ENGAGING THE CONTINENT
With African markets increasingly considered the land of opportunity, business expansion is moving in from every corner, with South Africa no exception. The message on the lips of every adviser is, as many have learnt the hard way, Africa is not one homog
People are not statistics, emphasises Joseph Kamiri, head of marketing and distribution at UAP Insurance, Kenya, suggesting that many of the large South African players moving into East Africa are missing certain dynamics of the region’s markets. “Within five years, we will see these companies either restructure or exit the market entirely.”
While this may not be true of every expanding South African business, it is certainly something that many global businesses have struggled with in the past. A recent example was that of an advertising campaign in Africa from Indian mobile phone company, Bharti Airtel, which fell flat. Though the business is active in 17 African countries, the advert used images of the savanna, actors from South Africa and coins when many Africans use only paper money, limiting the advert’s appeal in many parts of the continent.
“This is where multinational companies go wrong. They have their global brand positioning and they want to cut and paste,” says Bharat Thakrar, head of Nairobi- based African marketing services agency Scangroup. “They think everybody looks the same; but merely having black models is no longer enough. It’s like putting a Thai, a Chinese and an Indian in the same Asian ad. People recognise themselves,” he adds.
According to Terry Behan, CEO of experience branding consultants VWV’s EMEA division and author of Connect with the Continent, the gap between how the African market is represented in the global press and the realities on the ground is vast. “The level of misinformation and hype touted at conferences, and both local and global news is considerable. The result is that your average investor, entrepreneur and brand builder are left somewhat confused when trying to comprehend the opportunities and challenges presented across the key markets on the continent.”
Middle- class mania
The World Bank, along with some of the most respected global consulting firms, have estimated Africa’s middle class to be in the region of 300 million people. This is a considerable figure considering that the USA has a total population of 311 million, notes Behan, suggesting the statistic is misleading.
“When estimating the size of the middle class in sub- Saharan Africa, economists have used the lowest possible relative measure; a $ 2- a- day criteria. By comparison, in France or Germany if you earn less than $ 40 a day, you are beneath the poverty line.”
However, says Behan, the rise of the middle class across the continent is significant and should not be undervalued. “More sober commentators put middle- class numbers at 120 million, based on an income of between $ 15 and $ 20 a day.”
Take advantage of the trends
“In the developed world, we tend to create vanilla brands that skim across market segments and groupings. Africa is different. Broadly generic campaigns have been shown to be less effective than tailor- made ones. Businesses need to understand the different market segments, appreciate the differences and create regional campaigns in context using local language and local models. When
you consider, for example, that Nigeria has 510 living languages and 250 distinct ethnic groups, the enormity of the task is clear, but experience shows that the result is always worth the effort,” says Sean McCoy, director of strategic branding consult antsy Harwood Kirsten Leigh McCoy ( HKLM).
“It is an environment that favours the bold; an environment that requires a pioneering approach and a willingness to do things differently. It is a territory that requires some new brand thinking,” he continues.
Brand a social cause
There are no shortage of problems to be solved in key African markets, presenting opportunities for proactive brands to step in to provide basic services, gaining widespread visibility and a positive brand association. In South Africa, Outsurance already provides pointsmen and women to direct traffic at busy intersections. In Nigeria, Sterling Bank hires street sweepers to keep high- traffic intersections neat and tidy.
“Branded social causes may be a very legitimate way for brands to formally partner with local, regional and national government to address social challenges and, in some cases, make the daily lives of citizens that much easier. It can also have a positive commercial impact on the brands themselves,” says Behan.
“The impact of these ventures on brand equity and shareholder value is considerable and new financial reporting guidelines recommend that corporations value and report on their intangible assets, meaning that you can expect branded social causes to start appearing as line items on balance sheets the world over.”
Edutainment, category development and product education
The Nollywood powerhouse that is Nigeria’s booming film industry represents a powerful opportunity for branding and communication across the continent. Broadcasting to over a dozen African countries, in 2013, Nollywood produced over 1 000 movies, double that of Hollywood. The largest Nollywood markets are Ghana, South Africa, DRC, Zambia, Kenya and Nigeria.
“One of the challenges faced by many growing industry categories across the continent is that the consumer is unaware they exist, or simply doesn’t understand the value of the services and products on offer,” notes Behan. “For the short- and long- term insurance sector, now expanding into the middle income and mass market sectors, the problem is that many families don’t understand the importance of protecting their assets, livelihoods and future earning potential and therefore don’t insure. Having the industry body fund consumer education using Nollywood could go a long way to growing market awareness and driving new business,” he suggests.
The age of opportunity
The power of edutainment is a valuable tool in accessing the youth market. Populations in Africa fit largely into the sub- 20 age bracket. According to the CIA World Factbook, in Nigeria and Angola, 44 per cent of the population are under the age of 15; in Ghana, 39 per cent. Similar statistics play out across all the significant consumer markets on the continent. African countries also make up 45 of the 50 countries with the highest birth rates. Not only does this mean that African consumer markets will continue to swell significantly in the coming decades, but that the current youth market holds significant power.
In 2011, Access Bank in Nigeria entered into a strategic partnership with Nickelodeon, a global family entertainment brand, in the launch of a new retail banking product, the Early Savers Account, targeted at children in Nigeria. The partnership leverages Nickelodeon’s world- famous animated preschool heroine and cartoon character, Dora
the Explorer, to encourage financial responsibility from an early age. “The campaign, the first financial literacy campaign in Nigeria, has been enormously successful, growing the market as well the Access Bank brand. The show is broadcast to 2.8 million households across the continent,” explains Behan. “The case study serves as a lesson to others in the importance and relevance of ‘ edutainment’ for with younger audiences, buying Access Bank valuable real estate in the hearts and minds of millions of young Nigerian customers.”
While not geared for children specifically, Santam Namibia is also tapping into the power of television to grow its market, last year launching a 32- week series presented by Santam Namibia CEO, Franco Feris, teaching the basic concepts of insurance.
Christianity as commodity
Both McCoy and Behan confirm that the biggest brands on the continent are not always listed companies. Perhaps the most powerful brands of all are the preachers behind the continent’s Christian congregations. “Preachers on the continent have a stronger and more passionate following than even the biggest European football teams,” says Behan. “They promote peace and love and preach financial prosperity and commute in private jets, commanding the respect of millions in Africa, Europe and North America.”
Most powerful is Pastor Chris Oyakhilome, founder of Christ Embassy, with operations in Nigeria, South Africa, United States, United Kingdom and Canada. With 1.2 million followers on Twitter, Pastor Chris runs television stations, hotels, fast- food chains and a publishing company. Just one of its magazines sells two million copies a month.
Behan suggests that it would make sense for financial houses to target congregations through the larger churches, with a percentage of the profit going back to the church to be invested into grassroots development.
“In the same way that football clubs like Manchester United and Liverpool build their brands and balance sheets through the endorsement of products, services and related activities, it makes sense that the most powerful and charismatic brands on the continent do the same,” he suggests.
Taking the time to delve into the market nuances and design innovative branding strategies in response is key to the success of businesses across the continent and, notes McCoy, no companies are better placed to do this than home- grown African brands. “In the telecommunications industry, for example, countries are developing their own brands that are leaving their international competitors behind, such as Nigerian Glo, which was also awarded a licence in Ghana. They may not have huge budgets but they are much more tactical in their branding activities and that’s paying dividends.”