Nigerian Brands-the Bullish, the Bearish

At the beginning of 2017, Nigeria’s inflation rate had hit 18.55 per cent, the highest in 11 years. This was no good news for businesses because it meant they have to pay more for raw materials and consumers’ purchasing power was also significantly decreased. Added to that was a forex market that was clearly out of control.

The volatility in the economy as at then was a massive turn-off for retail spending, as many households could no longer afford basic items. As sales plummeted and consumers’ confidence headed south, the implication was not lost on business owners as many of them immediately adopted different cost-saving strategies including cutting down on production to stay afloat.

Till date, the situation hasn’t changed significantly. Though there has been some stability in the market, as inflation rate recently declined marginally for the first time since Q1 of 2016 and exchanged rate is now less volatile, analysts have insisted that the conditions are still not favourable for investment. “The improvement is cyclical rather than structural, owing to recovery in oil earnings”, said Moody’s Aurelien Mali, who reckons that sustainable recovery hinges on foreign investors’ return.

He said further, “While the latest policy moves have indeed narrowed the divergence between parallel and official rates, dollar liquidity constraints are likely to persist because oil receipts will not rise significantly.

One thing that has become clearer from this situation is that the dynamics of the marketing communication industry has changed, not just because the marketing budget, just like every other budgets, has shrunk, but more importantly because during a recession consumers become value-oriented as their propensity to consume declines. Consumers have become more selective and discerning in their consumption habit, and that means brands must embrace this new reality in their communications.

“There is no way better to become more creative with brands and branding for quality, competitiveness and growth. It, therefore, behooves practitioners in the industry as well as business and brand visioners to innovate as well as strategically connect their brands with consumers’ minds to remain relevant and ensure growth and profitability”, Chizor Malize, a branding expert and CEO of Brandzone said.

In other words, it is a season for brands to either evolve or die. And in reality, many brands have not had sweet stories to tell about the recession, because they have probably been overwhelmed by the dynamics of changing consumer behavior, especially in a recession. But a number of brands have been able to rise to the occasion with regards to creatively engaging the consumer and they have been rewarded with brand loyalty and increased market share.

Take, for example, Nigerian Breweries Plc, known over the years for its creative deployment of marketing campaign to drive consumer engagement and market leadership. Yet, in the last couple of years, NB has been even more aggressive in exploring new grounds in a bid to engender consumer connection despite the recession.

Some of the innovative campaigns from the brewery giant in recent times are ‘Build your City’, which drove awareness for its premium brand, Heineken. Last year, the company unveiled an unprecedented partnership with some of Europe’s top clubs like Arsenal, Manchester City, Juventus, PSG and Real Madrid. These are very strategic; as it provided an emotional touch point between the Star brand and millions of Nigerians football lovers, who passionately follow these European clubs daily.

And just recently, the company launched another major campaign “33 City of Friends” a 72-hour long concert in Lagos to drive engagement for 33, a fast growing value brand. And apart from its communication progress, NB in recent years has tactically reinforced its portfolio with value brands, through mergers and acquisition. These value brands, which have since evolved into the mainstream segment, turned out to be the catalyst for growth for the company. “The single digit growth recorded in the total brewed product market was driven by the larger category, particularly by the new mainstream”, Chairman of NB Plc said during the company’s 2017 Annual General Meeting in Lagos.

Nigerian Breweries probably benefitted from the misfortune of Guinness Nigerian, which has struggled for growth. But lately, the two-horse race has become a three horse race with the entry of SAB Miller, which has now been acquired by world’s biggest brewer Anheuser-Busch InBev.   Anheuser-Busch InBev is already giving NB some concerns with its Life, which has become one of the fastest selling beer in Nigeria, despite its relatively small marketing budget.

Another exciting category worth exploring is the food category, where Sona Agro Allied Foods is steadily climbing up the ladder to market leadership. The ability of Sona Agro Allied Foods to adapt its brand to suit market expectations says a lot of the ingenuity of the brand owners and its marketing team. Despite the difficult environment, Sona Agro Allied has flourished because of its unique brand proposition and focus. The brand has also leveraged on the forex crisis, to start producing local replacement for imported premium biscuit brands. “I have travelled wide, and I can say with certainty that when you taste Sona biscuit products, there is no difference between it and the foreign ones,” OtunbaAbimbolaAshiru, Ogun State Commissioner for Commerce and Industry said recently.

The chairman of Sona Group, the holding company of Sona Agro Allied attributed the success of the biscuit company to its commitment to quality. “When you produce good quality, you don’t have to show off. Consumers themselves will determine what the market of the product should be. If I give you my product and you enjoy using them, then I think you will become my customer. If you buy a product and you are not able to use, will you buy it a second time? The answer is no”, explained ArjanMirchandani, Sona Group’s Chairman.

The non-alcoholic segment has been shaped by the sensational entry of Peruvian soft drink giant Ajeast, makers of Big Cola, which immediately caused a stir among competitors and challenged the long standing duopoly of Coca-Cola and Pepsi. The brand immediately resonated with consumers because of its strategic offering of more content for less money. But its growth was soon tamed by a timely response by the big two- Pepsi and Coca-Cola that immediately announced a 20 per cent more content for the same old price of N100.

Peak Milk clearly stands out for running one of the most brilliant campaigns in recent memory. The Pecadomo campaign is a classic that has not just deepened the brand’s bond with consumers, but also won it new demography of consumers. While it is true that the dairy segment has been highly competitive, with brands like Cowbell, Hollandia and Dano demonstrating innovation in their marketing endeavors, Peak deepened consumer loyalty and even gained market demography thanks to Pecadomo.

One cannot overlook the marketing ingenuity of financial brands like GT Bank, UBA and even Sterling, that is now being noted for its innovations, in product designed and marketing communications. The smartphone segment also deserve some mention for its creativity and aggressiveness in driving sales. New smartphone brands like Geonee, Infinix, iTel, Innjoo, Fero have become household names within a short period, courtesy of creative communication and aggressive business to consumer dynamics.

So while some brands have been full of lamentation, others have simply undergone a process of creative rediscovery which has helped them warehouse new competencies and position them to explore new market opportunities. “It has been a learning curve for many brands and the lessons of this period can become a major driver of sustainable growth for brands that have dared to be creative”, Malize said.




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