Affordability
DKT is Committed to Affordable Care
DKT International ensures our products are affordable for the average couple in the countries we serve by pricing products in line with with local purchasing power. We develop pricing strategies based on clear affordability guidelines informed by economic indicators like Gross National Income, and benchmark our prices against commonly purchased consumer goods.
Charging a price for socially marketed products is an important part of our business model, but not just for financial reasons. When consumers pay for a product or service, it conveys a sense of dignity and empowerment. Charging even a modest fee for products confers value, facilitates the incentives needed for wide-reaching distribution, and reinforces our reputation for delivering high-quality products. DKT also periodically provides vouchers or subsidies to discount the price of our products and services.
We are committed to enhancing global health outcomes by ensuring our products and services remain accessible and affordable for all. This involves pricing products to meet consumer purchasing power.
Purchasing Power Parity and Affordability Guidelines
Our pricing strategy is multifaceted and designed to tailor the cost of reproductive health products to the economic circumstances of each market.
In each market, we aim for a one year’s supply of at least one contraceptive to be priced below 0.25% of Gross National Income (GNI) per capita, adjusted for Purchasing Power Parity (PPP). By determining the price of our products based on consumer purchasing power, we are able to keep our products affordable in even the most challenging economies.
DKT’s affordability guidelines guarantee that the vast majority of the population can afford to take control of their reproductive lives with their own income. But DKT also undertakes price-elasticity and willingness-to-pay studies, allowing us to tailor pricing strategies based on current market realities. Key to our strategy is making high-quality products accessible and affordable.
Assessing Consumer Purchasing Power with The Big Mac Index
Each DKT program also uses its own version of the Big Mac Index, an informal price index developed by the Economist to measure purchasing power parity in different markets.
The Big Mac Index offers a different way of looking at affordability, comparing the cost of DKT’s condoms to everyday products. DKT uses the Big Mac Index to quantify the number of condoms a consumer could purchase for the cost of a pack of cigarettes or a cup of tea (for example) in a given market. This is an informal way for our teams to determine the most reasonable pricing structure possible for our condoms by comparing them with other fast moving consumer goods in their markets.
Pricing to Meet Consumer Needs
Achieving affordability for all also involves offering an array of products at different price points to appeal to each type of consumer. DKT uses segmentation strategies that use differentiated packaging, marketing, messaging, and distribution channels to meet the needs of price-sensitive consumers. Refer to the Sustainability page for more information on cross-subsidization.
DKT recognizes the critical value the public sector plays in supporting the poorest of the poor, but our commitment to health equity inspires DKT to find innovative ways to support individuals, regardless of their income level. Beyond establishing pricing that meets clear Affordability Guidelines, DKT also employs special approaches to ensure our products are affordable, including subsidizing some products and services with coupons, vouchers, and direct outreach programs. Our sales teams also go the extra mile to reach urban slums, rural areas, and outlets that cater to lower-income consumers. Our marketing and sales teams launch periodic promotions for providers and retailers that reduce the end cost of products and services to better meet the needs of underserved communities and grow their clientele.
