What is market development?
Market development addresses the components of the market – from the manufacturer, to the distributor to the local seller or supplier – to evaluate necessary changes to ensure the system benefits everyone.
PSI’s mission is to make it easier for Sara to be healthy and plan the family she desires. Our mission aligns directly with that of global universal health coverage: to ensure that all people obtain and use the health products and services they need without suffering financial hardship. Universal health coverage results from strong health systems, including healthy and performing markets. A market is broadly defined as the space where consumer need is turned into demand and where the demand is fulfilled through a supply chain that results in product and service provision. PSI’s approach is to develop the total market for health products and services to achieve universal coverage.
This approach keeps tabs on how markets are working or failing. It also addresses the underlying causes of success or failure. Interventions that make markets work for the most vulnerable need to be flexible, highly nuanced and catalytic.
Market development is part of a “total market approach.” In taking a holistic view, we evaluate where we can best add value as a direct implementer of a service or purveyor of goods or by co-opting others. The goal is always to realize sustained and equitable increases in the use of these health products and services. PSI promotes market development by addressing demand and supply simultaneously, converting need into demand and facilitating supply to meet demand. Our action and facilitation of the total market is intended to grow demand and supply to meet the consumer’s need.
How do we develop markets?
We look at the “health” of a market – how well it operates and how sustainable it is . We implement interventions to improve the market long-term so that health solutions last well beyond our project cycles.
For example, we continue to develop markets for sanitation in India. In 2012, with funding from the Bill and Melinda Gates Foundation, we launched 3SI: Supporting Sustainable Sanitation Improvements in Bihar, India. Together with our partners, PSI generates both supply and demand by working with toilet producers, service providers, finance organizations, the public sector, the private sector and the government.
The project has shown that demand for toilets exists in rural India. The availability of high quality, low-cost products, as well as financing, is key to unlocking a sizeable part of this demand. We learned that accessing existing subsidies can significantly increase market penetration. Partners have also identified business models that can meet customer needs and make a profit. They have also identified players in the sanitation ecosystem who could serve as the “market maker,” conducting market-building activities and creating an enabling environment for growth.
UNITAID funded PSI to create markets in the private sector of five malaria endemic countries for malaria rapid diagnostic tests (RDTs) in five malaria endemic countries within the private sector. An RDT is a simple test that can be used in the field outside of laboratory conditions to quickly detect if a patient has malaria. An entrepreneur in a corner store can correctly administer the test once trained. This project aims to increase both access to and demand for quality-assured RDTs, while improving private providers’ fever case management skills.
More than 40 percent of the population in endemic countries seeks care and treatment for fevers in the private sector. Appropriate use of RDTs is critical to ensure proper diagnosis and treatment. Without these private sector purveyors, RDTs are either not available or, where available, are more expensive than the recommended frontline treatment for malaria, artemisinin combination therapy (ACT). This means consumers and providers overtreat fevers for malaria, often misdiagnosing the illness and wasting antimalarial drugs, This contributes to future resistance to malaria drugs and doesn’t correctly treat the fever from which the patient is suffering.
To address this, we are taking a market facilitation approach. We mapped Kenya’s RDT market to see what barriers kept the private sector from adopting and promoting the widespread sale of RDTs. This in-depth analysis has revealed :
- The regulatory environment does not allow certain types of outlets, such as informal drug shops, to stock or sell RDTs;
- Providers have no incentive to stock RDTs when demand is low and supply chains to restock are weak;
- Consumers do not demand a test because they may lack knowledge of the benefits of RDTs or are unable to afford one;
- Providers choose not to adhere to negative RDT results due to lack of confidence in the test results, loss of profit from a foregone ACT sale and/or demand from customers to treat with an ACT anyway.
Working with market development experts from the Springfield Centre, we analyzed the issues the RDT market faces and started by addressing who best performs the functions and who best pays for the functions. Once the natural incentives for this market are clear to the private sector, we aim to leverage them to serve those who need theses services, namely the poorest and most vulnerable citizens. To create and sustain the market, we look for solutions that neither replace the existing market players or distort their incentives. This is how we change a system rather than simply fill a gap.
- PSI Vietnam: Social Marketing for Improved Water, Sanitation, and Hygiene
To address unsafe water, poor hygiene and limited sanitation in rural communities, PSI Vietnam launched a market based sanitation initiative in rural areas of the Mekong Delta and Central Highlands.
- Webinar: Stimulating the Market for Malaria RDTs in the Private Sector
PSI, UNITAID, Malaria Consortium, FIND, and JHSPH held a webinar to discuss leveraging the power of the private sector to transform the mRDT market in support of universal access to malaria diagnostics.
- Shaping the Family Planning Market by Strengthening the Public Sector
PSI considers total market approaches to be critical for achieving universal health coverage, especially when it comes to contraception. This program brief presents cases, supported by several different donors, which take into consideration the total family planning market.
- Transforming the Private Sector to Support Universal Malaria Diagnostic Coverage
To assure the available and use of malaria rapid diagnostic tests in the private sector, PSI and partners conducted a three-year project between 2013 and 2016 to increase the uptake of quality-assured mRDTs in private-sector markets in Kenya, Madagascar, Nigeria, Tanzania, and Uganda by taking a market development approach to identify market failures.
- Constructing Septic Tanks On-Site Using Ferrocement
This technical brief from PSI’s Sanitation Service Delivery (SSD) project describes the procedure for constructing septic tanks using ferrocement.
- Conducting Soils Evaluation for On-Site Wastewater System Design
This technical brief from PSI’s Sanitation Service Delivery (SSD) project describes the procedure for conducting soil evaluations accurately and without a laboratory or expensive soil sieve.
- Women’s Limited Choice and Availability of Modern Contraception at Retail Outlets and Public-Sector Facilities in Luanda, Angola, 2012–2015
Despite high rates of unintended pregnancy, access to a wide range of contraceptive methods, especially injectables and long-acting reversible contraceptives (LARCs), is severely limited in both public and private facilities. Knowledge of contraceptive choices is likewise limited, yet a substantial proportion of women are not using their preferred method among the methods they know of.
- Developing Family Planning Markets in Francophone West Africa
In Francophone West Africa, PSI partners with Ministries of Health to achieve the goals set out by the Ouagadougou Partnership to reach at least 2.2 million additional family planning users by 2020. The pillars of our response are access, choice, quality, and equity.
- Towards Subsidized Malaria Rapid Diagnostic Tests. Lessons Learned from Programmes to Subsidise Artemisinin-Based Combination Therapies in the Private Sector: a Review
Private sector subsidy programmes of ACTs have been effective in increasing availability of ACTs in the private sector and driving down average prices but struggled to crowd out antimalarial monotherapies. A subsidy of rapid diagnostic tests (RDTs) in the private sector has been recommended by governments and international donors to cope with over-treatment with ACTs and to delay the emergence of resistance to artemisinin. In order to improve the cost-effectiveness of co-paid RDTs, we should build on the lessons we learned from almost 10 years of private sector subsidy programmes of ACTs in malaria-endemic countries.
- Business Model Development for Fecal Sludge Management: Insights from Bihar, India
In 2014 PSI began implementing Project Prasaadhan to address critical gaps in fecal sludge management in Bihar, India. Read about the project's key highlights on this poster presented at the 4th Global Symposium on Health Systems Research.