DESIGN THINKING ASSINGMENT

DARDEN BUSINESS SCHOOL – COURSERA

OFF-GRID REFRIGERATION CHALLENGE IN ABUJA-NIGERIA

Habibu George

Abuja, October 30, 2016

CONTENTS

1. CHALLENGE; Market penetration  ……………………………………………  3

2. TOOL SELECTED; Learning Launches …………………………………..........  3

3. APPLICATION and INSIGHTS ……………………………………………………..  3

4. APPROACH  ………………………………………………………………..….. ..  4

CHALLENGE; Market penetration

Power is a significant challenge in Nigeria. In about two decades this nation has expended  over twenty billion U.S. Dollars yet our total power output is about Five thousand  megawatts. This is a country with a population of about a hundred and seventy million  people occupying about a million square kilometres of land. Many people need power to  run their fridges, freezers, air conditioning etc but this lack of it created a challenge and an  opportunity. So we set up a factory to produce blocks of ice that we could provide the  people in our state to use in meeting some of their refrigeration needs. Because of the  burning nature of the need and huge population we believed this would be a no brainer  and would hit the market in a huge wave. This did not happen. As a matter of fact, we  struggled to make sales of 20 blocks a day from a 1000 block a day factory. This was not  sustainable and we had to take significant action and fast if were not going to shelve the  business.    This way we would get hard facts on why the market was reacting with such poor reception  to a product that was designed (as we thought) to meet an ardent refrigeration need.

TOOL SELECTED; Learning Launches

Lucky for us I had this challenge in mind while taking the course and it seemed sensible  to use the learning launches. This would keep is in the market experimenting to get to the  truth we required to take a decision on our current business and or, model. The whole idea  was that we would get the true market feel and information we would use. From the videos  Estela Perez on learning launches it seemed reasonable to get our product into specific  markets, get feedback and act on the feedback.    We could not continue to run the factory in perpetuity if were not utilizing the factory at  least at 80% and making 100% sales of whatever came out of it. We would not be able to  pay for equipment, diesel to run generators, maintenance, salaries and all would make us  bankrupt. So trying out well designed darts at the market and using the feedback to adjust  our offering cum operations would be our best bet and not just a set of brainstorming  sessions with the team.

APPLICATION and INSIGHTS

We first decided to call in for a meeting with all those we had tried to sell to who had made  claims of being re-sellers of ice-blocks for other producers. The meeting was a town hall  type set-up that would allow us hear from them what it was that made them purchase the  product from the competition despite what we believed were the attributes of our product;  high quality, hygienically produced ice, cost efficient since it lasted longer than their current  purchase (great value for money proposition), and we delivered to the client. We also  hoped to share with them our vision for the business and what benefits lay in store for re- sellers who worked with us.    The meeting held with us asking questions to participants like, how long they had been in  the business, what advice would they give to those who wished to start up such a business,  what were the pitfalls to look out for, what would a producer do for them that would make  them loyal, what sort of support would they wish they had, what kind of support where they  currently getting, had they tried out our product, what issues did they have with it, what  could we do to address these issues? Through this process we learnt about the seasonality

of the product demand which rhymed with the natural season. We also learned that pricing  was usually variegated from season to season and did not remain same especially for our  target market. That is not all, we also gained other insights as to what kind of support  would keep them loyal, their thoughts on our offers and other concerns.

APPROACH

What we did thereafter was to offer variegated pricing to those who would commit to certain  minimum volumes per week. We would also require their daily feedback so we could keep  tabs on our performance. In addition, we would attempt to support them further with storage  facilities such as coolers and freezers, not to mention ad campaigns that would now be  focused on them and not on us. This so far has increased sales volumes to about 30% of  installed capacity based on signing on 3 dedicated resellers out of our target of 10.    I think that going forward it would make sense to have stakeholders in a business give some  form of guided feedback that would allow for the launch of any product. Then launch out in  small areas based on that feedback continue to adjust where necessary.


DESIGN THINKING ASSINGMENT DARDEN BUSINESS SCHOOL – COURSERA OFF - GRID REFRIGERATION CHALLENGE IN ABUJA - NIGERIA Habibu George Abuja , October 30 , 2016 CONTENTS 1 . CHALLENGE ; Market penetration … … … … … … … …… …… …… …… …… 3 2 . TOOL SELECTED ; Learning Launches … … … … … …… …… …… …… .......... 3 3 . APPLICATION and INSIGHTS … … … … … … … … …… …… …… …… …… …… .. 3 4 . APPROACH … … … … … … … … … … …… …… …… …… …… …… …… .. … .. .. 4 CHALLENGE ; Market penetration Power is a significant challenge in Nigeria . In about two decades this nation has expended over twenty billion U.S. Dollars yet our total power output is about Five thousand megawatts . This is a country with a population of about a hundred and seventy million people occupying about a million square kilometres of land . Many people need power to run their fridges , freezers , air conditioning etc but this lack of it created a challenge and an opportunity . So we set up a factory to produce blocks of ice that we could provide the people in our state to use in meeting some of their refrigeration needs . Because of the burning nature of the need and huge population we believed this would be a no brainer and would hit the market in a huge wave . This did not happen . As a matter of fact , we struggled to make sales of 20 blocks a day from a 1000 block a day factory . This was not sustainable and we had to take significant action and fast if were not going to shelve the business . This way we would get hard facts on why the market was reacting with such poor reception to a product that was designed ( as we thought ) to meet an ardent refrigeration need . TOOL SELECTED ; Learning Launches Lucky for us I had this challenge in mind while taking the course and it seemed sensible to use the learning launches . This would keep is in the market experimenting to get to the truth we required to take a decision on our current business and or , model . The whole idea was that we would get the true market feel and information we would use . From the videos Estela Perez on learning launches it seemed reasonable to get our product into specific markets , get feedback and act on the feedback . We could not continue to run the factory in perpetuity if were not utilizing the factory at least at 80 % and making 100 % sales of whatever came out of it . We would not be able to pay for equipment , diesel to run generators , maintenance , salaries and all would make us bankrupt . So trying out well designed darts at the market and using the feedback to adjust our offering cum operations would be our best bet and not just a set of brainstorming sessions with the team . APPLICATION and INSIGHTS We first decided to call in for a meeting with all those we had tried to sell to who had made claims of being re - sellers of ice - blocks for other producers . The meeting was a town hall type set - up that would allow us hear from them what it was that made them purchase the product from the competition despite what we believed were the attributes of our product ; high quality , hygienically produced ice , cost efficient since it lasted longer than their current purchase ( great value for money proposition ) , and we delivered to the client . We also hoped to share with them our vision for the business and what benefits lay in store for re- sellers who worked with us . The meeting held with us asking questions to participants like , how long they had been in the business , what advice would they give to those who wished to start up such a business , what were the pitfalls to look out for , what would a producer do for them that would make them loyal , what sort of support would they wish they had , what kind of support where they currently getting , had they tried out our product , what issues did they have with it , what could we do to address these issues ? Through this process we learnt about the seasonality of the product demand which rhymed with the natural season . We also learned that pricing was usually variegated from season to season and did not remain same especially for our target market . That is not all , we also gained other insights as to what kind of support would keep them loyal , their thoughts on our offers and other concerns . APPROACH What we did thereafter was to offer variegated pricing to those who would commit to certain minimum volumes per week . We would also require their daily feedback so we could keep tabs on our performance . In addition , we would attempt to support them further with storage facilities such as coolers and freezers , not to mention ad campaigns that would now be focused on them and not on us . This so far has increased sales volumes to about 30 % of installed capacity based on signing on 3 dedicated resellers out of our target of 10 . I think that going forward it would make sense to have stakeholders in a business give some form of guided feedback that would allow for the launch of any product . Then launch out in small areas based on that feedback continue to adjust where necessary .