This study considers the nature of South African municipal water service delivery, and how marketing strategies can provide a framework for better management of this service. It reflects on the elements that guide municipal decision making and evaluates user preferences for levels of the municipal “water service mix” by employing conjoint analysis. Particular attention is paid to consumer willingness to pay for improvements in the “water service mix”. The study argues that the values municipal consumers attach to the variables of the water service mix need to be better incorporated into decision making regarding water service delivery, and that conjoint analysis is an informative method to assist in generating this information. The study outlines a water service marketing challenge and methods of research followed to deal with it (Chapter One) and the nature of the laws and institutions governing water service provision in South Africa (Chapter Two). The task of providing water services is delegated to Water Service Providers (municipalities). The key variables of the water service mix from the consumers perspective include; quality of the water, rate of flow from tap, interruption of water flow, sewerage disposal, assurance of supply, and water service tariffs (Chapter Three). The study covers the areas of Amathole, Kouga and Nelson Mandela Bay Municipalities' (Chapter Five). The method of marketing analysis applied is conjoint analysis, alternatively known as choice experiment analysis. An overview of the method is provided and its application to three samples of one hundred residents at each of the study sites is described in Chapter Four. The responses of the three hundred residents provide the basis for the results. Respondents were requested to make a series of choices between alternative water service mixes consisting of six variables differentiated by three levels (Chapter Three). In making these choices they implicitly compared and weighed up the relative worth of the selected variables against each other. The findings of the analysis were diverse (Chapter Six); two of the three estimated models did not yield significant results. An interpretation of these results showed that the respondents of the Kouga municipality were willing to pay R65.05 more (per 10 xii Kilolitres of water) than their current monthly tariff for a marginal improvement in water quality, R57.29 more (per 10 Kilolitres of water) per month for a marginal improvement in sewerage disposal and R21.90 (per 10 Kilolitres) per month for marginal improvements in assurance of water supply. Findings showed that willingness to pay for reduced interruptions and improved flow rates was lower and not as highly valued as the abovementioned variables. Most of these findings were consistent with similar international and national studies showing their reliability. Although there has been significant improvement in extending the reach of the network since 1994, the standards of water service provision in South African municipalities do not appear to have improved. The results of this study mirror a number of concerns that have been expressed about the standards of service, particularly sanitation (in publications like the Green Drop Report). Municipal service delivery in these areas would appear to be constrained by a number of issues including a lack of public involvement, legislation, limited financial resources and institutional capabilities. However, it is a service that is too vitally important to be allowed to deteriorate. Marketing analyses can make a valuable contribution to allocating and managing the scarce resources to best satisfy the consumers of water services (Chapter Seven). When consumer orientation is formally introduced as the main objective into the thinking of the service provider, it becomes untenable to offer poor service delivery. But that is exactly what many municipalities appear to be doing. There is a need to get back to the basics – where the consumer is king. This analysis concludes that consumers want, above all else, assurance of water supply, a high quality of water, and safe environmentally sensitive disposal of waste water. It is recommended that municipalities not lose sight of the fact that price is an important part of the marketing mix. From the paying consumers perspective, when the government incorporate too many other considerations into pricing of water services they are, in effect, disengaging price from the marketing mix by not being sensitive to consumer needs. This approach shows a weak marketing strategy, and may result in dissatisfied consumers who may become unwilling to pay for their water services – an outcome that the researcher would discourage.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:9357 |
| Date | January 2011 |
| Creators | Hosking, Phillipa |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MCom |
| Format | xii, 132 p, pdf |
| Rights | Nelson Mandela Metropolitan University |
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