CRITICAL SUCCESS FACTORS
Co-ordinate efforts: Effectiveness
will be compromised in the long term if
one donor pursues a market
development approach and others
continue to subsidize transactions and
services in the same market. It is
important to advocate for market
development as free services dampen
stakeholders willingness to cost share
and take ownership. Coordination is
critical between donor funded
interventions that choose to work with
the same suppliers in the same
market. Suppliers can be overloaded
or lose their commercial focus if they
receive significant financial resources
from several donors.
Focus on developing markets:
Develop the whole market system so
that the poorest in society are
included and served by this market.
Work with a commercial industry,
predominantly operated by the private
sector, to identify and build on the
overlaps between the commercial and
developmental agendas.
Build awareness of market
opportunities: After existing or
potential commercial providers are
identified, the facilitating organization
must persuade them that a market
opportunity exists to serve dairy
enterprises. Facilitators can assist by
sharing market assessment findings
with targeted providers and showing
providers the demand in the market.
Assist providers with developing
viable business models and plans:
Providers will not enter a new market
unless they are reasonably confident
that they will make money. Market
information can provide much of the
data needed.
Demonstrate the demand for
services: Particularly for new or
unfamiliar services, demand creation
is an essential part of attracting
commercial service providers to the
market. No amount of persuasion will
attract commercial BDS providers if no
demonstrable demand exists for the
service. Indeed, if providers do not see
early revenues, they will quickly drop
out of the market. Service
demonstrations and sales agents are
two useful strategies for stimulating
demand.
Strengthen demand for BDS in
weak markets: Demand stimulation in
weak or limited support markets is
important to demonstrate the value of
services. The key is to help the
providers market the services so that
the potential clients can see the link
between that service and their desired
business outcome. This can be done
by conducting demonstrations/
technical clinics of the services or
using vouchers as a direct stimulation
strategy. Facilitators an also assist
providers to improve their products
and marketing and improve their level
of interaction with small enterprises.
Be prepared to share risks with
service providers and other market
players: Some of the risks include sunk
costs in service development without
assured returns. Risk sharing may
persuade service providers to try out
new ideas. Try assisting providers to
conduct their own market research,
subsidizing training costs, sharing the
costs for initial promotion or sponsoring
providers‘ exposure visits. The risk
should not be eliminated completely
because assuming some risk is a sign of
a provider‘s commitment.
Promote embedded and stand-alone
services: Stand-alone BDS provide
enterprises with more choice and give
them more power to effect service
provision. Embedded services can act as
a natural driving force of market
transactions and thus provide programs
with an advantage in developing
markets. Such services are well tailored
to improving transactions between
small/micro businesses and other
businesses. Small enterprises may not
be able to afford BDS in any form that
requires direct payment. Services
embedded with another service may
stimulate the demand for stand-alone
services. A combination of fee-based
and embedded service provision is
crucial in creating a dynamic,
competitive market.
Procurement takes time: Competitive
processes are elaborate and lengthy.
For example in KDSCP, the call for EOIs
for the studies/assessments lasted 3
weeks, proposal development another 4
weeks, and the evaluation took 2 weeks.
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