NetMark: - Private Sector Health Initiatives

NetMark:A Case Study In Sustainable Malaria Prevention ThroughPartnership with Business

A n A E D C a s e S t u d y

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April 2005

AAbboouutt AAEEDDFounded in 1961, the Academy for Educational Development is anindependent, nonprofit organization committed to solving critical socialproblems and building the capacity of individuals, communities, andinstitutions to become more self-sufficient. AED works in all the majorareas of human development, with a focus on improving education,health, and economic opportunities for the least advantaged in theUnited States and developing countries throughout the world.

The NetMark Project is operated by the Academy for EducationalDevelopment and funded by the U.S. Agency for InternationalDevelopment.

The writing and production of this publication was solely funded by theAED Global Health, Population and Nutrition Group.

The opinions expressed herein are those of the authors and do notnecessarily reflect the views of USAID.

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NetMark:A Case Study In Sustainable

Malaria Prevention Through Partnership

with Business

AN AED CASE STUDY

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NetMark Accomplishments 2000-2005

• More than US $18 million has been invested by private sectorpartners in developing the commercial ITN market in Africa.

• Nearly 15 million more people are protected from malaria byinsecticide-treated bed nets (ITNs).

• More than 100 million people have been educated about malaria,the importance of ITNs and how to use them effectively.

• More than 350,000 pregnant women and children under five have gotten discount vouchers for ITNs, of which 243,000 havebeen redeemed.

• Treated nets now cost from 30% to 75% less than untreated netsdid in 2000 due to competition fostered by NetMark.

• NetMark has increased the supply of ITNs in eight Africancountries, with the number of ITN distributors increasing from 2 in 1999 to 29 in 2005.

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AED / NETMARK CASE STUDY I 1

NetMark's mandate is to increase demand for andexpand the availability of insecticide-treated nets(ITNs), a simple but effective way to prevent themosquito bites that cause malaria. To accomplish thistask, AED has developed a market-based approach ofshared risk and investment dubbed Full MarketImpact ™ (FMI™), based on the premise that asdemand grows within a competitive market, consumerswill benefit from improved quality, lower prices, andwider availability.

FMITM provides an operational model that createscommon ground between the private and public sectors.Partners from both sectors agree on common objectiveswhile observing their respective roles across each of thefive factors: supply, distribution, affordability,demand/appropriate use, and equity/sustainablemarkets.

NetMark’s FMITM model was intentionally designedto reflect the way businesses thought about the market,thus the model’s convergence with the classic “4 Ps” ofmarketing: product, place, price, and promotion. In thisway, FMITM demonstrates how meeting the needs of thepoor can translate into good business that promotesexpansion into new market segments. AED believes thatFMITM challenges the way businesses think aboutmarket opportunity, taking a broader view of the roletheir products play and the consumer behaviors theyinfluence, while addressing critical public health issuesand serving the needs of the poor.

In its six years, the NetMark project has shown thatinternational and African companies are willing toinvest in producing, marketing, and distributing ITNswhen working in partnership with the public sector.

Data from household surveys conducted byNetMark in 2004 show considerable gains since thebaseline research in 2000 and the first country launch in

late 2001. In all NetMark countries, awareness and useof nets and ITNs increased dramatically, and more netsare being treated or purchased pre-treated. For example,the percentage of households that owned a net or ITNin Nigeria rose from 12% in 2000 to 27% in 2004; inSenegal from 34% to 56%; and in Zambia from 27%to 50%. Moreover, NetMark’s commercial sectorapproach resulted in increased use among all socio-economic groups. Net coverage rates are increasingequitably, and vulnerable groups are being reached inboth urban and rural areas.

By 2004, ITN sales by NetMark’s formal partnersneared the 2 million mark. While this represented only62% of the ambitious projection total made by thevarious commercial partners for 2004, it did represent a132% increase over 2003 sales. Progress is being madein a sustainable manner, and the market appears to bepoised for rapid growth now that supply issues are beingaddressed. Overall commercial sales in NetMarkcountries have reached 9 million based on reports frompartners, and estimates of additional sales made byNetMark based on market research conducted in 2004.This demonstrates the broad impact NetMark has hadon growing the overall market.

Challenges still lie ahead. Public policy mustcontinue to support ITNs and a role for the commercialsector; free and subsidized ITN programs must be fullytargeted to the poorest and not totally underminecommercial investments; NetMark and partnermarketing efforts must continue to build sustainabledemand; and NetMark’s commercial partners mustexpand their investment in ITNs to replace the supportprovided by NetMark. Under these conditions, the ITNmarket will continue to grow while serving the publichealth fight against malaria.

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2 I AED / NETMARK CASE STUDY

MALARIA IS A MOSQUITO-BORNE DISEASE that has adevastating health and economic impact. Anestimated 300 to 500 million cases each year cause1.5 to 2.7 million deaths, more than 90% inchildren under 5 years of age in Africa1. In addition,Africa loses $12 billion in GDP p.a. due to malaria2,due to the inability of millions to escape poverty.-

In 1998, the World Health Organization(WHO), United Nations Development Program,United Nations Children’s Fund (UNICEF), andThe World Bank Group launched a partnershipcalled Roll Back Malaria (RBM). RBM provides acoordinated international approach to fightingmalaria. In 2000, member states of the UnitedNations committed to reducing malaria as part of aglobal framework for measuring developmentprogress—the Millennium Development Goals.

In response, the United States Agency forInternational Development (USAID), the arm of thegovernment responsible for development assistance,initiated a five-year, $15.4 million effort called“NetMark.” Well aware that economic developmentis the key to social and economic progress, USAIDwanted to engage the private sector in the fightagainst malaria, and at the same time fostereconomic development in Africa.

NetMark's original mandate was to establishcommercial markets for ITNs in three to fivecountries in sub-Saharan Africa. NetMark was askedto work with the private sector to increase demand,appropriate use, availability and affordability ofITNs, and determine the extent to which the privatesector could meet the demand generated by theproject. The project began in 1999 and was slated toend in 2004. In 2002, however, because of positiveresults, NetMark was extended until 2007, thefunding ceiling was increased to $65.4 million, andthe project's mandate was expanded to includedevelopment of "targeted subsidy" programs. Theproject is now at work in eight countries—Ethiopia,

Ghana, Mali, Nigeria, Senegal, Uganda, Zambia andZimbabwe, and is looking to expand to Cameroonin 2005. During the past six years, NetMark hasevolved under the management of a nonprofit,charitable 501(c)(3) organization, the Academy forEducational Development (AED).

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AED EMPLOYEES DAVID MCGUIRE, WILL SHAW, AND

Camille Saade had long been incorporating theprivate sector into their public health projects. Mr.McGuire had lived for many years in developingcountries, where he managed social marketingprograms. Dr. Shaw was an expert in behaviorchange and communications with years ofinternational field experience. And Mr. Saade had abackground in the pharmaceutical industry and inthe implementation of social marketing programs.However, NetMark was their first chance tointegrate what the development community came tocall “public-private partnerships” as a core projectmodel and on a large scale. Together, they tailored amarket-based approach to convince the commercialsector, other non-governmental organizations(NGOs), and public sector players to turn malariaprevention into a sustainable business, supplyingITNs currently purchased by donors.

During the design of NetMark, USAID took ahard look at the traditional social marketing model,which allowed NGOs to build brands throughsubsidized marketing that existed only as long asfunding existed. In the past, the public sector hadengaged the commercial sector in the role ofcommodity supplier rather than brand marketer.Under NetMark, the commercial sector was asked to

make a real commitment to building its own brands.For the first time, the public sector—via NetMark—would assist in the creation of market conditionsthat would enable business growth. If NetMark weresuccessful, it would work itself out of a job as thecommercial sector, under its own power, sustainedthe market and created a sustainable supply of ITNsin malarious areas.

In 1999, AED forged a partnership with SCJohnson, a global leader in the marketing ofconsumer insect control products. Mr. McGuire andDr. Shaw, who had become NetMark’s Director andDeputy Director, respectively, felt it necessary towork with a company that had insect control as partof its core business and that had the distribution andmarketing capacity to take on a new product underan existing well-known brand. Such a relationshipwould increase the likelihood of creating a viableITN market in at least four countries—as stipulatedin the agreement between USAID and AED—within the original five-year timeframe of theproject. They both understood that there was a riskin partnering with a company that did not have netsor net treatments as part of its current business, butstrongly felt that the consumer product developmentand marketing capacity of SC Johnson as well as itsmulti-national, sub-Saharan distribution network

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was a critical advantage that was not found in any ofthe other company units that were producing netsand treatment kits. SC Johnson made it clear fromthe start, however, that it would work closely withNetMark on conducting extensive market researchbefore it would make a final commitment to developand market a RAID® line of ITNs.

When the market research yielded mixed resultswith regard to the potential for developing an ITNmarket in Africa, SC Johnson proposed launching atest market of its newly developed ITN treatmentduring the first year in Nigeria, before making afinal decision to roll out on a larger scale after threeto six months. SC Johnson had understandableconcerns about the viability of a commercial ITNmarket in an environment of low ITN demand,highly subsidized and free ITNs as competition, anduncertain tax and tariff policies. In addition, itstimeframe was not consistent with NetMark’scommitment to USAID to launch in at least fourcountries on a national scale. SC Johnson ultimatelydecided that it was not a good business decision forit to enter the ITN market at that time, and it madethe decision to withdraw from the partnership.

At this point, AED and USAID contemplatedwhether NetMark could continue. Mr. McGuire andDr. Shaw made a case to AED’s senior managementand to USAID for presenting market data to all majornet and insecticide manufacturers to determine if thesemanufacturers would reach the same conclusion as SCJohnson. They pointed out that:1. The data could be interpreted differently,

particularly because some of the analysis wasbased more on developed markets in Europe andNorth America than on those in Africa;

2. This bias resulted in lower sales projections thanmight be achievable; and

3. Companies that were already producing ITNproducts (nets or treatment kits) were alreadyactive in the donor market and might be willingto expand into the commercial market.

The six major suppliers of nets and insecticides atthe time—Aventis, Bayer, BASF, SiamDutchMosquito Netting, A-Z Textiles, and Vestergaard

Frandsen—were subsequently contacted. Eachcompany agreed to accept a visit at its headquartersby Mr. McGuire and Dr. Shaw to discuss AED’scompelling value proposition: “How would you liketo at least double your marketing budget and gainthe support of key policy makers and communitygroups to enter a new market where few competitorsexist, all while saving the lives of millions?”

Mr. McGuire and Dr. Shaw left on a 10-day tripacross three continents to sit down with eachcompany and present data showing that a largepercentage of potential consumers who tried ITNsliked them, were willing to pay commercial pricesfor them, and expressed an interest in purchasingthem if they were made available.

Within six months, NetMark had negotiatedpartnerships with each of these companies, which, atthe time, represented almost 80% of the estimatedglobal production of nets and insecticides. Somemanufacturers perceived an opportunity to shareinvestment risk to build a commercial market whereone did not exist; others hoped to gain first-movercompetitive advantage by establishing their brands inthe minds of hundreds of millions of futureconsumers; and others, while not convinced of thebusiness opportunity, wanted to ensure they werenot excluded from a new venture. And, in the wordsof several, they wanted their businesses to becommitted to more than “just making a profit.”

The realities of working with the commercialsector quickly became apparent with ongoingconsolidation of the global insecticide industry, thebeginning of a transition of the net industry fromdonor tenders (donor-funded procurements through acompetitive bidding process) to a consumer market,and the challenge of getting the global net andinsecticide industries and country distributors to worktogether to market affordable ITNs that metinternational standards. But through mergers andacquisitions among partners in the insecticideindustry, and through resulting shifts in ownership ofproduct lines, lay-offs, and office closures, theNetMark team persevered.

“…they wanted their businesses to be committedto more than ‘just making a profit.’”

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NETMARK, BY DESIGN, WOULD ACT AS A CATALYST

and was therefore dependent upon its partners forexecution and achievement of its objectives.NetMark was to take an active role in implemen-tation by sharing risk and investment with thecommercial sector while helping it build itscommercial brands and businesses.

First-year results showed sales of over 910,000ITNs and 600,000 re-treatment kits, well short ofNetMark’s original targets of 2.2 million ITNs and re-treatment kits. However, much of the shortfall wasdue to delays in launching programs rather than lackof demand. The initial approach of focusing oncommercial expansion suffered various setbackstypical of developing a non-existent market, and theproblem was exacerbated by highly subsidized productand product giveaways by various NGOs, ministriesof health, and donors which were not carefullytargeted to the most needy. But evidence of theefficiency of the commercial approach began toappear. In Zambia, for example, NetMark’s partnerswere selling ITN products (unsubsidized) for less than“socially marketed” (donor-subsidized) ITN products.Early gains were made by a well-crafted advertisingand promotion campaign produced by NetMark andadapted to each participating country.

Nevertheless, it became obvious that NetMarkneeded better coordination with other players toaddress the need to segment markets and to assistministries of health and donors in better targetinglimited resources to the poorest populations as thecommercial sector targeted those who could afford topay. NetMark also needed to answer public sectoropposition to its strategy: Influential persons wereclaiming that it was immoral to build an ITN market“on the backs of the poor,” which was not the intent.This opposition occurred in an atmosphere in whichmost public sector officials were highly suspicious ofthe commercial sector, and in which many businessesperceived the government to be an inefficient and

untrustworthy partner.In 2002, the international RBM Partnership

issued a strategic “framework” that promotedbuilding a “sustainable system that guarantees accessto ITNs for the most vulnerable, while harnessingthe entrepreneurial spirit and efficiency of theprivate sector. Planning such a system raisesimportant issues concerning subsidies and theinteraction between public and private sectors.”3

Recognizing the need to create a broader mechanismto support RBM goals, USAID expanded themandate and funding of NetMark, which wasoriginally focused entirely on generating demand forITNs and helping partners build their businesses tomeet that demand. AED developed a concept paperfor “NetMark Plus,” which detailed a three-prongedapproach of commercial expansion (the originalfocus), market priming, and equity, all to improvethe impact of NetMark. NetMark and its partnerswould now build a solid commercial market whileexpanding outlets into areas not served by thecommercial sector and would deliver subsidizedproduct to the poor in ways that would expandrather than undermine commercial markets.

With additional funding for NetMark Pluscame additional pressure to deliver public healthimpact on a larger scale and to deliver it quickly.This pressure put new demands on NetMark’scommercial sector partners and created a tensionbetween delivering public health benefits whilebuilding a sustainable market. The NetMark teamrecognized the need to work with the commercialsector to develop new strategies for faster marketdevelopment, while managing the expectations of abroad array of public and private partners andstakeholders. Friction often arose when NetMarkpushed international and national commercialpartners to expand their ITN business more rapidlythan their normal business practices allowed.

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WHEN NETMARK WAS BUILDING ITS PARTNERSHIPS,it asked all interested companies to submit proposalsthat included draft marketing plans and ademonstration of commitment to invest indeveloping the ITN market for their brands withNetMark support. NetMark turned down onecompany because that company was not prepared toinvest its own money. After negotiating with eachcompany, AED signed collaborative agreements thatspelled out roles, responsibilities, and objectives. Inorder to maintain competition, NetMark selected atleast two partners for supply and distribution in eachcountry. Partners with whom AED has agreementsin place are considered “formal partners.”

But NetMark is interested in increasing overalluse of ITNs. It has developed generic materials thatsupport all sales and the general use of ITNs, even ifthey are given away for free. While the projectprovides support to its “formal partners” to helpthem leverage their investment in building theirbrands, it also has begun building partnerships withimporters, traders, and retailers who do not haveformal agreements in place but who benefit fromNetMark’s information sharing, campaigns, andattempts to link them with good net and insecticidesuppliers. These groups are referred to as “informalpartners.”

The expansion of NetMark also necessitated thehiring of additional staff to ensure solid links withall partners at the country, regional, and globallevels. Originally, the project limited staff to officesin Washington, D.C. and Johannesburg, SouthAfrica, relying on local communication andcommercial partners at the country level to conductday-to-day implementation. NetMark’s originalphilosophy was to avoid building an office and staffstructure in every country according to the normal“international development” approach, when it was

clear that any such structure would be disbanded atthe end of NetMark and when NetMark’s goal wasto build markets sustained by local organizations.NetMark’s expanded mandate under NetMark Plusand the problems that occurred without countryrepresentation, however, made it necessary to hirelocal staff and open country offices.

Today, NetMark’s headquarters is based inWashington, D.C. in AED’s main office. TheWashington team is responsible for overall projectmanagement, global partnerships, research andevaluation, and various kinds of technical support.The Johannesburg regional office is responsible forday-to-day oversight of country operations and themaintenance of relationships with regionalcommercial and communication partners. Countryoffices are responsible for the implementation ofplans, the provision of support to commercialpartners, and interaction with USAID missions,ministries of health, NGOs, and other RBM partners.

As NetMark grew, it became different things todifferent players. Known by the public healthcommunity as a “public-private partnership,” it alsobegan to fit what the private sector called a “cross-sector partnership.” Throughout its evolution,NetMark benefited by stability with its participatingpersonnel and with its partners—USAID as thedonor/client, AED as project manager, commercialsector and NGO players as project executors, andRBM and its multilateral partners as champions.

U.S. Agency for International Development (USAID)USAID is an independent federal governmentagency that receives overall foreign policy guidancefrom the U.S. Secretary of State. Its work supportslong-term and equitable economic growth andadvances U.S. foreign policy objectives. From the

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beginning of the project, USAID was committed todeveloping a new market-based model to build uponits 20 years of funding for traditional socialmarketing. This consistency has allowed NetMarkthe funding and flexibility over six years to developboth a new development model and a commercialmarket.

Dr. Dennis Carroll, Senior Health Advisor inthe Bureau for Global Health in USAID’sWashington, D.C. office, provided vision andunprecedented support by believing that a newdevelopment model would only arise throughexperimentation and calculated risk-taking. Staff in-country at USAID Missions, however, held a rangeof perspectives about how to best increase ITN use(e.g., traditional social marketing, free giveaways,partnership with the commercial sector, and variouscombinations of these), and it was the responsibilityof the NetMark team to obtain support from bothUSAID headquarters and local missions.

NetMark felt that traditional public healthmeasures of success, such as number of ITNsdistributed, were not good indicators of the progressbeing made with this bold new concept; who wasreceiving product and the level of sustainabilitybeing created were also important considerations.Early metrics disappointed the public sector’sexpectations, particularly when most countries werefocused on achieving the RBM goal of 60% coverageof pregnant women and children less than five yearsof age by 2005.

Academy for Educational Development(AED)

Founded in 1961, AED is one of the world’s leadinghuman and social development organizations.Independent and nonprofit, AED is committed tosolving critical social problems through education,research, technical assistance, and social marketing.Its major areas of focus include health, education,youth development, the environment, and leadership

development. The NetMark team had to managestakeholders both external and internal to AED.NetMark’s success in attracting partners created theclassic organizational issues associated with fastgrowth. There was a constant need to bring newpeople on board and to reorganize in order to servethe needs of the growing partnership. The broadbusiness skill set necessary to implement NetMarknecessitated hires outside of AED.

NetMark’s regional manager, Dr. Shaw,described the situation as “dealing with 30 CEOs atonce, all with their own agendas.” At present,NetMark is struggling with its own headquarters-regional-country organizational issues and the needto decentralize decision making to the country leveland build capacity among country managers. AndRBM and other public health stakeholders stillexpect NetMark to align with their organizations toensure good communications and coordination withthe public sector.

Commercial Sector PartnersThis eclectic group of for-profit businesses

represents the formal partners for NetMark. Mostwere attracted to an association in which they couldshare risk, contribute to a credible and unified voicethat could influence policy makers, and benefit fromgeneric demand creation for ITNs. They alsorecognized the need to hedge against the volatiletender market, which would evaporate when donorfunds shifted to other issues. From multi-nationalcorporations (MNCs) to 25 small-to-medium-sizedAfrican enterprises (SMEs), the range of capabilities,relationships, objectives, and goals was broad. Thesmallest enterprises were severely under-appreciatedat the start, but they have proven to be key players

“As NetMark grew, it became differentthings to different players.”

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in both the execution and economic development ofthe countries served by NetMark. NetMark’s globalpublic health and commercial partners found itdifficult to differentiate between philanthropic andbusiness strategies. In the former, a donation wasonly sustainable as long as the donor continued togive, whereas the latter was tied to the very profitsgenerated by a business, which was sustainable aslong as the business continued to profit. Whencommercial partners were asked why they wereinvolved, one responded that it was inspired by theidea of using the market to solve big problems.Another added that the partnership gave it thelicense to think about issues of equity and access,instead of just profit.

Other Non-Governmental Organizations (NGOs)AED has actively sought out partnerships with

other NGOs and community-based organizations inits effort to serve the needs of diverse marketsegments. Some of these NGOs were competitors,contending for funding on malaria and other publichealth projects while partnering with NetMark.Most NGOs welcomed the opportunity to joinforces; however, as with any disruptive innovation,some perceived the NetMark model as a threat tofunding for social marketing and donor giveawayprograms. The NGOs and multi-lateral agencies that

have committed massive resources and time to theseefforts as a public good remain skeptical of theNetMark model, despite the seemingly obvious needfor both donor and commercial models to addressthis disease.

The Roll Back Malaria (RBM) PartnershipThe RBM Partnership is a global initiative

supported by more than 90 partners. Its aim is tohalve the burden of malaria by 2010.4 A key elementof its malaria prevention strategy is to increase theuse of ITNs among pregnant women and childrenless than five years of age from less than 10% inmost countries to 60%, as stated in the AbujaDeclaration of 2000, a commitment by 44 Africancountries to fight malaria using RBM strategies.5

While RBM could draw attention to the need forITNs and could mobilize resources, it did not haveexecution resources, and therefore found NetMarkto be a useful vehicle for implementation ofstrategies to help achieve its goals. It was also criticalfor NetMark to work within the RBM framework toensure alignment of its goals and strategies withthose of national ministries of health and others inthe malaria community. RBM’s public healthprofessionals, who were accustomed to indicators ofsuccess in the millions of units distributed ratherthan in the tens of thousands of units sold, found it

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difficult to accept the commercial sector’s view ofsuccess. In the opinion of one public health advisor,“The NetMark intervention [was] a failure.” Theability to use public channels for distribution of freegoods can be faster and less complicated for healthauthorities than trying to develop a market andlong-term net supply. If NetMark had not acted as abuffer and advocate, one commercial partnerdoubted that it would have “wasted the energy tostay in the game,” given what it perceived to be theunrealistic expectations of the public healthcommunity.

In summary, because of NetMark’s mandate, acomplex constellation of partnerships was formed toaddress the needs of numerous stakeholders andplayers. This effort required engagement andalignment with official public health programs andnon-traditional players such as net/insecticide

manufacturers and distributors, along withadvertising and promotion agencies. Management ofthe dynamics among traditional public healthplayers and commercial partners proved to be one ofthe greatest challenges for NetMark. Not only didthey differ in objectives and goals, but also in theirmissions and cultures. Each spoke its own“language.” And, as with any innovative operationalmodel, all partners were “learning while doing.” The appendix summarizes the partnerships in eachof the seven countries where NetMark has full-blown programs (NetMark is providing limitedsupport for a pilot project in Zimbabwe throughReckitt Benckiser), and in Cameroon, where theproject hopes to expand in 2005.

(L to R) NetMark billboard inSenegal, NetMark wall mural inZambia, Former Senegal Ministerof Health, Professor Awa-Marie Coll-Seck (now ExecutiveSecretary of the RBMPartnership) at the NetMarklaunch in Dakar in August 2002

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WHILE AED EXPECTED THE NETMARK PROJECT TO

be an experimental process of innovation—tryingthings out and keeping what works—team membersknew that they needed to align their project designwith the way business thought about the marketand, at the same time, expand the traditional view ofthe market. A conscious effort was made, therefore,to align NetMark’s design with the classic “4 Ps”—product, place, price, and promotion. The aim wasto demonstrate how meeting the needs of the poor

could translate into good business that promotesexpansion into new market segments.

Gradually, over several years, a model hasemerged that meets the needs of the variousstakeholders. This model, dubbed “Full MarketImpactTM” (FMITM), encompasses five factors thatcan be addressed to achieve public health andbusiness objectives through integrated strategies:supply, access, affordability, demand/appropriate use,and equity/sustainability. Private and public sector

partners agree on common objectiveswhile observing their respective rolesacross each of the five factors, whichthey would address even if they wereworking independently. AED helps tocreate a bridge of common objectivesacross related factors, providingtechnical assistance to public andcommercial partners along the wayand helping to leverage resources in amutually beneficial manner.

AED hopes that FMITM willchallenge the way businesses thinkabout market opportunity,encouraging them to take a broaderview of the role their products canplay and the consumer behaviors theycan influence while addressing criticalpublic health issues. Figure 1 depictsthe AED/NetMark FMITM model,including the points of convergencebetween the 4 Ps and the five factorsof FMITM.

Full Market ImpactTM ResultsDespite the reality that ITN sales byits formal commercial partners wereonly 62% of forecast in 2004,


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NETMARK CASE STUDY I 11

NetMark has every reason to be optimistic. Sales byformal partners in 2004 were up 132% over those in2003, and growth of the overall market in NetMarkcountries is estimated to have reached over 9 million in2004. Moreover, demand creation has been successfulin building awareness of ITNs. While the pacing ofinitial forecasts was overly ambitious and based on littlemore than guesswork, the past several quarters haveshown a sharp increase in sales. Indications from recentmarket surveys are that the market has entered agrowth phase, now that NetMark and its partners aresolving supply and access issues, and many others areentering the market in response to demand thatNetMark has generated for ITNs.

In a 2000 household survey, ITN use in Nigeriawas found to be virtually non-existent; indeed, only7% had even heard of treated nets.6 In 2004, however,commercial players that benefit from NetMark-

Sales staff for QCL, NetMark partner in Uganda, on ITN distribution motorcycles

AED hopes that FMITM will challenge theway businesses think about marketopportunity, encouraging them to take abroader view of the role their products canplay and the consumer behaviors they caninfluence while addressing critical publichealth issues.

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12 I NETMARK CASE STUDY

0

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Nigeria Senegal

1 2 3 4 5 1 2 3 4 5

LOW HIGH LOW HIGH

SES

Untreated Ever Treated Currently Treatedin 2004 in 2004 in 2004

Untreated Ever Treated Currently Treatedin 2000 in 2000 in 2000

The socio-economic status (SES)scale was developed from aseries of questions aboutownership of assets, as well asmeasurement of other variablesknown to be associated withSES, such as level of education.Using statistical procedures(principal components analysis)to analyze the responses, eachhousehold was assigned ascore. Households were thendivided into quintiles based onthis score.

0%

10%

20%

30%

40%

50%

60%

70%

Urban Rural Urban Rural

2000 2004 2000 2004 2000 2004 2000 2004

Nigeria Senegal

Untreated Ever Treated Currently Treated

Figure 2: Percent of Households that Owned a Net or Insecticide-TreatedNet (ITN), by Socioeconomic Status (SES), Nigeria and Senegal, 2000, 2004

Figure 3: Percent of Households that Owned a Net or Insecticide-TreatedNet (ITN), Urban and Rural Areas, Nigeria and Senegal, 2000, 2004

FFuullll MMaarrkkeett IImmppaaccttTM aanndd tthhee 44 ““PPss”” ooff BBuussiinneessss

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NETMARK CASE STUDY I 13

financed generic promotion sold more than981,000 nets in Nigeria. There has also been adramatic increase in the percentage of nets sold withre-treatment kits, and 37% of net owners reportedthat their net was treated, according to an OmnibusConsumer Study in October 2004.7

In addition, data from household surveysconducted by NetMark in 2004 show considerablegains since 2000.8 Data from Nigeria and Senegalshow that awareness and use of nets are increasingfairly dramatically and that more nets are beingtreated or purchased pre-treated. The percentage ofhouseholds that owned a net or ITN in Nigeria, forexample, rose from 12% in 2000 to 27% in 2004;in Senegal, the percentage of households that owneda net or ITN rose from 34% to 56%; and inZambia, household ownership rose from 27% in2000 to 50% in 2004.

Importantly, NetMark’s commercial sectorapproach is resulting in increased use among allsocioeconomic groups; that is, net coverage rates arevery equitable and vulnerable groups are beingreached in both urban and rural areas. Figures 2 and3 show the percentage of households that owned anet or ITN in 2000 and 2004, by socio-economicstatus, followed by urban and rural areas, in Nigeriaand Senegal. Equitability of net coverage is alsoevident in Ghana, where NetMark began operationsin 2002.

NetMark provides matching funds to Reckitt Benckiser todevelop their ITN brand in Zimbabwe

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Product (FMITM Supply)“NetMark is increasing the supply of ITNs by improving thecoordination of commercial and institutionalprocurements, providing technical and financial support toexpand manufacturing capacity and quality, and creatingstrong links between manufacturers and the bestdistributors in Africa. Increasing the supply of ITNs isnecessary to meet the rapid increase in demand for ITNs(particularly long-lasting ITNs [LLINs]) among consumersand institutional buyers. NetMark is working closely withinsecticide companies and net manufacturers to bring themost promising LLIN technologies from the laboratory toAfrica as quickly as possible.” 9

FOR MANY YEARS, THE COMMERCIAL SECTOR HAD

thought of itself as a supplier for public institutions,and some businesses had trouble shaking this self-perception. It took time for the commercial sector tofully realize that NetMark was helping to open up anentirely new consumer market—a classic “base-of-the-pyramid” marketplace completely off the sector’s radar.As one partner commented, “At first I thought this wasjust another tender, like UNICEF or MOH, now Irealize that the net is not sold until the lady puts it upin her house. NetMark has made me think about theconsumer.”

The MNC-to-SME supply partnership—in whichhigh-quality products are linked to locally savvydistributors and their networks, and the businessplanning capacity of SMEs in the developing world isimproved—is a potentially powerful new tool for thedevelopment community. One example is SiamDutch,an MNC based in Bangkok, Thailand, along withPalunet, a small for-profit business started in Senegalby Abdou Gueye in 2002. SiamDutch was alreadysupplying one of NetMark's partners in Senegal withnets. However, they were eager to launch their ownbrand and teamed up with Palunet. NetMark was notconvinced that this small company was worth

investing in, and decided not to support Palunet untilthey proved their commitment and showed results.With support from SiamDutch and a totalcommitment to selling ITNs, and only ITNs, Palunetentered the market aggressively.

Palunet proved to be a capable player evenwithout formal partnership status by riding on themomentum of the demand creation NetMarkcatalyzed. After 1.5 years, Palunet joined the partner-ship and gained access to technical, financial, andmarketing support to build the Sentinelle™ brand.

Now, Palunet is expanding from Senegal intoneighboring West African nations, with a financingguarantee supported by NetMark and SiamDutch. Inthis way, an MNC’s willingness to invest in a long-term relationship has allowed an SME to grow themarket while winning on both the economic andsocial fronts. NetMark provides business planning andreporting tools to improve Palunet’s efficiency andprofessionalism. This SME especially appreciates thesupport that NetMark brings with its distributormeetings and interface with the Senegalese governmentbureaucracy, which can be difficult for a small businessto negotiate.

Long-lasting ITNs (LLINs) represent the cuttingedge in ITN technology. They are much moreconsumer-friendly in that they do not require re-treatment to remain effective. However, the supply ofLLINs is currently limited to two manufacturers, andLLINs are generally more expensive. NetMark isinvesting in bringing new and less expensivetechnologies to the market by providing manufacturerswith technical assistance from leading textile processengineers. NetMark is also working with Africanmanufacturers to improve the quality of their netproduction through training in quality control.Without this financial and technical support, thesupply of LLINs and the quality of many African-

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made nets would continue to be an issue andcompetition would be minimized.

PPrroodduucctt//SSuuppppllyy LLeessssoonnss LLeeaarrnneedd

NetMark’s willingness to reduce investment risk bysharing in research and development costs is helping toensure that an adequate supply of high-qualityproducts can be brought to the market by commercialplayers at affordable prices. In addition, transforminglocal partners from traders to marketers with improvedbusiness planning skills is a key to building a reliablesupply. Overcoming the “trader mentality” of buyingand selling whatever goods are available and indemand continues to be a big obstacle. NetMarkfound it needed to put increased resources into helpingAfrican partners adopt Western business practices suchas development of a marketing strategy and plan for asingle product line based on sales projections, stockprocurement planning, and cash flow analysis.

Place (FMITM Distribution)“NetMark is working with suppliers and distributors toensure the uninterrupted distribution of ITNs at anational scale through improved stock management,joint investment to expand the number of outletscarrying ITNs, partnerships with grassroots organizationsfor community-level distribution, and mobilepromotional teams.” 9

The lynchpin players for place/distribution have become poorly capitalized SMEs with anentrepreneurial spirit and a willingness to becomefocused manufacturers and marketers of ITNs.However, expectations for large-scale public healthoutcomes cannot yet be met within the constraintsof these small businesses. NetMark’s recent effort topartner with NGOs has expanded productavailability beyond purely commercial channels.Both sectors clearly have room to grow. It willcontinue to be a challenge to select the rightpartners, both in terms of financial strength and acommitment to focus their resources on ITNs.

Initially, NetMark chose distributor partnerswho represented other well-known internationalconsumer packaged goods brands, but found thatITNs were not a priority for these large businesses,especially given the size and bulk of ITNs, whichmake them difficult to transport and stock.NetMark then included small businesses that werefocused solely on ITNs and, as such, were moreloyal and energetic market developers. These smallbusinesses can neither survive massive un-targetedproduct giveaways nor bid on large tenders; as aresult, the ongoing coordination of all ITN playersremains critical. NetMark supports the free orsubsidized distribution of ITNs to those who areunable to pay and promotes a market segmentationmodel that ensures that those subsidies are well-

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targeted and allows the commercial sector to grow inmarket segments that do not need subsidies.

NetMark also encouraged international donorsto include SMEs in their tender process, thushelping establish both retail and institutional(donor) markets for these businesses. Much progresshas been made since a report from 2002 outlinedproblems:

“Distributors and agents of NetMark’s partners areresponsible for placing orders. They remainhesitant to place large orders due to the threat ofun-targeted subsidies; fear that new tax laws willnot be respected and enforced by customs agents;[and] devaluation and high interest rates.”10

One issue of concern to NetMark is to avoidcreating a sense of dependency among SMEs thatcurrently look to NetMark for access to affordablefinancing and as a remedy for their own weakplanning. NetMark provides valuable technicalassistance for business planning and recently beganexploring financing options that can be managed byother sources such as commercial banks. NetMark isalso initiating agreements with manufacturers tohelp them increase credit to their distributorsthrough improved planning and partial paymentguarantees that reduce their risk. For the past year,NetMark has provided matching funds to helpdistributors expand their distribution efforts,providing dollar-for-dollar investment based onapproved marketing plans and submission of receiptsand monthly sales reports.

Some distributors feel that NetMark’srequirements are creating too much bureaucracy,while others feel these conditions have helpedprofessionalize their business. As one regionalNetMark manager put it, “We are putting first-world business planning tools in the hands of third-world businesses.” Fine-tuning to create a usefulprocess without becoming burdensome will requirecontinued monitoring and feedback.

PPllaaccee//DDiissttrriibbuuttiioonn LLeessssoonnss LLeeaarrnneedd

NetMark is helping commercial partners improvetheir efficiency and lower the cost of buildingdistribution capacity beyond urban markets for theirbranded products. Employing both traditionalretailers and new channels, such as community-based and donor groups, these partners are buildingnew markets while serving the needs of the poor.

Price (FMITM Affordability)“NetMark will continue to support the transfer oftechnology for LLIN production so that LLINs areavailable to individual and institutional buyers at thelowest possible cost. NetMark will continue to seek theelimination of taxes and tariffs in the countries wherethe project works and beyond by working in closecoordination with local RBM partners.” 9

Taxes and tariffs are constant battles in whichNetMark plays an important role in creating anenabling environment for its commercial partners.Having a non-profit advocate for lowering taxes andtariffs in the interest of the public good is morecompelling to policy makers than speaking purely asa for-profit business. Disconnects between officialproclamations to reduce taxes and tariffs and actualpractices remain commonplace. NetMark explainedthe situation in Nigeria late in 2002:

“The reinstatement of taxes and tariffs onimported ITNs and increase to a shocking 75%(three times the rate prior to the 2000 AbujaDeclaration in which African heads of state agreedto reduce or eliminate taxes and tariffs on ITNs)have virtually halted sales of ITNs by ourcommercial partners within the country andcrippled NetMark activities.

“The Nigerian MOH has put great emphasis onthe need to encourage local net production.Unfortunately, current net production is notsufficient to meet the needs of the commercial and

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public sectors. NetMark will work with both localand international partners in Nigeria tocomplement local production with internationalimports.”11

That same year, the project also reported:

“Even where taxes have been reduced oreliminated, there continue to be problems at theborders due to customs officials not beinginformed of changed policies.”10

A direct correlation has been shown between areduction in taxes and tariffs and increased ITN usein several countries. Lower barriers to entry andimproved local quality have increased marketcompetition and put a downward pressure on prices.For instance, in Zambia, one year after NetMark’slaunch in November 2001, retail prices decreased30% due to increased competition and lower taxesand tariffs. In Uganda, sales more than doubled afterthe elimination of taxes and tariffs.

NetMark has also supported commercialpartners with seed funding in the form of matchingfunds for initial product orders, support ofpromotional teams, and distribution expansion on atime-limited basis in order to support commercialpartners and their local distributors. By supportingmultiple partners in each market and attractingother players into the market by building overalldemand, NetMark has further fostered a competitiveenvironment in which prices continue to fall.

PPrriiccee//AAffffoorrddaabbiilliittyy LLeessssoonnss LLeeaarrnneedd

NetMark’s efforts to coordinate public sectorinitiatives, reduce taxes and tariffs, and makestrategic time-limited investments are keys tolowering the barriers to entry for commercialplayers. In addition, NetMark’s cost-sharing ofconsumer market research and demand creationhelps create an attractive market into whichcommercial partners can deliver affordable productsto serve this public health need.

Promotion (FMITM Demand/Appropriate Use)“NetMark builds demand for ITNs through marketingcampaigns based on extensive behavioral research.Thiseffort is amplified by joint investment with Africandistributors and ITN suppliers who market their ownbrands. As demand grows within a competitive market,consumers should benefit from improved quality, lowerprices, and wider availability.” 9

NetMark partnered with two premier agenciesto develop a world-class advertising andcommunication campaign with regional andcountry-specific components. AED’s behaviorchange communication experts joined forces withFoote, Cone & Belding (FCB), a global advertisingagency, and Exp Momentum, a pan-Africanconsumer products promotion company. Together,these firms merged strategies and techniques toproduce a successful advertising and promotionalcampaign. The campaign included mass media—TV and outdoor billboards, as well as traditionalpromotional and social marketing techniques such asroad shows geared toward building awareness andbehavior change. One TV spot won a prestigiousinternational industry award for best “benefitcommunication.”

In addition, NetMark created awareness for its“seal of quality” (Figure 4), which assured consumersthat products carrying the seal met internationalstandards, including use of WHO-recommendedinsecticides. Partners incorporated the seal into theirpackaging designs, which served to link their brandwith the generic marketing campaign. Though the“lack of supply in the market prevents us fromknowing our actual demand,” as one team memberstated, the tag line, “Mosquitoes KILL. KILLMosquitoes” (Figure 5) has undoubtedly createdawareness within the target markets. With adequatesupply filtering into commercial channels, demandcreation efforts should finally pay off. In 2005,

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NetMark will launch a newpan-African campaign inwhich the seal of qualitywill be linked with themessage, “ITNs are the newway for Africa to live.”

PPrroommoottiioonn//DDeemmaanndd

LLeessssoonnss LLeeaarrnneedd

NetMark's matching fundsand public educationcampaigns built awarenessabout malaria and ITN use,enhancing the commercialsector's marketing efforts.Partners are leveragingNetMark’s seal of quality onproduct packaging and

piggy-backing generic demand creation funded byNetMark onto advertising and promotions for theircommercial brands. A new hybrid communicationcapacity is developing in the African region. Partnerscan deliver a dual message, building consumerdemand while creating behavior change in theinterest of public health. Finally, while promotion isimportant, NetMark has learned the importance ofbalancing investment in supply- and demand-sideactivities.

Sustainable Markets (FMITM Equity)“NetMark works with commercial and public sectorpartners to ensure there is equal demand and access toITNs across all socio-economic groups. NetMark usestargeted subsidies to provide discounted or free ITNs tothe most vulnerable populations via the commercialsector. Over time the commercial sector will continue toincrease its investment in the ITN market and grow arobust retail market, which will lead to long-term marketviability and sustainability across all income groups.” 9

The sustainability of the ITN market isdependent on continued profitiability. NetMark’s

investment is intended to defray marketdevelopment costs so that consumer prices can bekept as low as possible while allowing all participantsin the value chain to earn normal margins. At thesame time, businesses may consider makingsupplemental investments from their foundations or“social responsibility” budgets during the growthphase of markets in ways that relieve marketing orbusiness managers from making decisions onwhether to invest in ITNs or other health-relatedproducts within cross-sector partnerships basedpurely on profit and loss.

Equity and profitability can be a challenge tobalance, and early reports were populated withexamples of untargeted distribution of subsidizedITNs, which discouraged the commercial sectorfrom investing in market development. To addressthis issue, NetMark developed an innovative voucherprogram in partnership with national ministries ofhealth, UNICEF, and ExxonMobil. Rather thanassuming full managerial and financial responsibilityfor product procurement, storage, packaging,promotion, distribution, and management, donorsprovided the subsidy directly to high-riskpopulations in the form of discount vouchersdistributed through antenatal clinics. Pregnantwomen would present vouchers at retail outlets toreceive a discount. While NetMark focused onaddressing the volume and quality of productionand distribution of ITNs, ExxonMobil supportedvoucher redemption at Mobil Marts® and launched acause-related promotional campaign, “Help UsHelp,” in which customer purchases of gasolinegenerated additional funds for the voucher program.This targeted subsidy program won on three fronts.

Figure 4. Seal of Quality

Figure 5. NetMark Poster


NNeettMMaarrkk’’ss EExxppeerriieennccee wwiitthh FFuullll MMaarrkkeett IImmppaacctt™™

“‘Mosquitoes KILL. KILL Mosquitoes,’has undoubtedly created awareness

within the target markets.“

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It enabled almost all of the donor money to go intothe subsidy with a minimum amount spent onmanagement, thus reaching more people; reducedthe burden on health care workers so that they didnot have to stock and sell ITNs themselves; andincreased the number of retail outlets, particularly inareas that were not previously served by thecommercial sector.

Balancing equity with sustainability has beensuccessfully accomplished in Ghana, where purelycommercial channels were used to reach targetpopulations, including those in rural areas. Threedistribution partners set up and supplied 668 retailershops, including 101 Mobil Mart® gas stations, 45 of which were in regions participating in thevoucher program. Two targeted subsidy programshave been linked to this distribution network, andresults have shown that:

• In the Kumasi and Great Accra Regions, theExxonMobil/USAID program distributed75,000 vouchers to pregnant women with an87% redemption rate.

• Mobil Marts® involved in the program reportedtwo-thirds of ITNs were sold at full commercialprices.

• In the Volta Region, the ongoing BritishDepartment for International Development(DFID)/USAID program distributed 20,460vouchers in 2004 and achieved a 51.4%redemption rate. In addition, the number ofcommercial outlets grew from 10 to 185 as aresult of the voucher program in this region.

• Overall, vouchers are expanding the market,with close to 55,000 ITNs sold at fullcommercial prices in addition to 83,000 ITNsbought through vouchers.

These programs have been so successful that theGhana Health Service (GHS) adopted the voucherapproach to provide subsidies for the purchase of an

additional 200,000 ITNs for children less than fiveyears of age in the Central Region during a polioimmunization campaign held in October 2004. TheGHS is also working with NetMark and its partnersto expand DFID programs in the Eastern Region inorder to target 80,000 pregnant women, and toexpand work with ExxonMobil in the Brong AhafoRegion in order to target 40,000 pregnant women.

Today in Ghana, NetMark is focused onincreasing the use of insecticide re-treatment kits,especially among vulnerable populations in ruralareas. Building on the successful voucher approach,NetMark is partnering with NGOs for thedistribution of re-treatment kits to village-levelcommunity health workers. In addition, othergovernments in the region have begun toincorporate vouchers as a cost-effective and scalablemethod of intervention, emphasizing rural areaswhere few retail outlets exist.

SSuussttaaiinnaabbllee MMaarrkkeettss//EEqquuiittyy LLeessssoonnss LLeeaarrnneedd

NetMark’s approach to shared investment risk ishelping catalyze a new market in the interest of publichealth, one that the commercial sector would likelynot have created alone. The competitive advantage ofbeing the first to establish new brands in the minds ofmillions of new consumers may be a cost-effectivebusiness development strategy for these companies.

The Future of the FMITM ModelThe five factors of the FMITM model—supply,

access, affordability, demand/appropriate use, andsustainable markets/equity—have helped diversepartners build common ground with the 4 Ps ofbusiness, while expanding market opportunity. Overthe next three years, the NetMark team believes itwill achieve significant public health impact inmalaria prevention. AED will continue to developthe FMITM model to ensure that business and publichealth goals are met as the markets in which themodel is applied evolve.

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NEARLY SIX YEARS INTO THE NETMARK PROJECT, THE

approach of building a sustainable ITN marketthrough joint investment with the commercial sectoris beginning to gain traction. NetMark’s commercialsector partnerships have resulted in tremendousleveraging of donor resources, having lowered the costper ITN delivered by 44.3% (from $7.65 to $4.26)since 2001. More than 30 formal commercial partnershave invested approximately $18 million inbuilding a sustainable ITN market in Africa as ofDecember 30, 2004. For every dollar that USAID hasinvested in NetMark in 2004, formal commercialpartners have invested $0.68. Figure 6 demonstratesthe trend toward equal investment by NetMark andcommercial partners. This is a conservativeaccounting for the overall impact that NetMark hashad, since it does not include the massive investmentmade by informal partners and traders who have alsobeen investing in building the market.

The NetMark project has shown thatinternational and African companies are willing toinvest in producing, marketing, and distributingITNs when working in partnership with the publicsector. This commercial investment is setting thestage for a sustainable ITN market. As one teammember commented, “More of USAID’s money canbe spent on reaching the very poor and biologicallyvulnerable as the commercial sector is able to reachmore and more of those who are willing and able topay. NetMark is demonstrating the efficiency ofletting each partner do what it does best.”

By 2004, ITN sales by NetMark’s formalpartners neared the 2 million mark. While thisrepresented only 62% of the ambitious projectiontotal made by the various commercial partners for2004, it did represent a 132% increase over 2003sales. Progress is being made in a sustainable manner,

and the market appears to be poised for rapid growthnow that supply issues are being addressed. Overallcommercial sales in NetMark countries may haveexceeded 9 million based on reports from partnersand estimates of additional sales based on marketresearch conducted in 2004. The number ofhouseholds from all socioeconomic groups inNetMark countries owning nets and ITNs is showingsignificant growth, even in rural areas, demonstratingthat this model is capable of achieving business andpublic health objectives in a relatively shorttimeframe.

In addition, NetMark’s approach to measuringtotal market impact more accurately reflects the shiftoccurring in the ITN market. In the words of onepartner, and as similarly expressed by several others,“If NetMark were to go away tomorrow, most of theplayers would stay in the market. The commercialmarket has been created and would continue toexist.” And in the highest form of flattery, targetedsubsidies and market-based approaches arebeginning to emerge from other NGOs and donororganizations.

Overall, the NetMark approach is expanding thereach of ITNs through both the market and donorchannels. While the first few years have been difficult,it is quite typical for SMEs to see a market opportunityin advance of MNCs. SMEs begin to develop themarket, paving the way for greater investment byMNCs in the future. Indeed, based upon the interestexpressed by other MNCs, NetMark is beginning toinch toward a new stage of its evolution. It is yet to beseen what form these new partnerships will take, butpartners have proven that there is synergy in pairingglobal know-how and influence with local Africancapacity in order to develop a new market andstimulate economic development.

NNeettMMaarrkk’’ss SSuussttaaiinnaabblleeDDeevveellooppmmeenntt AAcchhiieevveemmeennttss

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0

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USAID/NetMark investment through December 2004 **

USD

(mill

ion

s)

*Commercial sector investmentincludes product procurement,marketing, distribution,vouchers, management, andproduct development. Totalcommercial sector investmentresulting from NetMark activitiesfar exceeds that which has beendocumented among its partners.

**USAID investment includes allNetMark expenditures to datefor implementation, demandcreation, campaign for re-treatments, policy, research,conferences, and programdevelopment.

Figure 6: Commercial Sector Investment as a Percentage ofPublic/Private Joint Investment Under NetMark, 1999-2004

1999 2000 2001 2002 2003 2004

DDeevveellooppmmeennttss aanndd CChhaalllleennggeess

NETMARK IS MAKING PROGRESS ON SEVERAL FRONTS.It is improving the quality of nets and the efficiencyof production by providing technical assistance toAfrican manufacturers in quality control, and byworking with net and insecticide companies todevelop new long-lasting technologies that can bemade widely available. In this way, NetMark isbuilding significant local capacity within the ITNindustry while encouraging policy makers togradually open up these protected sectors tocompetition from imports.

In addition, NetMark is beginning to monitorall ITN activity in the market—that is, the activityof informal partners and the broader ITN market inaddition to that of formal partners. Previously, the

focus was on its formal partners, but clearly,USAID’s investment through NetMark (particularlythrough national-level ITN promotion and policychange) is having a much broader impact on themarket, and this impact needs to be documented. Itis felt that this monitoring will provide a betterrepresentation of total market impact by allparticipants.

On the supply side, Vestergaard’s PermaNet®, theonly long-lasting ITN (LLIN) in significantnumbers in the market, will soon be joined bycompetitors. This change is expected to drive downLLIN prices to more affordable levels. The LLIN isthe most desirable product, lasting up to four yearsor 20 washes, whereas other products need to be re-

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treated after just three washes. Another LLIN,Olyset® (manufactured by Sumitomo and A-ZTextiles), has only been used through donor-fundeddistribution and has not yet been launched incommercial markets.

Due to the limited supply and high prices ofLLINs, NetMark began to explore how a strategicinvestment in R&D might benefit consumers. Overthe past year NetMark has worked with textileengineers from Anovotek, Bayer andSiamDutch/Tana Netting to develop a newmechanized process for the mass treatment offinished nets with long-lasting insecticides. Theobjective was to seek a less expensive, scalable andeasily transferable process that minimizesenvironmental impact and exposure to insecticidesamong workers.

SiamDutch/Tana and Bayer agreed to work onthe development of the new process, investing theirown resources to cover all capital investments.NetMark provided technical assistance fromAnovotek's textile engineers to develop the processto apply the insecticide formulation to the nets, withthe understanding that it would be shared publiclywith all interested African and international netmanufacturers.

In September 2005, the first factory to utilizethe new process was opened in Bangkok, Thailand.Two weeks later NetMark hosted an internationalmeeting in Nairobi to unveil the process to allknown African net manufacturers, insecticidemanufacturers, and donors.

Although the testing of the product is not yetcomplete, preliminary laboratory results are verypositive, and it is expected that LLINs using the newprocess will be available in 2006 under the DawaPlus brand. SiamDutch/Tana hope to produce asmany as 10 million LLINs per year in their newfactory, and NetMark will provide technicalassistance to other manufacturers that wish to investin this new process.

Furthermore, MNCs are investing inwarehousing for regional stocks in Africa toeliminate the risk of stock-outs. Their vibrantrelationships with SMEs may become a best practicefor development, especially because of MNCincentives to build technical and business capacitywith their local partners.

Developing the NetMark partnership has alsoproduced some insights into the process of buildinga cross-sector partnership. The key lesson has beento manage expectations, ensuring time in thebeginning to co-design a process of stages,


Mary Carlin Yates, U.S. Ambassador to Ghana, visiting NetMark’s voucher program

Packaged nets for sale

DDeevveellooppmmeennttss aanndd CChhaalllleennggeess

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checkpoints, and measures of progress upon whicheveryone can agree, while defining roles andresponsibilities and clarifying “language” issues. New commercial sector players are also approachingNetMark as the market begins to emerge.

NetMark will continue to adapt its approach asthe lifecycle of the ITN market evolves. Dealingwith the sheer number of competitive partnersinvolved in the project is a challenge. NetMark mayneed to simplify the partnership in some mannerand will need to gradually scale down its role as chiefcatalyst and facilitator as it works itself out of a jobin 2007. NetMark has become closely associatedwith a group of AED employees who have struggledthrough the stages of team building and haveevolved into a “performing” team. Now, thechallenge will be to continue to manageorganizational growth, including the ability totransition exiting and entering parties, and

institutionalize NetMark’s FMITM model at AED. As with any emerging market, the realities of

economic, political, and social instability remainreal, but this sector is likely to be no more, andperhaps less, volatile than other consumer markets.If public policy continues to support ITNs, if themarketing programs truly create a sustainabledemand, and as the business partnerships becomeincreasingly viable without NetMark’s support, thenthe ITN market will continue to grow while servingthe public health fight against malaria.

But ITNs are only a part of the preventionsolution. As new players enter the market,NetMark’s commercial partners will eventually haveto compete not only with higher volume and better-quality ITNs, but also with other options for malariaprevention that may emerge over time. And so, theITN market will have a lifecycle not unlike that ofany other commercial market.

MOSQUITOES KILL.KILL MOSQUITOES.

TThhee PPaatthh FFoorrwwaarrdd

NETMARK PARTNERS HAVE LEARNED MANY LESSONS

over the past six years. As with most matters worthlearning, it has not always been easy. The key lessonspresented here will help inform future partnerships,whether for malaria prevention or for tackling otherpublic health or social problems. AED is alreadybeginning to leverage its core competencies byapplying the Full Market Impact™ (FMI™) modelin hygiene and reproductive health partnerships.Capitalizing on its knowledge of behavior changecommunications and design and management ofdevelopment programs, AED hopes to continue topartner with the commercial sector to grow newmarkets while addressing global public health issuesand serving the needs of the poor.

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IINNTTEERRNNAATTIIOONNAALL IITTNN MMAANNUUFFAACCTTUURREERRSS::A–Z TEXTILES, BASF, BAYER, HARVESTFIELD,

MOSSNET KENYA, SIAMDUTCH, SUNFLAG/NIGERIA,SYNGENTA, VESTERGAARD FRANDSEN


FCB/EXP Momentum

MOHPNLP

A–Z Textiles/Polyflex

Syngenta/Jacovides

Lion AdvertisingFCB/EXP

Momentum

MOH

A–Z Textiles/East African Group

SiamDutch/PETRAM

AdMedia FCB/EXP Momentum

Ghana HealthService Regional HS

Vestergaard/Netco

Vestergaard/Transcol

Syngenta/Reiss & Co.

SiamDutch,Bayer/Agrimat

ExxonMobil

FCB/EXP Momentum

MOHPNLP

SiamDutch/Indusries Kulubali

Vestergaard/Ets. Simpara

Centrespread FCB/EXP Momentum

FMOH & SMOH

Sunflag/Harvestfield

Bayer/CHI

Sunflag/Syngenta

Vestergaard

ROSIES Textiles

FCB/EXP Momentum

MOHPNLP

SiamDutch/Palunet

Vestergaard/Negitra

Bayer/Senphyto

CCAAMMEERROOOONN EETTHHIIOOPPIIAA GGHHAANNAA MMAALLII NNIIGGEERRIIAA SSEENNEEGGAALL

RREEGGIIOONNAALL CCOOMMMMUUNNIICCAATTIIOONN PPAARRTTNNEERRSS::FCB SOUTH AFRICA, EXP MOMENTUM

AAEEDD NNEETTMMAARRKK AANNDD UUSSAAIIDD PPAARRTTNNEERRSS

AAppppeennddiixx

ExxonMobil

MOHPNLP

ExxonMobil

Ghana HealthServices Regional HS

PSI & CARE

MOHPNLP

ExxonMobil

FMOH & SMOH

PPOOLLIICCYY AANNDD PPLLAANNNNIINNGG

CCOOMMMMUUNNIICCAATTIIOONN

MMAANNUUFFAACCTTUURRIINNGG//DDIISSTTRRIIBBUUTTIIOONN

TTAARRGGEETTEEDD SSUUBBSSIIDDIIEESS

UNICEF

MOHPNLP

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Limelight FCB/EXP Momentum

ITN CommitteeNMCP

Vestergaard/NetShoppe

SiamDutch,Bayer/QualityChemicals

Syngenta/Twiga

Safinet

FCB/EXP Momentum

NMCCCBOH

A–Z Textiles/Cropserve

Bayer/Ecomed

Syngenta/Melcome

ExxonMobil

UUGGAANNDDAA ZZAAMMBBIIAA

IINNTTEERRNNAATTIIOONNAALL PPUUBBLLIICC SSEECCTTOORR::RBM, LSHTM, DFID, INTERNATIONAL

FEDERATION OF THE RED CROSS,UNICEF, WORLD BANK, WHO, CARE, PSI

Reckitt Benckiser

FCB/EXP Momentum

ZZIIMMBBAABBWWEE

Sunflag/Coopers

IFRC, UNICEF,ExxonMobil

CBOH/NMCC

PPOOLLIICCYY AANNDD PPLLAANNNNIINNGG

CCOOMMMMUUNNIICCAATTIIOONN

MMAANNUUFFAACCTTUURRIINNGG//DDIISSTTRRIIBBUUTTIIOONN

TTAARRGGEETTEEDD SSUUBBSSIIDDIIEESS

LLeeggeenndd::

CCAADD = Consortium Africain de Droguerie

CCBBOOHH = Central Board of Health

DDFFIIDD = Department for International Development

FFCCBB = Foote, Cone & Belding

FFMMOOHH = Federal Ministry of Health

HHSS = Health Service

IIFFRRCC = International Federation of Red

Cross and Red Crescent Societies

IITTNN = Insecticide-treated Bednet

LLSSHHTTMM = London School of Hygiene and

Tropical Medicine

MMOOHH = Ministry of Health

NNMMCCCC = National Malaria Control Center

NNMMCCPP = National Malaria Control

Programme

PPNNLLPP = Programme National de Lutte

Contre le Paludisme

PPSSII = Population Services International

RRBBMM = Roll Back Malaria

SSMMOOHH = State Ministry of Health

UUNNIICCEEFF = United Nations Children’s Fund

WWHHOO = World Health Organization

67039_AED.qxp 10/25/05 3:00 PM Page 25

1 "Malaria in Africa." International Federation of Red Cross and Red Crescent Societies. 2005.<http://www.ifrc.org/WHAT/health/archi/fact/fmalar.htm>.

2 "Key Statistics." World Economic Forum. 2005.<http://www.weforum.org/site/homepublic.nsf/Content/Global+Health+Initiative%5CKey+Statistics>.

3 Roll Back Malaria, Scaling-up Insecticide-treated Netting Programmes in Africa. A Strategic Framework forCoordinated National Action, August 2002. Available online:http://rbm.who.int/cmc_upload/0/000/015/845/itn_programmes.pdf.

4 For information about Roll Back Malaria (RBM), seewww.rbm.who.int/cgibin/rbm/rbmportal/custom/rbm/home.do.

5 For information about the Abuja Declaration of 2000, seehttp://mosquito.who.int/docs/abuja_declaration.pdf.

6 NetMark, NetMark Baseline Survey on Insecticide Treated Materials (ITMs) in Nigeria, May 2001. Available online: www.netmarkafrica.org/research/quantitative/NigeriaQuan2001.PDF.

7 NetMark, “Omnibus Consumer Study,” October 2004.

8 Household surveys are available online at www.netmarkafrica.org/research/.

9 Academy for Educational Development (AED), “NetMark Plus Concept Paper,” April 2002.

10 NetMark, “NetMark Semi-Annual Report, January–June 2002.”

11 NetMark, “NetMark Semi-Annual Report, July–December 2002.”


RReeffeerreenncceess

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NetMark: - Private Sector Health Initiatives

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