Businesses are restructuring to survive economic headwinds-Agu
By Oghale Mafuru
As the Nigerian economy continues to experience inflationary pressures amid decline in purchasing power, clients have been forced to rethink their business models to drive down operational cost per unit purchase as well as other marketing and sales related costs. Emmanuel Agu, Group Marketing Director of Jotna Nigeria Limited (The LaCasera Company), a leading Carbonated Soft Drinks company, reaffirmed the struggles of clients within the Fast-Moving Consumer Goods, FMCG sector who are being confronted with the challenge to deliver quality products at affordable rates despite the rising cost of production.
The marketing expert who has served in the CSD market for decades revealed that clients are now very cautious with advertising expenditures with increased efforts targeted at maximizing shrinking marketing budgets.
His words: “We are embracing cheaper and effective ways of communication. How many FMCG companies shoot commercials like they normally do? In the past, people shot commercials like every quarter or twice every quarter and then increase their media weight in terms of media spend. Now, everybody is becoming very cost conscious and very careful”.
According to him, clients are constantly grappling with the most critical questions centered around channeling advertising budgets to areas with high Return on Investment and cost-effective ways to advertise their products.
“How do I navigate this murky water? Do I have to go on a full TVC production or do I have to go for a video shoot? Naturally, it will cost between 60 to 80 million naira and in some cases, if it is a premium brand, between 100million to 150million to shoot a good commercial then. We know that when you spend close to 150 million to shoot a commercial, you need to spend three times the value of the production cost in your airtime to fly those commercials” he said.
Mr. Agu advised marketers to be innovative and adept with the marketing realities especially within their segment for effective brand management.
“That innovation comes with a forensic insight of what the consumers want. If you do the right innovation at the right time, you will get the right benefit in the marketplace before insurgent brands start getting into that space. Because the way the economy is now, every brand is looking for what is working. You do 35cl, it works for you for 6 months, before you know it, everybody is in the 35cl space. You innovate on ginger flavor, you can only reap the benefits in less than six months, the next seven eight months, everybody in that space because people” he added.
The Jotna boss who decried the impact of the economic challenges on the sector, stated that clients are now regionalizing their brand with specific attention on areas of high patronage and demand.
“Before every brand wanted to be a national brand, now with the cost of logistics, clients are becoming very specific. You need to be very forensic in the ways and manners in which they distribute their brands. So, people are beginning to regionalize their brands in the locations where the brands are doing well”.
The marketing icon stressed the need for marketers and brand managers to continue to innovate to stay ahead of the current economic challenges.
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