Published on June 30th, 2015 | by Peter Ward0
Service-Dominant Logic, Medicine Consumption and Supply Chains
Over the past few months I have had the pleasure of working with Kate Kynvin of the Clinton Health Access Initiative (CHAI), and our first project together has been to write a paper for this year’s EurOMA (European Operations Management Association) conference in June.
Based on research conducted by CHAI in India, Uganda and Nigeria on the appeal and acceptance of diarrhoea medicine for children, our paper used Service-Dominant Logic (S-D logic) to investigate consumption preferences of Oral Rehydration Salts (ORS) and zinc of children under 5. Kate provided the results of interviews with 630 caregivers and 119 medicine dispensers, while I applied S-D logic and a theory of consumption to try to understand both the similarities and the differences in the results across the three countries.
Service-Dominant Logic & Patient Adherence
Consumption theory indicates that the value potentially obtained from the action of consumption is not only determined by the offering, but also from the experience and the perceptions of others. These personal experiences and external perceptions may determine whether consumption takes place and if so, in what way and in which circumstances. This suggests that all forms of consumption are determined, or controlled, by a combination of internal and external forces acting on the consumer. Applying that to medicine consumption, we speak of “adherence” as a measure of whether the patient abides by the medical instructions (prescription, standard treatment guidelines, etc). But it is clear that this is just one of the external forces that act on the consumer when he/she decides whether to obtain and take the medicine.
According to S-D logic, consumption is better understood as co-creation of value in context by the consumer making use of the offering. The consumer exploits the affordances of the offering by exercising her agency within the constraints of her particular context. While agency, resources, contexts and constraints may vary even for different consumers in the same family, they will certainly not be the same across regions or countries. Adherence research has tended to emphasise the need to “change the patient”, implicitly placing the blame for non-adherence on a lack of motivation. However, the lens of S-D logic permits us to investigate the effects on adherence of the offering’s value proposition. In this case, the option to “change the offering” may be appropriate in order to address varying contexts. Recognising the need for the packaging and formulation of medicine to be perceived positively by patients in order to enhance its appeal and acceptance, our paper focused on these two factors.
Existing package designs for ORS are very utilitarian, dull in colour with uninspiring artwork. Three bright new designs tested with caregivers were unsurprisingly found to be more appealing, with one particularly standing out in Nigeria and Uganda (third from left in Figure 1). This design was found to look most “medical” whilst also having the clearest wording and appearing “modern”. Interestingly, in India there was no preference across the three designs, while in Nigeria there was a feeling that the new designs could be improved by making them brighter and more “captivating”.
ORS is sold in powder form, sufficient to make up 1 litre. Once made up it lasts only 24 hours and must then be discarded. Seven formulation options were considered in the research: smaller powder sachet, effervescent tablets dissolvable in water, premixed liquid in a plastic bottle, premixed liquid in a Tetra Pak, premixed liquid in a soft plastic pouch, powder sachet with water purifier included, and powder sachet and zinc tablets packaged together in a “co-pack”. The smaller sachet was popular amongst those surveyed in all three countries because it reduced wastage. The other options were rated differently in the three countries.
Multiple factors lead a caregiver to decide whether a product is appealing. Firstly, even when caregivers are motivated to heal, they have differing levels of agency – that is, their capabilities vary. Respondents in India considered that the ORS/zinc co-pack was too complex for them (lack of personal competence), while in Uganda there was a strong need to demonstrate they were considering child safety (living up to perceptions of themselves or by others). Across the three countries, the most common agency issue was the caregivers’ lack of time, which tended to direct them towards labour-saving premix formulations in the absence of price information.
Secondly, value propositions of resources take on different levels of importance depending on the context in each country. In Nigeria, for example, the overriding issue with the co-pack was that water still had to be fetched in order to complete the resources required to co-create value.
Thirdly, the research showed that the value proposition of ORS in the three contexts depends on the affordances of both package appearance and formulation. Considering appearance, while the new packs were preferred over the old ones it was found that packs must be different in different contexts in order to have maximum appeal. Not surprisingly, the formulations offering the highest affordances – lower cost, premixed, with additional ingredients, acceptable taste, in a co-pack – were most appealing, but different combinations were considered to have different affordances in each country as a result of contextual variety. Caregivers were therefore seen to be comparing affordances of the offering against the availability of other value propositions (for example, clean water) and their own agency (time, money) in order to select their preferred compromises.
S-D logic therefore provides a framework that facilitates an understanding of what is happening in both the pre-consumption (appeal and acceptance) and consumption (value co-creation) contexts. It becomes clear that, while changing the consumer’s agency can increase the likelihood of consumption, changing the product’s affordances (packaging, formulation) is at least as important.
The Role of Supply Chains
This is where supply chains can make a difference. Once the target context is understood in sufficient detail, a product’s value proposition can be designed or refined so that its affordances achieve greatest appeal and acceptance in that context. Historically, supply chains have been reluctant to engage in the consumption space. To facilitate this being considered part of supply chains’ remit, WMG has coined the concept of the “last yard” to help supply chain managers accommodate the idea that consumers should be considered part of the supply chain.
One impact of this current research is that the supply chains responsible for the ORS and zinc products in the three focus markets are already taking action to add new formulations and to change packaging designs in response to the findings.
We believe that the approach taken in this research may also provide a new framework for assessing medicine appeal and acceptance more widely. It is likely that the same approach can also be applied across other product groups such as pre-packaged food.
This research was orchestrated by the Clinton Health Access Initiative, with funding from the Norwegian Agency for Development Cooperation (NORAD), Bill & Melinda Gates Foundation, Ikea Foundation and ARK and ELMA. IPSOS Kenya ran the interviews and focus groups across the three focus countries.
To read the full working paper on which this blog post is based, please visit Warwick WRAP.