DKT Philippines Social Marketing Assessment

Social Marketing Assessment

In 2003, USAID decided to phase out its already reduced provision of contraceptive commodities to the Philippines public sector; USAID had stopped supplying condoms in 2002 and had planned to phase out supplies of pills and injectables over the period 2004–2008. The phase-out is scheduled to coincide with the Philippines’ implementation of a contraceptive self-reliance (CSR) policy that aims to diversify sources of family planning services and commodities, shift those who can afford to pay out of the public sector market, and continue to protect those who need access to free products. Many USAID projects are assisting directly or indirectly with implementation of the policy. In July 2004, the Philippines Department of Health (DOH) issued an Administrative Order on the subject of contraceptive self-reliance that describes a strategy to help local government units (LGUs) cope with the phaseout. In view of the Philippines’ general decentralization policy for government services the country faces great uncertainty about how the market will adjust to CSR; each LGU’s reaction will reflect local circumstances, and the policy is too new for clear directions to have yet emerged. What is clear, however, is that an enormous market opportunity will be created over the next three to five years as up to 70 percent of contraceptive users currently served by the government change their sourcing habits.

In anticipation of the phase-out, USAID entered into a three-year $3.1 million Cooperative Agreement (CA) with DKT Philippines, Inc. commencing in October 2002. The CA calls for supporting the social marketing of modern contraceptive methods. Under the terms of the CA, USAID has principally funded the marketing expenses associated with launching and expanding the use of two new DKT products.

In May 2005, USAID/Philippines commissioned the Abt Associates led-PSP-One project to evaluate DKT’s performance to date under the current CA and propose a strategy for future support to social marketing in the Philippines. The assessment revealed the need for a future USAID CSR strategy organized around three main themes: maximization of client choice, dense geographic coverage with more private providers to dilute the public sector’s dominance, and strengthened demand creation. With these three themes in mind, six main recommendations were made by the evaluators:

  • Consolidate public sector procurements. The consolidation of procurements (possibly at the provincial level) will make the average order quantity more attractive to potential new suppliers, but a third party must assume responsibility for such purchases in order to maximize transparency. Consolidation might also help alleviate the government’s slow payment practices.
  • Increase the commercial sector’s role in public procurements. Given that it is the poor who are most at risk during phase-out, it is essential to procure products for free distribution. It is highly unlikely, however, that many of the existing commercial players will be interested in such an activity. Therefore, a group of mostly new players possibly local manufacturers and importers - will need to be created and encouraged to tackle the new market opportunity presented by phase-out.
  • Improve referrals of clients out of the public sector. To ensure that phase-out does not result in discontinued use of family planning, it is essential to maximize the chances that consumers will fill prescriptions or follow up with referrals to a new private provider. A combination of health systems strengthening and operations research is needed.
  • Assist the market in developing a better understanding of segmentation. Both LGUs and the commercial sector can benefit if they fully understand and apply economic segmentation in a rational manner. Existing segmentation data need to be disseminated and/or updated, and a reliable but simple segmentation process needs to be developed.
  • Expand the commercial sector’s role in family planning services. With the ongoing work of the Well Family Midwives Partnerships and PRISM’s workplace efforts, DKT’s franchising model could be extended to the private sector.
  • Improve market development planning and coordination. The various players in the contraceptives market talk different languages and lack common purpose or a good understanding of each other’s processes and objectives. The players need to cooperate with one another through better communication and increased opportunities for collaboration.