Addressing the bane to solar energy promotion

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More than thirty people huddled under the house of the village chief to listen to the presentation of the Cambodian SUN marketing staff. Using a flipchart, they discussed the technical aspects of the product and after sales support to the solar home system (SHS). It was fast, within fifteen minutes and the presentation was finished. Question-and-answer portion followed and excited voices asked questions at the same time. The marketing staff patiently answered each question to satisfy the curiosity of the audience.

Surprisingly, the price was not the main concern, but the “cowboys”.  The term refers to the agents selling solar panels house-to-house in the rural areas of Cambodia. They sell solar home systems cheap, as they do not concern with quality of the products. The main approach is “let the buyers beware”.  No after sales service is given. Some promise to provide but when the units break down, nobody comes or the telephone number cannot be accessed.

It is no wonder that most of the questions raised were about customer service.  A specific case shared was the case of a neighbor who bought a unit and after 2 years broke down. Nobody came to repair, and the panel on the roof is a clear testament of an unfulfilled warranty. Another case is a donated set to the school. After several months, the unit was broken and nobody came to repair or maintain it.  Again, the set of three solar panels at the roof of the school reminds the people that it cannot be maintained, and investment to the SHS will be a waste of money. Business practices like these do not contribute in making solar home systems as alternative energy sources in the rural areas. It also deprives the people, especially the poor of cheap, quality and long-term energy source.

One of the main emphases of the Cambodian SUN program is to address the negative effects of cowboy sales.  With the tripartite partnership, the supplier ensures the quality of the product and the after sales customer service; the microfinance institution does not only provide loans but monitoring as well; and, the marketing firm ensures continuous information and education activities to the clients.  It is a good sight to behold that at the end of the marketing session, several people signed up for installation. They will be assessed by the microfinance institution if they are qualified. Once ascertained of their capacity to pay, units will be installed in their houses.

One unexpected result as we leave the village is a cash sale.  While the marketing staffs were answering questions, a lady phoned her children to inform them that she will be buying a solar home system unit. And she paid in cash!

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MARKETING TO INCREASE PRODUCTIVITY OF TEA FARMERS IN VIETNAM

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The rolling hills looked like a manicured green in a golf course. As we came nearer, terraced slopes revealed the rows of tea shrubs. The village is 85 kilometers from Hanoi, and can be reached in a two-hour leisurely car ride.  Despite the short distance from the main market, farmers in the area earn less from their products for the simple reason that they sell immediately during harvest.

Consider the price of freshly harvested tea leaves at VND 800,000 ($40.00) per ton.   Consolidators buy  the leaves on the day of harvest and send it to tea processing centers which is less than an hour travel from the village. The price may even be lower during the harvest season months of June to August.

Some farmers do have equipment to dry the leaves. The processing has an average recovery rate of 20%, transforming one ton of fresh leaves to 200 kilos of processed tea leaves. A kilo of processed leaves is sold at VND80, 000 ($4.00) giving a value of VND16million ($800.00) for the processed tea leaves.

There is a big difference between the price of the freshly harvested and processed tea leaves, but for the farmers, the concept is simple – they have cash after the harvest is taken from them. Processing will mean additional labor and cost, and they will have to look for buyers of processed tea.

There is still a third stage in the value chain.   Branded tea products are sold at an average of VND200, 000. ($10.00) per kilo. So if additional efforts will be done in further processing, quality control, packaging and branding, the 200-kilo harvest can roughly amount to $2,000 in the market.

This is rough computation shows how productivity of the farmers can be enhanced.  It does not mean pushing the farmers to do marketing which is not their line of work. Let the farmers do farming, but efforts can also be done to consolidate the resources of the farmers for them to be able to “hire” professionals who can do the marketing or even the product development for them.