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1 IREX Social Enterprise Orientation Training Gbanga, Liberia Kim Alter Virtue Ventures LLC.

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Presentation on theme: "1 IREX Social Enterprise Orientation Training Gbanga, Liberia Kim Alter Virtue Ventures LLC."— Presentation transcript:

1 1 IREX Social Enterprise Orientation Training Gbanga, Liberia Kim Alter Virtue Ventures LLC

2 Part 6: Market Research Example 2

3 3 Haiti Example Impetus for social enterprise: Poverty alleviation Greyston, “bake brownies to create jobs”

4 SK OLL CE NT RE FO R SO CIA L EN TR EP RE NE UR SHI P 4 Social Problems Many poor people Few economic opportunities in rural areas Urban flight High population of women single heads of household Low skilled/illiterate population No local market for client-made products Socio-economic situation has negative impact on children’s health, education & quality of life

5 Rural Clients Market Port au Prince Limited Local Market Bottleneck Demand Mamba Market Study Results Market Access

6 6 Design Assumptions 1.Women in rural Haiti make peanut butter 2.Demand exists for peanut butter 3.Clients source raw materials 4.Market access is a major constraint 5.Clients are entrepreneurs 6.Can be a viable business 7.Social enterprise will not impact the product or production process 8.Marketing strategy focuses on distribution and competitive promotion for “mature product”

7 7 Services: Branding Marketing Inventory management Distribution Sales Revenue: Product mark ups Marketing Social Enterprise

8 Centralized Decentralized TOLPA’s Value Chain

9 1. Clients Already Make Peanut Butter Yes, but … No standard recipe Can make only small quantities Never used technology in production Quality/consistency variable Hygiene a problem

10 2. Demand for Peanut Butter / Business viability TRUE, but... Very price sensitive / Low profit margin Lots of competition “Mature product” Undeveloped consumer taste for “natural peanut butter” product Demand-supply gaps  sales depends on constant supply  complementary product can help sell  need better product mix to secure commercial contracts and increase margins

11 3. Clients Source Raw Materials True, but… Raw materials are seasonal  storage is required for year-round production  technology needed to avoid spoilage Capital is a constraint  Cannot realize cost savings of bulk purchase Coordination/management required  increases overhead

12 4. Accessing Markets is a Constraint TRUE, clients lack… Marketing know how Transportation Knowledge of markets Sales acumen Contacts

13 5. Clients are Entrepreneurs True but…  Entrepreneurs out of necessity not choice  Would prefer a job  Risk averse  Clients lack capital & access to capital  Purchase assets  Buy bulk materials  Finance working capital

14 6. No Impact on Production/Product FALSE... Food products require stringent quality control to sell commercially  product consistency /quality / reliability  Sales volume/output Technology inputs required  increase profitability  achieve economies Inventory management  Raw materials (purchase, store, maintain)  Finished products (freshness/shelf life… ) Long time to consumer causes product to change

15 7. Implications on Marketing New product strategy  Different “perceived” benefits Introductory product  Requires educational marketing to penetrate market Need to differentiate vis-à-vis competitive positioning Additional new products are needed to cross-sell and increase margins

16 Shift in Model Entrepreneur Model  Entrepreneur focused  Impact focused  Decentralized  Entrepreneur assumes risk  Not market oriented  Clients are entrepreneurs  Threat - not viable Enterprise Model  Enterprise focused  Viability focused  Centralized  Partner assumes risk  Market oriented  Clients employees  Threat - clients become laborers

17 New SE Model Product Mix TOPLA Sales Force Entrepreneur Groups Sourcing Production Storage

18 Design Viability and social impact  May require phasing and trade-offs Realistic for client  Social criteria & role of the client in SE Understand nature of demand Based on market realities  Thoroughly test your assumptions  Know your deal breakers

19 19 Best way to learn about markets? Start selling Test market Pilots

20 20 Business Plan Structure Objectives Target Market External / internal factors Competitors/Industry Marketing Plan Operations Plan Financial Plan Human Resource Plan Financial Plan Vision Mission Contingency

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