NEW PRODUCT DEVELOPMENT IN SACCO SOCIETIES

In view of the changing economic role of the co-operative societies, there is need to properly formulate investment policies for maximum returns to the members.

Prior to liberalization of the co-operative movement and the economy at large, our co-operatives had been too complacent and lacked innovative approaches in performance improvement.

These co-operatives have tended to operate under policies which have led to;

a)      Lack of creative innovation

b)      Reluctance to embrace change

c)       Over-reliance on traditional customer and products

d)      Inward looking policies, etc.

Co-operatives must strictly and urgently address their operational deficiencies. This involves;

a)      Improving service delivery

b)      Focusing on core customer needs

c)       Reducing on waste

Co-operative members are becoming more demanding and knowledgeable. This means that the management cannot assume that its products will be well received forgetting that the members have a wide choice. The co-operative therefore must offer its customers additional services and customised products. This can be achieved if:

–          There exist well thought out investment strategies

–          There is proper implementation of those strategies

Developing a new product

In developing a new product, the society needs to address the following aspects.

–          What product needs to be developed?

–          Who are the targeted customers?

–          What benefits will be derived from the consumption of the product?

–          How will the product be financed?

–          How will the product compare with existing products and harmonizes with the existing market structure?

–          What is the technical capability of the society in implementing the investment/product?

–          Will the implementation be in harmony with the existing legislative and regulatory controls?

In addressing the above the society shall move in the following direction:-

1. Identify the most important service the members need;
2. Identify the extend of the market for such need;
3. Identify the sources of finance of the society;
4. Conduct a cost benefit analysis to find out if the project/investment is justified and;
5. Prepare the following:

a)      The staff skills;

b)      The system of implementation;

c)       Structure of the scheme and;

d)      System of evaluation and control.

Target market selection

The following guidelines should be followed by the Sacco when selecting target markets:

i)                    The target should be consistent or at least compatible with Sacco’s goals and image;

ii)                   The Sacco should seek markets that are consistent with its resources and;

iii)                 The Sacco should seek markets that will generate profitable volume of trade.

 

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