169
water. If this distributor has sufficient reach, the business champion could explore
a potential collaboration. The advantage is that such an approach may reduce the
business champion’s own investment in setting up a distribution system. Also,
this can be done quite quickly and easily. The disadvantage is that there is limited
control. Therefore, it is often suggested that business champions build initial
sales themselves before involving external distributors.
• Hybrid partnerships: The second approach is to explore hybrid partnerships. The
difference from the first strategy is that hybrid partnerships focus on organizations that are not primarily focused on selling FMCGs. These could be nongovernmental organizations (NGOs), microfinance institutions (MFIs), self-help
groups (SHGs), or cooperatives. For example, an NGO that works on promoting
health messages in a BoP community might also be interested in promoting and
selling nutritious porridge. The benefit of such a hybrid partnership is that there
might be strong synergies, without any pressing business competition. The
downside is that hybrid partnerships can take quite some time to establish, and
they can be political in nature. These partnerships are not necessarily driven by
business acumen, limiting their commercial viability.
• Micro-franchise: The final strategy is the micro-franchise model, in which a
business champion works on setting up a network of individual microentrepreneurs. These micro-entrepreneurs can function as sales agents, either by
having a small shop or pushcart or going door to door. The product portfolio that
these agents sell can exclusively belong to the business owner or include other
FMCGs. Building such models requires significant investment. All the agents
need to be recruited, trained, and provided with marketing materials and stock.
After that, it requires thorough management to ensure the agents perform well.
The main advantage of this approach is that the business champion has better
control of aspects such as pricing, product placement, and more. It can take years
before the model is fully operational and has reached scale. It is often a model
that has high appeal among business champions; however, it is important to keep
these challenges in mind before adopting such an approach.
As mentioned above, GUTS Agro’s Supermom food product did not sell as fast
as we had expected. So, the business looked at a more direct distribution method
that utilized different wholesalers and increased GUTS Agro’s control over distribution. Ultimately this led to the setup of the Likie Ladies’ network, a network of
around 100 independent female sales agents that distribute GUTS Agro’s products
door to door.
Also, as part of the pineapple partnership in Benin, business champion Promo
Fruits set up a micro-franchised network of sales agents, as it wanted to have control
over the distribution and sales of its fruit juice. Additionally, it was an opportunity
to spark micro-entrepreneurship locally. It was also a good way to access firsthand
customer feedback through the agents that interacted with consumers daily. At the
same time, the model was relatively cost intensive, so Promo Fruits developed a
business plan for the distribution network to secure working capital to tackle cash
flow challenges (Box 6.6).
6 Innovating at Marketing and Distributing Nutritious Foods at the Base…
water. If this distributor has sufficient reach, the business champion could explore
a potential collaboration. The advantage is that such an approach may reduce the
business champion’s own investment in setting up a distribution system. Also,
this can be done quite quickly and easily. The disadvantage is that there is limited
control. Therefore, it is often suggested that business champions build initial
sales themselves before involving external distributors.
• Hybrid partnerships: The second approach is to explore hybrid partnerships. The
difference from the first strategy is that hybrid partnerships focus on organizations that are not primarily focused on selling FMCGs. These could be nongovernmental organizations (NGOs), microfinance institutions (MFIs), self-help
groups (SHGs), or cooperatives. For example, an NGO that works on promoting
health messages in a BoP community might also be interested in promoting and
selling nutritious porridge. The benefit of such a hybrid partnership is that there
might be strong synergies, without any pressing business competition. The
downside is that hybrid partnerships can take quite some time to establish, and
they can be political in nature. These partnerships are not necessarily driven by
business acumen, limiting their commercial viability.
• Micro-franchise: The final strategy is the micro-franchise model, in which a
business champion works on setting up a network of individual microentrepreneurs. These micro-entrepreneurs can function as sales agents, either by
having a small shop or pushcart or going door to door. The product portfolio that
these agents sell can exclusively belong to the business owner or include other
FMCGs. Building such models requires significant investment. All the agents
need to be recruited, trained, and provided with marketing materials and stock.
After that, it requires thorough management to ensure the agents perform well.
The main advantage of this approach is that the business champion has better
control of aspects such as pricing, product placement, and more. It can take years
before the model is fully operational and has reached scale. It is often a model
that has high appeal among business champions; however, it is important to keep
these challenges in mind before adopting such an approach.
As mentioned above, GUTS Agro’s Supermom food product did not sell as fast
as we had expected. So, the business looked at a more direct distribution method
that utilized different wholesalers and increased GUTS Agro’s control over distribution. Ultimately this led to the setup of the Likie Ladies’ network, a network of
around 100 independent female sales agents that distribute GUTS Agro’s products
door to door.
Also, as part of the pineapple partnership in Benin, business champion Promo
Fruits set up a micro-franchised network of sales agents, as it wanted to have control
over the distribution and sales of its fruit juice. Additionally, it was an opportunity
to spark micro-entrepreneurship locally. It was also a good way to access firsthand
customer feedback through the agents that interacted with consumers daily. At the
same time, the model was relatively cost intensive, so Promo Fruits developed a
business plan for the distribution network to secure working capital to tackle cash
flow challenges (Box 6.6).
6 Innovating at Marketing and Distributing Nutritious Foods at the Base…