WILLINGNESS TO PAY: A PRACTITIONER’S PERSPECTIVE

Alex Banful, GSMF International

BACKGROUND

OBJECTIVES FOR USING THE WTP SURVEY The original objective was to use WTP as a pricing mechanism

tool

However, when the study was ready, we used results as a Strategic Marketing Tool not just to increases prices but to;

Balance improved cost recovery vrs Increased CYPs, and

Differentiate between Protector and Panther condoms in the various market segments

Re-position brands for sustainability Move Protector & Panther towards commercial market brands

PRODUCTS

Condoms Champion Panther Protector

Oral Contraceptive Pills Secure

JUSTIFICATION FOR PRICE CHANGE

Inflation was high

Prices had stagnated for a long time

Leakage of low cost condoms (MOH) into

commercial market

Need for increased cost recovery

ACTION TAKEN

WTP conducted for Commercial Market Strategies by Bill Winfrey in 2002

Main Partners Commercial Market Strategies Research International GSMF International Ministry of Health PPAG

SURVEY DETAILS

Client intercept survey 2,670 clients were interviewed 147 outlets were sampled including;

Chemical Shops 105 [1,845 clients] Pharmacies 23 [504 clients] MOH Clinics 15 [260 clients] PPAG Clinics 4 [61 clients]

SURVEY RESULTS

WILLINGNESS TO PAY FOR 50% PRICE INCREASES

Champion - - 83.3%

(90.4% WTP for 25% increase)

Panther - - 79.1%

(49.4% WTP for 100% increase)

Protector - - 73.3%

(40% WTP for 100% increase)

Secure - - 81.6%

If price increases too much..

6.9

28.3 29.6

23.6

11.7

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Stop usingcontraceptives

altogether

Try to find acheaper brand at

establishment

Try to find acheaper source for

the same brand

Swith to differentcontraceptive

method

All otherresponses

IMPLEMENTATION

PRICE CHANGES

PRODUCT Pre-Survey Prices

Post-Survey Prices

Percentage Increase

Champion 100 120 20%

Panther 333 667 100%

Protector 375 1,000 166%

Secure 1,000 1,000 0%

Champion Condom

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Yr 2000 Yr 2001 Yr 2002 Yr 2003 Yr 2004

Champion - Quantities

Champion Revenue (Divided by ¢100)

PriceIncrement

Panther Condoms

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Yr 2000 Yr 2001 Yr 2002 Yr 2003 Yr 2004

Panther - Quanitities

Panther Revenue (Divided by ¢400)

Price Increment

Protector Condoms

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Yr 2000 Yr 2001 Yr 2002 Yr 2003 Yr 2004

Protector - Quantities

Protector Revenue (Divided by ¢300)

PriceIncrement

LESSONS LEARNT

LESSONS LEARNT

For brands that increased prices within the more acceptable limits (Champion) Sales volumes continued to increase after

prices were increased

For brands that did otherwise (Panther, Protector) Sales volumes dipped after price were

increased

CONCLUSION

By using the WTP report as a strategic marketing tool, GSMF was able to; Balance Improved cost recovery and

Increased CYP Re-position Panther and Protector condoms,

and Differentiate between Panther and Protector

condoms in the various market segments

THANK YOU