Project Flora – Willingness to pay Study Prepared for AED/GSCP January 2006 Final Report

Outline Background The brief Objectives The findings Contraceptive use history Purchase Intention Price Trade Off Demographics Media Habits Summary of findings and conclusions Methodology

Summary of findings

The Secure User  Results of the study indicates that Secure users are women mainly in the years bracket peaking with those at years.  Just under 50% are married with children and a third are single.  Secure users are quite well educated, compared to the country’s norm, with only 18% of them without at least some secondary education.

Usage of oral contraceptives and Secure  47% of respondents have been using OC’s for between 1-3years. 19% for 4-6 years and 31% for less than a year.  All the respondents who have used oral contraceptives less than a year were Secure users.  Of the 47.2% respondents who have been using oral contraceptives between 1-3 years, 79% have been Secure users for the whole period.  19% of the respondents have been using oral contraceptives between 4-6 years. Of this number 44% have been Secure users for the whole period.

Type of Family Planning Methods used before and in addition to Secure  3 out of every 5 users interviewed acknowledged having used a particular type of FPM before switching to Secure. However only 13% of the users interviewed are still using another other type of FPM in addition to Secure  The male condom was the most widely used FPM before and in addition to Secure.  This was followed by the female condom and injectables.  However in the rural areas the most widely favored FPM used before switching to Secure was the injectables (Bechem-33.3%, Dodowa-29.8%).

Methods used in preventing STD or HIV/AIDS  Overall, only 33% of the respondents use methods for the prevention of STD or HIV/AIDS. This may be explained by the fact that about 50% of respondents are married and may not see a need for STD protection.  Users in Kumasi (85%) came tops as those who employ nothing in the prevention of STD or HIV/AIDS. This was followed by respondents in Bechem, Dodowa and Accra.  Majority (73%) of the respondents who use STD/HIV/AIDS preventive methods use the male condom. This was followed by the use of the female condom by 25% of the respondents. Across all the centres the male condom emerged as the most widely used method in preventing STD or HIV/AIDS.

Secure cycles bought at a time  Overall 2 out of 3 respondents usually bought three (3) cycles of Secure at a time. Respondents who bought one (1) cycle were 23.3% of the total sample, followed by 12.4% who bought two (2) cycles at a time.  A greater majority(83%) of the respondents in Accra bought three cycles at a time. This was closely followed by Dodowa (62.5%), Kumasi (53%) and Bechem (43%).  Bechem had the highest number of respondents buying only one cycle at a time. Kumasi and Dodowa followed, with respondents in Accra being the lowest group of users who buy a cycle of Secure at a time.

Ex-outlet price range of Secure  The price at which a packet of Secure (three cycles) is sold ranges between ¢2000 – ¢6000. The maximum price being paid by respondents in Accra, Kumasi and Dodowa is ¢6000, while respondents in Bechem are paying ¢4500.  The average price at which a packet (of 3 cycles) of Secure is currently bought is ¢4800. On the average, respondents in Accra, Kumasi and Dodowa are buying three cycles (packet) of Secure between ¢4200- ¢4800, whilst respondents in Bechem are paying an average of ¢3176 for a packet of Secure.  For two cycles of Secure the price range is between ¢2000-¢4000. Respondents in Accra, Kumasi and Dodowa pay a maximum of ¢4000 for two(2) cycles of Secure. Respondents in Bechem however pay a maximum of ¢3000 for two(2) cycles of Secure.

Ex-outlet price range of Secure  On the average, two (2) cycles of Secure is being bought at a price of ¢2462 in Bechem, whilst the average price for two cycles of Secure ranges between ¢3100-¢3750 in Accra, Kumasi and Dodowa.  A cycle of Secure is being bought between ¢1000-¢2500. In Accra a cycle of Secure is bought for a minimum of ¢1500.  In Kumasi, a cycle of Secure is being bought at a maximum price of ¢2500, whilst in Accra a cycle is being bought at ¢2000. Users are paying ¢1500 and ¢2000 for a cycle of Secure in Bechem and Dodowa respectively.

Reasons for using oral contraceptives and Secure  For oral contraceptives in general, the main reason for using them was because it is very effective in preventing pregnancy. This reason was ranked as the second main reason for using Secure.  Secure’s affordability and it being less expensive compared to the other brands were mentioned as the main reasons for patronizing the brand.  The brand’s reliability and trustworthiness were mentioned as third main reasons for patronage (13.4%).  Secure’s availability was mentioned by 11% of respondents as one of the main reasons for patronage of the brand.  Other reasons for using Secure was because it is very comfortable to use(4%) and it helps regulate menstrual cycle (7%)

Purchase intentions at different price points  At the price of ¢2000 per cycle, 96.5% of respondents have a positive intention of buying Secure. As the price increases to ¢3000, demand drops to 83% and further down to 63% at a price of ¢4000. This indicates that as the price of Secure is increased demand of the product gradually falls.  All respondents in Bechem would definitely buy the brand at the price of ¢2000 per cycle. This is followed by Accra 91% of respondents, 84% in Dodowa and 70% in Kumasi.  At a price of ¢3000 per cycle demand for the brand at all the centers falls. However 81% of respondents in Bechem would definitely buy the brand. 67% of the users in Accra would definitely buy the brand at this price point whilst 75% and 40% would definitely buy the brand in Dodowa and Kumasi respectively.

Purchase intentions at different price points  At the price point of ¢4000 per cycle only a slight majority (63%) would definitely/probably buy the brand. 26% would definitely/probably not buy the brand, whilst 11% are indecisive about it  In Accra at this price point, a majority 71% of respondents have positive intentions of buying the brand. 73% of respondents in Dodowa also have positive intentions of buying the brand. This is followed by 65% and 60% exhibiting positive intentions of buying in Kumasi and Dodowa respectively.

Price per cycle at which users will abandon brand  At the price point of ¢2500, (7%) of consumers will be lost to competing brands or alternative methods. 13% of consumers will abandon the brand at the price of ¢3000  Rate at which the consumers abandon the brand continues to rise sharply as the price is increased. 36% and 53% consumers abandon the brand at the price point of ¢4000 and ¢5000 respectively.  The rate at which consumers start abandoning the brand immediately a new price is mentioned, means at a price point of ¢6000, patronage of the brand will be from only the 40% of core loyal users.  Consumers from Kumasi will abandon the brand at a faster rate. This is followed by consumers from Bechem, Dodowa and Accra.

Price per cycle at which users will abandon brand  Core loyals remaining at a price point of ¢6000 will be 21% in Kumasi, whilst loyals in Accra will be 53%.  At the price point of ¢2000, overall customers retained will be 96%. Retention rates drops to 87% at a price point of ¢3000, 64% at price point ¢4000 and 40% at a price of ¢6000.  These figures coincides with intention to purchase at ¢2000 which stood at 96%, ¢3000 at 83% and ¢4000 at 62%.

Alternative anti-pregnancy methods to be adopted  Almost half (49.8%) of the respondents indicated that they would employ the use of the male condom as an alternative anti-pregnancy method if they can no longer afford Secure.  This is followed by 13% who would make partners use the withdrawal method.  9% will opt for the female condom and 8% will go for injectables.  5% of the respondents indicated that they will go for a cheaper pill

Demographic profile of Secure users  Slight majority (56%) of the respondents are in the age group years. 18% are aged between years and 12% between the age years.  49% of them are married with children whilst 33% of the respondents are single. Co-habiting partners make up 10% of the sample.  87% of the users have had some form of formal education. 23% of the users had either completed/were in university or polytechnic. 29% had completed secondary education (SSS). 18% and 10% have either had some (JSS) education and vocational/technical education respectively.  With regards to occupation 38% are traders or artisans, 19% are students and 18% of the respondents comprises lecturers or self employed business people.

Demographic profile of Secure users  Almost all 94% of the users of Secure patronise religious activities. 79% enjoy local movies, 78% attend marriage and engagements ceremonies and 67% attend funerals.  16% of the consumers go for a walk or enjoy jogging. This indicates the increasing interest in fitness activities by women.

Sources of information  The most effective medium of communication to respondents in all the centres will be through TV (50%) and Radio (45%).  Friends/Relatives are also an effective medium of getting information out on new products, health related products and current affairs.  Overall, 29% of the users get information on health related products from chemical shop sellers/pharmacists

Background

Studies have shown that the commercial oral contraceptive (OC) market is small, between 600,000 and 800,000 cycles per annum. Price points range between 25,000 cedis and 45,000 cedis per cycle and is said to contribute only about 10% to 15% of all oral contraceptives used in Ghana. Secure which was introduced into the Ghanaian market under a USAID funded social marketing program has the largest share of approximately 70% with 6 million cycles per annum, mainly due to its high subsidy and availability in private outlets A segmentation study conducted in 2005, has indicated that a share of the current Secure users can afford to pay a higher price for Secure. To reduce the level of donor subsidy to this product, GSCP is now planning to segment the OC market by adjusting the prices for Secure and introducing one new product.

The objectives The survey sought to provide answers to the following;  Ascertain what consumers are currently paying for Secure  Test three hypothetical price increases  At what price point will the Secure user abandon the brand.  What will the user do if they can no longer purchase Secure  Estimate the demand at the new price

Methodology

 A quantitative research method using elements of the Brand Price Trade Off (BPTO) and Price Sensitivity Measure (PSM) was employed in collecting data for this study. Study location The study was conducted in two regions and four locations.  Greater Accra- Accra and Dodowa  Ashanti – Kumasi  Brong Ahafo - Bechem Sample structure Women in the reproductive age group of using Secure comprised of  A total of 515 respondents were interviewed in all the locations.  70% of interviews from the outlets in the urban locations  30% of interviews from outlets in the rural locations Methodology and Sample Design

Intercept  Maximum of 4 respondents were intercepted per outlet In home visits  Respondents were visited in the homes  Method adopted on the fourth day Sample URBANRURAL TOTAL ACCRAKUMASIDODOWABECHEM Target Achieved

The findings Purchase Intention Contraceptive use history Price Trade Off Demographics Media Habits

Contraceptive Use History

Usage of oral contraceptive & Secure Q1& 2 Base % of the 47.2% OC users have been using Secure for 1-3 years All OC users who have been using Secure less than a year are Secure users 44% of the 19% OC users have been using Secure for 4-6 years SECURE 44% 45% of the 2.1% OC users have been using Secure for 7-9 years

Type of FPM used before and in addition to Secure Q3 & 3a 58% of respondents acknowledged using other types of FPM before switching to Secure 13% of respondents acknowledged using other types of FPM in addition to Secure Base Before switching 298 (58%) Used in addition 65 (13%)

Methods used in preventing STD or HIV/AIDS Q5 & 5a 33% of the respondents acknowledge the use of FPM’s in the prevention of STD or HIV/AIDS Base Usage of methods in preventing STD or HIV/AIDS 172 (33%)

Secure cycles bought at a time - Location Q6 Base: 515

Q7 Base: 120 Ex-outlet price range of one cycle of Secure

Q7 Base: 64 Ex-outlet price range of two cycles of Secure

Q7 Base: 331 Ex-outlet price range of three cycles of Secure

Main reasons for using oral contraception and Secure Q8 & 9 21%indicated that the main reason for using Secure was because it not expensive/ affordable 23.1% indicated that the main reason for using oral contraceptives was because of its effectiveness in pregnancy prevention Base:515

Q8 & 9 Other reasons for using oral contraception and Secure Base Secure: 367 OC: 234

Purchase Intention

Price – 2000 per cycle/6000 per pack Base:515

Price – 2000 per cycle/6000 per pack Base:515

Price – 3000 per cycle/9000 per pack Base:501

Price – 3000 per cycle/9000 per pack Base:501

Price – 4000 per cycle/12000 per pack Base:450

Price – 4000 per cycle/12000 per pack Base:450

Summary of Purchase intentions at different price points

Price Trade Off

Price per cycle at which users will abandon brand Percentage of consumers retained as price increases 7% of consumers will be lost at a price increase to ¢ % of consumers will be lost at a price increase to ¢3,000 36% lost at ¢4,000 53% lost at ¢5,000 Base:515

Price per cycle at which users will abandon brand Base:515

Consumer retention (price trade off) compared to intention to purchase at different price points

Alternative anti-pregnancy methods to be adopted Q14 Base:301

Demographics

Demographic profile of Secure users Base:515 Q16, 17,18

Demographic profile of Secure users Base:515 Q16, 17,18

Demographic profile of Secure users (Marital Status) Q16 Base:515

Demographic profile of Secure users (Occupation) Q17 Base:515

Demographic profile of Secure users (Education) Q18 Base:515

Demographic profile of Secure users (Income) Q19 Base:515

Demographic profile of Secure users (Income) Q19 Base:515

Demographic profile of Secure users (Age) Q20 Base:515

Lifestyle

Lifestyle of Secure users Base: 515 Q31

Lifestyle of Secure users Base:515 Q31

Media Habits

Sources of information on current affairs Q32 Base:515

Q33 Base:515 Sources of information on new products

Q34 Base:515 Sources of information on new health related products

Most effective medium of communication Q35 Base:515