067 Development of distribution channels to upscale sawdust stove sale

Posted on | June 27, 2011 | No Comments

Partner
Kisangani Blacksmith and Renewable Technology Company Ltd (KIBARTCo)

Status
Closed

Project description

The Kisangani Blacksmith Group is based in Njombe, Tanzania. KSG trains and employs disadvantaged young people, enabling them to make and sell tools in three workshops. Existing sales show growth of market potential for KSG’s products and tools. Late 2009 / early 2010 Triodos Facet has provided business skills coaching to KSG during two coaching visits. A business plan, marketing strategy and a draft franchisee agreement are concrete outputs of these sessions. Before, KSG combined business activities with charity work. To create more transparency, management decided to create a new company: Kisangani Blacksmith and Renewable Technology Company Limited, to house the commercial activities. A key challenge for KSG is to develop its markets in order to be profitable. This project aims to support KSG in its efforts to upscale the markets for two popular new technologies: sawdust stoves and rope pumps. In addition, continued coaching support will be needed to strengthen the financial management of the company and the creation of a network of sales agents.

The coaching support will not only benefit the sales of the sawdust stoves and rope pump, but the whole variety of tools and products sold by KSG.The description in the project document focuses most of all on the sawdust stoves.

Moreover, although the contract party of the project is KIBARTCO, the support provided will also benefit KSG in general. Specifically, 4 members of KSG will also participate in the coaching on financial management.

In 2009 KSG sold 823 sawdust stoves and 95 rope pumps. The majority of rope pumps were sold to institutions such as schools, and the majority of sawdust stoves were sold to individuals. KSG markets for stoves and pumps have been growing. Key customers are Njombe district residents. However, over the past two years KSG’s sales have expanded throughout the whole Southern Highlands (Iringa, Mbeya, Songea, Rukwa). Through participation in trade fairs KSG has even been able to sell its products beyond these regions. To upscale the sales of good quality products with after-sales services the major challenge is the lack of outreach through professional sales points and capable staff to strengthen the KSG marketing and sales strategy. Next to up scaling the sales and marketing, KSG will need further support in strengthening its financial management. Without additional working capital, there is little room to increase marketing and sales. And if operations are expanded, financial management systems and procedures have to be improved. The following identified problems could then be resolved:

- Adequate follow-up on customer requests

- On time delivery of products

- Lack of personnel focused on marketing

- KSG workshop are not professional sales points

In 2010, KSG would to focus on capturing the nearby market in Iringa region. In addition, KSG will introduce an improved saw dust stove and add new products to its existing line, which will be branded to be ‘KSG distinct’.

The objective of the project is three-fold:

install KSG’s own sales points and 4 other sales point that are well-established and equipped for sales, after-sales, and promotion.
Improved financial management
Improved marketing/PR/communication

Learning questions:

Who are ideal franchisee candidates? How can they be found? Which criteria are important in the selection of franchisees?
What is the impact of increased efforts on customer education?
Which kind of capacity building needs (administrative, technical, client management) exist on the level of the franchisees and how can these be addressed by KSG?
Which market segments have been identified for KSG products and what are their characteristics? What is the size and feasibility of these market segments?
5. What is the customer satisfaction of the users of KSG products? What are experiences from and impacts on the users (men and women) of the products?
What after sales service model should be developed and how can this model be organized?
Which type of promotion is most effective?
How can the experiences of the project be used for sales on a higher scale?