Labo Progressive Multi–Purpose Cooperative (LPMPC)

Market oriented commercialization for Philippine Cooperative

 

About LPMPC

 

Labo Progressive Multi–Purpose Cooperative (LPMPC) aims to provide better services to their members through establishing market (local and international). To provide better income for members by providing decent jobs to the large number of unemployed in the province.

Originally, LPMPC was set up as a micro-finance cooperative and extended its services with savings and consumers stores for their growing members. Nowadays, since the cooperative is continuously growing, they are also into marketing of their members' products like piña cloth and other by-products of pineapple, virgin coconut oil and handmade papers. The LPMPC members supply international buyers, makers of specialty paper and local markets like textile mills, government agencies, garments and fashion accessory makers.

 

The social impact of the organisation is to develop lives of indigenous people through capacity building. LPMPC reduces unemployment and provides an alternative source of income to small farmers. As of 30 June 2009, there are 2,879 members. The current goal is to strengthen their national market position and to penetrate the international one. There are a lot of inquiries about the products of their members, but to convert these into profit is another.

 

 

 

 

Business case

The assignment was to increase profitability for its members, by capitalizing on LPMPC´s portfolio of products through a market-oriented commercialization.

 

Rik Bakker is an experienced marketer and business developer, in an international setting with a focus on export; mostly for multinationals that made the transition from product-push to market-pull. He’s also involved in several product launches, which gave him a better understanding of how to commercialize products. Regarding the intercultural aspect of this assignment, he tried to make use of the lessons learned while travelling extensively to all corners of the world, both for business and as tourist.

Results

Analysis
Several weeks before going to the Philippines he communicated with the general manager of LPMPC to fine-tune the scope of the assignment. In this process he used SharePeople as ‘challenger’. Although the business case provided by LPMPC gave a lot of information about the cooperative itself, not much information was included about the market and customers. Even at this stage, it already rang some bells about where to focus on. 

 

After an opening session in Labo with the board of directors, he scheduled 1-on-1 interviews with Mario (general manager) and his staff to get to know them and to determine the status quo. It soon became clear that LPMPC is very much internally oriented and had not yet full understanding of the basics of marketing.

 

They recently did perform a SWOT analysis which he used as well, in order to develop a roadmap, which he validated repeatedly by talking to all relevant officers to see if it was understandable and if it made sense to them. At the end of the assignment he presented the recommendations in to the board of directors as well as several representatives of both national and regional government institutes.

 

 

Advice
Most recommendations were related to either marketing, sales, general management or HR. The most important ones were:

1.    Appoint a dedicated, full-time marketing officer. Now just 2% is spent on marketing and sales, which is clearly insufficient if LPMPC wants to take it to the next level.

2.    Stop competing with multinational companies. Instead, position LPMPC’s products as high-end and adopt a ‘focus’ (or niche) strategy by using e.g. fair-trade shops as an outlet.

3.    Don’t glorify export. Export often means higher prices, but also more hassle and higher costs. It is the net margin that matters, not the gross price.

A roadmap was created that consisted of 22 questions that LPMPC should ask itself when developing and launching a product into an existing or new market. Furthermore, he added several ‘tools’ to make it more easy to use the roadmap. Also, he included real-life examples to make the document livelier.

Impact on the partners
The whole experience as such, both from a project and social perspective was great and rewarding. For Mario and his staff Rik hopes and trusts that they learned to take the customer as a starting point when making decisions on e.g. product development. But more important, I hope that they simply feel more confident and knowledgeable when approaching future market opportunities.

 

Quotes LPMPC: "The expert’s profile, knowledge, skills and experience are exemplary the best that can help the organization in its aim to improve, innovate and made our products competitive and  generate income that can boost and improve the operation of the organization"

 

"The experiences shared with us by the expert gives us hope and inspire us to become more competitive, perform efficiently and effective and utilize our time and resources in the right place, time and application."
 
Follow up
Within a few weeks LPMPC will jointly decide with the governmental institutes that subsidize LPMPC which recommendations to approve and implement. The outcome of this meeting will determine the follow-up between Mario and Rik

 

This is a start of a two-year partnership between SharePeople and LPMPC. Both organisations will keep in touch, and with the experts as well. After this Group Programme, an official evaluation takes place every 6 months. With this information, an Expert Programme is one of the possibilities to boost the organisation if needed. Participation in a yearly SharePeople Experience Week is also an option.

Related business cases

• Kamay Krafts, 2010, Expert Program, Philippines
• Labo Progressive Multi–Purpose Cooperative (LPMPC), 2010, Expert Program, Philippines
• Hotel Maya, 2010, Expert Program, Philippines