MARKETING RESEARCH OBJECTIVES

 

 Introduction

 Most municipalities in developing countries spend a large proportion of their budgets on the collection, transport and disposal of solid waste. Their solid waste management is a costly service that consumes between 20 and 50 percent of available operational budgets for municipal services, yet serves no more than 70 percent of the urban inhabitants (Bartone and Bernstein, 1993). The unserved are almost always the growing low-income populations concentrated in the peri-urban areas. Keeping pace with the requirements of rapid urbanisation and continuing population growth, and because of its critical role in protecting the environment and public health, accomplishing effective municipal solid waste management should be a priority for Third World cities.

Most attempts to improve solid waste management in cities have focused on the technical aspects of different means of collection and disposal (WB, 1992). Recently, more attention has been paid to enhancing institutional arrangements for service delivery, with a special emphasis on privatization (Cointreau, 1994). Also an abundant number of articles focused on the demand-side of water and sanitation can be found (Whittington et al., 1990; Whittington et al., 1991; Whittington et al., 1992; Altaf and Hughes, 1994). However, much less effort has been directed at investigating the demand for solid waste management. In other words, the attempts at improving the solid waste service performance have focused mainly on supply-side aspects, such as collection and disposal capacity, but have seemed to circumvent the approach of solid waste management improvement through demand-side information. This makes the case of an improved municipal solid waste management driven by demand-side information in the underdeveloped urban areas in Third World countries all the more important.

 
    1. Objectives

      2.  The present research has its general objective to explore if demand-side information, among other things willingness-to-pay and affordability-to-pay, will turn out to be the most important elements to improve solid waste management in urban areas of developing countries. For this purpose, a general methodology has been developed and tested in a case study country.

      The target group for using the methodology consists of people who develop and design waste management services, amongst others governmental planning agencies and development project institutions. It almost goes without saying that those who will apply the methodology should work closely with, or better, let the target community members participate in the process towards accomplishing improved solid waste management. The wisdom of involving community members directly in improving the waste conditions of their neighbourhoods appears clear. The question remains, however, how to orchestrate the most preferred solid waste alternative as a solution for the community, given their priorities and possibilities. Hence, in order to specify the research objective in more detail, several essential questions come to mind regarding three specific objectives in the search for a viable marketing method (see also Annex 1).

      For a marketing method to be successful, the specific objectives need to be considered carefully because they lie at the heart of the research. Answering them will determine the contents and radius of action of the ultimate contours of a sustainable solid waste management system.

       

       Identification of alternatives, or sets of alternatives for the delivery of waste management services

      In a service oriented approach a solid waste management system can be divided into two subsystems: a primary and a secondary system. The primary system comprises the collection of waste from households at the neighbourhood level. The secondary system is the transportation to, and the disposal and treatment at the final disposal site. To identify the alternatives in the delivery of waste services, the research will try to indicate what components in the integrated solid waste system are essential and what variables need particular care. Therefore, care should be taken of the myriad ways and manners solid waste can be delivered, or better, processed. The type of delivery of solid waste services itself depends vastly on the preferred waste handling process, such as segregating waste materials for reuse or for turning components of solid waste into compost.

      Measurement of the affordability-to-pay and willingness-to-pay for solid waste services of the community

      A price oriented approach will perhaps be the most essential element in the marketing of municipal waste service. If urban waste management projects are to be both sustainable and replicable, a planning methodology is required that includes a procedure for eliciting information on the value placed on different levels of the service. Contributions should be paid by those who benefit from the system in order to recover the cost. A key concept in such a methodology is that of Awillingness-to-pay@. If people are willing to pay for the full costs of a particular service, then it is a clear indication that the service is valued and therefore will most likely be used and maintained. Hence it will be possible to generate the funds required to sustain the service.

      To obtain the information about individuals= preferences for solid waste services, a contingent valuation method (CVM) can be applied. Such a method reveals the values of private goods and goods or services with a more public character. Contingent valuation methods are often used to assess preferences for goods and services for which a conventional market does not exist. A hypothetical situation must be described to the individual who is asked to value the good or service, through a questionnaire for example. The individual is then asked one or more questions to determine how much he or she would value a good or service if actually confronted with the opportunity to obtain it under the specified terms or conditions.

      However, the extent to which an individual is willing to pay for a hypothetical service also depends on how much he or she can afford. Therefore, next to the willingness-to-pay, the affordability-to-pay is a key element in the marketing of solid waste services. Not knowing the affordability to pay implies the danger of a failure of recovering the full costs of solid waste services.

      Assessing the demand for services

      A preference oriented approach is needed to obtain a sense of the relative priority of improved waste management services as compared to other services, like, improved water services or better sanitation performances. This comparison is fundamental because a recent study showed that households consider solid waste services as a normal economic good with its consequences for household welfare (Altaf and Deshazo, 1996). Households can make this trade off if they understand the problems that exist and appreciate the risk they pose. Forcing the solutions upon them seems less successful compared to a process of self-identification of problems and solutions through community participation. It can be argued that providing services to people without investigating what they really want is unsustainable. This argument has led more and more development organisations all over the world to attempt to provide services that are community-driven. Such a demand-driven approach requires clear guidelines on how to select the most preferred service, because simply asking what people want is not enough. For this reason methodologies have been developed which serve as a solid base to investigate what the community really wants. However, the question remains to what extent the community can maintain and sustain their most preferred service in the years to come. As with all services, someone has to cover the costs. Most likely, if the service in question extends to a whole community, it calls for a community based financial contribution, that is, each community member pays his share of the cost. On the other hand, considering the scarcity of resources, there will be a trade-off between the different services asked for.

      In order to come forward with methods to measure the concerns or demand for waste services of households, the next chapter will discuss the methodology to assess this essential aspect of the marketing of solid waste services.

       

    2. Outline of the working document

 

This working document treats the management of solid waste services. In particular, the document tries to develop a methodology for measuring the willingness and, directly linked herewith, the affordability to pay for community geared solid waste services. Nonetheless, the focus of this study is not limited to the determination of the willingness and affordability to pay for solid waste services only, but may also be of interest for other services.

Chapter 2 intends to be a broad concept, applicable as a step-by-step guideline for the measurement of the willingness and affordability to pay for solid waste services. Also, it tries to visualize the way in which the community should come up with the most preferred solid waste alternative. In that respect it builds on the idea of community involvement in the determination of their desired solid waste system.

In Chapter 3 the results of the demand assessment and survey that were implemented in Tingloy will be presented. Tingloy is a small, green island of approximately 22 square kilometres of mostly mountainous land, located two nautical miles off the Batangas mainland. Tingloy has a total number of 17000 residents, 2200 of whom live in the so-called "urban area" of the island. This area formed the nucleus for a marketing research study for the new solid waste management system to be introduced in the area. The methodology developed in Chapter 2 stands as a model for the way in which the research and questionnaire were conducted. Furthermore, to observe if the outlined step-by-step methodology really worked, Chapter 3 reads as an evaluation of the research methodology as the reader will come to notice.

 

It can be said that local governments in developing countries face an array of environmental problems that are growing more complex and that are particularly severe in urban communities. Because they compete with many other issues for attention and resources, there is a pressing need for analytical and procedural methods that will help the community select their concerns themselves, and to determine their financial contributions and affordability. In this way they could make sound policy decisions, and implement effective solutions to environmental threats. The methodology presented in this working document tries to help in meeting this need.