Marketing skills are vital in securing success for small energy businesses. Find out how GVEP’s specialist training is addressing marketing-specific issues faced by small-scale energy entrepreneurs, including lack of promotion, suitable business premises, product range and awareness.
Every business owner or service provider knows that without a market, they have no basis to operate. It is with this in mind that GVEP, through its Developing Energy Enterprise Programme (DEEP), seeks to strengthen the marketing potential of each of the selected business owners.
In September 2011, GVEP published a study entitled Marketing Challenges and Strategies for Energy MSEs in East Africa, which analysed the obstacles faced by micro and small energy entrepreneurs in East Africa.
According to the study, there is a definite market for alternative clean energy products in the region, particularly because of low access to modern energy. “In a country of approximately 39 million people,” states Laura Clough, author of the study, “only 14% of Kenya’s population have access to grid electricity. This statistic is even lower in the neighbouring countries of Uganda and Tanzania with many households in East Africa relying on biomass, dry cell batteries and kerosene to meet their energy needs, mostly for cooking and lighting. Such statistics show that the demand for alternative and clean energy products exists in East Africa, yet many energy entrepreneurs are struggling to find wider markets and grow their businesses.”
Take for example the case of Jane Tukawa. For 20 years she has run a small business producing clay liners for energy efficient cookstoves in Namanve, near Kampala, Uganda. Even though she had some success selling liners, she knew she could not grow her business without improving the quality of her products.
She was offered this opportunity in June 2010 when training from GVEP’s DEEP Programme allowed her to diversify and expand her business. “As a result of training, I have seen my activity flourish. A sound business and marketing plan is at the basis of my success” Jane explains. GVEP’s staff assessed her business and noted that there were some failings in areas of product development, marketing, record keeping, and costing, which were preventing the business from taking off. Her recruitment in the DEEP programme was critical to her progression.
Jane's mentor Julius Muwera – also trained by GVEP – taught her in several sessions how to improve the quality of her liners. Methods she was trained in included material mixing, proper use of a motor while moulding and tips such as drying the liners on a flat surface out of the sun to prevent them from cracking and losing shape.
He also instructed her on how to load her kiln (firing oven) efficiently – arranging the liners uniformly, each resting on another to avoid breakages during offloading, and keeping the liners out of direct contact with the fire of the kiln.
Julius' advice on developing a business plan has had a dramatic impact on Jane's methods of working. She explains, “My business is showing signs of growth because of its sound business plan.” Her training included devising marketing plans, and financial planning – components that were critical in reshaping Jane’s business.
Introducing a new line of products
Technical and business development support from GVEP not only allowed Jane to improve the quality of her liners, but her business has also diversified into the production of briquettes, as encouraged by Eric, her GVEP-provided technology consultant. Briquettes are compact blocks of fuel, which Jane makes by hand with charcoal dust and cassava flour. She buys these raw materials from the local trading area. Her briquettes produce little smoke, which makes them especially attractive for businesses such as hotels, several of which she maintains as customers.
Despite their good qualities for use as fuel, briquettes are a new product in Jane's community. This means that their market is not so developed. To help her assess the potential market opportunities Jane was offered training in marketing techniques focussed at to raising awareness of this product among her community. “My mentor and I drove around Namanve with a loudspeaker telling everyone about briquettes. We even set up demonstration stalls in the local market people can touch and see the qualities of briquettes for themselves and learn about my business points of sale.”
Jane’s market development training with GVEP business mentors also taught her methods to encourage sales. These included sending businesses free samples, and offering new customers reduced prices to get them interested in briquettes - a product that they may not have otherwise been aware of or incentivised to purchase. These promotional activities have helped her to increase product awareness and her sales have grown from 3kg a week to 10kg. Jane is able to produce 40kg a week and believes the quality of her briquettes is high and she can sell 1kg for around 2,000 Ugandan Shillings (US 80 cents).
As a result of the training Jane's income has significantly increased. Her sales went up by 10% and she now has a gross income of around 1 million Ugandan Shillings (US$ 400) each month. The improved quality and diversification of her products has encouraged many permanent customers in the area to buy from her in bulk, and has even attracted those outside the local area – some even travelling 10km to buy from her.
Until the recent expansion of her business, the kiln that Jane used to fire her liners was in disrepair and only able to fire around 600 liners a day. With her new income she has been able to repair her kiln at a cost of around 300,000 Ugandan Shillings (US$125), an investment that will allow her to boost her production to 1,000 liners a day.
Before training, Jane employed only one other person, but since increasing production she has been able to take on another two employees who each earn around 200,000 Ugandan Shillings (US$80) a month, depending on production. She has also been able to expand her home and take tenants. The development of her skills has allowed her to teach other people in her community how to make ICS liners.
Jane still faces challenges if she wants to scale up her business. She would need further training on briquette making – in particular, the mixing process – in order to increase the quality and lifespan of the briquettes. As her products are mostly handmade and require manual labour, she would like to acquire machinery that would aid production. Marketing and product promotion also needs to be worked on, as briquettes are still not a widely used product in her locality.
With the help of GVEP’s experienced staff these goals are now achievable. Jane has recently been linked up with a local financial institution to get a loan – something that’s hard to obtain as a small entrepreneur without much collateral in Africa. This will enable her to turn her business plan into reality.
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