Sanitation Marketing in Rural Vietnam IDE’s Experience Quang Van Nguyen Country Director IDE | V IETNAM Brussels, July 5-7, 2010

About IDE An international NGO: Asia, Africa, Latin America Best known for disseminating low-cost appropriate products and services (treadle pumps, drip irrigation…) Market-based approach: – Treat poor people as potential customers, rather than recipients of charity  No material subsidy or handout – Use business principles to facilitate unsubsidized market systems in which the poor can participate  Project to be implemented through profitable private sector

The case ? – 2002: A DANIDA-funded sanitation project implemented by government in Vietnam, with subsidy, didn’t meet targets 2003 – mid 2006: A DANIDA-funded sanitation project implemented by IDE without subsidy – 54,000 HHs (19% poor) in 6 coastal districts, 2 provinces – (1) Rural HHs would invest in latrines when a range of low- cost options are available? (2) Promotional campaigns can influence rural HHs’ decisions to invest in latrines? 2009: WB WSP’s ‘Three-year-after-the-fact’ study done by IRC to find out about project sustainability

Conventional vs. market-based approaches Conventional ApproachesMarket-based Approaches Heavy subsidies for capital costSubsidies for market development. Full capital cost recovery from users Standardization of modelsA range of affordable options Decision making by external agencies Users decide what and how to buy Focus on infrastructure targetFocus on behavioral targets Focus on centralized service provision Focus on diversified local service provision Conventional ApproachesMarket-based Approaches Heavy subsidies for capital costSubsidies for market development. Full capital cost recovery from users Standardization of modelsA range of affordable options Decision making by external agencies Users decide what and how to buy Focus on infrastructure targetFocus on behavioral targets Focus on centralized service provision Focus on diversified local service provision

What is Sanitation Marketing Marketing: Not about selling things they don’t want, but finding what they want, then making it available Sanitation Marketing: Public investment to create poor households’ demand for improved sanitation and simultaneously catalyze private sector market- based supply of sanitation products/services to satisfy that demand at scale

Sanitation Marketing approach Paying full costs, no subsidy Building latrines for profit Private sector masons Poor households as customers SUPPLYDEMAND MARKET 1.Find out what they would want 2.Design / choose latrine options 3.Build market- based supplying capacity for private masons 4.Create demand thru marketing 5.Facilitate market transactions

Sanitation Marketing processes Perform situational analysis Perform market assessments Formulate marketable solutions Develop an advertising and promotion campaign Build local supply network of low- cost sanitation Implement promotion activities Link supply and demand Broadcast communication campaign

Supply development Select/design latrine options Select masons Train on low-cost latrine construction Train on how to do business Get endorsement from local government

Demand creation Selling dreams, not latrines – Emotional triggers, rather than functional Person-to-person communication – Local promoters (Women Union members, Community Health workers, Village Heads) “Mr. Latrine” representing “Hygiene, Civilization, and Health” Slogan: “Be an exemplary person”

Supply Mason Demand HH Household without a hygienic latrine Implementation structure District Steer. Com. Commune Steer. Com. VP Village Promoter

Rural HHs do demand and purchase latrines Private sector masons do respond to HHs’ demand Project results Under governmentUnder IDE pilot Latrine coverage increase from 16% (2003) to 46% (mid 2006) ■ 16,000 latrines (per year: ~4 times compared w/ avg previous 4 years) ■ >$1M invested by households (leverage Donor : HH = 1:2, Marketing cost : HH pay = 1:5) ■ 90 masons making $250,000 profit

WB WSP’s “3-Year-Later” study Latrine coverage sustained Rural marketing and promotion continued Supply services further developed “Spillover” effect: nearby areas

Scale-up – in progress Coastal pilot District Upland pilot Provincial Scale-up Regional Scale-up 2010 The further from peri-urban areas, the more challenging

Scale-up – challenges High degree of segmentation requiring tailored strategies and designs Limited buy-in from highest level government Limited ground level implementing capacity

Lessons learned Sanitation Marketing effectively stimulates unsubsidized demand Never underestimate the poor’s willingness to pay Sanitation Marketing could be sustainable with local promoters