What is less obvious to R&D institutions is how to create these new beneficial marketing settings that involve different marketing chain actors, who normally compete and mistrust each other in their daily business. Attempts in recent years to promote collaboration along marketing chains have often not generated the wished benefits. The main reasons for this limited success are:

The Participatory Market Chain Approach

The Participatory Market Chain Approach (PMCA) is a participatory R&D method that has recently been developed. Involving the different actors of market chains, it seeks to generate group innovations based on a well-led and well-structured participatory process that gradually stimulates interest, trust and collaboration among members of the market chain. These innovations can be new products and processes, new technologies or new institutions, benefiting the different actors of the marketing chain directly or indirectly.

This paper documents the theory behind the method, critical factor and an initial application in Peru. Current application of the PMCA under different circumstances in Peru, Bolivia and Ecuador will help improve the approach. A first user guide is planned to be published in the coming months.

The only fixed elements of this approach are its three phases, with flexible duration depending on how the process advances. Each phase has a specific objective and a closing event. At the final event of each phase, results are presented to a larger group of participants and further steps are discussed. It is important that the institution that leads the PMCA process understands the "sustainability logic" of this three-phase structure, gradually seeking to empower key actors involved in the process on the cost of the R&D institution, which progressively reduces its importance and influence on decision making along the process (Figure 1).

Figure 1. The Participatory Market Chain Approach

Phase 1 of PMCA is diagnostic research, typically taking two to three months and involving between 20 and 40 qualitative interviews. In contrast to conventional market research, the gathering and evaluation of technical or quantitative information is less important than getting to know and understanding the key actors of the market chain, with their interests, problems, and ideas. Contacts established through the interviews help to motivate these actors to participate in the first public event of the project, where also other actors of the market chain, representatives of research and government institutions are invited.

In the first part of the event, findings from the interviews are presented and discussed in plenary. Then two or three smaller working groups are formed, based on topics of joint interest identified through the interview session. In this sense, this event is used as a first occasion to share ideas and interests among the different stakeholders.

Phase 2 of PMCA aims in each thematic group to define and analyze potential business opportunities. For every working group, the R&D institution provides a facilitator who ensures optimal interaction and mutual learning. The group meetings have a strong demand-oriented focus, not giving room for never-ending, supply-driven discussions. Six to ten meetings might suffice to analyze carefully the different joint opportunities. To support the working groups with in-depth studies, the leading R&D institution might want to contract marketing specialists at this stage.

At the final event of this phase, the identified market opportunities are represented by each working group and discussed with a wider audience. This event provides an opportune momentum to integrate new actors into the R&D process, to complement the working groups with requested but lacking knowledge and capabilities.

Phase 3 of PMCA concentrates on the implementation of all activities needed to put in place the suggested market opportunities. The time needed for their implementation might vary according to working groups and projects: complex settings require more time, while availability of support staff and frequent meetings speed up the process. In any case, three to six months are necessary to satisfactorily implement the planned activities and launch the generated innovations at the closing event of the project. In contrast to previous events, invitations to this last event are sent to a much wider group, such as press people, politicians, and public donor agencies. The idea of this last big event is to optimally capitalize on the project's outcome and empower those actors who will be prominent to sustain the innovations over time.

PMCA explicitly finishes with this big last event, seeking to pass full responsibility over to those market chain actors who, at this stage, are the owners of the engendered products. Nevertheless, this does not impede the R&D institutions from following up with specific activities to help consolidate all achievements: new products, processes, and institutions. The degree of involvement will be different from case to case, depending much on the nature of the innovations and the capabilities of the market chain actors to move forward independently. Further support is especially necessary when new institutions are formed, which need initial resources to start to operate properly.

Advantages of PMCA

PMCA has not been widely used yet, but the first application and its initial results were well analyzed in a participatory setting, where R&D experts from different Andean countries participated. The following advantages were identified:

The approach covers a range of activities from diagnostic to the implementation of coordinated concrete activities. Many participatory research methods tend to stop with the definition of a work plan of activities that should be implemented.

Our experience shows that research input is important during all three phases, being more conceptual in the initial phases and more technical to support initiatives during the implementation phase. In any case, the continued backstopping of the R&D institution in the implementation phase is crucial to avoid losing group dynamics until innovated products are launched and institutional innovations are consolidated.

The approach consists of three explicit phases with a clear objective, but its implementation is highly flexible as it responds to different contexts and user needs. Many key actors are identified in later stages of the process, when concrete marketing opportunities are analyzed and implemented, but specific key knowledge and capacities might be lacking in the working groups. In this sense, the approach has shown to be very effective in functionally pooling information and skills during the different phases while optimally combining development with research activities.

The approach is strictly demand-oriented and responds to collectively identified business opportunities seeking to link consumer-oriented demands to technological innovation. Supply-driven discussions are minimized and put into the context of the market chain. This allows giving more room to those actors who are closer to consumers, and therefore crucial for identifying and analyzing valid joint marketing opportunities.

The approach generates differentiated and continuous benefits for all involved in the project. Group meetings generate tangible benefits for participants: access to new and relevant information, skills, and business contacts. The leading R&D institution is on the winning side as acquired knowledge and contacts help to better respond to concrete needs and opportunities. In this sense, PMCA provides an interesting concept to determine technological innovation at the farm level based on market demands.

PMCA has been very successful in bringing together actors with different backgrounds, such as traders, farmers, processors and R&D institutions, who previously mistrusted each other. It allowed the creation of confidence among them to the point that they shared the same project interests and they were willing to invest considerable time and money to take forward the group's activities.

Disadvantages and Critical Success Factors

PMCA per se does not guarantee a successful project. Failures might result from bad application or a difficult context, when, for instance, certain key actors dominate a whole marketing chain and alternative commercialization solutions do not seem feasible. In any case, the following factors need to be addressed to enhance PMCA's successful future applications:

The approach works with new and rather unconventional mindsets and concepts that are not always easily understood, especially by R&D institutions related to agriculture, where most staff members have been trained in production sciences. If the R&D institution does not have the technical expertise and social skills to apply PMCA, it would be wise to access consultants who have the desired skills.

The fact is that inadequate leadership frustrates voluntarily participating "market chain experts," putting at risk their active project involvement and thus mutual learning as a first important step in stimulating desired group innovations.

The approach is market-oriented and prioritizes the identification and implementation of marketing opportunities. This initially gives less attention to production-oriented problems and the actors behind them (i.e., farmers). These production-related activities are tackled at a later stage when the marketing opportunity is constrained by production quality, volume or prices.

If the geographical distance between the production areas and the market impedes active participation of producers as the main beneficiaries, the R&D institution needs to maintain a firm position in favor of producers and focus only on those activities that ultimately generate direct and/or indirect benefits for this target group. Moreover, field trips might be planned to improve the links with farmers.

The approach requires a flexible allocation of funds to support those activities that participating actors jointly identify as important for the project. It will be important that donor agencies move away from activity-based towards objective-and process-oriented funding. This would help the R&D institution to better respond to demands from market chain actors and make research activities more relevant for achieving development goals.

Contributed by:
Thomas Bernet, André Devaux,
Oscar Ortiz and Graham Thiele
Email: t.bernet@cgiar.org