marketing seminar - nabc.nl marketing seminar.pdf · - opening by maryn kkleingeld -...

Marketing

Seminar

April 23 2014 - © Copyright NABC

By Maryn Kleingeld – NABC

“Marketing Strategies and

Instruments”

Opening:

'African consumers were horrified by

an American baby food company's

product packaging.'

https://www.youtube.com/watch?v=raNFs7whRgc

https://www.youtube.com/watch?v=raNFs7whRgc

“Unilever comes under fire for

'homophobic' South African Flora ad”

- Opening by Maryn Kkleingeld - NABC

- Introduction on Marketing in Africa by Aad van

Tilburg – Former professor Wageningen University

- Strategy Speech by Simba Ngandu on "Market

Research and Finding local Partner”

- Strategy Speech by Jeffrey de Visser on

"Microfranchising in Africa“

- Break

- Strategy Speech by Frans de Pater on "Hands-on

Development“

Program:

- Panel Discussion by:

Heineken - Rob Marijnen

Friesland Campina - Jan Bles

Dasuda - Robert van Kats

Philips - Nick Kelso

Vlisco - Saskia Bosscha

Moderator: Aad van Tilburg

- Matchmaking with the speakers

- Drinks & Networking

Program:

By Aad van Tilburg – Former Professor at

Wageningen University

“Introduction to

Marketing in Africa:

Marketing and Consumer

Behaviour”

Presentation:

Customer satisfaction?• Who is your customer?

• How can we reach our customer?

• What is necessary to bridge the geographical gap between

supplier and customer?

• How does the customer evaluate your product or service?

• How do you evaluate your customer?

How to bridge the gap between

producers and consumers?

• Consumers and producers may be o close to each other, or

o Separated, to be connected by a value chain.

• Linkages: o an information flow,

o a flow of products or services,

o a flow of payments, credit, insurance

However, bridging this gap implies

transaction costs

Transaction costs are the costs to prepare and to complete a transaction

o Cost categories:

• Search costs:

o before the transaction is concluded

• Negotiation costs to conclude the transaction

• Enforcement costs in case of breach of contract:

o potential costs after delivery

Transaction costs tend to be high in

African developing countries

• Lack of market information?

• Lack of standardization?

• Absence of vertical coordination in value chains?

• Missing collateral in case of credit? o Smaller business (wo-)men are constrained by a lack of

assets that can be used as collateral

• Is the value of a transactions small in relation to the enforcement costs?

• Lack of a proper institutional context?

Trust in a transaction environment

• Trust is the willingness of at least two persons o to enter in a negotiated agreement

o to incur obligations and to acquire rights

o that have only imperfect legal protection.

Trust & Relationship

• When can contract partners trust each other?

o Reputation: Trust may result from a history of successful

exchanges

• Relationship-based contracts are expected to arise

in markets where:

o Personal trust is a substitute for external contract

enforcement

o Product-screening costs are high

• Shortcomings in institutions can be bypassed by trust-

based exchange!!

Relationships among traders

• Good relationships can be used for:

o Mutual exchange of information about

• Market conditions and prices, e.g.:

o The regularity of trade flows: trend, seasonality,

irregularities

o Current and expected prices in different stages of the

value chain

o Obtaining or giving trade credit

o Minimizing the risk of contract problems

o Risk sharing in case of unexpected external

events

Benefits of trade relationships• Trade relationships can be beneficial for:

o Business start-up support and training

o Sharing information

o Ensuring regular demand or supply

o Sources of credit

o Reducing the risk of contract breach

o Risk sharing

Types of transaction relationship

• How important are the following contract types in

your (potential) customer base?

o Reputation-based exchange,

o Trust-based exchange or social network based exchange,

o Exchange based on a written contract (that can be

enforced).

A contract links suppliers and customers

Contract content:

• Type of product or service

• Its quality

• Its packaging

• Its price, terms of credit, insurance

• Its (food) safety (HACCP, tracking & tracing)

• Its logistics

• Type of arbitrage that will be used in case of a problem?

Contract & trust

• Assume two persons want to conclude a

contract (e.g. sell & buy ........)

o Do they have reasons for opportunistic

behaviour, for example, to cheat each other?

Why (not)?

o Are there opportunities for cheating?:

• For example, with respect to o quantity

o quality

o warranty

o form of payment

Are legal contracts useful?

• Legal contract: o The instrument that defines the legal battleground.

• Courts can hardly enforce the legal contract itself:o Delivery or payment itself is difficult to enforce, but:

o Some financial compensation can/may be offered.

• Assume a breach of contract, consider:o If the expected gains from future trade are larger than the

expected gain from immediate court action:

o Legal suit or not?

Contract flexibility

• Is breach of contract due to

o unanticipated events (excusable breach), or

o to carelessness, or incompetence of one of the contract

partners?

• Depends the sanction on the cause of the breach

of contract?

• Contract flexibility

o means acceptance that contractual performance may depend

on external events that are affecting one or both contract

parties.

o may lubricate long-term relationships!

Sources• Aad van Tilburg:

o Linkages between theory and practice of marketing in developing countries (2010)

• Marcel Fafchamps: o Market institutions in Sub-Saharan Africa, Theory and Evidence (2004)

By Simba Ngandu – Category 5 Consulting

“The Importance of

Market Research and

Finding a Local Partner”

Presentation:

© 2013 Power in Partnership

“A company determines there’s an

opportunity in Africa.

Then it flies in all its expats, recreates what it

has at home and runs the operation out of its

European headquarters……it’s expensive

because it doesn’t work.”

Neville Isdell, Former Coca-Cola CEO

Taken from article on Forbes.com “Glaxo and Unilever Take Note” 02 Apr 2014


What we already know….

• Potential to give attractive returns› Not confined to single sector (telecoms, tourism, retail….),

economies diversifying

• Not one country› 54 countries, ~2000 spoken languages, >250 religions› Not reading from same policy script

• Changing rapidly› Urban transformation, Middle class burgeoning, cultures

diluting, traditions transforming

• No longer the “dark continent”› Exponential mobile/internet reach, increasing spend on

research and data collection


…..presents interesting challenges to B2C marketers

• Unfamiliar terrain› Challenges of physical, logistical, regulatory and social

constraints

• Strong incumbents and increased competition› Early entrants/local stars have deeper roots

• Diffused nature of market› One size does not fit all - informal, formal and modern

retail

• High trial, low adoption› Market is hungry for the new and foreign, but stable

sales/growth can prove elusive


How can market research be of use?

African Ambition

Build a Consumer-centric marketing model

Assess Risk

Understand competitive landscape

Optimize local vs. Global

Non-traditional media channels

Leverage marketing

tools


Overcoming market research challenges

• Offer is no longer 2-dimensional

• Innovative methods/options –inaccessible segments etc

Expensive

• Multi-pronged approach using multiple sources (primary, published, expert opinion)

No depth of understanding

• Mobile platforms

• Interactive sms, feature phonesHigh turnaround times

• No preconceived position

• Integrate active and passive data Low Trust

• Partner should know what/how to ask

• Understand local phenomena like top-boxing, badging etc

Poor interpretation


Examples – birthed from insight

M-PesaSafaricom

Eagle Lager SABMiller

MYOWBU channelNestle

Ekocenter kiosksCoca-Cola

Cooking CaravanMaggi


Who can you speak with?

• Finding the right partner can be challenging:› Right skills› Reputable› Specialized› (True) Local knowledge› Integrated into local business network

• Professional associations like ESOMAR, SAMRA, or MSRA have membership lists

• NABC and matchmaking consultancies are able to scout markets on your behalf

• Or talk to people like us who have a specific MR network……..

By Jeffrey de Visser – African Endeavours

“Micro-franchising in Africa”

Presentation:

How can we design businesses that alleviate poverty?

32 African countries

58.000 kilometres

4 out of 6 billion people live off less than $2.50 a day

People turn to the market

To change the world go for-profit

Goals

- Reach consumers at a local scale

- Alleviate poverty with market mechanisms

- Design a profitable business model

How can we design businesses that alleviate poverty?

Lesson: it’s all about opportunity

Micro finance provides opportunity

Lesson: not everybody is an entrepreneur

Lessons

- For-profits have a larger impact

- Micro finance provides opportunity

- Not everybody is an entrepreneur

- Use design thinking to innovate

Microfranchising

- A ‘business in a box’

- Providing the tools they need to start & operate a business

- Optimize, systematise & replicate

- Alleviate entrepreneurial burden

Finance using micro-loans

Fan Milk

- Ice cream sachets sold from bicycles

- Started in Ghana by Danish company

- 7 countries in West Africa

- Legion of micro-entrepreneurs

- $78 mln turnover in 2012

1. Listen & assess needs

2. Use design thinking

3. Live market tests

4. Systematise & replicate

5. Achieve profitability

Market entry strategies

Agent

Non-equity Equity

Distributor Joint ventureExport

Licensing Turnkey Acquisition

Subsidiary

Greenfield

Microfranchising

Advantages

- Mitigate certain risks

- Get feet on the ground

- Secure ‘first-mover’ advantage

- Use local market knowledge & networks

Create a synergetic

collaboration

between Western & African parties

social impact

&

profitability

to achieve

Break

April 23 2014 - © Copyright NABC

By Frans de Pater – Africanwise

“Hands-on Development”

Presentation:

haarlem | cape town | lagos | nairobi

strategic hands on developmentNetherlands-African Business Council Zeist, April 23th 2014

frans de pater – managing partner

presentation limited to B2Capplicable to B2B or H2H

strategic hands on development

date |april 23th 2014

presenter |frans de pater

some structural trends• the global race for commodities; cost competitive location

for sourcing many minerals• access to international capital; the highest return to fdi of

any region• seismic demograpthic shifts; increase of discretionary

spending power; the largest workforce by 2040• green revolution; africa has 60% of world’s available arable

land• …




a continent of both vast opportunities and significant risks for entrepreneurs, corporations and investors.




strategic hands on

development?

strategic hands

on development

date |

april 23th 2014

presenter |

frans de pater

Now

Goal

???

time & strategy

what is your company strategy?

• increase markt share• add services or products• enter new markets or regions• add services or products in new markets




what is your african strategy?

• how will your survive?• how will you be succesfull?• how will your company benefit?• …




presentation

title

date | april 23th

2014

business model canvas




key partnersvalue

proposition

customer

segments

key activities

key

resources

customer

relation

channels

revenue streamcost structure

customer segments

• how to find?• how to know?• how to reach?• how to communicate?• how to supply?




customer

segments

presentation

title

date | april 23th

2014

s.a.v.e.

• solution instead of product • access instead of place• value instead of price• education instead of promotion




strategic market selection – key issues

• uniqueness of product or service• barriers to entry• scalability• business and operation model• …




‘western’ planning process




Planning

Analysis

Design

Develop-ment

Execution

Evaluation

‘african’ logical process




Decide Do Analyse Evaluate Design Plan

critical factors

• market data and consumers insights• value proposition• network and contacts• market entry strategy• supply chain• marketing channels and technology• …




hands on development

• from desk to street• involve the market• ‘testing the waters’• translate ideas into actions• keep it simple at start• create local footprint




hands on development

• gain data and insights• analyse• develop scenarios• simultaneous scenarios• create company awareness




necessary company awareness

• set priorities• strategy is not the budget• quick response• decisive and adeptive• long term view• reviewing african strategic goals




key essentials

• entrepreunerial orientation• strategic development with an project focus• short term actions with long term view• ‘out of the airco’




Panel Discussion:

Heineken - Rob Marijnen

Friesland Campina - Jan Bles

Dasuda - Robert van Kat

s

Philips - Nick Kelso

Vlisco - Saskia Bosscha

What is changing withrespect to the marketing tools

nowadays used in Africa?

How do you use these or other marketing tools?

To what extent is the use of social media

possible/necessary as a marketing tool in Africa to

reach your cutomer?

Do you take social classes or other characteristics of your

potential customer intoaccount when choosing a marketing instrument?

How do you – step-by-step –use market research tools in

order to gain information about potential customer

demand or B2B opportunitiesin African countries?

To what extent is it relevant to establish a good

relationship with institutionsin general and the local

government?

Are there any examples of no-go’s when it comes to

marketing in one or more of the African countries you are

working in?

How do you deal with localcompetition, either local or

foreign?

What strategy go you use todeal with competition: defensive or offensive?

What is the best advice to a company represented herethat wants to enter an/the

African market?

Closing Note:

Thank you for your attention

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