impact85 naira redenomination marketing communications proposal for cbn 2008
DESCRIPTION
Currency Redenomination is a process by means of which zeros are eliminated from the national currency of a country, so that starting from a specific date; all amounts of money will be expressed in a new and smaller monetary scale.TRANSCRIPT
Impact Eight Five 2008 Page 1 of 20 Central Bank of Nigeria
Central Bank of Nigeria
Proposal for:
Strategic Communication Agenda for Naira Redenomination 2008
Impact Eight Five 2008 Page 2 of 20 Central Bank of Nigeria
Content Introduction
Ground for redenomination
SWOT Analysis
Media Objective
Media Strategy & Rationale
Communication Strategy
Newspapers & Magazines
Audience Analysis
Media Plan
Action Plan
Action Details
National Media Planning
Television Media Plan
Radio Media Plan
Press Media Plan
Internet Media Plan
Outdoor Media Plan
I. Mobile Media Cost
II. Public Relations Cost
III. Promotional Activities Cost
Budget Summary
Global Media Plan
Television Global Media Plan
Press Global Media Plan
Budget Summary
Summary of Total Communication Cost
Payment Terms
Impact Eight Five 2008 Page 3 of 20 Central Bank of Nigeria
Introduction
Currency Redenomination is a process by means of which zeros are eliminated
from the national currency of a country, so that starting from a specific date; all
amounts of money will be expressed in a new and smaller monetary scale.
For this financial policy to be effective its main conviction must go beyond
psychological and portability effect. Before and after the suspension of the policy
Nigerians have expressed different opinions with others having doubts and more
a thousand questions to ask.
But with the policy’s primary objective of stabilizing & enhancing global
integration, many Nigerians will not hesitate to embrace this reform with many
asking if redenomination should top our priority now.
The general purpose of the currency redenomination process is to contribute to
the consolidation of the currency and to reaffirm the objective of economic stability
as part of Nigeria’s policies aimed at fostering economic growth and socio-
economic development.
It is expected that such measures will achieve greater efficiency of the payment
system, facilitate the calculation of economic and business transactions and
simplify the country’s financial and accounting management. Likewise, this change
can reinforce the confidence in the currency and will reflect the strength of the
national economy.
Impact Eight Five 2008 Page 4 of 20 Central Bank of Nigeria
In practical terms, by means of a currency redenomination, zeros are eliminated
from the national currency of a country, so starting from a specific date all
amounts will be expressed in a new and smaller monetary scale. In other words, it
is a measure that simplifies the understanding, use and handling of transactions
with national currency, while generating favourable expectations.
However the key to redenomination according to research from countries that
have successfully executed a redenomination programme is ‘timing and planning’,
‘clear-cut communication’ and ‘well informed education campaigns’. Therefore
informative and educational campaigns that will contribute to get the public ready
for this change and to easily assume it with confidence.
Embarking on certain measurement indicators besides the subjective indicators of
feel, neatness, portability, convertibility, etc. that are commonly recognizable by
the public. If one contrives to engage the larger public in the issues of cost
concerns, then one must also endeavour to educate the public about the technical
parameters that bear on cost assessment.
Evidence of redenomination
COUNTRIES BEFORE REDENOMINATION
AFTER REDENOMINATION
Indonesia 100.000 12,04
Cambodia 100.000 25,06
Lebanon 100.000 66,03
Mozambique 100.000 4,24
Paraguay 100.000 16,09
Romania 1.000.000 31,01
Ghana
Vietnam 100.000 6,39
**Source: MRI Bankers’ Guide to Foreign Currency: Financial Times, FX Rates. (Currency in relation to the United States Dollar)
Impact Eight Five 2008 Page 5 of 20 Central Bank of Nigeria
Grounds for Redenomination
Multiple zeros cause difficulties in;
Expressing monetary values,
Transactions at the cashier’s office
Book-keeping and statistical records
Data processing software
Payment systems
Price tagging
Challenges
Contrary to the belief that the re-denomination is a simple exercise, we believe
that the exercise poses significant challenges to businesses. There are enormous
cost implications for business organizations. A significant part of the cost will be
one off, but there are other costs, which will continue to be incurred until the
current currency is completely withdrawn.
The costs include:
Upgrade or re-configuration of business and accounting software
Staff training
Costs involved in changes to business processes and procedures
Cost of printing new stationery (invoices, receipt books, cheque books etc)
Time cost of ensuring accurate data capture when both currencies are in
circulation. With the proper planning and preparation, the re-denomination
exercise should not be too much of a burden for companies, but it is important
that action is taken now
Impact Eight Five 2008 Page 6 of 20 Central Bank of Nigeria
SWOT Analysis
Strengths
Given Nigeria’s enhanced status in the international community it will help to restore credibility and confidence to the naira.
Will reduce the presence of foreign exchange especially dollars in the Nigerian economy. If the value of the new naira is maintained or improved, people will look to store their money in naira instead of dollars thereby reducing the demand for the dollar. The drop in demand of the dollar will further strengthen the naira.
Assist in taming inflation. For example. The average national newspaper is priced at =N=100 in present day Nigeria. If they decide to review pricing, they will most likely increase it by =N=50 which is a 50% increase. After the redenomination, some said paper will cost =N=1 and due to the presence of coins which hold more value, the increase could only be by 5 kobo making it =N=1.05k instead of =N=1.50k. This shows a 5% increase instead of a 50% increase. Keeping soaring inflation in the single digits and maintaining stable economic growth.
Weaknesses
Reconfiguration of computers, ATM machines, accounting and data processing software, staff training, cash registers etc. by companies and individuals will be time consuming and costly.
Cost of printing new stationary (invoices, receipt books, cheque books etc)
Printing and minting costs of new currency.
Opportunities
As with numerous cases of other countries (such as Ghana, Turkey, Venezuela) that have sought currency redenomination, low currency values will rapidly increase.
Redenomination would boost the gross domestic product (GDP) by at least 0.9%.
Threats
Psychological hurdle of the tendency of people to think their money has been devalued. This could result in a decrease in spending in the early stages of the redenomination.
Impact Eight Five 2008 Page 7 of 20 Central Bank of Nigeria
Objectives
Reaching the different strata of the society with appropriate media strategies.
Communicating with every group in the urban areas using all available means of
communication. Paying more attention to the people in the rural areas and also
traders, civil servants, farmers and other artisans in both urban and rural areas.
Creating total awareness and conviction highlighting the benefits of
redenomination to elicit favourable responses from the public with frequent
evaluation of the entire exercise.
To communicate effectively to Nigerians at home and in Diaspora by creating a
nationwide awareness and employing local and trans-national media channels
to reach the different demographics of the nation.
Taking advantage of the different target audience and creating simple and
understandable concepts that will introduce redenomination properly within 16
months.
To increase the awareness and enlightenment by 80% within the first three
months of introduction and keeping the people informed of recent developments
in the process.
To appropriately allocate assigned budget to achieve the desired result of the
aforementioned objectives.
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Media Strategy & Rationale
Channel our communication to the target audience through all the mass media
and inter-personal communication levels at launch/introductory stage.
Electronic – Radio, TV, Internet, SMS (Text Messaging).
Print – Newspapers, Magazines, Posters and other below the line items.
Outdoor – Billboards, Banners, Signposts, Pop-up stands and Multi-media LCD
e
Allocate media spending to achieve the objectives of redenomination and
ensuring successful campaign from the introductory through the transitional
periods.
Reinforce communication at every point where the public needs to be informed
or educated on the exercise.
Maintain flexibility to be involved in further activities that will add vigour to the
success of the campaign.
Employ the right media vehicles in cognisance to the peculiarities of this
exercise. For example, using the stations that run programmes in local dialects
to reach a particular age group and class of people.
Utilise effective size and positions in newspapers and magazines to prominently
relay our messages.
Buy strategic spots in the print media and airtime adjacent to popular
programmes on television and radio to effectively reach our target audience.
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Erect outdoors hoardings in strategic high traffic sites that can effectively reach
our targets e.g. Markets, Stores, Hotels, Airports, Businesses, Government
buildings, ministries, local government offices, Hospitals etc nationwide.
Provide handbills, pamphlets, portable conversion chart (that can be kept in
wallets) in banks, stores and other point of sales. Example of what will be
printed is a conversion chart with the aim of enlightening people on the
relationship of the new and old currency.
Radio
We intend to use radio as the lead media because of the increasing radio
listenership nationwide. The radio has been described, as a most effective of mass
communication in Africa owing to its affordability thus, there is a big need to exploit
the coverage of this medium to reach many Nigerians.
There is hardly a state in Nigeria without government owned and operated radio
stations, these stations run several programmes in their local dialects, and will
further educate the rural masses who make up a higher percentage of the
population.
The audience demographic of 18 – 45 years old are upwardly mobile and have
hectic lifestyles, but radio is one medium that is readily available at home, work,
schools, public transportation and cars.
It is the only electronic medium that still enjoys maximum listenership in spite of
power outages, because most individuals have battery-powered radios.
Impact Eight Five 2008 Page 10 of 20 Central Bank of Nigeria
We recommend buying fixed time spots adjacent to programmes that command a
high followership amongst our various target audiences and also during peak rush
hour traffic (When most people are going to and returning from work). These
programmes include news, sports, drama, musical/talk shows, current affairs,
phone-in-programmes etc. Fixed times spots will enable us measure accurately
the reach of our message and give room for flexibility.
TV
Combining its audio-visual advantage, the television is a dependable medium of
mass communication and an indispensable tool of advertising. Most of the usage,
strategies and scheduling in radio are always applicable to TV.
Internet
Using the Internet is one of the most effective electronic media in modern day
business. The emergence of the computer and its application to daily transactions
has created room for its use as a medium of advertising.
Although majority of Nigerians do not have access to the Internet, a good number
of youth and a particular set of adults (Both at home and abroad) can be reached
through the Internet.
Our research shows that some websites are updated on a daily basis with display
advertising, interactive and email marketing. These sites are Yahoo, Hotmail,
Google and Facebook.
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These websites now target consumers via IP address recognition. Therefore the
campaign will be viewed by those connected to the website from Nigeria and those
linked to certain keywords related to Nigeria or words like redenomination, CBN,
money etc.
We also recommend that we build a website, solely dedicated to redenomination.
It will allow discussions, FAQ (Frequently Asked Questions), updates on the
exercise, press releases etc.
Newspaper & Magazines
At every point of media planning, the print media is selected based on circulation
and interest. In such a national exercise, all genres of print media must be
considered. Even the national newspapers like The Guardian, Punch, ThisDay and
others still do not cover all the geo-political zones in Nigeria and not all
newspapers and magazines cater for every human interests.
Thus, we will utilise national and regional newspapers, specialised
newspapers, and soft-sell magazines.
The new notes would be displayed on pages of the print media with its
features and securities clearly outlined.
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Communication Strategy
Our strategy cuts across every medium and stages of implementation, we are
employing new communication systems like mobile marketing, interactive
marketing, and display adverting on the Internet.
We recommend ad-hoc officials/Promotional teams. These teams will be
instrumental to further enlightening the public (especially people in the rural areas
and traders) on redenomination.
Our promotional team will be available in financial institutions, stores, schools etc
to distribute promotional items to complement other communication efforts.
Advertising Strategy
We will adopt the affordable approach. In the affordable approach, the advertising
budget is set simply on the basis of an assessment of what CBN can afford to
spend within a 16-month period. It is therefore an extremely arbitrary method
which, although it has the advantage of been simple to operate and of ensuring
that the organisation does not over extend itself, suffer from several severe
limitations.
The two fundamental weaknesses of the affordable approach are first, it does not
encourage the development of long term planning of advertising expenditure and
second, that short term advertising opportunities are likely to be overlooked.
Despite these weaknesses many organisations use the affordable approach
seemingly without encountering problems.
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Difficulties are likely to arise, however, if the organisation’s awareness begins to
decline. Any decrease in the amount of advertising may well lead to a further
decrease in awareness. The efforts of using the affordable approach in such a
situation are therefore likely to be cumulative.
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Media Plan
We will utilize a pulsing schedule whereby a comprehensive level of campaign will
be in place throughout for the period of 16 months.
For television advertising, run-of-the-station 60-second spots will be purchased
(please refer to television advertising below). For example, all NTA news
broadcast will follow with an advert on redenomination. Several spots will run
Monday through Friday on daytime rotation basis. Weekend spots will run
alternatively too. Adverts would be creatively designed in different languages and
run in every state of the federation.
Radio
Radio will be used to target commuters because 74% of Nigerians spend 40% of
their time commuting to and from the city in private or commercial vehicles.
Therefore, many consumers will hear the radio campaign and respond positively
towards the process.
Radio is an important part of our media planning as it acts like information
reference point for most Nigerians. Furthermore, radio can reach many of the
smaller states where consumers do not have access to television or other
technological developments.
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Newspaper Advertising
Only the press campaign and vital information will be used from the launch date
through to the end of the exercise. We will use the support of the radio to
effectively help
Promotional launches or announcing information relating to subsequent
developments.
However, new notes will be present in national papers across the country for the
First quarter. This is to simulate peoples’ interest and develop enquiry feedback
from the campaign.
Campaign Research
Bespoke pre and post monitoring programmes can be commissioned to measure
both the awareness and effectiveness of your advertising communication
campaign or PR campaign. This will enable to be objective and as well as
ensuring that your budget has been spent effectively.
Target Market
Target market refers to the amount of the people the media campaign needs to
reach before a response is made to either, acknowledge the product or services
and then act upon that interest to purchase or deepen curiosity. This media
planning has been divided into six-target market zones, to indicate penetration
spending according to the size of the implementation policy.
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Audience Analysis
Nigerians Home and Abroad
Illiterates and Literates
Urban and Rural dwellers
The International Community
Advertising Efficiency
Monitoring people’s opinions on and after the campaign.
Implement before and after measures of usage attitude studies.
Hire agencies to carry out qualitative analysis of work produced by ad
Agency.
Ensuring that every Nigerian (including illiterates) understands the
relationship between the old and new notes.
On commissioning, client is required to pay 100% of all production costs before
the agency can develop, implement and execute your required tasks after the
pitching process. The 100% refers to the agency charges, VAT, creative concepts
and or pitching fee where included.
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Budget
The budget for the complete communication, educational programme and media
campaign is estimated at N2.750 billion.
Breakdown as follows:
National media campaign N2 billion
Global media campaign N500 million
N250 million (Inclusive of agency fee plus VAT and contingencies).
N.B This is a speculative budget, which is based on our research from campaigns of this magnitude and what other countries that have implemented the policy in recent time have spent to achieve a successful communication campaign. We have little or no idea of the amount CBN intends to spend on this project.
It is worthy of note that several efforts must be put in place to achieve desired
result, thus, it is advised that government agencies (especially The National
Orientation & information Agency) play active and supportive roles throughout the
exercise.
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Acceptable Payment Methods
Irrevocable Letter of Credit (Cash Covered) for the full 100%.
All pricing quoted is inclusive of V.A.T.
LPO (Letter Purchase Order)
Secure Bond where necessary
Cheque payment
Bank Transfer
Agency Fee
Agency fee is provisionally estimated on the basis that Impact Eight Five Limited
will be the appointed advertising agency for the full duration of 18 months.
Media Placement
Pre-payments for media insertions will be made at the beginning of the campaign
to facilitate the smooth running of the campaign and to further enable bulk
discount from the media houses. All media buying payment must be settled to the
agency a week before any media planning is executed.
Impact Eight Five will present tear sheets and certificates of broadcast for the
previous month no later than the end of the first week of the following month. For
all outdoor advertising we will commission the expertise of a company called
Media Track. Media Track will be responsible ensuring all advertising instalment
are implemented in accordance with our execution time requirements. The
company has offices around the country.
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Pitching
You must issue a brief, specifying what your organisation wishes to achieve and
invite Impact Eight Five to present a communication strategy and creative concept
for the project. Finally, your organisation should specify a budget, since this would
have a major impact on the type of ideas we can recommend.
If after the pitch, Impact Eight Five is not the selected agency then a pitching fee
will be charged for service provided. The pitching fee is normally 7-10% of the
clients’ budget. However, if Impact Eight Five becomes the selected agency, that
will execute the campaign then the pitching fee becoming only 3.5% of the budget.
Refer to Media Plan for detailed financial spending of the proposed budget
(Media Plan/Global Media Plan).
Impact Eight Five 2008 Page 20 of 20 Central Bank of Nigeria
Proposal produced by:
Impact85 Marketing & Communications Nigeria Limited
Lagos
w. www.impact85.com.ng e. [email protected]
t. 018509141 m. 08088500000