Marketing Matters
with Neta Nwosu
08023051444 • [email protected]
Recent analysis of Nigeria’s key economic indicators, experts say, raises cause for concern, as it reveals a looming economic recession. They argue that government’s failure to have proper plans in place to tackle issues, such as the crude oil price drop, fall of the Naira and struggles in other sectors could likely grind the economy to a halt.
Other factors responsible include global economic slowdown, inflation, NSE capitalisation and FBN manufacturing index.
An Economist, Professor Akpan Hogan Ekpo, delivering a keynote address at a lecture in Lagos recently said: “The high rates of unemployment, combined with reduced output since the third quarter of 2015, suggest an economy in the sphere of “stagflation”, a prelude to a recession.”
Prof Ekpo, who also is the Director General of West African Institute for Financial and Economic Management, considering the decline in the contribution to the nations GDP by the industrial sector from 24.20 per cent in the 3rd quarter of 2014 to 23.5 per cent in the same period in 2015 lamented that “This is an unhealthy situation given the importance of manufacturing in driving growth and development as well as job creation.”
However, acknowledging that recessions are to be expected in any capitalist economy, the academia noted that the President Muhammadu Buhari led government must put in place effective policies to combat the misery it brings upon the common man.
Prof Ekpo, consequently advised the government to design and implement policies that would prioritise massive investment in hard infrastructure, employment generation, investment in housing construction, rebuilding the public school system, building strong institutions, and an aggressive monetary and fiscal policy.
In the marketing ecosystem, this economic downturn is presenting new and difficult challenges for marketers, particularly those wishing to provide goods that retain consumer loyalty while the current situation persists and even beyond this period.
This is so because practitioners expect the slump to result in changing consumer behavioural pattern. There are speculations that with the simultaneous rise in prices of commodities and some consumers faced with job losses, their shopping habits will not only change, consumer purchasing power will shrink significantly.
Additionally, as uncertainty stares customers in the face, they are likely to drastically cut spending and reduce private investments.
The panic this fiscal dip generates among consumers is usually translated into stress for marketers, who often resort to adopting diverse survival strategies to stem the tide.
As part of these surviving strategies, brands in Nigeria have been advised to innovatively expand and sustain their platforms for consumer engagement even during periods of difficult economic climate like the one experienced in Nigeria at present. The advice was handed down last Friday by research and consumerism expert, Lampe Omoyele, at the maiden edition of Advertisers’ Association of Nigeria (ADVAN) Marketers Conference.
Omoyele, who is also the Managing Director of The Nielsen West Africa, a brands and marketing research company, strongly urged brands not to succumb to the temptation of cutting down on their marketing budgets despite internal and external pressures because they will ultimately make more gains.
Presenting a paper on ‘Consumer Confidence Trends and Engagement’, the Managing Director of Nielsen West Africa stated that since the third quarter of 2015, consumer confidence in the economy has dropped significantly and it has dropped even further in the first quarter of 2016 due to nagging issues like forex crisis, high inflation, budget delay and many others. He also noted that his company’s research revealed that there was a general decline in job prospects and a reduced willingness to spend by most consumers.
Because of these challenges, he explained further, most households now prioritise their expenditures and are consistently cutting down on what they spend on.
Omoyele also noted that, as expected, the sector that has had the worst hit is the Fast Moving Consumer Goods (FMCG), which is usually a major indicator for consumer confidence in any country. Most of the companies in the FMCG, he stressed, had reported losses. On the other hand, Alcoholic beverage brands, Telco brands and non-alcoholic beverage brands had all recorded some growth despite the drop in consumer confidence.
According to Omoyele, the growth in the alcoholic sector resulted from the natural tendency for alcoholic consumption during down moments. The telcos, from his research, recorded growth because of the general attitude of Nigerians to talk and connect with family and friends regardless of the economic situation.
However, from his study, the growth in the soft drink segment was primarily driven by Coca-Cola’s Share a Coke campaign, which was a highly successful and inspiring marketing drive. Likewise, growth in the alcoholic segment has been largely driven by Nigerian Breweries. Diageo Nigeria was in a form of decline despite the acclaimed success of Orijin, the rave of the moment alcoholic brand.
Omoyele explained further that the key factor responsible for the growth of NB Plc. was their acquisition of Consolidated Breweries, which had a host of value brands. “So, the growth was driven by the value brands,” he said.
This study’s INDEX – an acronym for Information through Disguised Experimentation – was gathered each quarter via survey of households and consumers opinion on current conditions and future expectations of the economy. And the current reverses in the economy according to the research and marketing expert have been triggered by inflation and other macro-economic issues like fall in oil prices, delay in the passage of budget, static wages, loss of jobs, etc.
Ultimately, Lampe warned that the FMCG must begin to engage consumers in a positive way if they want to retain or even expand market share. “They must ensure they remain in touch with people consuming their brands, and they should do so through quality engagement,” he admonished.
“Businesses should know that it’s a marathon and not a sprint and so should not think this is the right time to take drastic actions or go quite. They are to engage consumers at different levels and maintain top of the mind awareness.
“Consumers at the time would be looking for not just brands that they can trust, but those that will be sensitive to their plight and stay with them, as they try to make adjustments in reaction to the economic realities on ground,” he said.
Alluding to the previous discourse, the second speaker, Mrs. Juliet Ehimuan Chiazor, Country Manager of Google Nigeria, while presenting a paper on ‘key digital trends and opportunities for Advertisers’ said that as marketers seek to engage consumers further, they are to make digital marketing an intrinsic part of their planning process and not as an afterthought if they don’t want to go into extinction.
Reinforcing this belief, she stated that whether brand owners like it or not, digital communication has come to stay so brands must learn how to utilise it properly.
“It is not so much as brands going digital, since digital won’t be replacing traditional media, it is digital being a part of the conversation from scratch,” she stated.
As part of her organisation’s contribution to this vital need for awareness, she announced that Google would be offering free digital training to five people from each member organisation of ADVAN.
All through her lecture, Juliet spiced the presentation with different digital ads to project the level of growth and development of digital advertising in the last few years. She also pointed out the advantages of producing an ad basically for an online audience as against just transferring TV ad to the online medium.
There were two panels of discussants anchored by Chidi Okoro, MD of UAC Foods Plc; and Ugo Geri-Roberts ,MD of Milward Brown Nigeria to dissect various issues thrown up by the two main speakers. The panellists included, Joan Ihekwaba, General Manager, Marketing, UAC Foods Nigeria; Kachi Onubogu, Commercial Director, Promasidor Ltd; Ken Onyeali Ikpe, Managing Director/Chief Executive Officer of Mediacom Nigeria; Fatai Odesile, Managing Director of Grand Oak Ltd, Bunmi Oke, Managing Director of 141 Worldwide ; Obinna Anyalebechi, Consumer Marketing, Guinness Nigeria Plc and others
In their submission, they advised that Marketers should be mindful of what consumers want and work towards achieving them. On the relevance of the digital space in Marketing they stressed the importance of flexibility, creativity and openness but they also advised that brands should not just focus on what is “shining and new” but what can really deliver in the marketplace.
So many top marketing players and experts were guests at the conference that had the Minister of Information and Culture, Alhaji Lai Mohammed, as Special Guest of Honour.
In his keynote address at the conference, Alhaji Mohammed stressed the need for ADVAN and government to work as a team so that government can learn from the professional marketers on how best to build consumer/citizens’ confidence in a difficult situation and galvanise them to rally behind government and support its policies.
The Information and Culture Minister used the platform to speak on the recent increase in the pump price of petrol to N145 per litre, and highlighted that it would create additional 600,000 jobs.
He also listed other benefits to include ending the recurrent petrol scarcity and ensuring steady availability across the country.
According to him, the action would reduce smuggling, diversion of petroleum products, improve domestic supply, cause labour market stability and add jobs to the job profile of the country through new investments in refineries and the retail chain.
He insisted that the decision was in the best interest of the masses adding that only complete deregulation would make for availability of products. He also sought the understanding and cooperation of the citizens and the various organisations in the efforts to end the cycle of fuel scarcity.
Earlier in his welcome address, the President of ADVAN, Mr. David Okeme, said the association, an umbrella body of brand owners and advertisers, was formed 22 years ago. He disclosed that the overall vision of the annual conference “Is to create marketers who will do their jobs better, serve customers better and serve the needs of the nation better.”
He revealed that the conference was in line with the association’s tradition of keeping strategic marketing issues on the front burner of businesses in Nigeria,
Okeme promised that more programmes are in the offing this year for the purpose of aggregating all shades of thoughts, ideas and suggestions that will place the relevance of marketing at the heart of strategic business discussions in Nigeria.
Notable practitioners and experts from related fields like Mr. Tony Agenmonmen, Vice President National Institute of Marketing of Nigeria; Mr. Richard Iwenoge, General Manager, Consumer Marketing, MTN Nigeria; Mr. Osamede Uwubanmwen, Marketing Manager, Stanbic IBTC; Mr. Abiona Babarinde, General Manager, Marketing and Corporate Services, Coscharis Group and Mrs. Johan Ihekwaba, General Manager, Marketing, UAC Foods Nigeria, graced the event.