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Marketing supplementary food products in LDCs
Marketing supplementary food products in LDCs A case study in Morocco
S. Tamer Cavusgil, Lyn S. Amine and Edward Vitale
Developing country governments as well as a number of intemaWnal agencies have bscome directly involved in the past two decades in the production and marketing of supplemeMryfoodpmducts.This article discusses the Moroccan government’s intiement in introducing a weaning food targetsd for low-income Moroccan children. It elaborates on ths factors which contributed to the failure of this and other similar vsntures, while drawing attention to ths important role that marketing plays in launchsocially desirable food ing products in developing country environments. Keywords: Supplementary foods; Marketing; Developing countries
The widespread nature of malnutrition and undernutrition has been a Iong-term concern of developing country governments and various agencies of the United Nations. Coupled with the problem of inadequate and inefficient distribution channels usually prevalent in these countries, the malnutrition problem has forced developing country governments to become involved in the development and commercialization of low-cost, high-nutrition food products for consumption by nutritionally vulnerable groups - infants; pre-school children, and pregnant women. In this article, we examine the case of introducing a weaning food by the Moroccan government to combat malnutrition among Moroccan children. We also review the marketing procedures followed in supplementary-food introductions elsewhere, to improve our understanding of the difficulties encountered in marketing socially desirable food products in developing countries. The underlying thesis is that the application of modem marketing know-how and techniques can significantly enhance the success of such projects. Therefore, the article begins with a discussion of the role of marketing in the development and modernization process.
The contribution of marketing to development Dr S. Tamer Cavusgil is AssociateProfessor of Marketirg, Dr Lyn S. Amine is Assistant Profassor of Marketing, and Dr Edward Vile is Profassor of Marketing at the College of Business Economics, University of and WisconsirMMhiiewater, 900 West Main Street, Whitewater, WI 531901797, USA.
ElO$-9192/93/02011
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Very few countries have been content with their standards of living and the rates of economic growth. Consumption levels and patterns are not occurring at a uniform rate, nor is the character of change necessarily the same. Emerging demand in developing countries, where threequarters of mankind live, and rising expectations of the people create both challenges and difficulties for the economic systems in these countries. What role can marketing play in the development process? Many government officials and planners of less developed countries have argued that a shortage of goods and services is the central problem, and that the most pressing need is to expand production. It has been pointed
0 1993 Butterworth & Co (Publishers) Ltd
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See, for example, Leon V. Hirsch, ‘The contribution of marketing to economic development: a generalfy neglected area’, in W.D. Stevens, ed, The Social Responsibilities of Marketing, American Marketing Association, Chicago, 1961. *Arieh Goldman, ‘Transfer of a retailing technology into the less developed countries: the supermarket case’, Journal of Retailing, Vol 57, Summer 1981, PP 5-29. %ee, for example, C.C. Slater,et al, Market Process in La Paz, Bolivia, Latin American Studies Center, Michgan State University, East Lansina. 1969: C.C. Slater. et a/. ‘Market ctbnnel coordination and economic development’, in L.P. Bucklin, ed, Vertical Marketing Systems, Scott Foresman Glenview, IL, 1970; Food and Agriculture Organization (FAO), Development of Food Marketing Systems for Large Urban Areas, Report to the Technical Conference on the Development of Food Marketing Systems in Large UrbanAreas in Latin America, 1973. “Hirsch, op tit, Ref 1. 5Peter F. Drucker, ‘Marketing and economic development’, Journal of Marketing, January 1958, pp 252-259. 66. Wickstrom, Want food Companies in Europe and the United States and Their Policies for Marketing in the Developing World, WHO, Geneva, 1977. See also, H.G. Johnson, ‘Is there a role for market forces in the development of developing countries?‘, in S. Spiegelglas and C.J. Welsh, eds, Economic Development: ChaHenae and Promise, Prentict+Hall, Engfewiiod Clii, NJ, 1970. ‘Charles C. Slater. ‘The role of food marketing in Latin. American Economic development’, in Peter D. Bennett, ed, Marketing and Economic DeWopment, American Marketing Association,Chicago, 1965. DD 30-37. aErd&&r Kaynak, ‘Government and food distribution in LDCs’. Food Po/icv. Vol 5. NO 2, May 1990, pp ik-142. .
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out that marketing, with its focus on identifying needs and wants, is out of place in an economy characterized by scarcity and where the needs are well known. l In many developing countries of Africa and Asia, marketing is often considered a wasteful activity. Proponents of such a viewpoint typically point attention to excessive numbers of intermediaries, excessive profit margins, archaic marketing institutions, and inadequate distribution channels in order to strengthen their position. Indeed, losses from poor physical distribution methods are large in developing countries, as are losses resulting from the failure of the marketing system to integrate consumer needs with productive resources. It is also true that marketing enterprises in such countries have conspicuously identified their target markets as composed of the relatively few but wealthier consumers, and have neglected the lowincome majority.2 In fact, some observers have argued that this is the primary factor responsible for the failure to transfer a modem marketing institution such as a supermarket to developing country environments. Increasingly, however, scholars of development and developing countries argue that, with proper incentives and public sector guidance, modem marketing institutions and techniques can play a significant role in development. 3 Marketing is considered as essential to the overall development of a country, irrespective of the stage of development of marketing system reached by that country. As Hirsch observed many years ago, marketing can help to increase the size of the existing market by uncovering and directing the existing demand, and thus setting the stage for economies of scale in production and distribution that may have not existed before.4 Fundamentally, marketing is more than a search for new needs and wants. It is essentially a system of concepts, tools, and skills that enable managers to match the resources of the organization to the needs of society.5 As such, marketing principles and techniques can be directly applied to the needs of the developing countries. As Wickstrom remarked, however, one needs to be cautious with the selection and use of specific marketing instruments. 6 A similar mix of instruments in a developed market could be included, but the relative weight of the instruments and their combined effects might differ.
Food marketing in developing countries The cost of food expenditures accounts for a substantial portion of consumer incomes in developing countries. Assembly market activities, transportation, crating, storage, terminal market costs, processing costs, wholesaling and retailing distribution make up at least one-half of the expenditures for food for many product categories. Thus, the cost of marketing itself is an important variable in disposable incomes and, therefore, in economic development.’ In a broad sense, the wholesaling and retailing process is essential and of universal application in every economy. Differences may exist, of course, with respect to particular structures, motivation, and efficiencies of performance. The more developed an economy, the greater the variety of marketing functions demanded, and the more sophisticated and specialized the institutions will become to perform marketing functions. It is generally agreed that food marketing systems in developing areas remain inefficient because of their highly fragmented structure.a A large number of small, neighbourhood stores prevail at the retail level, FOOD POLICY May 1983
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carrying limited lines. Trade areas for these stores are narrow and tixed, resulting in marginal sales volumes per store and per worker. Shopkeepers are typically passive and resistant to change. Poor sanitary conditions, inaccurate measurement tools and high price levels are among other characteristics of traditional food stores. Together with other small retailers in public markets and countless itinerant retailers, they make up the retailing scene in the urban areas of developing countries. Various characteristics of consumers in developing countries help explain why the traditional, and basically inefficient, food marketing system still prevails. 9 First, low incomes tie these individuals to traditional vendors and public markets where obtaining credit will be easier. Others will refrain from paying for the additional services which may be offered by modem stores. Limited storage capacity of the typical household and the desire of the household members to socialize through daily shopping also favour the small, neighbourhood stores. Limited means of transportation is an additional constraining factor, forcing the consumers to buy within easy walking distance - typically within a mile radius. Mittendorf argues that a situation characterized by small traditional food retailers and street hawkers is still predominant in the developing countries of Asia and tropical Africa.lO Other areas in Latin America, Near East, Far East, and the Mediterranean, on the other hand, have reached a more developed stage typified by the existence of wellestablished specialized grocery stores and limited-line stores. A third stage of development can now be observed in Western Europe and parts of Latin America where integrated and associated food chains have already developed.
Dealing witb the nutrition problem
’ 9Erder-w Kaynak and S. Tamer Camsgil, ‘The evolution of food retailii systems: contrasting the experimx ofdeveloped awl devebping axmtri&, Jouma/ of the Academy of Marketing Science, Vol 10, No 3, Summer 1982, p~249-289. ~oHans-JoachimMi, ‘Thechallenge of organizingcityfocd matketingsystemsin developing countries’, Zeitschritt fur Auslandkche Landwirtschaft,Voll7, No 4, 1978,w32%341. “A. Buffa, hwd Technobgy and Devebpment. UNICEF. Geneva, 1971. ~%&matfonal Action to Avert the Impending Protein Crisis, United Nations, New York, 1988. ~~Ptvvisiona/ Indicatitm Wodd Plan for Aaticuftural Devebment, VolunesIand II, Food and AgiicuHuti Organization, Rome, 1989. 14Viieka Linde, Matkeffn9 in Developing Countdes, MF. Vasastadens Bokbinderi,Goteboq, 1990.
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It has been estimated that approximatey 65% of the population in developing countries are suffering from various degrees of undernutrition (quantitative deficiencies in the food intake) or malnutrition (unsatisfactory composition of essential nutrients). l1 Nutrition deficiencies obviously have far-reaching effects on the physical, economic, social and political development of a country. Acute and chronic infections among starving and underfed adults lead to general reductions in the capacity for physical and mental activity. 12The negative effects on the 600 million children estimated to be suffering from malnutrition are even more alarming as they cause mental retardation of the surviving children which may be carried over to future generations. Individual goverments as well as the specialized agencies of the United Nations (FAO, WHO, UNICEF and WFP) have long recognized the nutrition problem. The Indicative World Plan of 1969 called for a series of general and specific measures to combat malnutrition.13 General measures included: achieving faster growth in cereal production; balance of payments improvements; a faster development of the agricultural sector; and dietary improvements. More specific measures, on the other hand, were often aimed at particular target groups in a country. Examples are supplementary food programmes, nutrition education programmes, applied nutrition programmes, and school-feeding programmes. The small scale of such projects facilitates their practical application.14 Steering, control and evaluation of potential effects are 113
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made easier. When they are successfully implemented, desirable results can be achieved in a relatively short time period. Several of the measures proposed by the UN agencies focused on providing low-cost, protein-rich foods for consumers suffering from protein-calorie malnutrition. Production and marketing of such foods were to take place within the framework of supplementary food programmes. Orr estimated in 1972 that more than 50 supplementary food programmes were in operation in Central and South America, Africa, Middle East and Asia. l5 These programmes were aimed at nutritionally vulnerable groups within low-income population segments. The protein source of the products was typically wheat, chick pea, soybean or rice depending upon local conditions. The desirability of a low-cost product implied the utilization of indigenous raw materials. Other ingredients such as vitamins, minerals, sugar and milk powder were usually imported from abroad. It was emphasized that such foods were to be used as a supplement to the traditional diet rather than as a substitute. In the next section, we examine a specific example of the introduction of a weaning food in a developing country environment in order to alleviate the nutrition problem.
The case of a weaning food in Morocco
‘SE. Orr, The Use of Protein-Rich Foods for the Relief of Malnutrition in Developing Countries: An Anafysis of Experience, Tropical Products Institute,Report No 673, London, 1972. W%e John Eghmy, A Statistical Description of Mofocco’s Poor, Agemy for International Development, Rabat, Morocco, 1960; Royaume du Manx, Annuaire Statistique, Secretariat d’Etat 1976; Royaume du Manx, Ls Lutte Contre la Malnutrition, Fiche Techque, MinisWe de la Santb, 1977.
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In 1977, the Moroccan Ministry of Health estimated that 1.2 million children under the age of four, in a total population of about 18 million, were suffering from malnutrition. This figure represented 41.5% of the under-four age group, and 61% of these undernourished children were living in rural areas. In addition, about 120 000 of these children were in need of hospital treatment. These statistics illustrate clearly the magnitude and severity of the problem. l6 The Moroccan government approached UNICEF seeking financial and technical assistance. With the technical cooperation of other international agencies (WHO and AID), it was decided to introduce local production of a high-protein weaning food (infant cereal) suitable for children aged from six months to five years. That is not to say that such a product was unavailable in Morocco. On the contrary, comparable imported products were already on sale throughout the country. But, the high price seemed to be restricting their use by this target market which characteristically has an annual per capita income of less than $250. A one million dollar grant from UNICEF was provided for the purchase and installation of a production plant in the economic capital, Casablanca, and for the development and marketing of the weaning food. A govemment commission designated a large local soap and table oil manufacturer based in Casablanca to undertake production. This manufacturer matched the one million dollar grant by providing facilities, staff and marketing expertise. The plant’s annual capacity was 3000 tons and incorporates the best features of cereal food manufacture. However, by 1980, less than 1300 tons had been sold, the manufacturer was losing enormous amounts of money, and production was halted. At the request of the Moroccan government, a group of nutrition, food and marketing experts were called in to investigate the failure of the product. As will be shown in the following analysis, many factors contributing to the failure of this project can be related to basic marketing principles. FOOD POLICY
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An assessment of the marketing environment In order to understand fully the implications of this marketing failure in Morocco, it is necessary to characterize briefly the socioeconomic and cultural environments and their effect on consumer food purchasing. Retail food market environment The Moroccan retail food market is made up of countless small neighbourhood grocery stores which, typically, cannot accommodate more than ten customers at any one time. These Ppiceries are dominated by a racial subgroup originating from the Atlas mountain regions (Soussi) who enjoy a long-standing reputation as efficient tradespeople. The Soussi language differs from Moroccan Arabic and constitutes an effective barrier to would-be newcomers to the retail food sector. The wholesale distribution sector is dominated, for its part, by the majority racial group made up of Moroccan Arabs, whereas high ranking government officers tend to originate from the area around Fez which also has its own linguistic particularities. While it is difficult to characterize market sectors purely on the basis of language or subculture, these factors doubtless play a considerable role in business transactions. Food purchasing by consumers involves many visits per week to these neighbourhood stores, and often two or three visits per day. Items are bought in small quantities and credit is widely used. Shopping is a social activity and consumers attach great value to food which is fresh the same day. Other grocery items bearing a ‘made abroad’ type of designation are also popular, being equated with superior quality. These two factors have an important bearing on infant feeding since the poor man’s substitute for an expensive weaning cereal is freshly-baked bread dough soaked in either cow’s milk or the national beverage, mint tea. However, this diet is usually only administered to children after an extended period of breast-feeding. Household shopping of this nature is usually carried out either by school-age children or domestic servants. Brand names of well-known products are commonly used as generic names for the product-type, as for example in the case of yogurt, detergent, and more specifically infant cereal. This, of course, plays a major role in perpetuating sales of longestablished market leader brand-name products. Other types of retail food outlets are limited to a handful of self-service and supermarket stores, situated in middle-class areas and appealing mainly to the foreign-born professional class, accustomed to the once-aweek, one-store buying pattern. It is important to note also that pharmacies play a significant role in marketing infant weaning foods. Their higher prices are justified in the consumer’s mind by a guarantee of hygienic storage, attractive point-of-purchase displays, and personal advice from a qualified professional. Competition in the infant weaning food market The market for infant weaning food is dominated by the presence of a Swiss multinational, Nestle, selling through both neighbourhood grocery stores and pharmacies, and marketing not only a full-line of infant foods but also extensive lines of other food and grocery items. In addition, French and German brand-name products are offered in pharmacies. Pharmacists also market their own specially developed, branded product with the backing of their particular cooperative marketing organization.
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A further source of infant weaning food outside the normal retail channels is the government’s network of public health dispensaries where products are given away free in unbranded and plainly packaged units. This has traditionally been the only source of infant cereal for the urban and rural poor. Profile of the weaning food company The oil and soap producer selected by the government to manufacture the infant weaning food appeared to offer the following strengths: a nationally known brand-name and company reputation; strong retail connections through sales of oil and soap to 400 grocery wholesalers and about 700 grocery stores nationwide; a reasonably wellqualified management team; space available for installation of the new plant and access to locally produced raw materials (chick peas, lentils, milk and wheat flour). Marketing practices As might be expected in a developing economy, demand for the majority of products far exceeds supply, and those manufacturers who have been established the longest tend to be the market leaders. The fact that Morocco was formerly a French Protectorate has led to a profileration of French brand-name products. The nascent local industries experience many setbacks in penetrating this foreign dominated market (despite nationalization of almost all companies), and several nationwide scandals relating to adulterated food and drink products have created a certain reticence in the consumer’s mind when buying ‘sensitive’ products such as infant weaning foods. The wholesale market for staple foods is characterized by a chaotic variety of small, medium and a few large-sized traders whose sheer number has so far defeated both government and private firms’ attempts to identify and enumerate. Lack of statistics makes accurate control of weights and measures, price, quality, collection of sales taxes and inspection of premises difficult, if not impossible. Periodic shortages in supply lead to speculation, widespread hoarding and the creation of black-markets. Market and business information is not freely available. Secrecy is regarded as a company priority, and participation in any research project is usually restricted either to motivated business executives or the Western-educated middle and upper classes. Marketing research is largely carried out through five advertising agencies, as local commercial firms are generally too small and cost-conscious to consider setting up in-house departments. Studies relate mainly to product tests, group discussions, and small-scale market surveys (sample size normally being limited to 100 interviewees). Marketing research is regarded by most of the advertising agencies as time-consuming and difficult to sell to clients, and so is priced to discourage most agency clients.
Initial marketing programme The marketing programme adopted in this case is outlined below. An evaluation is made of its effectiveness in the context of the Moroccan market environment. 116
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Selection of the target market The target market was composed primarily of families in both urban and rural zones with an annual per capita income of less than $250. Part of this target market could have been approached by the government’s social service programmes operating through dispensaries. The more affluent members of the general public would then have been reached through standard marketing of the product in the commercial sector. Success in the commercial sector could have subsidized the social service sector. In the event, however, both sectors failed. Development of the marketing mix Prior to the launch, marketing research relating to product taste, choice of brand-name and package was effected using a consumer panel of 24 housewives from three social classes. Despite evident social incompatibilities, panel members were assembled in one room and given a choice between 15 taste formulations, 15 brand names, and 15 packages - a daunting task by anyone’s definition. Furthermore, the investigating team of experts was unable to find any evidence of a direct one-to-one taste comparison with the leading imported brand. Following the product launch, continual complaints about taste were being received. So, hvo years afterwards, the formulation was changed although the brand name remained the same. The market leader, Nestle, presented tough competition in urban centres. Although the government imposed a 60% ad valorem duty on imported Swiss, French and German products, it was not enough to protect the newly-launched, locally-made product. The more affluent 5% of the population, which controls 25% of household disposable income, continued to pay higher prices for the competing imported product. The product formulation was dictated by a high protein requirement (20% protein compared with 10% for the competition). In order to reduce costs, the producer marketed two packages: one commercial package in a box form, the other in a pouch made of treated paper and intended for the government sector. Problems arose as soon as the two packages were marketed. The pouch-type product was perceived by the poorer segment of the population as being inferior and of lower quality since they were getting it free. The plain packaging drew attention to the assumed difference in quality between this and the attractively packaged brand-name products already known in the commercial sector. In this case, pricing was both difficult and critical. On the one hand, the local manufacturer had to sell almost at cost to the government; whereas in the commercial sector, the manufacturer’s pricing discretion was limited by the price of competing imported weaning foods. The best selling Swiss import sold for $1.27 retail where the local product was priced at $1.16 for a 350g box. Thus, the price differential was too small to sway consumers away from the strong image of the foreign competitors. Selling price in the government sector was $1.36 per kg, and govemment orders were never large enough to show a profit. As one would expect, the weaning food was expensive when compared to other food products in Morocco. Regarding production costs, the local producer with his 3000 ton capacity was not able to achieve the economies of scale enjoyed by the foreign multinationals with their estimated production runs of 20 000 tons yearly. Assuming full capacity production, the Moroccan producer’s FOOD POLICY May 1983
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17See, for example, the followingstudies: G.C. Belden, et al, The Protein Paradox: Malnuhftion, Protein-Rich Foods and the Role of Business, Harvard University, Graduate School of Business, 1964; M. Milner, ed, Protein Enriched Cereal Food for World Needs, The Amefkan Association of Cereal Chemists, St Paul, MN, 1969; 0. Osterling, Case Study: Incapatina, Harvard Business School, Boston, MA, 1972; S.P. SethiandJ.E. Post, ‘Infant formula marketing in developing countries: an anatysis of secondary effects’, in S.C. Jain, ed, Research Frontiers in Marketing, Amerkan Matketing Association,Chicago, 1978; J.N. Sheth and S. Sudman, ‘Malnutritionand marketing’, in J.N. Sheth and P.L:Wdght, eds, Marketing Analysis for Social Problems, University of Illinois, 1972; A. Berg, ‘Industry’sstruggle with worldmalnutritb?, Harvard Business Review. Vol50.1972; F. Proja Ronchi and J. koe Lop&, ‘Evaluations of supplementary feeding pro(lrams assisted bv the World Food ‘Pro&m’, Food and N&ion, Vol2, No 4, 1976: J. Gonaora Looez and D.J. Shaw. ‘World Food- Progkm assktance fo; supplementary feeding programs: review and recommendations’, Food and Nutrition,Vol3, No 2,1977; and S. Maxwell, ‘Food aid for supplementary feeding programs: an analysis’, Food policy, Vol3, No 4, November 1978. Also see: Wickstrom, op tit, Ref 6, Linde, op tit, Ref 14; and Orr, op cif, Fief 15.
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depreciation allowance was $200 per ton, an extremely high overhead by any production standard. Thus, unable to make a profit in government sales and unable to establish market share in urban centres, the local producer was finally forced to shut down production of the infant food. Market leaders in the weaning food business in Morocco focus their distribution on the 550 pharmacies, trusting in the pharmacist’s traditional role as an opinion leader to promote sales, despite the higher price than that found in grocery stores. The local producer’s greatest strength in the distribution field stemmed from the fact that, as an established producer of oil and soap, he had longstanding connections with both wholesalers and retailers. It was, therefore, decided to capitalize on this strength and sell the new product through both grocery stores and pharmacies, adjusting the price accordingly. Pharmacists, however, disliked selling the same product as grocers, at a slightly higher price. No counter displays were set up, and only four salesmen handled pharmacy and grocery distribution throughout the whole nation. The salesmen had no time to motivate pharmacists or their wholesalers. Furthermore, no point-of-purchase material or promotional backing were available to make the salesman’s task any easier. Distribution to grocery wholesalers was equally unsuccessful. The Swiss multinational sells a full line of food products - chocolate, powdered milk, soups, etc, to grocery outlets. Point-of-purchase materials and sales promotion are essential tools of competition in this sector, using a variety of posters, adhesive shelf stickers, mobiles, displays, samples, and a sales force of thirty to cover the country. The government of Morocco subsidized an advertising campaign on national television by making available 180 spot, sixty-second commercials. This was justified by the public interest value of the message and the importance of the product in national health planning. In order to communicate with a largely illiterate population, the parties concerned (manufacturer, government, UNICEF) and the local advertising agency decided to promote the idea of a nourishing high protein food. To do that, they showed a weighing scale with the infant food on the arm of the scale and raw steak, fish and fruits on the other. The result was that the consumer perceived the product to be made of fish. This was unfortunate on several accounts. First, fish is an inexpensive staple food of the working class. Second, fish is considered unsuitable as a supposed ingredient of infant food. Third, cultural habits preclude the preparation of any fish dish with milk (necessary to reconstitute the cereal). The extent of the damage caused by these unfortunate idea associations is measured by the fact that, four years later, pharmacists still refer to this food as the ‘fish product’.
Learning from supplementary food programmes As detailed above, the attempt to commercialize a socially desirable product in Morocco proved to be a total failure. A review of existing evaluations of similar supplementary food programmes generally confirms this conclusion. These evaluations suggest that supplementary food programmes have had only a limited effect (in terms of an improvement in nutrition) on their target gr0ups.l’ Even then, this effect was often limited to urban areas of the countries concerned. Although widespread retail distribution of the products could not be attained in most of FOOD POLICYMay 1983
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18E. Orr, ‘The contributionof new food mixtures to the relief of malnutrition:a second look’, Food and Nutrifion,Vol3, No 2,1977. 19J.B. Cordaro and D. Call, Nutritiona/ Protection of Vulnerable Groups Through Protein-Rich Mixtures: A Critical Review,
mimeo, 1972. 2oLinde,op tit, Ref 14, p 570. %heth and Sudman, op tit, Ref 17. ZzLinde,op tit, Ref 14, p 600. Wnde, op tit, Ref 14, p 592; and Sheth and Sudman, op tit, Ref 17.
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the introductions, some beneficial results may have been achieved in terms of increased awareness of health and nutrition issues, and the transfer of certain marketing skills.‘* In retrospect, it is possible to identify a number of factors which seemed to hinder the success of the numerous past supplementary food programmes. First, are market-related factors. In many of the countries, the scarcity of indigenous raw materials necessitated importation, which in turn tended to increase the cost of production. Rampant inflation was also responsible for cost/price escalation which meant that break-even levels had to be reached which were higher than originally planned. Discontinuities in production were also encountered. The underdeveloped nature of the distribution infrastructure and/or legal restrictions made it difficult to reach the really needy consumers in many countries. l9 Linde indicates that the employment of pharmacies in several of the countries restricted the products’ reach primarily to urban areas. Even when traditional retail intermediaries were used only an urban coverage was attained. The rural consumer was recognized to be the poorest but also the most difficult and expensive to reach.“0 Second, a number of administrative or government-related difficulties were troublesome. Often, initial enthusiasm with the project faded over time, and governments did not always fulfil their initial commitments. Commitments to purchase a certain proportion of the annual production for free distribution through institutions were not carried out. As illustrated in the case of Morocco, governments also failed in creating a conducive environment for the success of the projects. Favourable import duties and taxes, and simplified bureaucratic procedures should have facilitated successful commercialization.21 Third, a series of marketing-related mistakes can be associated with the projects. To begin with, a consumer orientation appears to be lacking in supplementary food programmes. Linde convincingly argues that a high degree of consumer orientation, inherent in the modem marketing concept, is even more necessary in a developing market where one encounters specific and often unknown norms and values.22 Surprisingly, only in a small number of cases were product acceptability tests conducted prior to launching the product. Product development was generally carried out outside the particular countries. Often, the product’s technical and nutritional aspects were overemphasized, and potential consumer acceptance was overlooked. The result was a product totally different from the ones the consumers were accustomed to - taste and otherwise. All of this, of course, contributed towards the negative reception of the product by target consumers. In almost all cases, distribution was too limited - restricted to one region or to urban areas. Special distribution channels were established to reach the rural consumers, which did not work well in all cases. The simultaneous use of the traditional food outlets and pharmacies led to misperceptions. Consumers were confused; it was not clear to them whether these products were essentially food items or pharmaceutical specialities. Also, traditional food retailers were often reluctant to market the products aggressively. Rather, they would wait for demand to pull the products off the shelves. With respect to promotion, Linde as well as Sheth and Sudman agree that positioning the product either as a ‘new’ or ‘improved’ product was not appropriate.23 Apparently, references to concepts such as new and improved differentiated the supplementary food from what was familiar
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to the consumers, and negatively affected its purchase and consumption. Positioning the product as a pharmaceutical also proved to be dangerous in the long run as it gave the consumers the perception of a ‘cure’ for malnutrition rather than being a preventive item. In a few cases, the price of the supplementary product was held too low, thus leading to the perception that it was a cheap product with questionable value. Low prices also meant lower trade margins and, hence, lesser incentives for channel intermediaries to aggressively sell the products. In the majority of cases, however, the price of the product escalated rapidly from the initially low levels, due to inflation. Consequently, the product was placed beyond the reach of the lowincome consumers who were typically targeted by the product. A general problem associated with supplementary food programmes relates to the basic choice between a conventional marketing and a social marketing approach. A conventional marketing approach would be one that places higher demands on the attainment of break-even points or profits, as well as explicitly excluding the poorest and rural consumers for reasons of economy. A social marketing approach would explicitly include the poorer consumers and aim at a national reach in spite of limited resources. According to Linde, the social marketing approach, generally employed in the various public projects studied, leads to a number of negative consequences. 24 For example, the ‘social project attitude’ which permeated certain organizations was devastating to overall project performance. In its extreme, it led to statements such as ‘a high sales volume is not necessary for the supplementary food product since it is a social rather than a commercial product’. Somehow, the ‘social’ nature of the project had become an excuse for the inefficient performance of marketing functions.
Conclusion
24Linde, op cif, Ref 14, p 601.
The central thesis of this article is that marketing can make a real contribution to the modernization of developing countries and to the enhancement of the welfare of their citizens. The attention was first focused on a general discussion of the role of marketing in development. We then examined a specific case of introducing a socially desirable food product to alleviate malnutrition among Moroccan children. A review of the experiences of similar supplementary food introductions in other developing country environments led to a number of general conclusions. Most significantly, the experience with the various projects suggests that a genuine marketing orientation can be an indispensable tool facilitating the successful commercialization of socially desirable food products in developing countries. The special environment and the prevailing conditions in these countries require the application of modem marketing techniques designed to: identify needs; establish product acceptance; properly motivate consumers; ensure efficient distribution; support the basic product; and achieve effective pricing levels. Marketing appears to be a necessity, rather than a discretionary tool to be used in such circumstances.
FOOD POLICYMay 1983
S. Tamer Cavusgil, Lyn S. Amine and Edward Vitale
Developing country governments as well as a number of intemaWnal agencies have bscome directly involved in the past two decades in the production and marketing of supplemeMryfoodpmducts.This article discusses the Moroccan government’s intiement in introducing a weaning food targetsd for low-income Moroccan children. It elaborates on ths factors which contributed to the failure of this and other similar vsntures, while drawing attention to ths important role that marketing plays in launchsocially desirable food ing products in developing country environments. Keywords: Supplementary foods; Marketing; Developing countries
The widespread nature of malnutrition and undernutrition has been a Iong-term concern of developing country governments and various agencies of the United Nations. Coupled with the problem of inadequate and inefficient distribution channels usually prevalent in these countries, the malnutrition problem has forced developing country governments to become involved in the development and commercialization of low-cost, high-nutrition food products for consumption by nutritionally vulnerable groups - infants; pre-school children, and pregnant women. In this article, we examine the case of introducing a weaning food by the Moroccan government to combat malnutrition among Moroccan children. We also review the marketing procedures followed in supplementary-food introductions elsewhere, to improve our understanding of the difficulties encountered in marketing socially desirable food products in developing countries. The underlying thesis is that the application of modem marketing know-how and techniques can significantly enhance the success of such projects. Therefore, the article begins with a discussion of the role of marketing in the development and modernization process.
The contribution of marketing to development Dr S. Tamer Cavusgil is AssociateProfessor of Marketirg, Dr Lyn S. Amine is Assistant Profassor of Marketing, and Dr Edward Vile is Profassor of Marketing at the College of Business Economics, University of and WisconsirMMhiiewater, 900 West Main Street, Whitewater, WI 531901797, USA.
ElO$-9192/93/02011
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Very few countries have been content with their standards of living and the rates of economic growth. Consumption levels and patterns are not occurring at a uniform rate, nor is the character of change necessarily the same. Emerging demand in developing countries, where threequarters of mankind live, and rising expectations of the people create both challenges and difficulties for the economic systems in these countries. What role can marketing play in the development process? Many government officials and planners of less developed countries have argued that a shortage of goods and services is the central problem, and that the most pressing need is to expand production. It has been pointed
0 1993 Butterworth & Co (Publishers) Ltd
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See, for example, Leon V. Hirsch, ‘The contribution of marketing to economic development: a generalfy neglected area’, in W.D. Stevens, ed, The Social Responsibilities of Marketing, American Marketing Association, Chicago, 1961. *Arieh Goldman, ‘Transfer of a retailing technology into the less developed countries: the supermarket case’, Journal of Retailing, Vol 57, Summer 1981, PP 5-29. %ee, for example, C.C. Slater,et al, Market Process in La Paz, Bolivia, Latin American Studies Center, Michgan State University, East Lansina. 1969: C.C. Slater. et a/. ‘Market ctbnnel coordination and economic development’, in L.P. Bucklin, ed, Vertical Marketing Systems, Scott Foresman Glenview, IL, 1970; Food and Agriculture Organization (FAO), Development of Food Marketing Systems for Large Urban Areas, Report to the Technical Conference on the Development of Food Marketing Systems in Large UrbanAreas in Latin America, 1973. “Hirsch, op tit, Ref 1. 5Peter F. Drucker, ‘Marketing and economic development’, Journal of Marketing, January 1958, pp 252-259. 66. Wickstrom, Want food Companies in Europe and the United States and Their Policies for Marketing in the Developing World, WHO, Geneva, 1977. See also, H.G. Johnson, ‘Is there a role for market forces in the development of developing countries?‘, in S. Spiegelglas and C.J. Welsh, eds, Economic Development: ChaHenae and Promise, Prentict+Hall, Engfewiiod Clii, NJ, 1970. ‘Charles C. Slater. ‘The role of food marketing in Latin. American Economic development’, in Peter D. Bennett, ed, Marketing and Economic DeWopment, American Marketing Association,Chicago, 1965. DD 30-37. aErd&&r Kaynak, ‘Government and food distribution in LDCs’. Food Po/icv. Vol 5. NO 2, May 1990, pp ik-142. .
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out that marketing, with its focus on identifying needs and wants, is out of place in an economy characterized by scarcity and where the needs are well known. l In many developing countries of Africa and Asia, marketing is often considered a wasteful activity. Proponents of such a viewpoint typically point attention to excessive numbers of intermediaries, excessive profit margins, archaic marketing institutions, and inadequate distribution channels in order to strengthen their position. Indeed, losses from poor physical distribution methods are large in developing countries, as are losses resulting from the failure of the marketing system to integrate consumer needs with productive resources. It is also true that marketing enterprises in such countries have conspicuously identified their target markets as composed of the relatively few but wealthier consumers, and have neglected the lowincome majority.2 In fact, some observers have argued that this is the primary factor responsible for the failure to transfer a modem marketing institution such as a supermarket to developing country environments. Increasingly, however, scholars of development and developing countries argue that, with proper incentives and public sector guidance, modem marketing institutions and techniques can play a significant role in development. 3 Marketing is considered as essential to the overall development of a country, irrespective of the stage of development of marketing system reached by that country. As Hirsch observed many years ago, marketing can help to increase the size of the existing market by uncovering and directing the existing demand, and thus setting the stage for economies of scale in production and distribution that may have not existed before.4 Fundamentally, marketing is more than a search for new needs and wants. It is essentially a system of concepts, tools, and skills that enable managers to match the resources of the organization to the needs of society.5 As such, marketing principles and techniques can be directly applied to the needs of the developing countries. As Wickstrom remarked, however, one needs to be cautious with the selection and use of specific marketing instruments. 6 A similar mix of instruments in a developed market could be included, but the relative weight of the instruments and their combined effects might differ.
Food marketing in developing countries The cost of food expenditures accounts for a substantial portion of consumer incomes in developing countries. Assembly market activities, transportation, crating, storage, terminal market costs, processing costs, wholesaling and retailing distribution make up at least one-half of the expenditures for food for many product categories. Thus, the cost of marketing itself is an important variable in disposable incomes and, therefore, in economic development.’ In a broad sense, the wholesaling and retailing process is essential and of universal application in every economy. Differences may exist, of course, with respect to particular structures, motivation, and efficiencies of performance. The more developed an economy, the greater the variety of marketing functions demanded, and the more sophisticated and specialized the institutions will become to perform marketing functions. It is generally agreed that food marketing systems in developing areas remain inefficient because of their highly fragmented structure.a A large number of small, neighbourhood stores prevail at the retail level, FOOD POLICY May 1983
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carrying limited lines. Trade areas for these stores are narrow and tixed, resulting in marginal sales volumes per store and per worker. Shopkeepers are typically passive and resistant to change. Poor sanitary conditions, inaccurate measurement tools and high price levels are among other characteristics of traditional food stores. Together with other small retailers in public markets and countless itinerant retailers, they make up the retailing scene in the urban areas of developing countries. Various characteristics of consumers in developing countries help explain why the traditional, and basically inefficient, food marketing system still prevails. 9 First, low incomes tie these individuals to traditional vendors and public markets where obtaining credit will be easier. Others will refrain from paying for the additional services which may be offered by modem stores. Limited storage capacity of the typical household and the desire of the household members to socialize through daily shopping also favour the small, neighbourhood stores. Limited means of transportation is an additional constraining factor, forcing the consumers to buy within easy walking distance - typically within a mile radius. Mittendorf argues that a situation characterized by small traditional food retailers and street hawkers is still predominant in the developing countries of Asia and tropical Africa.lO Other areas in Latin America, Near East, Far East, and the Mediterranean, on the other hand, have reached a more developed stage typified by the existence of wellestablished specialized grocery stores and limited-line stores. A third stage of development can now be observed in Western Europe and parts of Latin America where integrated and associated food chains have already developed.
Dealing witb the nutrition problem
’ 9Erder-w Kaynak and S. Tamer Camsgil, ‘The evolution of food retailii systems: contrasting the experimx ofdeveloped awl devebping axmtri&, Jouma/ of the Academy of Marketing Science, Vol 10, No 3, Summer 1982, p~249-289. ~oHans-JoachimMi, ‘Thechallenge of organizingcityfocd matketingsystemsin developing countries’, Zeitschritt fur Auslandkche Landwirtschaft,Voll7, No 4, 1978,w32%341. “A. Buffa, hwd Technobgy and Devebpment. UNICEF. Geneva, 1971. ~%&matfonal Action to Avert the Impending Protein Crisis, United Nations, New York, 1988. ~~Ptvvisiona/ Indicatitm Wodd Plan for Aaticuftural Devebment, VolunesIand II, Food and AgiicuHuti Organization, Rome, 1989. 14Viieka Linde, Matkeffn9 in Developing Countdes, MF. Vasastadens Bokbinderi,Goteboq, 1990.
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It has been estimated that approximatey 65% of the population in developing countries are suffering from various degrees of undernutrition (quantitative deficiencies in the food intake) or malnutrition (unsatisfactory composition of essential nutrients). l1 Nutrition deficiencies obviously have far-reaching effects on the physical, economic, social and political development of a country. Acute and chronic infections among starving and underfed adults lead to general reductions in the capacity for physical and mental activity. 12The negative effects on the 600 million children estimated to be suffering from malnutrition are even more alarming as they cause mental retardation of the surviving children which may be carried over to future generations. Individual goverments as well as the specialized agencies of the United Nations (FAO, WHO, UNICEF and WFP) have long recognized the nutrition problem. The Indicative World Plan of 1969 called for a series of general and specific measures to combat malnutrition.13 General measures included: achieving faster growth in cereal production; balance of payments improvements; a faster development of the agricultural sector; and dietary improvements. More specific measures, on the other hand, were often aimed at particular target groups in a country. Examples are supplementary food programmes, nutrition education programmes, applied nutrition programmes, and school-feeding programmes. The small scale of such projects facilitates their practical application.14 Steering, control and evaluation of potential effects are 113
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made easier. When they are successfully implemented, desirable results can be achieved in a relatively short time period. Several of the measures proposed by the UN agencies focused on providing low-cost, protein-rich foods for consumers suffering from protein-calorie malnutrition. Production and marketing of such foods were to take place within the framework of supplementary food programmes. Orr estimated in 1972 that more than 50 supplementary food programmes were in operation in Central and South America, Africa, Middle East and Asia. l5 These programmes were aimed at nutritionally vulnerable groups within low-income population segments. The protein source of the products was typically wheat, chick pea, soybean or rice depending upon local conditions. The desirability of a low-cost product implied the utilization of indigenous raw materials. Other ingredients such as vitamins, minerals, sugar and milk powder were usually imported from abroad. It was emphasized that such foods were to be used as a supplement to the traditional diet rather than as a substitute. In the next section, we examine a specific example of the introduction of a weaning food in a developing country environment in order to alleviate the nutrition problem.
The case of a weaning food in Morocco
‘SE. Orr, The Use of Protein-Rich Foods for the Relief of Malnutrition in Developing Countries: An Anafysis of Experience, Tropical Products Institute,Report No 673, London, 1972. W%e John Eghmy, A Statistical Description of Mofocco’s Poor, Agemy for International Development, Rabat, Morocco, 1960; Royaume du Manx, Annuaire Statistique, Secretariat d’Etat 1976; Royaume du Manx, Ls Lutte Contre la Malnutrition, Fiche Techque, MinisWe de la Santb, 1977.
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In 1977, the Moroccan Ministry of Health estimated that 1.2 million children under the age of four, in a total population of about 18 million, were suffering from malnutrition. This figure represented 41.5% of the under-four age group, and 61% of these undernourished children were living in rural areas. In addition, about 120 000 of these children were in need of hospital treatment. These statistics illustrate clearly the magnitude and severity of the problem. l6 The Moroccan government approached UNICEF seeking financial and technical assistance. With the technical cooperation of other international agencies (WHO and AID), it was decided to introduce local production of a high-protein weaning food (infant cereal) suitable for children aged from six months to five years. That is not to say that such a product was unavailable in Morocco. On the contrary, comparable imported products were already on sale throughout the country. But, the high price seemed to be restricting their use by this target market which characteristically has an annual per capita income of less than $250. A one million dollar grant from UNICEF was provided for the purchase and installation of a production plant in the economic capital, Casablanca, and for the development and marketing of the weaning food. A govemment commission designated a large local soap and table oil manufacturer based in Casablanca to undertake production. This manufacturer matched the one million dollar grant by providing facilities, staff and marketing expertise. The plant’s annual capacity was 3000 tons and incorporates the best features of cereal food manufacture. However, by 1980, less than 1300 tons had been sold, the manufacturer was losing enormous amounts of money, and production was halted. At the request of the Moroccan government, a group of nutrition, food and marketing experts were called in to investigate the failure of the product. As will be shown in the following analysis, many factors contributing to the failure of this project can be related to basic marketing principles. FOOD POLICY
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An assessment of the marketing environment In order to understand fully the implications of this marketing failure in Morocco, it is necessary to characterize briefly the socioeconomic and cultural environments and their effect on consumer food purchasing. Retail food market environment The Moroccan retail food market is made up of countless small neighbourhood grocery stores which, typically, cannot accommodate more than ten customers at any one time. These Ppiceries are dominated by a racial subgroup originating from the Atlas mountain regions (Soussi) who enjoy a long-standing reputation as efficient tradespeople. The Soussi language differs from Moroccan Arabic and constitutes an effective barrier to would-be newcomers to the retail food sector. The wholesale distribution sector is dominated, for its part, by the majority racial group made up of Moroccan Arabs, whereas high ranking government officers tend to originate from the area around Fez which also has its own linguistic particularities. While it is difficult to characterize market sectors purely on the basis of language or subculture, these factors doubtless play a considerable role in business transactions. Food purchasing by consumers involves many visits per week to these neighbourhood stores, and often two or three visits per day. Items are bought in small quantities and credit is widely used. Shopping is a social activity and consumers attach great value to food which is fresh the same day. Other grocery items bearing a ‘made abroad’ type of designation are also popular, being equated with superior quality. These two factors have an important bearing on infant feeding since the poor man’s substitute for an expensive weaning cereal is freshly-baked bread dough soaked in either cow’s milk or the national beverage, mint tea. However, this diet is usually only administered to children after an extended period of breast-feeding. Household shopping of this nature is usually carried out either by school-age children or domestic servants. Brand names of well-known products are commonly used as generic names for the product-type, as for example in the case of yogurt, detergent, and more specifically infant cereal. This, of course, plays a major role in perpetuating sales of longestablished market leader brand-name products. Other types of retail food outlets are limited to a handful of self-service and supermarket stores, situated in middle-class areas and appealing mainly to the foreign-born professional class, accustomed to the once-aweek, one-store buying pattern. It is important to note also that pharmacies play a significant role in marketing infant weaning foods. Their higher prices are justified in the consumer’s mind by a guarantee of hygienic storage, attractive point-of-purchase displays, and personal advice from a qualified professional. Competition in the infant weaning food market The market for infant weaning food is dominated by the presence of a Swiss multinational, Nestle, selling through both neighbourhood grocery stores and pharmacies, and marketing not only a full-line of infant foods but also extensive lines of other food and grocery items. In addition, French and German brand-name products are offered in pharmacies. Pharmacists also market their own specially developed, branded product with the backing of their particular cooperative marketing organization.
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A further source of infant weaning food outside the normal retail channels is the government’s network of public health dispensaries where products are given away free in unbranded and plainly packaged units. This has traditionally been the only source of infant cereal for the urban and rural poor. Profile of the weaning food company The oil and soap producer selected by the government to manufacture the infant weaning food appeared to offer the following strengths: a nationally known brand-name and company reputation; strong retail connections through sales of oil and soap to 400 grocery wholesalers and about 700 grocery stores nationwide; a reasonably wellqualified management team; space available for installation of the new plant and access to locally produced raw materials (chick peas, lentils, milk and wheat flour). Marketing practices As might be expected in a developing economy, demand for the majority of products far exceeds supply, and those manufacturers who have been established the longest tend to be the market leaders. The fact that Morocco was formerly a French Protectorate has led to a profileration of French brand-name products. The nascent local industries experience many setbacks in penetrating this foreign dominated market (despite nationalization of almost all companies), and several nationwide scandals relating to adulterated food and drink products have created a certain reticence in the consumer’s mind when buying ‘sensitive’ products such as infant weaning foods. The wholesale market for staple foods is characterized by a chaotic variety of small, medium and a few large-sized traders whose sheer number has so far defeated both government and private firms’ attempts to identify and enumerate. Lack of statistics makes accurate control of weights and measures, price, quality, collection of sales taxes and inspection of premises difficult, if not impossible. Periodic shortages in supply lead to speculation, widespread hoarding and the creation of black-markets. Market and business information is not freely available. Secrecy is regarded as a company priority, and participation in any research project is usually restricted either to motivated business executives or the Western-educated middle and upper classes. Marketing research is largely carried out through five advertising agencies, as local commercial firms are generally too small and cost-conscious to consider setting up in-house departments. Studies relate mainly to product tests, group discussions, and small-scale market surveys (sample size normally being limited to 100 interviewees). Marketing research is regarded by most of the advertising agencies as time-consuming and difficult to sell to clients, and so is priced to discourage most agency clients.
Initial marketing programme The marketing programme adopted in this case is outlined below. An evaluation is made of its effectiveness in the context of the Moroccan market environment. 116
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Selection of the target market The target market was composed primarily of families in both urban and rural zones with an annual per capita income of less than $250. Part of this target market could have been approached by the government’s social service programmes operating through dispensaries. The more affluent members of the general public would then have been reached through standard marketing of the product in the commercial sector. Success in the commercial sector could have subsidized the social service sector. In the event, however, both sectors failed. Development of the marketing mix Prior to the launch, marketing research relating to product taste, choice of brand-name and package was effected using a consumer panel of 24 housewives from three social classes. Despite evident social incompatibilities, panel members were assembled in one room and given a choice between 15 taste formulations, 15 brand names, and 15 packages - a daunting task by anyone’s definition. Furthermore, the investigating team of experts was unable to find any evidence of a direct one-to-one taste comparison with the leading imported brand. Following the product launch, continual complaints about taste were being received. So, hvo years afterwards, the formulation was changed although the brand name remained the same. The market leader, Nestle, presented tough competition in urban centres. Although the government imposed a 60% ad valorem duty on imported Swiss, French and German products, it was not enough to protect the newly-launched, locally-made product. The more affluent 5% of the population, which controls 25% of household disposable income, continued to pay higher prices for the competing imported product. The product formulation was dictated by a high protein requirement (20% protein compared with 10% for the competition). In order to reduce costs, the producer marketed two packages: one commercial package in a box form, the other in a pouch made of treated paper and intended for the government sector. Problems arose as soon as the two packages were marketed. The pouch-type product was perceived by the poorer segment of the population as being inferior and of lower quality since they were getting it free. The plain packaging drew attention to the assumed difference in quality between this and the attractively packaged brand-name products already known in the commercial sector. In this case, pricing was both difficult and critical. On the one hand, the local manufacturer had to sell almost at cost to the government; whereas in the commercial sector, the manufacturer’s pricing discretion was limited by the price of competing imported weaning foods. The best selling Swiss import sold for $1.27 retail where the local product was priced at $1.16 for a 350g box. Thus, the price differential was too small to sway consumers away from the strong image of the foreign competitors. Selling price in the government sector was $1.36 per kg, and govemment orders were never large enough to show a profit. As one would expect, the weaning food was expensive when compared to other food products in Morocco. Regarding production costs, the local producer with his 3000 ton capacity was not able to achieve the economies of scale enjoyed by the foreign multinationals with their estimated production runs of 20 000 tons yearly. Assuming full capacity production, the Moroccan producer’s FOOD POLICY May 1983
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17See, for example, the followingstudies: G.C. Belden, et al, The Protein Paradox: Malnuhftion, Protein-Rich Foods and the Role of Business, Harvard University, Graduate School of Business, 1964; M. Milner, ed, Protein Enriched Cereal Food for World Needs, The Amefkan Association of Cereal Chemists, St Paul, MN, 1969; 0. Osterling, Case Study: Incapatina, Harvard Business School, Boston, MA, 1972; S.P. SethiandJ.E. Post, ‘Infant formula marketing in developing countries: an anatysis of secondary effects’, in S.C. Jain, ed, Research Frontiers in Marketing, Amerkan Matketing Association,Chicago, 1978; J.N. Sheth and S. Sudman, ‘Malnutritionand marketing’, in J.N. Sheth and P.L:Wdght, eds, Marketing Analysis for Social Problems, University of Illinois, 1972; A. Berg, ‘Industry’sstruggle with worldmalnutritb?, Harvard Business Review. Vol50.1972; F. Proja Ronchi and J. koe Lop&, ‘Evaluations of supplementary feeding pro(lrams assisted bv the World Food ‘Pro&m’, Food and N&ion, Vol2, No 4, 1976: J. Gonaora Looez and D.J. Shaw. ‘World Food- Progkm assktance fo; supplementary feeding programs: review and recommendations’, Food and Nutrition,Vol3, No 2,1977; and S. Maxwell, ‘Food aid for supplementary feeding programs: an analysis’, Food policy, Vol3, No 4, November 1978. Also see: Wickstrom, op tit, Ref 6, Linde, op tit, Ref 14; and Orr, op cif, Fief 15.
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depreciation allowance was $200 per ton, an extremely high overhead by any production standard. Thus, unable to make a profit in government sales and unable to establish market share in urban centres, the local producer was finally forced to shut down production of the infant food. Market leaders in the weaning food business in Morocco focus their distribution on the 550 pharmacies, trusting in the pharmacist’s traditional role as an opinion leader to promote sales, despite the higher price than that found in grocery stores. The local producer’s greatest strength in the distribution field stemmed from the fact that, as an established producer of oil and soap, he had longstanding connections with both wholesalers and retailers. It was, therefore, decided to capitalize on this strength and sell the new product through both grocery stores and pharmacies, adjusting the price accordingly. Pharmacists, however, disliked selling the same product as grocers, at a slightly higher price. No counter displays were set up, and only four salesmen handled pharmacy and grocery distribution throughout the whole nation. The salesmen had no time to motivate pharmacists or their wholesalers. Furthermore, no point-of-purchase material or promotional backing were available to make the salesman’s task any easier. Distribution to grocery wholesalers was equally unsuccessful. The Swiss multinational sells a full line of food products - chocolate, powdered milk, soups, etc, to grocery outlets. Point-of-purchase materials and sales promotion are essential tools of competition in this sector, using a variety of posters, adhesive shelf stickers, mobiles, displays, samples, and a sales force of thirty to cover the country. The government of Morocco subsidized an advertising campaign on national television by making available 180 spot, sixty-second commercials. This was justified by the public interest value of the message and the importance of the product in national health planning. In order to communicate with a largely illiterate population, the parties concerned (manufacturer, government, UNICEF) and the local advertising agency decided to promote the idea of a nourishing high protein food. To do that, they showed a weighing scale with the infant food on the arm of the scale and raw steak, fish and fruits on the other. The result was that the consumer perceived the product to be made of fish. This was unfortunate on several accounts. First, fish is an inexpensive staple food of the working class. Second, fish is considered unsuitable as a supposed ingredient of infant food. Third, cultural habits preclude the preparation of any fish dish with milk (necessary to reconstitute the cereal). The extent of the damage caused by these unfortunate idea associations is measured by the fact that, four years later, pharmacists still refer to this food as the ‘fish product’.
Learning from supplementary food programmes As detailed above, the attempt to commercialize a socially desirable product in Morocco proved to be a total failure. A review of existing evaluations of similar supplementary food programmes generally confirms this conclusion. These evaluations suggest that supplementary food programmes have had only a limited effect (in terms of an improvement in nutrition) on their target gr0ups.l’ Even then, this effect was often limited to urban areas of the countries concerned. Although widespread retail distribution of the products could not be attained in most of FOOD POLICYMay 1983
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18E. Orr, ‘The contributionof new food mixtures to the relief of malnutrition:a second look’, Food and Nutrifion,Vol3, No 2,1977. 19J.B. Cordaro and D. Call, Nutritiona/ Protection of Vulnerable Groups Through Protein-Rich Mixtures: A Critical Review,
mimeo, 1972. 2oLinde,op tit, Ref 14, p 570. %heth and Sudman, op tit, Ref 17. ZzLinde,op tit, Ref 14, p 600. Wnde, op tit, Ref 14, p 592; and Sheth and Sudman, op tit, Ref 17.
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the introductions, some beneficial results may have been achieved in terms of increased awareness of health and nutrition issues, and the transfer of certain marketing skills.‘* In retrospect, it is possible to identify a number of factors which seemed to hinder the success of the numerous past supplementary food programmes. First, are market-related factors. In many of the countries, the scarcity of indigenous raw materials necessitated importation, which in turn tended to increase the cost of production. Rampant inflation was also responsible for cost/price escalation which meant that break-even levels had to be reached which were higher than originally planned. Discontinuities in production were also encountered. The underdeveloped nature of the distribution infrastructure and/or legal restrictions made it difficult to reach the really needy consumers in many countries. l9 Linde indicates that the employment of pharmacies in several of the countries restricted the products’ reach primarily to urban areas. Even when traditional retail intermediaries were used only an urban coverage was attained. The rural consumer was recognized to be the poorest but also the most difficult and expensive to reach.“0 Second, a number of administrative or government-related difficulties were troublesome. Often, initial enthusiasm with the project faded over time, and governments did not always fulfil their initial commitments. Commitments to purchase a certain proportion of the annual production for free distribution through institutions were not carried out. As illustrated in the case of Morocco, governments also failed in creating a conducive environment for the success of the projects. Favourable import duties and taxes, and simplified bureaucratic procedures should have facilitated successful commercialization.21 Third, a series of marketing-related mistakes can be associated with the projects. To begin with, a consumer orientation appears to be lacking in supplementary food programmes. Linde convincingly argues that a high degree of consumer orientation, inherent in the modem marketing concept, is even more necessary in a developing market where one encounters specific and often unknown norms and values.22 Surprisingly, only in a small number of cases were product acceptability tests conducted prior to launching the product. Product development was generally carried out outside the particular countries. Often, the product’s technical and nutritional aspects were overemphasized, and potential consumer acceptance was overlooked. The result was a product totally different from the ones the consumers were accustomed to - taste and otherwise. All of this, of course, contributed towards the negative reception of the product by target consumers. In almost all cases, distribution was too limited - restricted to one region or to urban areas. Special distribution channels were established to reach the rural consumers, which did not work well in all cases. The simultaneous use of the traditional food outlets and pharmacies led to misperceptions. Consumers were confused; it was not clear to them whether these products were essentially food items or pharmaceutical specialities. Also, traditional food retailers were often reluctant to market the products aggressively. Rather, they would wait for demand to pull the products off the shelves. With respect to promotion, Linde as well as Sheth and Sudman agree that positioning the product either as a ‘new’ or ‘improved’ product was not appropriate.23 Apparently, references to concepts such as new and improved differentiated the supplementary food from what was familiar
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to the consumers, and negatively affected its purchase and consumption. Positioning the product as a pharmaceutical also proved to be dangerous in the long run as it gave the consumers the perception of a ‘cure’ for malnutrition rather than being a preventive item. In a few cases, the price of the supplementary product was held too low, thus leading to the perception that it was a cheap product with questionable value. Low prices also meant lower trade margins and, hence, lesser incentives for channel intermediaries to aggressively sell the products. In the majority of cases, however, the price of the product escalated rapidly from the initially low levels, due to inflation. Consequently, the product was placed beyond the reach of the lowincome consumers who were typically targeted by the product. A general problem associated with supplementary food programmes relates to the basic choice between a conventional marketing and a social marketing approach. A conventional marketing approach would be one that places higher demands on the attainment of break-even points or profits, as well as explicitly excluding the poorest and rural consumers for reasons of economy. A social marketing approach would explicitly include the poorer consumers and aim at a national reach in spite of limited resources. According to Linde, the social marketing approach, generally employed in the various public projects studied, leads to a number of negative consequences. 24 For example, the ‘social project attitude’ which permeated certain organizations was devastating to overall project performance. In its extreme, it led to statements such as ‘a high sales volume is not necessary for the supplementary food product since it is a social rather than a commercial product’. Somehow, the ‘social’ nature of the project had become an excuse for the inefficient performance of marketing functions.
Conclusion
24Linde, op cif, Ref 14, p 601.
The central thesis of this article is that marketing can make a real contribution to the modernization of developing countries and to the enhancement of the welfare of their citizens. The attention was first focused on a general discussion of the role of marketing in development. We then examined a specific case of introducing a socially desirable food product to alleviate malnutrition among Moroccan children. A review of the experiences of similar supplementary food introductions in other developing country environments led to a number of general conclusions. Most significantly, the experience with the various projects suggests that a genuine marketing orientation can be an indispensable tool facilitating the successful commercialization of socially desirable food products in developing countries. The special environment and the prevailing conditions in these countries require the application of modem marketing techniques designed to: identify needs; establish product acceptance; properly motivate consumers; ensure efficient distribution; support the basic product; and achieve effective pricing levels. Marketing appears to be a necessity, rather than a discretionary tool to be used in such circumstances.
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