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Theory of Change

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Title: Theory of Change


1
Theory of Change
Get Grounded
Social Enterprise Design
2
Is the idea a concept?
Social Enterprise
3
Understand Nature of social problem
Needs/limitations of clients
4
Where to begin
  • Clarify your business and its goals
  • Build scenarios
  • Play it out your idea
  • Identify deal breakers
  • What will make or break your business
  • Money, laws, partners, etc.
  • Identify key design influencers
  • Competitors, industry dynamics, regulatory
    environment, demand, required resources
  • Reality Test
  • Objective feedback
  • Quick Market Test
  • Benchmarks

5
Pare it down
  • Scope
  • For most SEs scope is a practical issue of
  • Location (other resources) haves have nots
  • Time
  • Strategy
  • Low hanging fruit
  • Window of opportunity
  • Proof of concept/display
  • Inflection point for impact
  • Assumptions
  • Informs market research

6
Social EnterpriseBusiness Concept Discussion
7
Best way to learn about markets?
  • Start selling
  • Test market
  • Pilots

8
Marketing Videos
9
What is a Value Proposition?
  • Identifies
  • target market
  • opportunity
  • Explains
  • cost and benefits
  • how that combination is superior to other choices
  • A value proposition is NOT
  • a mission statement
  • an elevator pitch
  • A sales pitch Unique Selling Proposition

10
Creating your Value Proposition
  • For List target customers or beneficiaries.
    Group them and ultimately define THE customer or
    beneficiary.
  • Who Define the need or opportunity. What is
    critical issue?
  • The Name your product, service or concept. Place
    the product, service, or concept into a generally
    understood category
  • That Quantify the benefits of the product,
    service, or concept. Identify the single most
    compelling benefit
  • Unlike List the competitors and competitive
    alternatives
  • Our Differentiate the product, service, or
    concept. Set it apart from the competition.

Asserts the VALUE of the offering
POSITIONS the value
11
Example IDE India
For List target customers or beneficiaries. Who
Define the need or opportunity, i.e. what
critical issue for customer or beneficiary? The
Name the product or service or concept and place
the product, service, or concept into a generally
understood category. That Quantify the
benefits of the product, service, or concept.
Identify the single most compelling benefit
Unlike List the competitors and competitive
alternatives Our The primary differentiation of
the product, service, or concept.
  • For small scale rural farmers using surface
    irrigation
  • Who lose over 50 of usable water to surface
    runoff annually
  • The IDE-India low-cost drip irrigation system
    is an advanced irrigation device
  • That inexpensively and completely eliminates
    water loss from surface irrigation
  • Unlike currently used, expensive and
  • large-scale drip systems
  • Our product is a customized, modular and
    scalable system that consistently reduces water
    loss and increases farmers yields

12
Marketing Mix in SE Context
  • Availability - Product
  • Product/service does not exist
  • Collateral free micro-loans
  • Eyes on Four Paws
  • Affordability Price
  • Product/service exists but is too expensive
  • moneylenders (interest can be 200 of loan)
  • Aravind

13
Marketing Mix in SE Context
  • Access Distribution
  • Product/service exists but customers do not have
    access
  • Banks and formal financial markets
  • NOTE access to markets or undeveloped markets
    often major barrier for SE clients.
  • Vision Spring
  • AWARENESS - Promotion
  • Product/service exists but customers do not know
    that it exists
  • Information on meetings in markets
  • Kickstart

14
SE Marketing Considerations
  • Educational marketing
  • Market development
  • Undeveloped/fragmented markets, poor market
    infrastructure
  • Barriers to reaching clients through traditional
    marketing vehicles
  • Literacy, language, social physical isolation,
    fear and distrust, etc.

15
More
  • Communications /PR efforts to educate SE
    stakeholders
  • Community, donors, public, etc.
  • Demand Imbalance
  • Wants/inability to pay
  • High costs
  • Marketing cost/demand imbalance major reason for
    private sector market failure
  • Cultural context

16
Whats in a name?
17
Your marketing message is not your mission
  • Why will a customer buy your product or service
    more than once?

18
Baking with a difference
  • All-natural bakery products from scratch.  We
    mix small batches of fresh, premium ingredients
    and finish each product by hand to create
    irresistible desserts. 
  • Rubicon stands for more than fabulous desserts
    we are part of a nonprofit organization, Rubicon
    Programs, that helps individuals in the San
    Francisco Bay Area overcome economic and social
    hurdles.  Rubicon provides training, housing,
    employment and support services to people in
    need.  You can feel good about buying Rubicon
    products because you in turn support your
    community.

19
Customers buy Benefits
TOLPA PB
Microfinance
Features Benefits Features Benefits
High in protein Good nutrition Working capital loans Vehicle to grow business
Slightly sweet flavor Kids love it easy for parents Weekly repayment Easy to pay back
100 natural Peace of mind Collateral free Access
Expiration date Guaranteed Freshness Solidarity groups Peer support
Plastic container Convenient reusable Short loan cycles Lower risk
Produced by low income Haitians Feels good make a difference Easy application Low stress
20
1 Marketing Vehicle
How to incite?
21
Most common price strategy challenge for a social
enterprise?
  • Inability to Pay

Third party payer Payment plans
22
Watch out for subsidies in price!
  • Volunteer time
  • ED time on SE
  • Wage premium
  • Wastage
  • Lower employee productivity
  • Time spent on employee personal problems/social
    programs
  • Higher insurance rates
  • Supervisory staff (i.e. job coaches)
  • turn over
  • Time for SE fundraising

23
SE Distribution
  • Distribution strategy is often a key for social
    enterprises that serve clients with barriers to
    ACCESS
  • Markets, Jobs, Information, public services
    health, education, water, utility etc.

24
Distribution - Eyeglasses
Method/market Rural poor Urban poor Factory Workers Chemist Partner NGOs
Mobile vans X X
Vision Guardians X X
Micro-entrepreneurs X X
Chemists X
Direct Sales Franchise partners X X X X X
25
Distribution Channels
VE Channel
Wholesale Channel
Franchise Partner Channel
26
SE Marketing Pitfalls
  • Confuse marketing message and mission
  • Confuse need and demand
  • Assume customer loyalty can be built on social
    good instead of quality
  • Build it and they will come failure to market
  • Lack capacity/acumen - inability to deliver on
    basics
  • Failure to listen to customers/watch the market
    incorporate feedback
  • Inappropriate marketing vehicles for reaching
    customers
  • Confuse payer user / clients customers

27
SE Marketing Practice
  • Creative/unconventional and traditional
    marketing approaches
  • Take business to clients emphasis on
    distribution
  • Price and payment of services based on clients
    abilities to pay or third party payer
  • Quality, Consistency, Reliability are king
  • Brand
  • Market penetration is key - Test market new
    products
  • Accurate price
  • Flexibility and responsiveness
  • Social benefit
  • Mission leverage
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