Challenges of Marketing in Nigeria
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Challenges of Marketing in Nigeria

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please, also check my blog http://olusfile.blogspot.com for more thought leadership essays

please, also check my blog http://olusfile.blogspot.com for more thought leadership essays

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Challenges of Marketing in Nigeria Presentation Transcript

  • 1. Democracy, Deregulation, Digitalization and the New Challenges of Marketing in Nigeria Olu Akanmu olu.akanmu@yahoo.com June 2004 Olu AkanmuJune 16, 2004
  • 2. What this presentation is about? That the combined forces of the 3Ds of Democracy, Deregulation and Digitalization is fundamentally changing structure of many industries with potential seismic effects in some The nature and practice of marketing will need to adapt fundamentally to the changesJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 3. Democracy Five years of democracy and political stability has led to increased Business Confidence Foreign Direct Investment has increased significantly Telecoms MTN, Glo, MTEL Nigeria Breweries, Guinness, Nestle Significant national stashed-away capital is returning through private investments (BFIG/ ALSCON) Increased local savings (middle to top) ploughed into investments (capital markets, right issues etc)June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 4. Democracy and Business Confidence Economy grew by more than 10% last year, fantastic A more structured approach to managing the economy The middle class is growing again.. With increased purchasing power Dipstic index of economic prosperity. The number of new cars on the road is increasing Nigeria has become an attractive destination for investmentsJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 5. Democracy and Business Confidence Entry of new firms competing in old and new categories. Many forms.. Full entry, licensing agreements, agency Some firms that divested in the days of military rule are returning Guinness divested and later taken full control by reinvestment Intra-category and inter-category competition is on the increase Nigeria no longer the place where any kind of marketing goes, new and higher standards are expected by the European HQ of multinational firmsJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 6. Democracy and Business Confidence New investments in human capital in critical business areas like marketing Marketing professional standards fell in the days of military rule A far higher level of international exposure for marketing talents Change of guards to younger marketing leadership (returnees and expatriates) who could bring world- classness to marketing practiceJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 7. Deregulation Fundamental changes in industry structure Telecoms, Energy, Financial Services, Fall of monopoly power with attendant market inefficiencies The rise of Customer Power in old regulated industries An even new phenomenon of organized customer power.. (Consumerism) GSM boycott of 2003June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 8. Deregulation and Effects on Industry Structure Power of Substitutes COMPETITIVE RIVALRYPower of New Players coming in, Bargaining PowerSuppliers Protected niches are opened Of Customers Low to High Low to High (More customer choices) - Potential for New Entrants Low to High Regulatory barriers are crumbling Market efficient pricing attracting new entrepreneurial players Converged industries (insurance, banking, universal banking) June 16, 2004 Olu Akanmu Brand Wagon Lecture .
  • 9. Digitalization( technology) Digital technology most profound effects will be in the convergence of industries and categories Telecommunications, financial services (payment systems), entertainment Emergence of network industries requiring co- operation of many players to deliver service Leap-froging of new entrants over incumbents with legacy systems Digital technology enabled database marketing and Customer Relationship ProgramJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 10. Technology and Effects on Industry Structure Power of Substitutes , Low to High Convergence (VoIP), technology leap-froging COMPETITIVE RIVALRYPower of New Players coming in, Bargaining PowerSuppliers Protected niches are opened Of Customers Low to High Low to High (More customer choices) - Potential for New Entrants Low to High . June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 11. So what do all these mean? An unleashing of competition on a massive new scale without precedent What are the implications for strategy and marketing?June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 12. Strategic Positions are virtually inexistent in old protected industries? Few players competing largely on price, all serving the same type of customers?Differentiation Union Bank, Standard Bank, Coop, Wema Low Cost (in the 70s) Broad Focus June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 13. Where do you play? How are you different in your play-group?What is your strategic position? IBTC Zenith, GTB Bank L, k, JDifferentiation X, Y, Z, Bad location Low Cost Wema, P, Q, R, S ? Broad Focus June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 14. The new Competition and the need for a Strategic Position Clear Business Strategic Positioning is critical to avoid the commoditization tendency under new industry structure How can you differentiate your business from incumbents with large assets who are likely to play a pricing game? What organizational assets must you build to support the strategic position that you desire? What trade-offs must you make to support your strategic position?June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 15. Strategic Marketing -Segmentation, Targeting and Positioning Which segments are attractive? That we could serve better than anyone? Which portfolio of services/ products shall we deploy based on the segment needs and drivers? How shall we position ourselves in the market to stake a credible claim that we could serve our segments of choice better than anyone?June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 16. Strategic Marketing -Segmentation, Targeting and Positioning How should the market position drive our internal capabilities-build and resource configurations? Which segments shall we not serve (or serve well) so as not to dilute our desired market position?June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 17. Is the rise of customer power a threat to business? GSM boycott and the new ascendancy of customer power Only a threat to businesses that are not customer- centric Real opportunity to tap into the rising customer power phenomenon to build a differentiating market position of Customer Championship in many industries The Customer Champion position is arguably the strongest in a competitive market .. Not what you say but what you do in defining momentsJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 18. Technology and the emergence of network industries Several players are needed to co-operate to bring a service to live Value is enhanced by the cooperation of many players allied to a system Emergence of ATMs in financial services The more places I can use my ATM card, the better the value Hence banks must cooperate with each other to allow inter-connect and use of different ATM brands Yet they must also compete with each other for market shareJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 19. Technology and the emergence of network industries Inter-connection implies the need for agreement on standards in operating systems Yet standards can be tough, as it could be difficult to get everyone to agree on a common standard due to Self interest Legacy systemsJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 20. Technology and the emergence of network industries Traditional marketing strategy of competition in the context of network industries can be limiting Cooperation strategies are as critical (Co-opetition) The skill of organizing a network of co-operation may become real competitive edge Yet we must also learn to compete with our cooperators Network effects shall become more prominent in many industries in the futureJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 21. Other non traditional marketing strategies in network industries The network is a valuable as its size..hence build size advantages and grow fast (telecoms) Strong economic advantage..keep the money within your system Switching costs and lock in It is not enough for a competitor to say I am better, (traditional marketing), I must develop strategies that will reduce the switching cost for my target customers Compatibility with legacy systemsJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 22. Customer Relationship Management program..beyond the generic CRM shall be popular..shall become fashionable..pushed by hard selling IT consultants When everyone does it, where will be your edge? CRM is not strategy but a tool of strategy Without a clear business (differentiation)strategy to which a customer management program is aligned, CRM is only a fashion Learning from the airline industries .Integrate CRM into an overall business differentiation strategy Unique organization culture aligned to serve the customer in unique and better ways will be far more critical than generic CRM technologiesJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 23. Managing inter-category competition Soft drinks, beer and recharge cards . (share of pocket analysis) Brands must build strong emotional positions that are bigger than their rational category.. (friendship, love etc) How could soft drinks be greater than refreshments? And beer bigger than highness Could help to build resilience against competition from other categoriesJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 24. Managing Inter-Category Competition (Media Clutter) Media space and supply have not increased in the same proportion with demand Telecoms have taken over from Soft drinks in leadership of category share of voice It takes more than the ordinary for brand messages to cut through huge media clutter Media inflation is accelerating as result of the economics of supply and demand Compliance level is falling..most ads on drive time are not run on the scheduled beltJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 25. Inter-category competition (media clutter) Share of voice in category must be measured with share of category/ total media spend Breaking through clutter requires a return to the basics What is in it for me as consumer that I cannot get somewhere else? USP/ ESP and Relevant Consumer Insight Environmental friendly bank????? (good insight?) Creative execution that brings the Ad Idea to live Simplicity is the hallmark of great creativityJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 26. Inter-category competition (Media Clutter) A more excellent media planning Not just about buying cheap but buying right Scientific media planning based on audience research using audience delivery ratios (technology) Nascent, improving..not perfect but useful for trajectory/ trend information Digital signature enabled media compliance monitoringJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 27. Breaking through Clutter- Sponsorships As media get saturated, strategically relevant sponsorships programs could provide real edge in brand communications Sponsorship is not charity One that can generate positive brand associations that reinforces the intended market position 360 leveraging is critical..the property is valueless without it Create a unique brand experience The game is bigger than the property..it is the brand experience that provides deepest competitive edgeJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 28. Beyond tangibles..the marketing of experience (fast food category example) Changing lifestyles, people are eating out..busy more prosperous middle class Foreign brands are entering the market to exploit the new prosperity of the middle class Product parity..differentiation cannot be achieved at the rational level of chicken, snacks, pizza etc What is the experience of eating in the restaurant?June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 29. Beyond tangible..the marketing experience (fast food category) Take the brand beyond the rational to an emotional experiential level..(family, friendship, fun, love) Tantalizers.. Have you tantalized her lately? An eating ambience that creates the experience of love When I take the food away and eat in my office, What does the branded food pack say about me? How does it make me feel?June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 30. Experience Marketing..from Coffee to friendship Nescafe ads have changed? Not rational alertness but friendship Aligned sponsorship program Let do coffee in the afternoon is like saying lets have beer together in the evening Starbucks experience more than coffee..different from the old Nescafe Nescafe now has its own shops.. Fast food businesses should learn from the Coffee marketing sagaJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 31. The new competition for marketing and strategy talents Movement of human capital across the lagoon from Ikeja (manufacturing) to Victoria Island..(service) Capital ultimately moves to where it is best utilized and most valued HR practices in Ikeja needs to be fundamentally re- engineered to face the new competition for talents Manage people like knowledge workers Real empowerment of people and responsibility Flatter organization structure and shorter chain of command Change culture..(reduce the Sir, Sir, Sir)June 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 32. If marketing must lead the business? Marketing must understand the business Speak the language of business (finance) New competition demands stronger market opportunity-led business planning Romanticize the brand but recognize that there are other issues beyond the brand..(capability, assets, resources, systems, processes, technology, people, culture, leadership) Integrated knowledge of the above to lead strategy at business levelJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 33. Democracy, Deregulation and Digitalization 3D forces on the marketing environment New type of competition that our generation is not used to The new ascendancy of customer power A new leadership opportunity for true customer championsJune 16, 2004 Olu Akanmu Brand Wagon Lecture
  • 34. Thank youJune 16, 2004 Olu Akanmu Brand Wagon Lecture