Many third-world countries suffer from a problem that's known as one-in-five before five. This saying refers to the reality that one out of every five children under the age of five will die of preventable causes like diarrhea and dehydration. This is the problem in rural Africa. Despite the best efforts and intentions of aid organizations, this mortality figure hasn't changed for over 30 years. This suggests that the current approach is just not working. Now let's take a look at the conditions that are generally faced in the challenge of reducing the mortality rate by simply making products available at the right place and time. Today, more than half the world's population live in urban areas. But in many developing countries, a majority of people still live in remote rural environments. Zambia is a landlocked nation in Southern Africa, and most of its 14 million people live great distances from the major cities and towns. Zambia is the home of Victoria Falls, Africa's top football team, and one of the world's fastest growing populations. It is also a country where one in seven children die before their fifth birthday from preventable causes like dehydration caused by diarrhea. Diarrhea is too a leading killer disease in children under five. This is really a huge, huge problem. For many mothers taking a sick child to get help can mean walking all day. Rural health centers are understaffed and constantly face shortages of basic medicines like oral rehydration salts. ORS are essential in treating dehydration. The Ministry of Health struggles to meet demand. It regularly transport medicine to the major district towns, but getting that last mile into rural villages is a huge challenge. Bad roads and strained resources mean people must wait. There are shortages, like now we only have one box of ORS. This is the ORS that we have, but we don't have Zinc supplements at the moment. Since most cases are diarrhea cases, I think it'll be finished by a week. Then what happens? We do give them health education by using sugar and salt to make homemade ORS. Do most mothers have sugar and salt? No. Some of them can't afford to buy. Next to the struggling health centers, rural shops are stocked with goods. Is this a product problem? No. Turns out that oral rehydration salts and zinc supplements which prevent diarrhea and dehydration are plentiful and easy to make. So this is not a product design challenge. No new R&D is needed. So is this a promotion and communication problem? Maybe Africans just don't realize that there is a cure. Nope, the remedy is well understood throughout the region. Is it a pricing problem? Maybe it's priced too high. Well, actually, the stuff is really inexpensive to provide, even to the poorest of the poor. Perhaps you noticed at the end of that video clip that there are a lot of products available to consumers at their local retailers. Now, instead, this is a go-to-market challenge. We have the products on one hand, and we have the people who need them on the other hand. What we need in between is the channel, the black box that we just described and defined. Simon Berry is an aid worker in Africa who is committed to raising the odds for a baby born in rural Africa. But a new idea was required, and this is your task. So in order to solve this world health problem, a distribution channel is needed to get small amounts of products delivered to remote locations, so that the health leaders can use them. In other words, what's needed is intensive distribution of a variety of bulk broken products specific to a range of locales. So now it's your turn. At this time, you'll need to complete a thought exercise that will be graded by your peers. You'll also be grading and learning from your classmates responses. So the solution to this perplexing problem requires you to identify first a channel structure, or a route to market that the medicines must travel from a medicine supplier or manufacturer to the end user, which is the parent or mother of a child. This path may not be a straight line and does not consist of one single activity or what we often refer to as a channel function or a process. Importantly, we are looking for a solution that is self-sustainable. While charity is a great mechanism for helping the poor, it does not have to be the only mechanism that is used. So in business, we know that market mechanisms or pricing and reward incentives can be a very efficient means of motivating needed behaviors without having to give anything away for free. So we want a solution that can work even if the organization is not there. In other words, the solution cannot be dependent on this organization. This means that the organization must use what is available locally. A self-sustaining solution is also appropriate because the end user ultimately has the capability to pay. Now recall that remote communities also have retailers that stock a wide variety of products and goods available for sale. So this implies that customers have the ability to afford the purchase of goods and services. In other words, even the poor can generally pay something, although it may not be much. In this situation, the end-user is not completely destitute, they have sources of income and they face product choices. So the three questions that you will be asked in this thought exercise is first of all, what channel structure is needed to solve or at least reduce the one-in-five before five problem. The second question is, what channel partners must do what channel functions or activities in order to move the product along to the end customer. Finally, how would you do all of this in a cost-effective manner? Good luck with this quest.
