Branding for development

Translating cutting-edge branding knowledge into practical tools

Introduction
Current projects
KIT partners
Background

Introduction
Although not directly associated with small farmers in the developing world, branding could be a vital strategy to empower small producers in the value chain, adding value to their products. Therefore KIT aims at working on branding as a tool for development. The development community has limited knowledge on the potential of branding as a tool for product upgrading, while the private sector in developed countries has vast knowledge on branding. KIT aims to join these worlds by translating cutting-edge branding knowledge into practical tools for micro-enterprises in developing countries.

Current projects
KIT & EffectiveBrands, a global branding consultancy firm have already linked up with each other and started developing two brands. One for ground coffee in the Peruvian market. Another for organic lentils (dhal) for the Indian market.

Peru - Ground coffee
COCLA organizes 7500 small scale farmers, scattered/spread over 23 cooperatives in Peru. COCLA produces a range of coffees, cocoa powders and tea’s under their own brand names. KIT and COCLA have been working on restructuring and repositioning the organization’s coffe brand. They, for instance, worked together on developing a brand strategy during a workshop last March to come to improved branding and increased sales. Activities formulated included changes in the packaging design, in the range of different flavours, in the marketing slogan and promotional activities were planned for as well. Store visits were held and consumers and store owners interviewed. A blind coffee tasting session with consumers was organized as well.

India – Organic lentils
Zameen mainly produces and exports organic and fair trade cotton. The organization wants to invest as well in its main rotation crop: pulses. Zameen therefore reserved its fair trade premiums to invest in a mill to process these pulses into dhal, India’s staple food. KIT and Zameen work together on the challenging aim of achieving organic premiums with a crop that has limited export potential. A brand strategy was developed in which the concept of branding was discussed, store visits were done and consumer-research was carried out. Implementation of the brand takes place in India.

KIT partners

Effective Brands
KIT and Effective Brands have become partners in the branding for development projects complementing each others practice and experiences. Effective brands supports and coaches KIT’s development activities with their knowledge of and practice and experience with global brands.

Agriprofocus
KIT joins Agri-ProFocus which is a partnership of Dutch donor agencies, credit institutions, companies, training and knowledge institutions, with the goal to promote farmer entrepreneurship in developing countries. The working group regularly meets to exchange ideas and experiences and learn from these. Joint cases are discussed and looked into whether branding for development is possible and if so how it can be made feasible.

Background

From pro-poor market development to branding as a development tool
KIT’s first experiences with pro-poor market development were the lessons drawn on origin-based products. With the exclusive supply chains between preferred business partners due to globalization and liberalization KIT wanted to also prepare smallholder agriculture for such changes. KIT therefore started working on chain development: connecting people, markets and values.

KIT’s value chain projects with small producers focus on organising farmers and improving their business processes. The space for improving small producers revenues, however, tends to be limited as often the highest profit margins are to be found downstream the chain, at the levels of manufacturing, marketing and retailing. And exactly these activities are often already performed by existing players who will not easily give up their market positions. Important strategies in value chain development are then, for instance, to go and grow organic and fair trade to try and access high value export markets. Even if small producers manage to operate in these markets, they still depend on world market prices, trade policies and exchange rates. Wholesalers and importers can easily replace one supplier for another undermining the (small scale) farmers’ negotiation power. Farmers are still marketing commodities; their products remain largely undifferentiated and invisible to the end consumer.

Therefore, a stronger emphasis on product differentiation and marketing is needed to improve small producers’ incomes. Branding is an important tool in this. For most small producers in the developing world branding remains a foreign concept, even though they increasingly face competition on their domestic market from foreign and domestic brands. For development practitioners branding is a next step in the renewed focus of the development sector on market access for small producers. Through (pilot) projects and practical research KIT is working hard on filling the gap on limited existing knowledge about the use of branding in a development context. Indeed, KIT sees branding as a logical step within the framework of value chain development. It is an important tool to differentiate products and thus increase profit margins and negotiation power in the value chain. Ample opportunities exist for small scale producers to produces local brands, especially in domestic markets. Urbanisation, a growing middle class and the growth of modern retail has enhanced the demand for quality goods.

KIT’s branding for development programme started with drafting a working paper –referred to in the in depth section of this dossier- KIT now works together on branding concepts with organziations in Peru and India. Present and future experiences on branding will be documented during so called writeshops. Herein a number of people representing different cases gather together to exchange and document their experiences to learn from each other. The generated knowledge will then be disseminated, e.g. through higher vocational institutions for rural development, agribusinesses and entrepreneurs, development consultants, policy makers, NGOs, etc. Training offers excellent opportunities for knowledge dissemination as well. Training modules may be designed to complement the existing value chain development training meant for professionals, policymakers and PhD and Master students interested in value chain development.

KIT will continue its research and activities with regard to the question whether branding can contribute to poverty reduction and keeps you updated through this dossier.