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

RISKSA Magazine - - FRONT PAGE - Sarah Bas­sett

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.”

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