign 1

Road side sign 1

Of course, like all marketing, a single channel is not nearly as effective as an integrated multi-channel campaign, so these signs will reinforce the messages we’re promoting through live market demonstrations, community group presentations, educational fliers, and more.

Road side sign 2

Road side sign 2

Road side sign 3

Road side sign 3

Road side sign 4

Road side sign 4

Road side sign 5

Road side sign 5

Road side sign 6

Road side sign 6

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The interviews are just about done.  The competitive research is complete, as is an assessment of viable marketing and distribution options.  After several weeks in Africa and many weeks of research ahead of time, I’ve put together a 2.5 page document outlining the key findings and recommendations for the water filter marketing strategy.  I’ve previously posted several key findings and won’t repeat them now.  Instead, I’ll just include an excerpt of the recommendations.  If you’d like to see the full document, just let me know and I’ll be more than happy to send it your way.  I’d love to hear your comments on the recommendations below.  Tomorrow I’ll post the sample road side signs.  Also note that new pictures are available through the Flickr link on the right.

Key Recommendations

Promotion – Overall the biggest barrier to mass adoption will be lack of awareness, which can be overcome with continuous marketing efforts

1. Traditional advertising

  • Roadside signs
  • In-store signs (similar to Safaricom’s “Top up here”)
  • Flyers / brochures
  • Joshua’s radio program

2. Community presentation

  • Community / Women’s groups
  • Churches
  • Schools

3. Market demonstrations (live performances / demos)

  • Kiminini Market
  • Kitale

Distribution – A broad distribution network is required to reach a relatively disbursed population, especially given the need to pay in installment

  1. Dukas in Kiminini, Kitale, and in villages will likely be the primary distribution channel given the quantity of dukas and their ability to sell in installments given their personal relationship with customers
  2. Direct sales – We can hire and train commission-based salespeople to sell the filters directly to individuals.  These people can also give community group presentations and market demonstrations.
  3. Allow doctors and health offices to sell the filters.  In addition, if allowed by law, it would be great to check with the medical community to see where cases of typhoid are being reported so we can quickly target those communities (legitimate fear of typhoid is a huge and valid motivator)
  4. KCP could sell directly, but I recommend against undercutting the market on price.  We can set the price we would like to see in the market, but undercutting dukas jeopardizes those relationships and will drastically reduce coverage.
  5. Community groups can help members purchase filters in two ways
    1. Groups can establish a filter merry-go-round fund where x members contribute Price/x shillings every 2-4 weeks to purchase a filter for one member.  The process is repeated until all members have a filter.
    2. KCP can sell filters to the community group either for cash or on credit, and the group can sell to its members using whatever terms they prefer.  Selling to a community group on credit is less risk for KCP due to the social pressure to repay, potential joint liability, and greater ability to find and repossess filters from people who default.

Price

  1. We should sell the filters at the lowest price that allows KCP to operate at a minimum of break even plus profit used to invest in plant maintenance, financial reserves, and fair employee compensation.
  2. If KCP sells directly to individuals, we can set a fair price but should not undercut the 10-15% markup required by our distribution partners.  The 10-15% amount was obtained from Khetia’s (largest store in Kitale) staff, but should be validated with the duka network.
  3. It will be critical for us to be able to advertise that the filters are available for purchase in installments.  As such, dukas selling the filter should be told of this expectation, and we should consider not using dukas who refuse these terms.  Exceptions should be made for larger stores like Khetia’s and Subiri supermarket.

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