Supply Chain Analysis for Rural Sanitation Products and Services in Lao pdr



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Marketing and sales promotion


Almost all construction material suppliers and concrete producers interviewed have a passive sales approach. The research team could not find any proactive identification and development of potential customers.

Especially in the provincial capital cities, some retailers carry thick, glossy color brochures, including for bathroom products, from Thai suppliers, that are available for customers to peruse. However these brochures target high-end consumers, not the rural poor.39 Besides this, there is no specific marketing activity to promote the materials. Thai suppliers of building materials are more proactive, traveling every year to their major Lao customers to promote their products.

Lao PDR supply chain actors do very little marketing of their businesses, relying almost solely on word of mouth.40 There are some signs displayed at their premises, provided by manufacturers of materials, but very little or none for sanitation products. Especially in rural districts, where there are very few shops, no specific marketing strategy is provided because there is no necessity to promote products there.

Most suppliers verbally introduce and explain the price, quality and appearance of items to the buyer in the shop. However, there is not much introduction on other materials such as PVC pipe, cement, zinc, steel, etc. as they are commonly well known by the buyers. Marketing is based primarily on word of mouth as well as referral from previous customers.



One construction material supplier promotes itself with t-shirts

“Enterprises make very little effort to market sanitation solutions or to improve coordination, exert quality control, or reduce costs within the supply chain. Actors that have the resources to address this challenge do not see sanitation as an important part of their market, and the enterprises closest to the market are very small and constrained in geographic reach. Few of these enterprises specialize in sanitation services, and they find it hard to signal any unique quality of service outside of the immediate vicinity where reputation is attested to by word of mouth” (WSP 2014).

Business owners did state that thanks to promotion of sanitation programs, more and more communities are becoming more aware of sanitation. An indirect promotion of latrine related materials is achieved through the spread of sanitation programs by government officials, DPs such as WSP, UNICEF, Plan International, SNV, Oxfam and others that aim to increase the awareness in the local community of sanitation and hygiene.

Overall, 10% of construction material suppliers have now or had in the past a marketing plan. The percentage is higher for concrete producers where 27% of the businesses surveyed reply positively. These percentages vary significantly from region to region, with marketing plans more prevalent in the Central region than the rest of the country (32% for construction material suppliers and 42% for concrete producers). Suppliers in the South did not report any marketing related activities.

Table 35: Business or Marketing Plan – Positive Respondents (% of total) (n=68 and 37)



Region – Province

Do you have/have you ever done any of these types of plans?

Construction material suppliers

Concrete producers

Business Plan

Marketing Plan

Business Plan

Marketing Plan

Northern

70.0%

5%

50%

17%

Bokeo

90.9%

9%

50%

25%

Luangnamtha

44.4%

0%

50%

0%

Central

57.9%

32%

67%

42%

Borikhamxay

66.7%

22%

60%

20%

Savannakhet

50.0%

40%

71%

57%

Southern

10.3%

0%

26%

21%

Attapeu

8.3%

0%

33%

33%

Salavan

10.0%

0%

33%

33%

Sekong

14.3%

0%

14%

0%

Total sample

41.2%

10%

43%

27%

Examples of marketing initiatives for concrete producers include: a closer collaboration with masons, making T-shirts and giving them to customers as gift, distributing brochures in other villages especially at the marketplace.

Construction material suppliers’ initiatives include opening branches in remote area as well as focusing on development projects (targeting NGOs and governments).

A bigger percentage of respondents in both the categories have or had a business plan (mostly meaning plan to expand the shop or to sell more products): 41% of construction materials suppliers and 43% of concrete producers. Again, there is a huge variance in the three different regions, where Northern (70% for suppliers and 50% of concrete producers) and Central (58% and 67%) businesses are more likely to have expansion plan than the Southern ones (10% and 26% respectively).

Construction materials suppliers mostly want to expand their shops and/or products offerings. Two even said they wanted to expand into concrete producing. Concrete producers plan to expand production (more rings, more product types), and two said they would like to also sell construction materials.


      1. Sales agents


Three material suppliers (less than 5%) reported that they used sales agents. No concrete producers reported using sales agents or paying others a commission. This low prevalence of sales agents and paying a commission is not surprising given the passive nature of the businesses. Upstream, Lao Cement has sales agents in major provinces.


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