Microentrepreneurs try to sell new water treatment product in rural India

Distributing and selling products in rural India is difficult for any company: distances between villages are great, the retail sector—when it exists—is unorganized and diffuse, and consumers are generally out of reach of mainstream distribution channels. For these reasons, companies like Colgate-Palmolive, H.J. Heinz, and Eveready Battery Company, Inc. have initiated microdistribution models in which products are distributed and sold door-to-door by trained salespeople who are paid a commission for each sale. As a popular model for India’s market leaders in the consumer products category, PATH sought to test the model with a smaller market player and a new product.

Navigating the market as a new player

Medentech is a small company based in Ireland with a lean but expanding field staff. For over 25 years, it has sold its water treatment products to bulk procurement agencies like UNICEF for emergency response and is currently expanding its direct consumer sales market with its inexpensive water-purification tablet product, Aquatabs. Without a large field staff in India, Medentech hired a leading emerging-markets consulting firm, MART, to recruit, train, and manage a team of eight bicycle entrepreneurs who served as a mobile sales and marketing force in Pratapgarh, Uttar Pradesh (population 410,000). Each salesman covered a wide territory of 20 to 30 villages each, traveling by bicycle up to 20km from home to the target village. Sales took place door-to-door and at village markets (haats), and entrepreneurs were encouraged to enlist the help of key local opinion leaders including village leaders, auxiliary nurse midwives, and Anganwadi workers* to assist with prospecting and group meetings. Direct sales by bicycle entrepreneurs were supplemented by additional marketing and promotion efforts, including radio ads, video-on-wheels promotional campaigns, free-giveaways, and street theater.

Results

Levels of Aquatabs use remained negligibly small over the course of the pilot, indicating that while the intervention increased trial of Aquatabs from zero to 2.7 percent, it had little effect on long-term uptake or regular use. The primary reasons people cited for not trying the product related to a perceived lack of need for treatment of water or a lack of awareness of or access to the product.

Projections based on current sales and expenses indicated that implementing the model on a broader scale would be financially unsustainable, as Medentech would be unable to recoup investment in operational expenses within five years.

Key learnings

Although the model fell short of expectations, it yielded rich learning. Following are a few key highlights we think may be useful for other companies or organizations considering a direct sales approach, particularly when offering a new product to a new market.

• Pilot studies require constant iteration and real-time adjustment. A more hands-on approach with real-time monitoring is critical for partners to make better decisions more quickly about necessary adjustments or iterations to the model.
• Key opinion leaders have strong influence. Salesmen were most efficient when selling in a group environment organized by a local opinion leader. Combined with the video-on-wheels campaign, group sales explained 68 percent of repeat customers, thus contributing significantly to consistent use.
• Ongoing training and sales support are critical. Since direct sales were key to this approach, additional training, guidance, monitoring tools, and mentoring support would have gone a long way toward increasing the productivity and morale of bicycle entrepreneurs.
• What works for market leaders may not work for market newcomers. When market leaders use the bicycle entrepreneur model in rural India, they come with a familiar brand and often a range of product offerings. With no brand recognition in-country and only one product to sell, Aquatabs bicycle entrepreneurs were at a distinct disadvantage.
• Water storage habits can impact product relevance. A midline qualitative survey revealed that many households in this part of India do not store their drinking water for daily use, as they are able to easily collect for immediate use. This meant that the practice of collecting water and waiting 30 minutes for treatment was out of the norm for many households. Stored water was also negatively perceived in terms of freshness, temperature, and taste. Not surprisingly, water storage habits and perceptions played an important role in low rates of trial and uptake of Aquatabs in the pilot area.

Our goal in supporting this pilot was to evaluate the potential of the bicycle-entrepreneur sales model when applied to a new water treatment product and to transfer learnings to other projects and partners. Although the model did not work in this area with this product, it did generate valuable evidence that PATH is actively disseminating and incorporating in other pilots. PATH extends its gratitude to Medentech and MART for their transparency and frank sharing of learning with the global community. If anything, this pilot highlights the challenges, costs, barriers, and risks companies face when introducing new products in new areas. By sharing this learning broadly, other companies and organizations can make more informed decisions, thus lowering some of the risks involved in entering new and unexplored markets.

Further findings from the bicycle model are summarized in a project brief.

*Anganwadi workers are local women who interface between the community and public health system.

Photo: PATH.