market analysis and strategy for ics psps and biomass fuel briquettes for women in energy enterprise...

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WOMEN ECONOMIC EMPOWERMENT: Women in

Energy Enterprise in Kenya project

Market Analysis and Strategy for the promotion of Improved Cook

Stoves, Solar Products and Biomass fuel briquettes in Kenya; A

Marketing Strategy for Seven Counties in Five Regions in Kenya

2016

Martin Ombima, P.O.BOX 2696 40100 Kisumu Tel +254721710323/0786710323 Email: [email protected]

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Marketing strategy for ICS, Solar Products andBiomass fuel briquettes for women owned enterprises in

Kenya, 2016

ACKNOWLEDGEMENT ................................................................................. ERROR! BOOKMARK NOT DEFINED.

LIST OF ACRONYMS .................................................................................................................................. 2

GLOSSARY ................................................................................................................................................... 3

1.0 BACKGROUND ............................................................................................................................................ 5

1.1 OBJECTIVES ...................................................................................................................................................... 6

1.2 THE APPROACH ADOPTED ................................................................................................................................... 6

1.3 HOUSEHOLD ENERGY DEMAND AND SUPPLY TRENDS IN KENYA .................................................................................... 7

1.3.1 Defining the target market for WEEK ................................................................................................... 8

1.3.2 Willingness to Pay For Improved Energy Services ................................................................................. 9

1.3.3 Population segmentation by geographic, economic and fuel use patterns .......................................... 9

1.3.4 Competition SWOT analysis ................................................................................................................ 10

1.3.5 Target market segments for WEEK ..................................................................................................... 11

2.0 TARGET MARKET SEGMENTS ANALYSIS FOR WEEK .................................................................................. 11

2.1 SEGMENT 1 KEY INSIGHTS .................................................................................................................................. 11

2.1.1 Urban and Peri-Urban Middle Class .................................................................................................... 11


2.2.1 Urban and Peri-Lower Middle Class .................................................................................................... 14


2.3.1 Urban and Peri-Low income ................................................................................................................ 16


2.4.1 Rural -Middle class .............................................................................................................................. 17


2.5.1 Rural –Lower middle class ................................................................................................................... 19

3.0 MARKETING STRATEGY FOR THE FIVE TARGET SEGMENTS BY WEEK........................................................ 21

3.1 SEGMENT 1 MARKETING STRATEGY: URBAN AND PERI-URBAN MIDDLE CLASS.............................................................. 21

3.2 SEGMENT 2 MARKETING STRATEGY: URBAN AND PERI-URBAN LOWER MIDDLE CLASS ................................................... 24

3.3 SEGMENT 3 MARKETING STRATEGY: URBAN AND PERI-URBAN LOW INCOME .............................................................. 27

3.4 SEGMENT 4 MARKETING STRATEGY: RURAL MIDDLE CLASS ...................................................................................... 30

3.5 SEGMENT 5 MARKETING STRATEGY: RURAL LOWER MIDDLE CLASS ............................................................................ 33

4.0 IMPLEMENTING THE ICS, SOLAR PRODUCTS & BIOMASS FUEL BRIQUETTES MARKETING STRATEGY ....... 36

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Kenya, 2016

List of Acronyms

BDS Business development support

CBO Community Based Organization

EIP Energy Investment Prospectus

ERC Energy Regulatory Commission of Kenya

GoK Government of Kenya

ICS Improved cook stoves

IFC International Finance corporation

kW Kilowatt

KEBS Kenya Bureau of Standards

KES Kenya shillings

LED Light Emitting Diode

LPG Liquefied petroleum gas

MAS Market Analysis and Strategy

MFI Microfinance Institution

MNO Mobile Network Operator

MoEP Ministry of Energy and Petroleum

MoU Memorandum of Understanding

MSEs Micro and small enterprises

MW Mega Watt

NGO Non-Governmental Organization

O&M Operation and Maintenance

PAYG Pay As You Go

PMSD Participatory market systems development

SP Solar Product

PSV Public service vehicle

PV Photovoltaic

SACCO Savings and Credit Co-operative

SE4ALL Sustainable Energy for All

SHS Solar Home System

VSL Village Savings and Loans

WEEK Women in Energy enterprise in Kenya project

Wp Watt Peak

WTP Willingness to pay

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Kenya, 2016

Glossary

Biomass fuel briquettes: A fuel consisting compressed block of coal dust or other combustible biomass

material such as charcoal, sawdust, wood chips, peat, or paper that can be used in biomass cook stoves and or

kindling to start a fire.

Improved cook stoves: Cook stoves are commonly called “improved” if they are more “efficient” than the

traditional cook stoves.

Solar products: SPs are defined as devices that generate energy for use by transforming solar energy.

Price elasticity of demand: Price elasticity of demand is an elasticity used to show the responsiveness of the

quantity demanded of a good or service to a change in its price. More precisely, it gives the percent change in

demand one might expect after a percent change in price.

Solar: For the purposes of this report the term “solar” refers to solar PV technology.

Stand-Alone Products: Here the term “standalone” refers to a power-generating device or system that is self-

contained and is capable of functioning in isolation. Power is therefore only provided at the point of generation,

with systems designed to be suitable for a variety of load profiles. End-users can range from individuals,

households to institutions. This value-chain is distinct in that end-users purchase and own the technology;

therefore the responsibility for financing and O&M costs lies with them.

Willingness to Pay: WTP is an economic concept, which aims to determine the amount of money a consumer is

willing to pay for the energy product, which indicates the value to the consumer for that energy product. The

consumers’ WTP is becoming increasingly popular and is one of the standard approaches that is used by market

researchers and economists to place a value on goods or services for which no market-based pricing mechanism

exists1.

Women in Energy Enterprise in Kenya: For the purpose of this MAS report these refer to women owned

MSEs that engage in the production and or distribution of ICS and or biomass fuel briquettes and distribution or

retail of PSPs.

1Koss (2001) and Gill et al. (2000)

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Kenya, 2016

Figure 1: Product Figure 2: Price

Sun King Pro - Green Light Planet & S2 - d.light PAYG - Barefoot Powapack junior

Figure 3: Promotion Figure 4: Distribution

Open air marketing campaign for briquettes PSV Transportation of cook stove liners and ICS

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Kenya, 2016

1.0 Background In 2015, the GoK MoEP in consultation with stakeholders in the Energy sector drafted the

National Energy and Petroleum policy with the overarching objective of ensuring adequate,

affordable, competitive, secure and reliable supply of energy to meet National and County

needs at least cost while protecting and conserving the natural environment. This policy has a

number of broad objectives including ensuring adequate, quality, cost effective and

affordable supply of energy to meet development needs, while protecting and conserving the

environment. The specific objectives of the Energy and petroleum policy are to: provide

sustainable quality energy services for development; utilize energy as a tool to accelerate

economic empowerment for urban and rural development; improve access to affordable

energy services; provide an enabling environment for the provision of energy services;

enhance security of supply; promote development of indigenous energy resources; and

promote energy efficiency and conservation as well as prudent environmental, health and

safety practices2.

MSEs mainly from the informal sector have greatly contributed towards the attainment of the

specific objectives of utilizing energy enterprise as a means to accelerate economic

empowerment for urban and rural development and improving access to affordable energy

services. Although women entrepreneurs have practically been at the forefront of this, very

few have attained economic empowerment as most still lack the requisite skills for business

development and market growth thus majority find themselves in the labour intensive and or

low value levels of the energy services value chains. Further still access to clean energy for

cooking and lighting by consumers in Kenya is constrained by myriad of challenges at all the

three levels of the market system; supply and demand of the energy services, the business

support services to the core market actors and an ineffective enabling environment for the

energy sector. While production of ICS and promotion of SPs and biomass fuel briquettes has

been going on for years, penetration of these energy products in households, commercial

enterprises and institutions is still very low in the country. Significant number of households

across Kenya both in the urban and rural still continues to use unclean fuels and inefficient

energy technologies such as fuel wood on inefficient three-stone-stoves and kerosene lamps

for lighting.

To complement the implementation of the GoK EIP and the attainment of SE4ALL goals for

Kenya, Practical Action Eastern Africa and Sustainable Community Development Services

(SCODE) are implementing a 3 year project, Women in Energy Enterprises in Kenya

(WEEK), which aims to strengthen women’s capacity to effectively participate in and benefit

from the energy markets as either enterprise operators or energy technology end users. The

project is employing a Participatory Market Systems Development (PMSD) approach to

develop demand and supply at primary value chain level of the 3 energy technologies; ICS,

SPs and biomass fuel briquettes, the BDS services to the core market actors and to influence

policies that provide a more enabling environment for the 3 energy markets. WEEK purposes

to directly support 730 women energy MSEs who will in turn reach 364,200 consumers

including poor women, men, children and institutions with clean, affordable and efficient

2 Draft National Energy and petroleum policy 2015

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Kenya, 2016

energy products in 5 target regions; Nairobi, Rif valley, Central, Nyanza and Western. In

developing supply at the primary value chain level, the project intends to develop the

technical and business skills of 730 women in production and distribution of the three energy

services and to develop demand; the project will undertake public awareness and aggressive

marketing campaigns targeting seven Counties namely Nairobi, Murang’a, Nyeri, Nakuru,

Kakamega, Kisumu and Siaya.

For the attainment of these project undertakings, an explicit Marketing Strategy for the 3

energy technologies in each of the 7 target Counties has been developed and adopted by the

project.

1.1 Objectives Drawing from the findings of the MAS survey and other energy sector learning, this study

identified and recommends key project interventions and energy enterprise-led undertakings

that if employed will be useful in developing and growing the markets for ICS, SPs and

biomass fuel briquettes within the target Counties of the WEEK project. This document

focuses on developing a “4Ps” Marketing strategy by extracting energy services customer

insights while refining the target market for ICS, SPs and biomass fuel briquettes. The

objectives of this assignment were to:

1. Define ICS, PSPs and biomass fuel briquettes target market, and identify and develop

detailed profiles of customer segments to be targeted by marketing efforts

2. Develop a route to market strategy basing on the 4Ps (product, price, place, promotion) for

each of the three energy technology lines in the respective local market contexts of the seven

Counties

1.2 The Approach adopted Project baseline data and basic assumptions about the target segments were validated through

qualitative field research in rural, urban, and peri-urban areas in Nairobi, Nyeri, Murang’a,

Nakuru, Kisumu, Siaya and Kakamega counties of Kenya. The research team conducted

several contextual observation studies to develop a deeper understanding of consumer

behaviour and habits around income and expenditure patterns, cooking practices, and

seasonal changes. In addition, the market assessment team employed deep dives to develop a

richer understanding of consumer need and demands, value perceptions, motivations and

fears, and dreams and aspirations in regards to cooking fuel and cook stoves and lighting.

These deep dives used interviews and observations, activity maps with flash cards, focus

group discussions, and mock market testing.

For the marketing strategy, the 4P’s – product, price, place and promotion – offer a

framework for identifying strategic marketing goals and ensuring customer needs are met.

The segment based marketing strategy developed by this study takes into account stove

design, bundling strategies, payment options, fuel availability and type, distribution and sales,

promotional opportunities, and public and private sector engagement. The marketing strategy

identifies the potential geographic reach in the seven target Counties in Kenya for

commercial sale and promotion of ICS, biomass fuel briquettes and solar lanterns, maps out

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Kenya, 2016

promotional and positioning strategies for the three energy technology lines, and proposes

specific interventions for the adoption of these strategies in the target seven counties.

1.3 Household energy demand and supply trends in Kenya The ERC report on analysis of energy consumption patterns in Kenya 2010 showed that

about 70% of the consumers use biomass while 30% use other fuels. This supports published

studies that biomass provides 70% of the energy requirements3. The study showed kerosene

to be mostly used for lighting (52%) while biomass was widely used for cooking (60%). The

survey data showed that users of charcoal and fuel wood in Nairobi have to travel on average

0.59 and 6.44 kilometres respectively to access the fuel they need. Average monthly

consumption per household was high for electricity compared to the other fuels. The energy

budget share for households differed across the regions, fuels as well as whether rural or

urban. Fuel wood had the highest energy budget share on average for both rural (11.6 %) and

urban (9.34 %) compared to the other fuels. The findings indicated that Nyanza households

utilised a larger proportion of their energy budget on charcoal compared to other urban

households. Note that the penetration of fuel wood in the rural areas was 77.2 % implying

most of the households in the rural areas use fuel wood. Connectivity to electricity in Kenya

varied greatly across regions with Nairobi having the highest connection with 53.47 % of

total households. Central was second with 42.4 % while Western was among the lowest with

connection rate of 14.7. The results indicated fuel stacking where 54% of the households used

two fuels with 2% using only one fuel type. Cost of installation was the most cited reason for

not using LPG, Electricity and Solar Energy Sources with most households classified as

lower income groups not utilizing these fuels. Analysis of fuel types in Kenya by urban and

rural areas shows that the most popular fuel types in terms of their various uses are: kerosene

(80%), followed by charcoal (60), fuel wood (55%), electricity (37%) and LPG (21%) in that

order. The usage of fuel wood, charcoal and kerosene in rural areas is higher, compared to

urban areas. However, the use of LPG and electricity in the rural areas is lower, compared to

that of urban areas. While lower prevalence of electricity use in rural areas can be attributed

to lack of connectivity, lower LPG use can be attributed to lack of access and information.

Overall, the use of renewable energy from solar, biogas and wind is very low in Kenya with

3%, 0.2% and 0.1% respectively. The usage of fuel types by various income categories

reveals that the use of Material residue, kerosene and fuel wood declines with rise in income

(higher quintiles). However, the trend for use of charcoal, electricity, biogas and solar is

reverse. The use of these fuels increase with rise in income. Given that charcoal is regarded

as ‘unclean fuel’, we would expect households to substitute it with more clean fuel as income

increases. However, the results of the study show that usage of charcoal does not change with

increase in income. The energy choice model results showed that demand for cooking fuels

such as fuel wood, charcoal, kerosene, electricity, LPG are driven by certain key factors and

vary depending on whether the household is located in rural or urban areas. The key

determinants for kerosene choice at the household were occupation, total energy expenditure,

household size, fuel wood price, education level and price of LPG. With regard to fuel wood

choice, important factors included the price of fuel wood which has a negative coefficient,

3Kituyi 2002, Kamfor 2002

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Kenya, 2016

household size and total expenditure. The key determinants of choice for use of charcoal

included household size, price of charcoal, price of fuel wood, education level, and both

formal and informal employment. The regional dummies for Central were positive implying

that a household in Central Kenya is likely to use charcoal compared to Nairobi. The choice

of electricity was determined by employment level, price of wood fuel, and education level.

1.3.1 Defining the target market for WEEK

The ERC report on analysis of energy consumption patterns in Kenya 2010 findings indicate

that different factors significantly affect the fuel choice; household size, kerosene price, fuel

wood price, charcoal price, LPG price, gender of person purchasing fuel as well as education

level. The report also reveals as the household size increases, the budget share on kerosene

declines. This could be explained by the fact that as the household size increases, the

household switches to other fuel types such as charcoal and fuel wood supporting the earlier

finding on fuel stack hypothesis. Also as the price of charcoal increases, the budget share on

LPG increases. From the analysis, urban households are more likely to increase demand for

LPG than those in rural areas. The budget share for charcoal was driven by various factors

ranging from socioeconomic, prices, education and location of households among other

factors. Demand for charcoal is inversely related to its own price. That is, as the price

increases, less of it is demanded. Other important factors in the demand for charcoal included

household size, price of LPG, as well as primary education which is inversely related to

demand. Households in urban areas were more likely to use charcoal than those in rural areas,

while Rift Valley and Western regions had negative influence on demand for charcoal.

Energy consumption pattern in Kenya portrays more of fuel stacking than fuel switching,

where households are observed to be using multiple fuels (the use of more than one or

various fuels to meet different energy demands). Fuel switching occurs when a household

opts or chooses to completely shift and use a new fuel.

From this analysis, market segments to be targeted by this marketing strategy were drawn

based on whether they are located in the urban, peri urban or rural and on income levels;

middle class -earning upwards of KES 20,410 per month, lower middle class -earning

between KES 9,319 and KES 20,409 and low income -earning less than KES 9,319 per

month.

Further investigation was conducted to refine the target market segments which yielded the

following:

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Kenya, 2016

1.3.2 Willingness to Pay for Improved Energy Services

In our market assessment sample households across the 7 Counties were asked if they are

willing to pay to meet the cost of improving the quality, reliability and efficiency of energy

products. On quality issues, households were questioned if energy is of accepted standards &

amount desired. Reliability was measured by frequency, duration, extent of energy supply

disruptions. Efficiency looked at storage capacity in relation to transmission & generation

facilities for SPs, energy saving capability for ICS and duration of burning and amount of

heat produced for biomass fuel briquettes.

From the Market assessment of the energy markets of the seven target Counties, potential

consumers with WTP for any of the three energy technologies promoted by WEEK project is

summarized as shown in the table below:

1.3.3 Population segmentation by geographic, economic and fuel use patterns

Segment Urban Peri-urban Rural

Low income Purchased charcoal

+ Kerosene

Purchased wood +

Kerosene

Free wood + Kerosene

Lower middle class Purchased charcoal

+ Electricity and

kerosene

Purchased charcoal

+ kerosene

Free wood + Electricity

and kerosene

Middle class LPG, purchased

charcoal +

Electricity

Purchased charcoal

+ Electricity and

kerosene

Purchased wood +

Electricity and kerosene

•Urban and peri-urban households that are already buying and paying for charcoal and fuel wood, and are relatively easy-to-reach (based on the presence of existing ICS and briquettes production and distribution centers)

•Urban and peri urban households that are already buying and paying for kerosene fuel for lighting and are relativel easy to reach (based on existence of PSPs retailers)

A

•Urban and peri urban households that use LPG and electricity for cooking and lighting, and are relatively easy to reach with ICS and biomas fuel briquettes marketers

•Urban and peri urban households that are already using and paying for electricity for lighting and are relatively easy to reach with PSPs (experience regular electricity outtages and existance of retailers for PSPs)

B

•Rural Households that can be reached by adding ICS & PSPs to the portfolios of existing innovative distribution models run by NGOs, women’s groups, membership organizations, VSLs and MFIs

•Rural Households that can be reached through local kiosks by adding ICS & PSPs to their range of products stocked

C

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Kenya, 2016

1.3.4 Competition SWOT analysis

WEEK

product

Competition Competition Strengths Competition

Weaknesses

Advantage in relation to

competition Upesi ICS Traditional 3 stone wood

fuel stove, traditional

charcoal cook stove,

kerosene stove

Low acquisition cost

Popular with rural/peri-

urban low income users

Inefficient in fuel burning

High wastage of heat

Emit a lot of smoke

Highly efficient in wood fuel

burning

Significant reduction on

wastage of heat

Affordable

Suitable for rural/peri-urban

low income cooking space

Kenya Ceramic

Jiko

Traditional 3 stone stove,

traditional charcoal stove,

kerosene stove


Popular with urban low

income users

Inefficient in fuel use


Emit a lot of smoke

Highly efficient in charcoal

fuel burning


wastage of heat

Affordable

Easy to light and use for urban

low income cooking space

Burn Stove ICS LPG, Electric cooker,

traditional charcoal

stove,kerosene stove

Clean burning

(LPG/Electric stove)

High aesthetics

Low acquisition

cost(traditional

charcoal,

kerosenestove)

High acquisition cost


High cost of Kerosene,

LPG refilling/electricity

bills


(traditional charcoal cook

stove)


fuel burning


wastage of heat

No refilling/ electricity costs

Easy to light and usefor urban

cooking space

High aesthetics

Environfit ICS LPG, Electric

cooker,traditional

charcoal stove, kerosene

stove

Clean burning&High

aesthetics(LPG/Electric

stove)


(traditional charcoal,

kerosene stove)



High cost of kerosene,


bill

Emit a lot of smoke

(kerosene stove)


fuel burning


wastage of heat



cooking space

High aesthetics

Ecozoom ICS LPG, Electric cooker,

traditional charcoal stove,

kerosene stove

Clean burning&High

aesthetics(LPG/Electric

stove)


(traditional charcoal,

kerosene stove)



High cost of kerosene,



fuel burning


wastage of heat



cooking space

High aesthetics

Biomass fuel

briquettes

Charcoal, firewood, LPG,

Electricity, kerosene Popular with rural/

peri urban users

(Charcoal, firewood)

Popular with

urban/peri-urban users

(Charcoal, LPG,

Electricity, kerosene)

Highly fluctuating price

(LPG, kerosene)

Seasonal shortages

(Charcoal & firewood)

Regular electricity supply

disruption/outages

Highly efficient in burning

Long burning time (compared

to charcoal/firewood)

Easy to light and use in rural &

urban cooking space

Relatively low cost

PSPs Electricity, kerosene,

candles Popular with rural/

peri urban users

(kerosene)

Increased investment by

GoK for connection to

electricity

Popular with

urban/peri urban users

in case of short time

electricity outage

(candles)

Highly fluctuating price

(kerosene, electricity)

High initial investment

cost (electricity)

Emit a lot of smoke

(kerosene)

Poor quality light (candle,

kerosene)

Accidental fire hazard

(candle, kerosene)

High quality light

Easy to operate and use in

rural & (peri)urban spaces

Highly portable

Affordable

Nil O&M costs

Non-hazard (no accidental

fire)

Clean fuel for lighting

PSP may bear phone charging

capability

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Kenya, 2016

1.3.5 Target market segments for WEEK

Segment Urban Peri urban Rural

Middle class Segment 1 Segment 4

Lower middle class Segment 2 Segment 5

Low income Segment 3 Non target

For the purpose of this MAS the ‘rural low income’ consumers are considered non-target

segment because of their high dependency on freely available biomass fuel during most of the

year, they are also remotely located thus hard to reach by the marketing and sales force for

SPs which implies a higher retail prices to be charged for this market segment whereas their

disposable income and subsequently purchasing power is significantly low.

The middle class, represented in Segments 1 and 4, are part-time users of upmarket stoves for

cooking times less than 30 minutes and electricity for lighting. Further research determined

that the middle class in both rural and peri-urban areas continue to use traditional cook

stoves. While the middle class living in peri-urban areas may be able to afford upmarket

cooking options, investigation revealed that many households in this segment continue to use

traditional biomass cook stoves on a part-time basis for cooking at least one main meal a day.

2.0 Target Market segments analysis for WEEK

2.1 Segment 1 key insights

2.1.1 Urban and Peri-Urban Middle Class

Size14

Dem

og

rap

hic

s Average earnings upward of KES 20,410 per month

Regular source of income from formal employment

Average of 5 member household

Household either male or female headed

Educated to college level

Connected to electricity

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Kenya, 2016

Co

ok

sto

ves

/

Lig

hti

ng

fu

el/

Co

ok

ing

fu

el

Use different fuels for different uses

Electricity or LPG for short cooking times (breakfast, snacks, heating up food, baby food etc.)

Experience frequent electric power outages

Use biomass charcoal to cook at least one meal per day

Will not stop using biomass because of high fuel costs for kerosene

Purchase biomass charcoal, wood fuel from vendors

Indoor built-in kitchens or individual standalone kitchens with shelter

Living in rented houses are not allowed to cook using biomass fuel wood cookstove inside the built-in

kitchen

Pro

file

Living in areas with easy access to local market areas

Well informed on market trends

Have bank accounts and small investments in a local bank but not always familiar with MFI loans

Experience buying consumer products using loan and instalments

Highly influenced by multimedia marketing

Own electronic appliances such as TVs, refrigerator, smart phones and computers with access to internet

Subscribe to newspapers, magazines and online social media

Display high willingness to invest on premium and durable products

Aspire to improve lifestyle and social status

Most cook indoors either in their built-in kitchen or sheltered external kitchen

Most own and use either biomass stove or electric stove in combination with LPG stove

for daily cooking because of the comfort, convenience and safety offered by these

stoves while cooking indoors.

Electricity for lighting and back up candles or solar lanterns when electricity goes off

Some of them use charcoal cook stove to cook at least one main meal for the family

everyday while many others use charcoal stove occasionally to cook traditional food.

Biomass cook stoves are usually used in their external kitchen space.

Cooking indoors with more privacy is associated with high social and economic status

in urban areas.

Aspire to be able to afford LPG for daily use or cook with piped gas connection when

available.

High end imported rice cooker, electric kettle, microwave oven, LPG stove, blenders,

refrigerator, water filter are common home appliances in these households.

Usually show keen interest to buy or use proven new technologies, products or brands

that will improve their lifestyle (convenient and comfortable) and social status.

Pro

duct

Willingly spend KES 5,000 to 30,000 to buy kitchen appliances (rice cooker, LPG,

water filter, microwave oven, blender, electric kettle, and refrigerator) that help

make their life more comfortable and convenient.

Have sufficient disposable income to invest on a value for money products.

Usually buy home appliances costing more than KES 15,000 using loans or

instalment options from retailers.

Rent, children’s education, entertainment and healthcare are the main expenses for

these families.

Women sometimes contribute to family income through part time jobs and

participate in decision making while purchasing expensive products for their home.

Price

Women of the household usually purchase daily grocery from neighbourhood

shops.

The male members of the household do major purchases for the households from

the central market area of the city.

Usually buy household consumer products from reputed retailers and distributors in

the city.

Most of these households have experience buying from salesmen visiting their

home but do not usually trust the quality of such products.

Wood fuel sellers are not located close to these households. Households usually buy

huge bulk of charcoal fuel (transported by bicycle) to avoid frequent visits to

charcoal sellers in the suburbs.

Place

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Kenya, 2016

These households are highly influenced by popular media as well as word of mouth

and market trends.

Well exposed to mainstream advertisement and promotion channels like social

media marketing, posters, TV, newspaper ads, celebrity endorsement, door-to-door

marketing and sales.

Most of the households capitalize on seasonal and festive offers from major

retailers to make major purchases for their home.

Souvenirs, like calendars or caps, from private brands and NGOs can be seen in

these households.

TV series and movies are a window to their aspirational lifestyle that they strive for.

They are interested to explore new technologies and products that will help them

stay a step ahead of others by making their life more comfortable, convenient and

increase their social status/image.

They prefer to buy familiar and popular brands that are perceived to be trustworthy

with reliable after sales service.

Pro

motio

n

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Kenya, 2016


2.2.1 Urban and Peri-Lower Middle Class

Size14

Dem

og

rap

hic

s

Average earnings between KES 9,313 to 20,410 per month

Multiples sources of income with at least one regular source

Average of 5 members per household


Educated to secondary level

Connected to electricity

Women contribute to family income through part time job or small business

Co

ok

sto

ves

/

Lig

hti

ng

fu

el/

Co

ok

ing

fu

el


Kerosene or LPG for short cooking times (breakfast, snacks, heating up food, baby food etc.)

Experience frequent electric power outages

Use biomass charcoal/ fuel wood for long cooking time

Will not stop using biomass because of high fuel costs for kerosene

Purchase biomass charcoal, wood fuel from vendors


Living in rented houses are not allowed to cook using biomass fuel wood cook stove inside the built-in

kitchen

Pro

file

Living in plots or clusters of rented houses

Have migrated with family and young children to urban/peri-urban areas

Have membership in a recognized savings group/MFI/ CBO

Living in areas with easy access to school and local market area

Highly influenced by opinions of their relatives, friends and neighbours

Own electronic appliances like TVand/or radio, smart phones and subscribe to local newspapers and social

media

Display slight willingness to invest on premium and durable products

Want to be able to cook at least their main meals everyday using just one biomass cook

stove with multiple fuel types, irrespective of weather condition or food quantity.

Electricity for lighting and back up candles or solar lanterns when electricity goes off

Mostly cook outdoors (usually with shelter).

Most of them own a portable biomass cook stove and LPG (tiers 1 cities e.g. Nairobi,

Kisumu, Nakuru) or kerosene stove (in tier 2towns like Kakamega, Murang’a, Nyeri,

Siaya) as a standby stove for quick cooking time.

Cooking indoors with more privacy is associated with high social and economic status

in urban areas.

Lack of space, safety and cleanliness are the main concerns for them to cook indoors.

Usually cook large quantities of food at once to suffice the family for whole day.

Might use free / cheap biomass or kerosene when wood fuel is not available.

Rice cooker and electric stoves are largely perceived as the next level upgrade for their

cooking needs because of the comfort and convenience in using them indoors.

Usually show interest in buying or using proven new technologies, products or brands.

Aspire to live a comfortable and convenient urban lifestyle with improved social status.

Pro

duct

15


Kenya, 2016

Usually spend around KES 500 to 1,500 to buy either kerosene stove or portable

clay cook stove as standby.

New kerosene stoves costing anywhere between KES 400 to 750 are popular among

these households.

Irregular and small income makes it difficult to make huge expenditures in one go.

Many aspire to buy and use electric cooker because of the comfort and convenience

in using them indoors.

Most of them are either members of women’s savings group, VSL, CBO or a local

MFI.

Children’s education, house rent, food and healthcare are the main expenses for

these families.

MFI loans are usually sought for healthcare, school fees, family functions and

house improvement.

Husband or the male earning member usually makes purchasing decisions for

expensive products.

Price

Women of the household purchase daily grocery from neighbourhood shops.

Major purchases for the households are done by the male members of the household

from nearby market area or the central market of the city.

Small retailer dealing with kerosene, LPG and cooking utensils and small hardware

retailers and repair workshops are a common sight in their neighbourhood.

Wood fuel/charcoal sellers are located at walkable distances from these households.

While, charcoal sellers in certain towns go door-to-door, to sell.

Local NGOs, women’s savings group and VSLs are active channels for awareness

creation and product distribution for several aid programs in these areas.

These households are highly influenced by community opinion and hence many

NGOs effectively conduct community yard meetings and door-to-door awareness

campaigns in these localities.

Place

Well exposed to mainstream advertisement and promotion channels like bill boards,

posters, TV and newspaper ads, door-to-door campaigning, and community

meetings.

Most of the households wait for seasonal and festive offers from major retailers to

make any major purchases for their home.

Word of mouth marketing and endorsement from community opinion leaders like

village elders, religious leader, teacher, doctor etc., are very effective in creating

awareness and demand.

Souvenirs like calendar or caps from several private brands and NGOs can be seen

in these households.


Buy familiar and popular brands, which are perceived to be trustworthy with,

reliable after sales service.

Pro

motio

n

16


Kenya, 2016


2.3.1 Urban and Peri-Low income

Size14

Dem

og

rap

hic

s

Average earnings below KES 9,331 per month Single or multiple source of irregular income

Employment as day casual labourers, MSEs operators, vegetable vendors etc.

Educated to primary school level and or vocational training level

Not connected to electricity

Co

ok

sto

ves

/

Lig

hti

ng

fu

el/

Co

ok

ing

fu

el Use different fuels for different uses

Traditional three stone cook stoves for fuel wood or traditional charcoal stove and kerosene stove

Kerosene lamp or solar lantern

Try to access free or low-cost biomass whenever possible

Habituated to move cooking space indoors during night time or when rain falls

Pro

file

Living in housing clusters at informal or illegal settlements

Rely on easy access to central market areas

Susceptible to temporary displacement due to flooding

Susceptible to permanent displacement due to fire or legal evacuations

Have membership in informal savings groups, VSLs and CBOs

Highly influenced by community opinion

Want to be able to cook at least their main meals everyday using just one biomass cook

stove with wood fuel all year long, irrespective of weather condition or food quantity.

Mostly cook outdoors (with or without shelter).

Susceptible to flooding during monsoon and hence tend to cook indoors.

Kitchen spaces are congested with harsh usage conditions for appliances, like muddy

undulated floors.

Lack of space, safety and cleanliness are the main concerns for them to cook indoors.

Usually cook large quantities of food at once to last the family for whole day.

Cannot afford wood all throughout the year.

Might use free or cheap biomass when wood fuel is not available or not affordable.

Not comfortable with using unfamiliar technologies or products or brands.

Aspire to live a comfortable urban lifestyle.

Pro

duct

Don’t have sufficient disposable income to buy a new cook stove to fully replace their

free self-built biomass cook stove for daily use.

Irregular and small income makes it difficult to make huge expenditures in one go.

LPG and electric stoves are aspired, as the next level upgrade for their cooking needs.

Electricity is aspired, as the next level upgrade for their lighting needs.

Used kerosene stoves are available at price range similar to a portable clay cook stoves

(KES 250).

Most of them are either members of women’s savings group, VSL, CBO or a local MFI.

Children’s education, food and healthcare are the main expenses for these families.

MFI loans are usually sought for healthcare, school fees, wedding and house repair or

improvement.

Husband or the male earning member usually makes purchasing decisions for expensive

products.

Price

17


Kenya, 2016

Women of the household purchase daily grocery from neighbourhood stalls.


from nearby market area or the central market of the city.

Small retailer dealing with kerosene, LPG and cooking utensils and small repair work-

shops are a common sight in their neighbourhood.

Wood fuel/charcoal sellers are located at walkable distances from these households.

While, wood sellers in certain towns go door-to-door, to sell wood fuel.


creation and product distribution for several aid programs in these areas.

These households are highly influenced by community opinion and hence many CBOs

and NGOs effectively conduct community yard meetings and door-to-door awareness

creation campaigns in these localities.

Place

Well exposed to mainstream advertisement and promotion channels like billboards,

posters, TV and newspaper ads, door-to-door campaigning, and community

meetings.

Most of the households wait for weekly market day and seasonal or festival markets

to make any major purchases for their home.

Word of mouth marketing and endorsement from community opinion leaders like

village elders, religious leader, teacher, doctor etc., are very effective in creating

awareness and demand.

Souvenirs like calendar, caps from several private brands and NGOs can be seen in

these households.


They tend to buy familiar and popular brands which are perceived to be

trustworthy.

Pro

motio

n


2.4.1 Rural -Middle class

Size14

Dem

og

rap

hic

s

Average earnings upward of KES 20,410 per month

One or multiples sources of regular income


Household mostly male headed

May or may not be educated to college level

Employment as farmers, fish mongers, timber and brick merchants, teachers, County government

civil servants etc.

May or may not be connected to electricity

Co

ok

sto

ves

/ L

igh

tin

g f

uel

/

Co

ok

ing

fu

el


Traditional cookstoves with wood fuel and other biomass fuel to cook main meals

Main meals are cooked using biomass cookstove only


Electricity or SHS or kerosene pressure lamp

Electricity or gas for short cooking times (snacks, heating up food etc.)

Either gather biomass fuel or purchase charcoal from seller

Will not move up the energy ladder (using upmarket stoves only) because of the fuel cost and perceived

improved taste when cooked over wood fire

18


Kenya, 2016

Pro

file

Can afford to buy LPG for part time usage

Living in own house with sufficient space around the house

Earning and decision making members of the family are fairly educated and informed

Have bank accounts and small investments in a local bank and have experience with MFI

Have high social standing and their opinions are highly valued in the community

Own electronic appliances such as TVs, radios, mobile phones, refrigerators etc27.

Have disposable income to invest on building and maintaining their house

Have willingness to invest on premium and durable products

Cook all their main meals using biomass cook stove

Usually cook large quantities of food at once to suffice the family for whole day

Prefer to cook in kitchen space with shelter. Cooking in sheltered kitchen is associated

with high social and economic status

External kitchen spaces usually have permanent shelter to withstand damage during

heavy rain

Kerosene lamps or solar lantern backup when electricity goes out

Some of them own electric cooker or LPG stove for part-time usage for cooking quick

snacks, tea or to reheat food at night

Safety and cleanliness are the main concerns for them to cook indoors using biomass

stoves

Not very comfortable in using unfamiliar technologies or products or brands

Usually show interest to buy or use new but proven technologies, products or brands

that will improve their lifestyle and social status

Pro

duct

Willingly spend KES 2,000 to 10,000 to buy kitchen appliances (electric stove, LPG,

water filter) that help make their life more comfortable and convenient.

Have sufficient disposable income to invest on a value for money products

Usually take MFI loans and bank loans for home improvement, healthcare, agriculture

or business

House improvement, Children’s education, healthcare and agriculture are their main

expenses

Price


from the central market area in the nearest town or city

Usually buy household consumer products from a reputed retailers and distributors in

the nearest town or city


creation and product distribution for several aid programs in the rural areas

These households are highly influenced by community opinion and hence many NGOs

and CBOs effectively conduct community yard meetings and door-to-door awareness

campaigns in rural areas

Place

19


Kenya, 2016

These households highly trust awareness and promotion campaigns led by NGOs and

government bodies. For example: community meetings, loudspeaker announcements,

government campaign etc.

They are also exposed to mainstream advertisement and promotion channels like

posters, TV and newspaper ads, door-to-door marketing and sales usually done by NGO

marketing forces

Most of the households wait for weekly market day and seasonal or festival markets to

make any major purchases for their home


these households

TV series and movies are a window to their aspirational lifestyle that they strive for

They prefer to buy familiar and popular brands which are perceived to be trustworthy

with reliable after sales service

They are interested to be associated with new technologies and products that will help

them stay a step ahead of others as opinion leaders for the community, thus increasing

their social standing.

Pro

motio

n


2.5.1 Rural –Lower middle class

Size14

Dem

og

rap

hic

s

Average earnings between KES 9,331 and 20,410 per month

One or multiple sources of irregular income



May or may not be educated

Not connected to electricity

Co

ok

sto

ves

/

Lig

hti

ng

fu

el/

Co

ok

ing

fu

el


Traditional cook stoves with wood fuel and charcoal to cook

Main meals are cooked using wood fuel cook stove only

Individual standalone kitchens with shelter

Solar lantern or kerosene lamp

Either gather biomass fuel or purchase charcoal from seller

Will not move up the energy ladder (using upmarket stoves only) because of the fuel cost and perceived

improved taste when cooked over wood fire

Pro

file

Living in own house with some space around the house

Have membership in a recognized savings group/MFI/ CBO

Own electronic appliances such as TVs, radios, mobile phones

Highly influenced by community opinion

Cook all their main meals using biomass cook stove

Usually cook large quantities of food at once to suffice the family for whole day

Prefer to cook using wood fuel all year long. Due to non-availability of dry wood fuel

during wet season, they are often forced to but are forced to use other biomass (dry

leaves, straw, cow dung) in dry season in order to store wood fuel for wet season

Kerosene lamp or tin lamp for lighting

Prefer to cook in kitchen space with shelter. Cooking in sheltered kitchen is associated

with high social and economic status

Safety and cleanliness are the main concerns for them to cook indoors using biomass

stoves

Not very comfortable in using unfamiliar technologies or products or brands

Usually show interest to buy or use new but proven technologies, products or brands

that will improve their lifestyle and social status

Pro

duct

20


Kenya, 2016

Have limited disposable income thus very sensitive to price

Prefer layaway financing model for acquisition of high value products

Usually take MFI loans and bank loans for home improvement, healthcare, agriculture

or business

House improvement, Children’s education, healthcare and agriculture are their main

expenses

Price

Major purchases for the households are done by the female members of the household

from the local market area

Usually buy household consumer products from identified local retail kiosks in the

market


creation and product distribution for several aid programs in the rural areas

These households are highly influenced by community opinion and hence many NGOs

and CBOs effectively conduct community yard meetings and door-to-door awareness

campaigns in rural areas

Place

These households highly trust awareness and promotion campaigns led by NGOs and

government bodies. For example: community meetings, loudspeaker announcements,

government campaign etc.

They are also exposed to mainstream advertisement and promotion channels like radio,

posters and “talking walls”, door-to-door marketing and sales usually done by NGO

marketing forces

Most of the households wait for weekly market day and seasonal or festival markets to

make any major purchases for their home


these households

They prefer to buy familiar and popular brands which are perceived to be trustworthy

with reliable after sales service

Pro

motio

n

21


Kenya, 2016

3.0 Marketing strategy for the five target segments by WEEK

3.1 Segment 1 Marketing Strategy: Urban and peri-urban middle class Counties of Marketing strategy coverage: Nairobi, Nakuru, Kisumu

Product

ICS PSP

Biomass fuel briquettes

Value proposition

A “high tech” charcoal stove to

cook main meals

For cooking meals that require

over 30 minutes of cooking time

More efficient than traditional

charcoalstove

Quality assurance warranty

Value proposition

Offers lighting experience similar to

electricity

No recurrent expenditure on kerosene

or candles

For short time back-up use during

electricity outages

Cleaner than traditional kerosene

No risk of accidental fires


Value proposition

Offers cooking experience similar

to charcoal

A “high quality” biomass fuelto

cook main meals

For cooking meals that require over

30 minutes of cooking time

Burns longer than traditional

biomass charcoal

Offering: Stacking of Modern Premium cook stove with other modern kitchen cooking appliances for complementarity

Offering:

Stacking solar powered back up for

lighting with electricity to

supplement during electricity power

supply disruptions

Offering:

Stacking of modern biomass fuel briquette

with other modern kitchen cooking fuel for

complementarity Actual Product: Modern charcoal

cook stove

Augmented Product: Complements

other modern kitchen cooking

appliances

Brand names: KCJ, Ecozoom,

Envirofit,

Appearance: High aesthetics

Functionality: Single burner,

portable

Actual Product: Portable solar

lantern

Augmented Product: Back-up

quality lighting to supplement

frequent electricity black outs

Brand name: Phillips, Sun king,

d.light, Bare foot

Appearance: Durable

Functionality: Portable

Actual Product: Biomass fuel briquette

Augmented Product: Complements other

modern kitchen cooking fuels

Brand name: N/A

Appearance: Compact solid carbonized

biomass

Functionality: Smokeless, sparkles, long

burning and high calorific value

22


Kenya, 2016

Price Segment characteristics:

Low price sensitivity

High disposable income therefore can pay more for premium products

Financial loss risk averse therefore demand warranty for quality assurance

ICS PSP Biomass fuel briquette Offering:

Discount and warranty in order to

reduce risk of adoption

Offering: Discount and warranty in order to


Offering: Discount attached in order to reduce risk

of adoption

Retail price: Determined by retailers Monetary incentive:

Discount voucher for return customers

Product warranty reduces cost and risk of adoption

Money saved through diversified fuel scheme (e.g. electricity or LPG only for short time cooking)

Nonmonetary incentive: Increase in status as

forward-thinking early adopters of the Modern cook concept

Retail price: Determined by Solar brand Company Monetary incentive:

Discount voucher for quantity purchase

Product warranty reduces cost and risk of adoption

Money saved through eliminated cost of kerosene and candles

Nonmonetary incentive: Increase in status as forward-

thinking early adopters of portable solar lamps

Retail price: KES 30/Kg Monetary incentive:

Lower priced compared to immediate substitute (charcoal)

Money saved through guaranteed longer burning and with adequate cooking heat

Nonmonetary incentive:

Increase in status as forward-thinking early adopters of the Modern biomass fuel briquettes

Place Segment characteristics:

Retail locations are plentiful as they live in location with easy access to local market and are surrounded by many

well-regarded, branded retail outlets that consumers already frequent

ICS PSP Biomass fuel briquettes Offering:

Easily available in well-regarded retail

outlets the consumers already frequent

Offering:

Easily available in well-regarded,

branded retail outlets the consumers

already frequent

Offering:

Easily available in well-regarded

groceries kiosks or ICS and or

charcoal retail outlets the consumer

already frequents

Convenience Incentives:

Appealing location: Established and

well-regarded ICS retailers outlets

Be where target segment spends time:

Convenience Incentives: Appealing location: Established and

well-regarded retailers/brand outlets

Be where target segment spends


well-regarded retailers of energy

products outlets

23


Kenya, 2016

Living in areas with easy access to

schools and local market areas

Working with existing distribution

channels: Prefer to buy familiar and

popular brands from trusted distributors

or retailers

time: Living in areas with easy

access to schools and local market

areas



popular brands from trusted

distributors or retailers


time: Living in areas with easy access

to schools and local market areas

Working with existing retail

channels: Prefer to buy from familiar

regular charcoal/groceries kiosk

Distribution Channel:

Distributor: National-scale ICS

company with strong brand recognition

and market share in the cook stove

business.

Wholesaler: Small and micro scale

distributor with existing retail network

Retailer: Small and micro scale

stockists with well-maintained linkages

and access to high-trafficked market

areas

After sales: Spare parts easily

accessible through retail networks.

Trained technicians provide repair and

maintenance services both during and

after the warranty period.


Distributor: National-scale Solar

Products Company with strong brand

recognition and market share in PSPs

Wholesaler: Larger dealerships or

depots within Distributor’s existing

retail network

Retailer: Dealerships with well-

maintained linkages and access to

support services with the Distributor

in high-trafficked market areas



Trained technicians provide repair

and maintenance services both during

and after the warranty period.


Producer: Small and micro scale

producer of carbonized biomass fuel

briquettes with network of independent

retailers

Retailer: Local groceries/charcoal

kiosk located within the estate or local

market centre

Promotion Segment characteristics:

Attracted to a new product that will make life more comfortable, convenient and increase their social status

ICS PSP Biomass fuel briquette Offering:

An ICS product that now delivers an

aspirational balance of traditional home

cooking and “cutting edge”

contemporary urban living.

Offering:

A trusted solar brand that now delivers

health, economy and lighting

experience benefits. Offering:

An alternative to charcoal that now

delivers economy with traditional

cooking experience. Promotional activities:

Distributor/retailer advertising

Retailers’ open air demonstrations

at market centres

Request for referrals by customers

Early adopters testimonials

highlighting ICS benefits

Promotional activities:


Distributor’s sales agents personal

selling



highlighting PSP benefits


Retailer advertising


at market centres



highlighting biomass fuel

briquettes benefits

24


Kenya, 2016

3.2 Segment 2 Marketing Strategy: Urban and peri-urban lower middle

class Counties of Marketing strategy coverage: Nairobi, Nakuru, Kisumu

Product

ICS PSP Biomass fuel briquettes

Value proposition

Offers cooking experience

similar to traditional

charcoal/fuel wood stove


cook main meals




charcoal stove


Value proposition


electricity


or candles


electricity outages




Value proposition


to charcoal

A “high quality” biomass fuel to

cook main meals




biomass charcoal

Offering:

Stacking of Modern Premium cook

stove with other kitchen cooking

appliances for complementarity

Offering:

Stacking solar powered back up for

lighting with electricity to

supplement during electricity power

supply disruptions

Offering:


with other kitchen cooking fuel for

complementarity Actual Product: Modern biomass

improved cook stove


other kitchen cooking appliances

Brand names: Charcoal KCJ,

Charcoal/wood fuel Upesi

Appearance: Highly durable


portable


lantern

Augmented Product: Back-up

quality lighting to supplement

frequent electricity black outs


d.light, Bare foot

Appearance: Durable





Brand name: N/A


biomass

Functionality: Smokeless, no fire sparks,

long burning and high calorific value

25


Kenya, 2016


Price sensitivity

Disposable income that can accommodate investment in more efficient energy products


ICS PSP Biomass fuel briquette

Offering:






of adoption

Retail price: Determined by retailers

Monetary incentive:

Discount voucher for return

customers

Product warranty reduces

cost and risk of adoption

Money saved through

diversified fuel scheme (e.g.

kerosene or LPG only for

short time cooking)


forward-thinking early

adopters of the Modern

cook concept

Retail price: Determined by Solar

brand Company

Monetary incentive:

Discount voucher for quantity

purchase

Product warranty reduces cost

and risk of adoption

Money saved through

eliminated cost of kerosene

and candles


thinking early adopters of

portable solar lamps

Retail price: KES 30/Kg

Monetary incentive:

Lower priced compared to

immediate substitute (charcoal)

Cheaper than kerosene foe

cooking

Money saved through

guaranteed longer burning and

with adequate cooking heat


Increase in status as forward-

thinking early adopters of the

Modern biomass fuel briquettes


Retail locations are plentiful as they live in location with easy access to local market and are surrounded many retail

kiosks that consumers already frequent


26


Kenya, 2016

Offering:



Offering:



already frequent

Offering:




already frequents









or retailers






areas







products outlets









Distributor: District-scale ICS

producerswith strong brand recognition


business.

Wholesaler:Small and micro scale





areas

After sales: Trained technicians provide

repair and maintenance services both

during and after the warranty period.







retail network






accessible through brand retail

outlets. Trained technicians provide

repair and maintenance services both

during and after the warranty period.





retailers

Retailer:Local groceries/charcoal


market centre


Attracted to a new product that will reduce cost in the long term and increase their social status


Offering:

An ICS productthat now delivers an


cooking experience and modern efficient

technology.

Offering:


healthy indoor air quality, economy

and lighting experience as good as

electricity.

Offering:



cooking experience.

27


Kenya, 2016




at market centres







selling

Market to landlords investing in

fire cover to encourage tenants to

switch to solar from kerosene and

candles







at market centres




briquettes benefits

3.3 Segment 3 Marketing Strategy: Urban and peri-urban low income Counties of Marketing strategy coverage: Nairobi, Nakuru, Kisumu

Product


Value proposition

Offers modern technology for

cooking with experience similar

to traditional cooking




charcoal and kerosene stoves


Value proposition


electricity





Value proposition


to charcoal


cook main meals




biomass charcoal

Offering:




Offering:

Lighting experience similar to

electricity

Offering:



complementarity Actual Product:Modern charcoal

cook stove

Augmented Product:Complements

other kitchen cooking appliances

Brand names:KCJ, Upesi


Functionality:Single burner,


lantern

Augmented Product: Cleaner

cheaper substitute to kerosene

lighting


d.light, Bare foot

Appearance: Durable




Brand name: N/A


biomass


28


Kenya, 2016

portable

Functionality: Portable burningand high calorific value


High price sensitivity

Low disposable income that only cater for basic energy needs



Offering:






of adoption


Monetary incentive:


customers



Money saved through


kerosene only for short time

cooking)




cook concept


brand Company

Monetary incentive:


purchase



Money saved through






Monetary incentive:




cooking

Money saved through









29


Kenya, 2016



Offering:



Offering:



already frequent

Offering:

Easily available in local groceries

kiosks or charcoal retail outlets the

consumer already frequents









or retailers






areas







products outlets












business.






areas












retail network














retailers



market centre


Attracted to a new product that guarantees reduced cost


Offering:





Offering:






cooking experience. Promotional activities: Promotional activities: Promotional activities:

30


Kenya, 2016



at market centres






selling




candles






at market centres




briquettes benefits

3.4 Segment 4 Marketing Strategy: Rural middle class Counties of Marketing strategy coverage: Kakakmega, Nyeri, Murang’a,

Siaya

Product


Value proposition





cook main meals




charcoal stove


Value proposition


electricity


or candles


electricity outages




Value proposition


to charcoal


cook main meals




biomass charcoal

Offering:




Offering:

Solar powered lighting with

experience similar to electricity Offering:


with other traditional cooking fuels for

complementarity Actual Product: Modern

charcoal/wood fuel cook stove

Augmented Product:Complements

traditional kitchen cooking

Actual Product: SHS



lighting



traditional kitchen cooking fuels

31


Kenya, 2016

appliances

Brand names:KCJ, Upesi


Functionality:Single burner,

portable


d.light, Bare foot, MKOPA solar

Appearance: Durable


Brand name: N/A


biomass


burningand high calorific value


Price sensitivity




Offering:






of adoption


Monetary incentive:


customers



Money saved through



short time cooking)




cook concept


brand Company

Monetary incentive:


purchase



Money saved through


and candles





Monetary incentive:




cooking

Money saved through







Place

32


Kenya, 2016

Segment characteristics:




Offering:



Offering:



already frequent

Offering:




already frequents









or retailers






areas







products outlets












business.






areas












retail network














retailers



market centre




Offering:




Offering:






cooking experience.

33


Kenya, 2016





at market centres







selling




candles







at market centres




briquettes benefits

3.5 Segment 5 Marketing Strategy: Rural lower middle class Counties of Marketing strategy coverage: Kakakmega, Nyeri, Murang’a, Siaya

Product


Value proposition





cook main meals




charcoal stove


Value proposition


electricity


or candles


electricity outages




Value proposition


to charcoal


cook main meals




biomass charcoal

Offering:




Offering:

Lighting experience similar to

electricity

Offering:



complementarity Actual Product: Modern

charcoal/wood fuel cook stove


other traditional kitchen cooking

appliances


lantern






Brand name: N/A

34


Kenya, 2016

Brand names: KCJ, Upesi



portable

lighting


d.light, Bare foot

Appearance: Durable



biomass


burning and high calorific value


Price sensitivity




Offering:






of adoption


Monetary incentive:


customers



Money saved through



short time cooking)




cook concept


brand Company

Monetary incentive:


purchase



Money saved through


and candles





Monetary incentive:




cooking

Money saved through









35


Kenya, 2016



Offering:



Offering:



already frequent

Offering:




already frequents









or retailers






areas







products outlets












business.






areas












retail network














retailers


kiosk located within the village or

local market centre




Offering:





Offering:






cooking experience. Promotional activities: Promotional activities: Promotional activities:

36


Kenya, 2016



at market centres






selling




candles






at market centres




briquettes benefits

4.0 Implementing the ICS, PSP & Biomass fuel briquettes Marketing

Strategy Sequencing is critical to the Marketing Strategy. Initially, the WEEK project implementing partners

should engage distributors/retailers to model the Stacking bundle of the “ICS, Solar lantern and fuel

briquettes package” consisting of either:

i. Package of Charcoal ICS and discounted biomass fuel briquettes or free sample biomass fuel

briquettes to first time users

ii. Package of ICS and single solar lantern

iii. Package of PSP and discounted biomass fuel briquettes or free sample biomass fuel


iv. Package of ICS, PSP and discounted biomass fuel briquettes or free sample biomass fuel


These Stacking bundles offer targeted marketing and promotional gimmick with relatively broad

commercial appeal and accessibility across the Segments 1 to 4. This will utilize an existing product

in the market with clear traction and established producers/distributors to introduce a new product line

to the same target segment.

While the premium ICSs are gaining familiarity in the market, WEEK project implementers can

engage with producers/distributors/retailers and financial service providers (VSLs, MFIs) to explore,

pilot, and demonstrate small-scale consumer financing marketing and promotional strategy for

Segments 2, 3 and 5. These can take the form of:

i. Consumer financing by VSLs and MFIs through direct payment to

producers/distributors/retailers who then deliver any of the energy products of choice to

member of the women groups subscribing to the VSL/MFI loaning product.

ii. Use of VSLs meetings as marketing and promotional forum for the various energy prodct

bundles described above

market analysis and strategy for ics psps and biomass fuel briquettes for women in energy enterprise...

Documents