Building partnerships & reevaluating price points.
20 avril 2006 in LMI by Brennan Casey
Yesterday brought with it new perspectives, some challenges, and a few new opportunities. While visiting Ouelessebougou and Faraba on an information gathering expedition Matt and I we startled on a handful of occasions. The first was at the CLIC where we found they were charging 250CFA for a print from their HP LaserJet 1300 and 100CFA from their HP Officejet 6110 all-in-one. The standard price for a print in Mali is 100CFA. They didn’t realize the cost of the 6110’s prints were twice the cost of the 1300’s after taking the CLIC’s other factors into account. Instead they were charging twice as much for something that costs half as much to print. More shrewd people would think that this inflated margin would be helpful – after all, you’re getting 2.5X the revenue at half the cost of the other print. It isn’t. The CLIC was using the 6110 for nearly all their prints, not the 1300. They had unknowingly selected the option giving them the smallest margin. We explained this to the CLIC staff and hope that in the future more work will be channeled through the 1300 instead of the 6110.
While designing Cybertigi we have always used the idea of using the HP LaserJet 1300 and charging the standard Malian rate of 100CFA per print. We are currently working on how best to divide the margin between the CLIC’s materials cost and each of the Cybertigi’s core components: CLIC/hub, eKiosk, MobileKiosk, and savings/amortization.
Shortly after arriving in Faraba and greeting the mayor and the dugutigi* we were given a personal escort by Mr. Sayon Diabaté, the Secretary General of the Mayor’s office. We met with several entrepreneurs, the local druggist, and the region’s photographer. It was over the course of the meetings with the entrepreneurs we came to recognize how valuable a connection between them and their Bamako supplier could be. Some would have to spend several thousand CFA and an entire day in transit just to replenish their stock. If we can devise a bridge between wholesaler and vendor we bring the ability to ship directly noticeable cost savings for the retailer. Matt and I are looking into the possibilities now.
With the region’s photographer we proposed a partnership between him and Cybertigi. We offer superior quality prints, in a more timely fashion, the same market rate of 500CFA per print, and with roughly the same operating margins as the standard film reproductions. Our goal is not to infringe on the photographer’s operation but instead to complement it. We proposed he use our digital camera and process his prints through the Cybertigi. This would create close to the same profit per print margin for him as before and reduce his work burden. Currently the photographer has to wait until the entire roll of 24/36 prints is taken before he can pay to travel at least 2 hours to Bamako to have the prints developed, often with inferior results. The complete cycle usually takes several weeks from taking the picture to processing to payment for the prints. With our Cybertigi partnership he would have prints delivered at least once per week without having to travel at all. He can also verify with people which prints they want by showing them on the viewscreen before sending the print order in. There are also value-added options such as 2-per-page prints, special designs, or making photo IDs. Simply put, we offered a more streamlined enterprise with some value added components in exchange for using his existing recognized brand of “village photo-tigi”. Instead of competing head-to-head, something we in no way want to do, we found an equitable compromise that benefits all parties. We concluded the meeting with an understanding that we would like to work together and would discuss payment and billing details during our next meeting.
On the whole we left Faraba satisfied that we were able to glean so much valuable information in such a short period of time. This comes in large part from the generous assistance of Mr. Sayon Diabaté, the Secretary General, and Mr. Adama Wattara, the village’s go-to man.
There are still other details to be investigated, but the initial charge is well underway. We hope to begin the first phase of the Faraba component of Cybertigi within the next few weeks.
*Dugutigi: Village chief [“dugu” means village]
