Markets and Social Entrepreneurship

Why are markets important for social entrepreneurs? The short and simple answer is because without successfully engaging and catering to a market a social enterprise cannot be sustainable.

Last November 28, at the Social Development Conference of CODE NGO at the Megatrade Hall, Greg Perez made a brief presentation on things to consider to successfully engage the market and she shared G&G's experience and lessons learned. Sharing here a condensed version of the questions a social entrepreneur must ask to increase the probability of a market match.


First off, who is your market? We cannot be everything to everybody. We must choose our market, focus on our market, and get to know that market very well. In an exercise with Colette Forma of Moodies, the G&G team personified our target market by describing it as a person, describing the lifestyle, habits, and preferences, and demographics of our target market. What are your markets needs? aspirations? pain points?

The G&G team imagines Luisa Isabella

Second, know the structure of your market. Who are your competitors? What are the barriers to entry? How big is the market and how fast is it growing? What are the existing substitutes to your product? How well is the market currently being served?


Once you know your market, work on your offer. As mentioned earlier there must an intersection between what markets expect and what sellers offer in terms of the following:

1. Product - is it something the market wants or needs?
2. Price - what is the price of your product vis-a-vis the value you create? what is your unique value proposition? does the market perceive that it gets enough or more value for the price to be paid
3. Production - Is the product readily available, is it by special order? Is the quality good? What is your capacity to meet market demand?
4. Delivery/Distribution Method - Are the products easily accessible? Are they available on retail? will the products be delivered to clients?
5. Relationships - What level of relationship will you have with your customers? Will it be personal or self-service? What customer service will you provide?


There is however, no simple way to engage the market. These are just some basic guidelines and not hard and fast rules. For instance, while we need to focus on a market and get to know that market very well it's also possible to have several markets. In Gifts and Graces' case we cater to corporate, wholesale, and retail markets. Below is a simple illustration of part of our value chain. 

Every social enterprise will learn lessons along the way just as we have. In some cases we change our market, in some cases we change our product. The important thing is we stay in the game. Here are some lessons we've learned:
1. Integrate upwards and downwards the value chain. Engage the market, educate the market to grow it, and build the capabilities of our partners.
2. Just do it. The question of which comes first - the market or the product is a chicken and egg question and can only be answered properly based on the context of the social enterprise. In G&G's case the products came first, but we have since tweaked our products for a more market driven approach so
3. We've made our products skills based not product based. One community who makes fruit tart candles makes our unity candles.
4. Engage corporations where possible to enable producers to enter the value chain. Mainstream products so it's not a CSR project but part of a company's supply chain.


Another important lesson is the story is important but it's not enough. To deliver on our promise and satisfy the market, we should look at our own value chains. In a later blog post we'll talk about looking at our business model and value chain to make sure we are able to deliver our unique value proposition to our markets.