Thursday
January 8
2015

Alexei Bezborodov

Marketing the ‘Real Cool Honey’ Sachets: Launch lessons from Asali Poa in Kenya

Find a product-market fit and then execute flawlessly. Both are tough and have high risks that you need to overcome with the launch process. Here are a few big lessons from Honey Care Africa’s little sachet of honey, which we call Asali Poa (translated as “real cool honey”). We launched the product commercially in 2014 in Nairobi and currently reach 3,000 points of purchase.

First, product-market fit

  • Understand your market. Don’t assume you understand your market. You do not. Build a team that’s objective and obsess over observations and insights of the context. After all, you’re competing for a coin and you better be good because that coin is already budgeted for another product, and there aren’t “disposable income” coins going spare. Solve a critical problem or need your market actually has, not one you hope for to justify your good idea – and keep iterating until you find what that is. Obsess over consumer behaviors and figure out how you can leverage those; it’s easier to change your product than consumer behavior.
  • Target a specific segment. Figure out who your early adopter is, design your prototype product and price (at a coin) for them, and forget about everyone else. Asali Poa’s are school kids, during the day or after school, on routes from school, who have 5 shillings pocket money and typically spend it on sweets. These are impulse buyers who want maximum value from their coin, and the 15-minute experience of savoring every drop of pure honey from a little pack delivers that. These behaviors are a goldmine for a new product. Oh yes, and ignore revenue growth – this is not the time to create an overnight sensation.
  • Make the “trade” comfortable. You need a distribution path to consumers, and your path is through retail trade vendors who are risk averse, obsessive about cash flow and hesitant to new products. The trade will need to get comfortable with your offering, which is to say, if your product inventory doesn’t turnover within a week, you’re tying up their cash, a major deal-breaker. (And guess what? New products don’t move that fast.) We induced a state of comfort with Asali Poa sachets through heavy sampling – to mitigate product quality risk – and consignment sales in the beginning – to mitigate turnover risk. As you’re getting momentum, your sales reps have a Goldilocks outlook on pushing product – not too little (leaving opportunities on the table) and not too much (tying up stock).

Now, to flawless execution

  • Be obsessive about key data. Separate it from noise, of which there is plenty. Identify the key data assumptions you need to prove to scale distribution. For Asali Poa these were sales point density, route length and mapping, visit duration, visits per day, percentage of active trade buyers, average drop size (how many units sold per visit), ideal drop size, wholesale margin, retail trade margin, weekly order size trend. This is not about revenue growth this early – don’t even think about establishing sales targets. Instead, focus – and learn.
  • Be obsessive about the unit economics. Ultimately, this is about massive scale. With that great opportunity comes the great risk of product (and company) failure if you don’t get your unit economics right, because when a product finally connects in the market, adoption suddenly takes on viral characteristics in these high-density population areas. Don’t live in cost denial! Our analysis of a simple honey sachet came to include cost of honey and packaging. But what about waste in processing and packaging? What about product returns and replacements? Or the logistics of wholesale fulfillment. Direct sales costs – all of them. Don’t forget a marketing allocation, which should be 10 percent of the net revenue of each little sachet (and much higher in the early stages). These are very real costs.
  • Create the ideal market context and test within that. Find the “bright spots” to target and optimize your learning efforts. This means active, aggressive sales reps to build relationships in the trade; getting timing right (see below); ensuring product quality among your early production runs; detailed analysis of foot traffic and routing produce promotional samples; and below-the-line point-of-sale materials to maximize consumer trials. Imagine a hyperactive group of kids, honey samples in hand, following the Asali Poa Pied Piper through the streets of our ideal routes, their numbers growing around every corner.
  • Timing is everything. Timing of visits; i.e. is the shop owner there or just the assistant? You need the decision maker, and it’s more likely that his or her niece or youngest son is running the shop that day instead. What time of day is best for making purchases? Bread, milk and eggs are stocked early in the morning and our best chance to lay claim to any remaining working capital for honey sachets is right after that. Which day of the week does your sales rep visit? Most trade stocks weekly, and most days there may be no decision maker and no cash available if you’re showing up at random. What about holidays and other schedule disruptions? We must convince our trade to stock double when Jamhuri Day or any other holiday happens that same day the following week, because otherwise we’ll miss that stocking day and Asali Poa will be OOS (out of stock) on that route.

Image credit: Jonathan Kalan.

In spite of, or perhaps because of, the great challenges, the Asali Poa launch has been an exciting experience and a lot of fun, too. Along with our other honey product lines, it’s growing fast across East Africa.

Incidentally, as we continue to scale this up, we’re recruiting for a head of sales and other core members of our sales team to lead the execution of our exciting distribution strategy. Are you up to the challenge?

Alexei Bezborodov is the head of marketing for Honey Care Africa.

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consumer products, pricing, retail, supply chains