PATH’s segmentation research provides insights into low-income HWTS market

Last October, PATH disseminated the results of two major market segmentation studies to public- and private-sector colleagues in Vietnam and Cambodia. Our goal with these studies is to help our partners and colleagues target their efforts more efficiently towards segments of the population that share similar characteristics. Each of the two studies, conducted by IMS Health, reached out to roughly 1,000 households to identify market patterns, preferences, beliefs, and behavior related to household water treatment and safe storage (HWTS) solutions. Not only did the findings provide actionable insight for two HWTS markets, the ensuing discussion with partners helped each sector better understand their own market segments, who to target, how to find them, and what messages to offer. The results have been illuminating enough to inspire PATH to initiate a similar market segmentation study in Africa.

Notable insights

In each country, the studies describe five distinct market segments and provide a host of data that partners can access using an interactive segmentation tool developed by PATH and IMS. Based on the data, PATH has identified a number of key insights that are influencing future pilots or providing ample opportunities for discussion and negotiation with colleagues. Following are just a few examples of such insights.

Treatment behavior. In both countries, most respondents claimed to treat their water (most commonly through boiling); however,approximately one-third were not treating appropriately (e.g., not bringing water to rolling boil). This discrepancy suggests opportunities for new, easier-to-use products and improved messaging around treatment behavior.

Demographics. In both countries, greater wealth, age over 40, and urban dwelling were highly correlated with water treatment; from a public health perspective, these same consumers may need less assistance in accessing clean drinking water. Segmentation helps us identify populations with both a high need for HWTS products and a relatively high probability of use, as these are good targets for private-sector partners interested in lower-income markets. Similarly, segmentation data helps nongovernmental partners identify those segments that have great need for water treatment but may require more assistance in order to access it.

Messaging. Awareness and concern about bacteria were not highly correlated with water treatment, as might be expected. Depending on the segment, households may be more motivated by messages relating to improved technology or family health.

Subsidized products. In Cambodia, nearly 60 percent of ceramic water purifiers (CWP) are given for free (often subsidized by NGOs), yet the product has achieved only 3.5 percent uptake in 10 years. Both commercial and NGO distributors of the CWP have focused on the same (relatively well off) regions, neglecting more remote populations with greater need for subsidies. By segmenting and targeting the regions more appropriately, both the commercial and NGO sector might be more successful in increasing uptake.

Trial before use. In both countries, perceptions of dissolvable water treatment solutions (e.g., chlorine tablets or drops) and the CWP were relatively negative among those who had not used the products and considerably more positive among those who had. By encouraging trial, it may be possible to increase satisfaction and therefore uptake and sustained use of available water treatment products.

Methodology

PATH’s previous segmentation work in India derived from household and market research helped us identify discrete characteristics of potential buyers of HWTS products: geography, demographics, psychological factors, and marketplace behavior.

In the IMS studies, we placed more emphasis on user attitudes and behavior. Putting user behavior at the center of our segmentation work helped us derive more “actionable” segments. For example, knowing that a household is poor or lives in a rural area does not indicate which message will trigger a motivation to treat water. Segmentation by attitudes/motivations allows an organization to create a message that speaks to that entire group of households (i.e., “treat water for family health”). Broadcasting that message in some way (e.g., billboard, radio, product packaging) might create a pull that draws the household in to purchase or use.

The segmentation studies in Vietnam and Cambodia took place over two years (2009 and 2010) beginning with qualitative interviews with 28 households in each country to provide input for the quantitative questionnaire. Next, quantitative interviews were conducted with 1,000 households to highlight the overall behaviors and needs of consumers towards HWTS and to identify discrete consumer market segments. The study concluded with supplemental qualitative supply-side interviews with 14 manufacturers, distributors, and retailers of mineral pot HWTS products in each country.

What’s next?

PATH has incorporated lessons and insights from the segmentation research to influence the location, branding, product design, distribution, sales and marketing aspects of our pilots in Cambodia and Vietnam. For example, a pilot in Cambodia will introduce a new product design of the CWP and develop a brand that targets specific market segments. This pilot will also investigate ways to increase access to the CWP through testing use of product or establishing purchasing on credit, as suggested by the research findings. All pilots in Vietnam and Cambodia will test marketing concepts and key messages based on segmentation results.

Outside of Cambodia and Vietnam, PATH is refining the study questionnaire and analytical tool to apply it in Kenya and Tanzania. To our knowledge, no previous study like this has been done in the African context, and segmentation may be more difficult in these nascent HWTS markets because people are more homogeneous in their need for, knowledge of, and access to HWTS and other consumer products. A larger sample size and tighter questionnaire will help overcome these challenges. Coupling this work with previous segmentation-related work in India, Vietnam, and Cambodia, PATH hopes to gain a clearer global perspective on how consumer segments evolve as markets mature. PATH also hopes that the approach to collecting and using segmentation data will be useful in many other countries and product categories.

Photo: PATH.