_Private Sector Approaches to Effective Family Planning_ _36_ services, or what users pay in developing countries, because most survey work has focused on utilization patterns and trends. How consumers get their services, who pays for it, and the availability and effectiveness of alternative sources of services are issues that have not been addressed in any depth (p.43).

At the very least, governments should consider increasing the commercial share of supply methods. For example, in Thailand, the government currently controls 70 percent of the pill market. It that share were reduced to 28 percent (the blean for Latin America), 8 percent of the current users of mede,rn methods would have moved from public outlets to pharmacies, more than doubling the current market share of the latter (from 7 to 15 percent). Janowitz et al. (1990) estimate that if, by the year 2000, the source mix in Asia were to follow the commercial pattern found in Latin America in 1985, public and PVO program costs in that region would actually decrease, despite higher prevalence and increased use of modern methods. Similarly, increased commercial participation in Sub-Saharan Africa could reduce anticipated public and PVO costs by 10 percent.

On the down side, the commercial sector cannot satisfy a country's entire need for family planning because many low income households will continue to be effectively priced out of the market. It is unlikely that commercial family planning outlets will have any incentive to reach households entirely outside of the cash economy.

Health demand studies have clearly demonstrated that many individuals obtain their goods and services through the commercial sector. The commercial sector has the potential to produce contraceptive commodities and to deliver family planning to people who already obtain health goods and services from commercial outlets, keeping in mind that a single individual may use a variety of different health outlets, both public and private, depending on the nature of the health problem and the required intervention, prices and opportunity costs, perceived quality, competing sources, and other factors.

# 5.2. Impact of increasing **NGO** participation

NGOs can provide a useful adjunct to the public sector in providing family planning for low-income consumers and can often undertake promotional activities that governments may avoid for political or institutional reasons. However, care must be taken not to use donor subsidies to compete with the commercial sector. For example, in Latin America, where both the commercial and PVO sectors are well developed, NGOs compete with pharmacies for pill users (correlation between pharmacy and NGO market share, r = -.516) and with private physicians for female sterilization (r = -.525). In contrast, no interaction can be seen between NGOs and private practitioners for I13) users (r = -.037).

NGOs could benefit from hands-on technical assistance to position themselves better with respect to their markets. This would allow them to adopt a marketing strategy consistent with their level of development and the needs of the national family planning program. Three basic options are available: _price leader_ (offering products at a price lower than the competition); _market segmentation_ (finding a niche not being served by its competition; this niche may be defined geographically, by income, or by other consumer characteristics); or _differentiation_ (charging a higher price for a higher quality product or for a well-known label).

In areas of low contraceptive prevalence, the price leader strategy may be appropriate,