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What Coke teaches us about disasters (and development)

Abhas Jha's picture
Photo courtesy of chidanands through a Creative Commons license.

Coke sells 1.6 billion servings per day. You can find Coke in the remotest, poorest and most unlikely parts of the planet. I recently came across this fascinating video of a talk by Melinda Gates. She asks: For those of us working on development, what are the lessons to take away from Coke’s enormous reach (and success)? According to Ms. Gates, there are three:

1. Invest in real-time data that feeds back into the product. If you're running Namibia for Coca-Cola, and you have 107 constituencies, you know where every can versus bottle of Sprite, Fanta or Coke was sold, whether it was a corner store, a supermarket or a pushcart. So if sales start to drop, then the person can identify the problem and address the issue.

2. Tap into local entrepreneurship. Coke's been in Africa since 1928, but most of the time they couldn't reach the distant markets, because they had a system that was a lot like in the developed world, which was a large truck rolling down the street. And in remote parts of Africa it's hard to find a good road. But Coke noticed that local people were taking the product, buying it in bulk and then reselling it in these hard-to-reach places. In 1990 they started training local entrepreneurs, giving them small loans. They set them up as what they called micro-distribution centers. And those local entrepreneurs then hire sales people, who go out with bicycles and pushcarts and wheelbarrows to sell the product. There are now some 3,000 of these centers employing about 15,000 people in Africa. In Tanzania and Uganda, they represent 90 percent of Coke's sales.

3. Great marketing. The secret to Coke’s marketing is that it is aspirational. It associates the product with a kind of life that people want to live. Coke’s song for the soccer World Cup 2010 by K’Naan (“Wavin’ Flag”) was localized into 18 different languages and went number one on the pop chart in 17 countries.

What struck me is the applicability of these lessons to the most unlikely of areas: disaster risk management:

1. Real-time data: Acquiring and widely communicating risk data is one of the most effective things governments can do. In the wake of this month’s devastating floods in Queensland there are reports that Australian insurers are pointing to the lack of flood mapping as the main culprit behind availability of flood insurance in the region. The recent Economics of Disasters report (pdf) points out that in as varied settings as North Carolina and Bogota, mandatory disclosure of risk data boost the probability of adopting appropriate disaster prevention measures. The difference in impact between the earthquakes in Chile and Haiti has been widely reported. This is largely due to the systematic manner in which Chile has used data from each earthquake to update its building codes and regulations. In the aftermath of the Haiti earthquake organizations like Ushahidi and Random Hacks of Kindness played an amazing role in using technology and data for the massive relief and recovery effort. Through the efforts of Openstreetmap and Crisis Commons, in the space of a week-end Port-au-Prince went from being one the least mapped cities in the world to having a complete digital map of  roads, hospitals, triage centers and refugee camps

2. Local entrepreneurship: The best of policies, regulations, building codes etc. are useless if they are not applied effectively on the ground. Effective disaster risk management taps into local capacity and initiative. Curriculum for training of masons in confined masonry developed the Appropriate Infrastructure Development Group is a good example of this. Community based disaster risk programs in Indonesia (pdf) and Vietnam are others. 

3. Great marketing: And finally, great marketing in disaster risk management is not about selling stuff but effective communication: of risks and the need for ex-ante readiness. Bangladesh is a good example of a country that has systematically reduced death and destruction from cyclones. One of the pillars of their strategy has been effective early warning systems and especially the “last mile” connectivity of warnings into local communities. This is often as simple as a high-school student on a cycle with a megaphone. Organizations like RiskRed have done an excellent job in designing educational materials with a focus on adults (the general public), children, and schools for school safety.

So what do you think? Are there more lessons, innovations and analogies from Coke and other success stories that we in the development community can learn and adapt from? Feedback, comments and criticism welcome!
 

Comments

Submitted by Rajesh Pandey on
I agree entirely with the analogy provided with the coke case when discussing the disaster risk mitigation. I would , however, like to make the following limited submissions: 1. While the availability of real time data is a great asset, the capacity to use and analyse this data is of paramount importance. The ability (rather the inability) to put to use the data can lead to sheer waste of resources as was seen during the supercyclone disaster in Orissa state in India in 1999. Similarly, this inability to clearly analyse the weather warnings turned quite disastrous during the recent tsunami. 2. The adaptation to local conditions of the different regulations and policies also needs to be supplemented with the local traditional knowledge. This has been effectively used in understanding causes of Landslides in such disaster prone areas in the hill areas of Darjeeling, again in India, where the pointers like drying up of local jhoras (falls) and sudden increase or decrease in water levels of certain water bodies in the areas were effectively used in community assisted disaster risk mitigation and management. 3. While ensuring "last mile connectivity" of the disaster warnings there is a need to ensure that the classical "distortions in communication" do not creep in between the "intended warning message" and the "received warning message". This requires reducing the levels/channels of communications.

Submitted by Alvaro Tarazona on
Interesting article. Coke experience could be applied to help other industries/services reach poor communities. I am thinking in how this knowledge could be used to improve the delivery of services such as health, education, financial services, among others in a sustainable manner to rural populations.

Submitted by Abhas Jha on
Thanks Alvaro. I am sure similar analogies can be drawn for the delivery of all kinds of basic services. For example in Kenya Safaricom is using its huge reach via mobile phones to deliver basic financila services to the poor through M-Pesa.

Submitted by Aleem Walji on
Thank you Abhas for tapping into unlikely sources of inspiration and even aspiration. I've often thought about how private companies reach consumers in the most remote areas and how we as development folk can learn from their handbook. More importantly how can we tap into their distribution networks but perhaps leveraging the empty trucks that come home to help farmers get goods to market or perhaps include health information along with milk cartons when delivered. Some of these ideas will work while others may not but I suspect using the expertise and networks of corporates may do much more for fostering innovations in development than simply chasing their scarce CSR dollars.

Submitted by Abhas Jha on
Thanks Aleem. Yes, certainly the vast and effective distribution channels can be used for delivery of health and other basic services. I am reminded of a proposal in Haiti after the earthquake to use empty cargo shipping containers as (pretty sturdy) temporary shelter. As a result of the global recession there were literally thousands of such empty containers avialble for free!

Submitted by Ed Pantino on
This is a thought provoking article, which in my opinion lends credibility to the repeated (but rather unsuccessful) attempts to engage business in development and aid projects. Maybe the "thought gurus" of consultancy firms such as McKinsey, KPMG and Booz should allow the innovative minds of their consultants to turn to the business intelligence, strategy and productivity of development. There's a challenge!!!

Submitted by Xu Xiuli on
I am currently an academic visitor based on the Center for Development Studies at the University of Cambridge. I have been greatly inspired by rich discussion on the roles and dynamics of firms here in development studies, which seem not yet be adequately covered in the development theories and practices. Your analysis is very enlightening. How can we neglect the firms/business, one of the most important actors, when we talk about the development initiatives? Additionally what concerns me is why Coke can make it? What kinds of governance structure and institutional mechanisms ensure its performance in delivering the services to the remote poor areas? We should reshape our outlook on the implications of the firms, business, market, along with the capitalism to the development...

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