Marketing to Africa: Opportunities and Challenges28/03/2014
Anyone who knows Africa, knows you can never approach it as one homogenous block. For marketers, to approach the continent without a clear plan as well as understanding the differences, can lead to problems.
Africa houses a great number of different cultures, languages and landscapes. Of course, marketers should take this into account when targeting a country on the continent.
In an article on Business Day Live, Katrina Manson gives the example of the marketers working for Bharti Airtel.
After an unsuccesfull TV campaign in Africa, the Indian cellphone company’s marketing department investigated what went wrong. Their findings? The ad’s savannah backdrop, the South African actors and the use of coins in the ad failed to resonate with a large number of the African population.
According to Bharat Thakrar, head of Africa’s top marketing services agency Scangroup, says many multinationals follow the same strategy as Bharti Airtel.
Lack of Africanization
Companies love efficiency and thus use the same advertisements and strategies for the whole African continent. However, Bharat says, not all Africans look the same: if companies wish to use one advert for a number of countries, this ad must feature people from different cultures in it.
Manson compares entering the African market with entering the Chinese one. After all, companies such as Tesco and Walmart also struggled to find their own place in China. She believes failing marketing efforts can cost companies dearly, as the emerging market consists of one billion people and more and more Africans enter the consumer class. [Read this article which gives more examples of foreign retailers going into new markets.]
The Growing Middle Classes
On a global scale, companies spend 500 billion US dollars per year on advertising, information researcher Nielsen stated. Even though the amount of money spent on Africa is still very small, Nielsen revealed that Africa and the Middle-East are the fastest growing markets when it comes to adverting expenditures for companies. Moreover, Manson states that the International Monetary Fund expects an economic growth of 5 per cent on the African continent.
Manson had more evidence that the African market is worthy of the time and effort of foreign businesses: she states that a number of research studies have found that there are 300 million middle-class African consumers. In addition, according to research group Euromonitor, consumer spending in the sub-Saharan region is forecasted to be 1 trillion USD by 2020. Compared to the spending in 2010, this is a rise of 400 billion USD! Even though the amount of money spent on marketing is on the rise, Manson says the returns are not always in proportion as companies often target Africa as a homogenous market.
Culturally Aware Local Competition
Another reason for disappointing results, Manson says, is the fact that local companies understand the market better than those coming from abroad.
She gives the example of Toss, a detergent from a Kenyan-based company that obtained a market share from market leader Omo. Mother company Unilever has learned from the ordeal and states that the renewed competition was a good reason to adopt a more “consumer-centric marketing model. ” Now, Unilever tailors its ads for specific markets: traditional chicken stews are used to sell Maggi stock cubes in Angola, for example.
Bidco Oil is another local company that aims to take market shares from multinationals. Vimal Shah, CEO at the company, believes multinationals are no longer the only ones that can tap into technological knowledge, great sums of money and global networks. Moreover, he states that a company’s success overseas has nothing to do with its appeal to African consumers.
Manson believes the foreign companies with the greatest success on the African markets are those that go local in such a way that they become a part of a country’s society. This is why a number of companies are now hiring local “influencers” to sell their products, she says. These people are paid a monthly fee to feature products on their blogs and Twitter accounts.
Waking up to Localization
Companies are gradually becoming aware that they have to localize their marketing campaigns to specific African countries, Manson says. They are using local languages, food and the like to appeal to their target audience – but that is not the last of it! She states that next to their advertisements, companies are also adapting their products to the tastes of their African consumer bases.
Manson reveals the products from companies selling soft drinks and confectionery, for example, are a little sweeter on the continent, while Samsung launched a set of extra-loud stereos in Nigeria and fridges that can cope with power loss in all of Africa.
According to a European corporate executive, international companies used to have a tendency to launch universal products in African without any market research beforehand. This, however, is quickly changing because of the competition that these companies now face by local businesses, Manson says.
She gives the example of make-up brand Oriflame, wich was only able to launch 300 of its 1,500 products in Africa and is planning on developing darker shades of foundation to fit African skin types.
Oriflame does have a unique selling point: according to Manson, most Africans have never encountered make-up before. To get their products known, the company has created nail bars and makeovers. This way, they are hoping to prepare the market for more expansive brands such as Maybelline and Revlon.
This is an exciting time for Africa but for the brands really looking to do well on the continent, they need to avoid making the mistakes of old and come into Africa fine-tuned to the people’s expectations and needs.