‘One size fits all’ marketing by global companies fails in Africa

March 16, 2014 1:08 pm

‘One size fits all’ marketing by global companies fails in Africa

By Katrina Manson in Nairobi

When a television advertising campaign promoting Indian mobile phone company Bharti Airtel in Africa fell flat a few years ago, the marketers went back into the cutting room to work out why.

Images of the savannah, actors from South Africa, along with the use of coins – when many Africans use only paper money – had limited the advert’s appeal in some parts of the continent, no good for a company with business in 17 African countries.

“This is where multinational companies go wrong. They come with their global brand positioning and they want to cut and paste,” says Bharat Thakrar, head of Nairobi-based Scangroup, Africa’s top marketing services agency.

“They think everybody looks the same but just having black models is no longer enough. It’s like putting a Thai, a Chinese and an Indian in the same Asia ad. People can recognise themselves,” he adds.

Just as US megastore Walmart and UK supermarket Tesco found expansion into China tougher and slower than expected, global companies – whether new or old entrants to Africa – face similar headwinds if they fail to adapt their advertising to the continent.

The potential consequences of failure are significant as multinationals from Heineken to Unilever and from Nestlé to L’Oréal turn their attention to cracking Africa, investing millions of dollars over the past five years to tap a market with a billion people, a rising consumer class and some of the fastest growing economies. And the arrival of foreign mobile phone and consumer companies to Africa has led to an explosion in advertising on the continent.

While Africa still makes up a tiny proportion of the annual $500bn spent on advertising worldwide, information researchers Nielsen said that last year the Africa and Middle East region was the fastest growing destination for advertising spending, which rose by 14.6 per cent against 3.2 per cent globally.

The International Monetary Fund predicts economic growth of an average 5 per cent a year on a continent where some surveys put the number of middle-class consumers at more than 300m people. Key for multinationals is that consumer spending in sub-Saharan Africa is expected to reach $1tn by 2020, up from $600bn in 2010, according to research group Euromonitor.

The surge in marketing, however, is in some cases failing to deliver returns, as companies have been too quick to characterise the continent as a single entity and, as a result, have failed to connect with consumers.

Airtel learnt this lesson and, shortly after its disappointing campaign, put out a series of more tailor-made television adverts: one about a pidgin-speaking hustler in Nigeria to reflect the country’s “bigger-than-life” appreciation for all things slapstick; another about a Congolese mechanic whose poignant francophone tale was set to captivating local rhythms; and others showcasing graduation ceremonies to capture east Africa’s “more conservative” culture.

Foreign companies starting to advertise in Africa face another danger: homegrown companies that understand and respect the continent’s individual markets better than many global corporations and are prepared to work in fragmented markets.

“There is growing competition from local companies and brands,” says Nestlé regional head Ian Donald, who oversees 21 African markets.

In the past decade, a detergent named Toss from homegrown Kenyan company Kapa Oil Refineries, has begun to take market share away from Unilever’s 60-year-old market leader Omo. Unilever, the world’s second-largest consumer goods company after Procter & Gamble of the US, says that increased competition is “driving a long overdue shift to a consumer-centric marketing model in Africa”.

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The Anglo-Dutch company, popularly known for Lipton tea and Persil detergent, now makes Portuguese-language adverts depicting traditional chicken stews to sell Maggi stock cubes in Angola, while Amharic script emblazons its adverts for Knorr products in Ethiopia.

Mr Thakrar of Scangroup says: “We tell multinationals all the time – they have to produce advertising that’s more relevant, that resonates – it’s costing more but it’s the only way to do it.”

Like Kapa, which serves 18 African markets, Kenya-based Bidco Oil, which bought several brands from Unilever in 2002, plans to take further chunks out of multinationals as it expands beyond east Africa. “The barriers to entry are falling,” says Bidco chief executive Vimal Shah, arguing multinationals no longer have exclusive access to technological knowhow, large capital and global networks.

“Plus, if you come with a brand that’s not known in this market – unless it’s Prada or Mercedes – it could be famous in London but it won’t necessarily appeal to consumers out here,” he says.

The most successful brands go so local they become part of society – running marathons and musical festivals, raising money following natural disasters or regularly responding directly to customers.

Bob Collymore, boss of Safaricom, Kenya’s leading mobile phone company in which the UK’s Vodafone has a 40 per cent share, regularly tweets to his 209,000 followers. Now some international companies have begun recruiting local “influencers” to sell everything from vodka to phones, beer to mortgages, paying them a monthly wage to assess products on blogs and Twitter accounts.

It is early days, but foreign executives from consumer companies privately acknowledge that they will have to adapt, and quickly. “It’s only just now that people are beginning to see Africans as consumers,” says a European corporate executive.

“The time is coming when we and everybody else are going to have to tailor and adapt brands – advertising and marketing, both – to the different Africa markets,” the executive says.

Companies learn to adapt to local tastes

While big companies are beginning to tailor their marketing messages – increasingly choosing local models, languages, music and food to reach target audiences – some are also beginning to adapt their products to the tastes of local African markets.

Manufacturers of soft drinks and confectionery typically sweeten products aimed at African markets, while South Korea’s Samsung recently brought out extra-loud stereos to appeal to Nigerian consumers, and fridges that can withstand power loss and fluctuations, to cope in African markets where electricity regularly cuts and surges.

“There was a habit in Africa of pumping out universal products,” says one European corporate executive, adding that companies had not bothered to do market research. But that is changing now with the arrival of competition – particularly from homegrown African companies.

Swedish beauty company Oriflame set up in east Africa last year, but could only introduce 300 products from its 1,500-strong line. Some of its make-up was developed for the Indian market, but the company plans to introduce darker shades of foundation for an African range soon.

Often, products are so entirely new to local markets that customers are flummoxed. “Some of our customers try to put black mascara on their lips – they don’t know what it’s for,” says Tracy Wanjiru, at east Africa’s largest supermarket chain Nakumatt.

The company set up free nail bars and makeovers to spread the word and tempt new custom for more expensive western brands entering the market, including Revlon and L’Oréal’s Maybelline.