It will come as a real surprise to many to learn that Africa has eight countries with a higher GDP per capita than China and about 15 higher than India. Not surprisingly, a recent survey confirms that 94% of South Africa’s CEOs expect growth from the rest of Africa this year.
However, despite the progress made to expand into Africa by South African companies, they have been slow to realise the real and massive potential of the region – particularly its growing middle-class sector and its combined purchasing power estimated by economists to exceed $1-trillion.
By population Nigeria is the most difficult to ignore with an estimated population of 170 million and phenomenal growth rate over the past 10 years of around 7 percent. As a result marketers are scrambling to get into Nigeria given the success of early adopters such as Guinness, Shoprite and MTN. The burning question then is, how does one create success in the Nigerian market?
Some succinct answers come from a surprising source, Leftfield in Cape Town. This boutique full-service agency has created phenomenal success for two leading milk brands, Peak and Three Crowns, part of the Dutch dairy giant, Friesland Campina, the world’s fourth biggest dairy company. Between them, these two brands have 76 percent of the dairy market in Nigeria.
Founding member Jono Swanepoel, who acts as Strategic and Creative Director of the agency, explains that it’s been a real achievement to grow these brands over the past four years in what is an extremely competitive category.
“Essentially Peak milk is the category leader with 54 percent share so our challenge has been to grow a stagnating brand that is constantly under attack from other big players such as Nestlé and of course a multitude of cheaper, new entrants from China and elsewhere. Despite these challenges we’ve helped grow the brand’s Value Share by a phenomenal 55 percent in the first three years,” says Swanepoel.
Start in Nigeria
“You need to cast your net wide to catch a few fish. I’m not sure who it was that shared that with me but it’s stuck and held me in good stead over the years. It’s true, not only has Nigeria’s economy been tipped to surpass the size of South Africa’s by 2025 but Nigerians also spend the most on consumer packaged products whereas Ethiopia, Uganda and Kenya spend least. The Nigerian economy is one of the most developed economies in Africa. According to the UN classification, Nigeria is a middle-income nation with developed financial, communication and transport sectors. It has the second largest stock exchange in the continent. It makes fiscal sense to start here.”
Really know the target market
He moves on to explain that much of this success is thanks in part to the agency’s strong belief in pre-emptive consumer research which is then linked to bold creative execution.
“Part of our success was client innovation in new line-extensions but we’ve also done our homework with consumers and then looked to shift the brand out of pure above-the-line and move it into activations and relevant sponsorships including radio shows, TV shows and increasingly into digital and mobile to create far more consumer touch-points.”
What is unique about Leftfield is their belief in using ‘Pre-Search’ as they call it, not just research, to get the inside track on what consumers are thinking and how to get brands into the hearts and minds of Nigerian consumers.
“Pre-Search is in-depth pulse and consumer research done before we begin strategic work on any major campaign. Anyone can buy research from AC Nielsen, but if you really want to get it right you have to be seriously pro-active and do your own consumer immersions before you develop strategies and creative campaigns. Agencies talk it to clients, but it’s different to walk it,” adds Swanepoel.
Given their results in Nigeria, and the fact that their ads consistently track in the top 10 percentile, shows that this approach is working and explains why an agency based in the heart of Cape Town can so deeply connect with consumers in Nigeria.
Africa is a Continent Not a Country
No doubt Swanepoel refined this ability to get onto the inside track of consumers during his time as Creative Charmain at Leo Burnett and Regional Creative Director on the Friesland Campina business in South-East Asia. “I was based in Vietnam and Indonesia but also had to understand the Thai and Malaysian consumers to create campaigns that could work for all four of these markets – you learn new tricks pretty fast when you’re faced with this diversity of culture and language. It’s sometimes the little things that make all the difference and this holds even truer in Africa.”
Graham Marshall, Nielsen’s business leader for strategy development in Africa, says most companies have a continental-wide strategy for Africa. But the local level of execution was even more important than this. “What works in Kenya won’t necessarily work in Ethiopia,” he says. This was reiterated by Nielsen in its recent report entitled The Diverse People of Africa report which states, “Even a single country like Nigeria has over 250 different ethnic groups and over 500 languages.”
Likewise, consumer segmentation is a critical area to understand for marketers that wish to pinpoint their target market in a country where media costs are far higher than South Africa. “Having said all that, there are a few universal truths or safe spaces that work and which define the Nigerian consumer such as tradition, family, loyalty, affordability, colonial heritage and patriotism,” adds Swanepoel.
Comparing the seven distinct segments based on monthly income and average spend on consumer packaged goods, three tiers emerged:
Tier 1: Trendy Aspirants and Progressive Affluents
Trendy Aspirants (21%) and Progressive Affluents (7%) represent just 28% of the population, but they are responsible for 47% of the income.
Tier 2: Balanced Seniors and Struggling Traditionals
Account for 27% of the population but only 22% of total income.
Tier 3: Comprises Wannabe Bachelors (11%), Evolving Juniors (24%) and Female
Low-income consumer segments. Collectively, 45% of the population, yet contribute only 32% of the total spending on packaged consumer goods.
“Nigeria is hugely misunderstood by the average South African, tainted by the bad rather than the good yet Nigerians are better educated per capita than we are as a nation, they are the most optimistic nation in Africa, have bigger internet penetration and usage, are extremely hard-working, ambitious and future focussed. Go in with your eyes wide open and a knowledgeable partner that knows the situation on the ground if you want to succeed,” he concludes.
— Beyond Advertising (@leftfieldtweet) September 4, 2012
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