Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected] uwo. ca. Copyright © 2009, Ivey Management Services Version: (A) 2009-07-21 With the sun setting over the Rift Valley in Kenya, Sebastian Herrmann walked back to his tent with a head full of questions.
He was at a loss as he wondered what kind of marketing campaign would ensure that every family that should use a WaterHarvester received one. If he could answer this question, he could see the potential to significantly improve the living conditions for many of the amazing people he had met over the last couple of weeks during his April 2007 visit. Just yesterday, the first prototype of the WaterHarvester had been installed and worked far better than he and his fellow students could have hoped for.
It had been thrilling to see that the prototype had collected enough water with last night’s short rainfall to give a cup of clean water to each of the family’s children, cook a small meal, and still have some water left for the rest of the day! As Hermann thought about the possibilities he became very excited about what this product might mean for the region’s “hardcore poor,” a group that was hit the hardest by the harsh living conditions in rural Kenya. Once he got back o camp, he started to realize that there were a lot of answers needed before everybody in the community could benefit from gathering rainwater with the new WaterHarvester. Rainwater was a lot cleaner than the river water that the hardcore poor were used to drinking. He began wrestling with questions such as: How should it be marketed in a world where few of the conventional marketing communication channels even existed? How was he going to convince people to spend what was (for them) a large amount of money when they did not even have enough to provide food for their families?
And, would he need to consider changing the culturally entrenched practice of meeting at the river to gather the contaminated water that passed for drinking water? Having almost reached his tent he found himself lost in the most important marketing challenge of his young career. Tomorrow morning he was going to sit down with his group to discuss how they should proceed. If he wanted to be able to propose any workable solutions that could be put into motion in the short time he had left to spend in Kenya, it was going to be a very long night. Page 2 9B09A015
Free the Children (FTC), a Canadian non-governmental organization, was amongst the world’s most successful charity organizations. The cofounders of FTC, Craig and Marc Kielburger, and their organization had been recognized for their efforts in numerous ways: the Order of Canada; the World’s Children’s Prize; and multiple Nobel Peace Prize nominations, just to name a few. Craig had also been honoured with a Doctorate of Education from Nipissing University and the resulting relationships created unique and close ties between FTC and Nipissing University.
To begin with, education students from Nipissing began to travel to Kenya, one of FTC’s largest operations, to help build new schools and work together with the local children of the Chebinie primary school in the Rift Valley province. As the success of the Kenya project grew, FTC’s in-country personnel began to realize that it would take more than building schools to convince all parents in the area to prioritize their children’s education rather than having them work.
They began to believe that achievement of a higher level of participation in education would require an improvement in the economic and financial situation of the individual households. In other, similar circumstances, other charitable organizations had found one of the most effective ways to provide economic help for the hardcore poor in other parts of the world had been the introduction of micro-credit programs. 1 In 2006, FTC began to think more seriously about designing such a program for Chebinie and it asked Nipissing’s business school for help.
Three students, along with one of their business professors, answered and embarked on a three-week trip to Kenya in April of 2007. While the design of a new micro-credit program for small businesses was the focus of their work, they very quickly realized that there was one other significant contributor to poverty in particular — the lack of clean water. Working with groups of poor people throughout the world, FTC had learned that social change and lasting improvements in the standard of living only occur when the people it is working with assume ownership of the changes.
As a consequence, its overriding operating philosophy was to “teach people to fish,” as opposed to “give them fish. ” In the case of the WaterHarvester, this meant that any successful marketing program could not include outright gifting of the product and would likely need to cause a change in behaviour from the centuries-old practice of gathering water for domestic use from the river. Kenya lies on the western boundary of one of the most impoverished regions of the world — sub-Saharan Africa.
With seven million people living in environments as diverse as poverty itself, the Rift Valley region was one of the more populated areas in Kenya. While the lush highlands were home to one of the province’s most profitable industries (tea harvesting), other areas in the valley such as the constituency of Narok South struggled to provide the basic needs for their residents. Cattle and goat farming as well as small agriculture were the backbone of what passed for the economy in these poorer areas.
Micro-credit programs lent primarily to women that lived in the most impoverished regions of the world (small amounts of money starting as low as $50). While these loans basically worked like any other loan, they were intended solely for small business start-ups to provide the recipient with the opportunity to elevate themselves and their families out of the poverty cycle. Muhammad Yunus, Banker to the Poor, Public Affairs, New York, 1999, p. 41. 1 Page 3 9B09A015 An estimated 54 per cent of the population lived below the poverty line in Narok South2.
In rural areas for Kenya, this translated to monthly expenditures of approximately 1,846 Kenyan shillings (Ksh). 3 However, this was the average value for Kenya — there were many households that lived on a lot less every month. Like everywhere in the world, poverty in Kenya was a multi-faceted problem with no single cause or solution. For developing nations such as Kenya, this means that poverty must be assessed based on a variety of factors. While monetary measures can be an important aspect of evaluating poverty, a simple and basic test of household assets is often just as important.
Such a test often included a count of possessions including the number of farming animals belonging to the house, the ability to own and operate a kerosene lamp, or the nature of the house’s roof. As a result, impoverished households were commonly classified into hardcore poor and “just poor” segments. Kenya, in particular, showed how differentiated the face of poverty can be. While it was a sign of relative wealth in many nations to own a cell phone, it was not an uncommon sight in Kenya even in the poorest region of the country. The reason for this being that Kenya had recently undergone what was referred to as the “cell phone revolution. While this may seem like an odd “revolution” to put in front of so many other developmental goals, it was the result of a very rational decision. Proper communication is one of the most important aspects of a well-functioning economy and it was much more cost-effective to install cell phone towers than to lay down land lines. As a result, virtually everyone had access to a telephone at relatively low prices: at the same time, basic needs such as clean water were yet to be addressed. Another important indicator of poverty throughout the Rift Valley province was the type of roof used on the houses.
It was estimated that throughout Kenya’s rural areas, 23 per cent of households had thatched roofs. Within the villages around Chebinie (see Exhibits 1 and 2 for a description of the Chebinie area and the role of key stakeholders), this number was certainly higher. Although no verified numbers were available, after some quick counts Herrmann estimated that more than 70 per cent of households had thatched roofs. While just poor households were able to afford a tin roof, the hardcore poor were using thatched roofs, which were made of various types of grass and branches.
The nature of one’s roof was one of the more important status symbols in rural Kenya. With respect to clean water collection and use, the important issue was that straight-edged, water-repellent, tin-roofed households were able to easily obtain cleaner rainwater off their roofs by simply gathering the run-off using an eavestrough made from a hollowed-out tree branch — something that is not possible to do on a circular, water-absorbing, thatched roof. Access to enough clean water is one of multiple pressing issues a developing country faces on the road to sustainable development.