Despite known benefits, improved technologies, renewed vigor from international donors and new high-profile supporters, the vast majority of the world’s poor have yet to fully embrace clean cook stoves.
This means that, after 30 years of effort from the donor and philanthropic community, only one third of the target market has adopted an improved cook stove, leaving approximately 1.6 billion traditional consumers of biomass without a clean stove.
This not only calls for a paradigm shift in how clean cook stoves are promoted and distributed, but also an overhaul in the strategy to improve the quality of life for this segment of the world’s population. With this in mind, a team at Deloitte surveyed what donors and philanthropic organizations are currently doing around clean stoves and made some suggestions on how it can be improved.
Why the current distribution of cook stoves is ineffective
With so much need for the product and so many recent improvements in product design, the question then became: Why are these stoves not in demand? And how can development and health organizations stimulate demand so that their benefits can be more widely realized by those who need them most?
There are many theories on why clean cook stoves have been unable to penetrate their target markets, but with consumer demand recognized as a consistent challenge, our Deloitte team examined how these products are marketed and sold.
First, up until now, the donor community has relied heavily on the health message, trying to sell cook stoves on the idea that they produce fewer carcinogens, emit less smoke and can improve the health of women who spend many hours of their day cooking over these stoves. But, as many public health experts can tell you, “good for you” doesn’t always sell, especially to the base of the pyramid living on less than $2.50 a day.
Second, one-dimensional mass marketing to low-income communities has failed to stimulate uptake of cook stoves. The base of the pyramid is a nuanced, diverse group with many different types of households, at different levels of education and different levels of income. Not appreciating these differences and, more importantly, not tailoring outreach to mirror those market dynamics might be preventing messaging from having its intended effect.
Finally, clean cook stoves are expensive. For families earning $457 a year, the World Bank’s definition of extreme poverty, a $50 cook stove is a significant portion of their annual income. In the past, development organizations and nonprofits approached this problem by subsidizing the cost of the cook stove up-front or even distributing them for free. This has led to all kinds of market-distorting issues that result from giving away, rather than selling, household goods and services.
So, how can clean cook stove promoters and donors do it better?
In order for cook stoves to be successfully adopted by the populations they intend to serve, organizations charged with distributing these products still very much need to adopt techniques used by commercially minded entrepreneurs, which is why organizations like the Shell Foundation and the Global Alliance for Clean Cookstoves are committing their resources to build capable entrepreneurs and promote innovation.
Indeed, there is much to be learned from the growing literature around social entrepreneurship and the trend toward applying for-profit business models to development problems. Monitor Inclusive Markets, part of Monitor Deloitte, have written extensively on this subject. Hystra, a consulting firm that works with social sector “pioneers,” also recently published a report, “Marketing Innovative Devices for the Base of the Pyramid,” synthesizing 10 leading practices for social entrepreneurs.
After a systematic review of consumer products that adopted innovative approaches to demand generation in base-of-pyramid markets, our team came away with the following conclusions, which apply to the bottlenecks in clean cook stove dissemination.
1. Take the time to understand the target market.
Companies selling into high-end markets do this regularly — through market segmentation, product trials, customer surveys, etc. — before introducing new products to the marketplace; there is no reason development organizations promoting cook stoves should be different. This allows cook stoves distributors to know who wants the cook stoves, what features sell best and how to nuance the initial messaging.
2. Target early adopters to build a critical mass.
Success builds on itself, especially in smaller, rural communities. If organizations are able to identify those in the community most interested in the product and sell the product through them, the product tends to spread more easily.
3. Utilize creative social marketing techniques.
Once distributors have a good understanding of the market and who’s most likely to buy in first, cook stove promoters should drive awareness by tailoring marketing to the social values of the target community. Co-branding with already trusted products, engaging community leaders, leveraging popular culture and exhibiting products so people can get the look and feel are all techniques that have driven adoption with similar products in similar markets.
4. Leverage existing, trusted distribution networks.
The way a product comes to market is tremendously important. Using a location where people go frequently or a store or community center that they trust helps build a rapport with customers. Starting from scratch is not only expensive, but creates more unknowns around a product that is already new to many.
5. Connect consumers with innovative financing options.
Clean cook stoves are expensive for most in this target market. Therefore, providing financing options at the point of sale — providing financial services in-house — has enabled similar goods and services to gain market penetration in base-of-pyramid markets. With this, donors essentially subsidize the demand side rather than the supply side.
To learn more, see our full Point of View, “Generating Demand for Clean Cookstoves in Base of Pyramid Markets.”
She Builds is a month-long conversation hosted by Devex in partnership with Chemonics, Creative Associates, JBS International as well as the Millennium Challenge Corp., United Nations Office for Project Services and U.K. Department for International Development.