Massmart improves trading terms for non-profit condom organisation
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‘The more condoms sold, the more safe sex is being practised.’
Massmart is addressing HIV/Aids in South Africa by identifying areas in which it can help curb the spread of disease. The group which is one of a few select organisations that provides free ARV treatment to its permanent employees and their spouses has recently improved the trading terms for non-profit condom supplier, Society for Family Health (SFH).
Massmart found that it could set into motion a chain of events that would make condoms more affordable throughout the entire retail industry.
“This has not only helped reduce the cost to customer, but it has also improved unit sales,” says Massmart’s group corporate affairs executive, Brian Leroni. “It’s an example of how doing the right thing for the community can also do good for business, and how retailers can narrow the gap between social and business imperatives,” he says.
David Nowitz, senior marketing manager of SFH says: “We wanted to improve the affordability of our Lover’s Plus and Trust condoms and decided to see what, if anything, could be done to improve our trading terms with the group.”
“The resultant negotiations exceeded our expectations and the savings gained from Massmart alone have topped R314 000 in the first eleven months of this year. This gave us the leverage to approach other retailers for similar deals that resulted in a chain reaction that now spreads throughout the entire industry. As a result, SFH has increased its revenues and can now offer affordable condoms to the market. In addition, more Aids prevention work can go ahead in the townships. The more condoms sold, the more safe sex is being practised. That’s a win-win scenario for South Africa,” he says.
SFH continues to improve the market with an affordable barrier method against contracting HIV. Sales have risen in the industry because prices for these condoms have not increased that much. Even though the price of plastic, fuel and even paper have risen over the last year, the retail price of condoms has largely been offset by these savings. SFH reports that between January and November 2007, 27.2 million condoms were sold. This represents 46.8% volume growth and a 55.8% value growth.
“What we have achieved this year could never have happened had we not improved our trading terms with the industry,” says Nowitz.
SFH is a non-profit, section 21 company and is the South African affiliate of Population Services International (PSI) the largest social marketing organisation in the world that uses commercial marketing know-how to sell good health practice to citizens of 70 countries.