Researching The Mass Markets

Understanding the Nigerian consumer

ESOMAR Conference

Lagos Nigeria22nd September 2010

An affiliate company of

Kareem Tejumola

Executive Chairman

RMS Nigeria

Presentation Outline

Inspiration

Global Trends

The Nigerian Consumer

So what has changed

On a parting note

What are the implications?

“A good head

and a good heart

are always a

formidable

combination”

Nelson Mandela

Inspiration

This paper attempts to provide a synopsis into the changing

consumer

It delves into the intricacies that constitute the mass market

with a view of revealing what drives then and how the

Nigerian marketing fraternity can leverage on this

4

Global Trends

1. China will emerge as the world‟s largest

economic power in 5 years

2. Global demographic and migration shifts

3. The Youth rule

4. On-Demand Media Consumption

5. Extensive Expansion of Customization,

Personalization and Community Experiences

Key Global Trends: For Marketers & Researchers

Source: Research World 2009

1. Combine analysis with deeper

understanding of communities to spot

shifting trends

2. Identify and predict business drivers

3. Track trends and look for unexpected shifts

4. Enhanced communication and delivery by

brands to specific communities through

innovation and technology

Implications: For Marketers & Researchers

Source: Research World 2009

Bottom line is : We need to rethink our business models

or change consumer interaction with our brands

Media fragmentation – more

channels to chose from

New ways to communicate, to be

entertained, to shop and to do

business

An abundance of choice

What has changed: For the Consumer

Marketing to individuals – the

fragmentation of media makes

consumers harder to reach

More touch points to plan and

manage – new channels also mean

new ways and means of

connecting with consumers

Less control - consumer

generated media has shifted

power to the people

What has changed: For Clients

One who loves

the vase

loves also

what is inside

- African

Proverb

The Philosophy

Let us recall the “Marketing Concept”

“The business philosophy that a company's effort

should be adapted to the needs and wants of its

customers.”

The three pillars of the Marketing Concept:

I. Focus on customer needs

II. Integration of marketing activities

III.Profitability

So what has changed?

Real GDP Growth Forecasts

4.5% (in 2010) and 5.2% (in 2011)

15 countries to grow > 5% in 2010

Challenges:

Need financial aid to sustain growth path

Poor infrastructure a major impediment –

need $93b pa for 10 yrs to fix this

Drivers:

Urbanisation, Expanding labour force and

the rise of the middle class African

consumer

What’s Driving Africa’s growth?

Source: African Development Bank

The

Nigerian

Consumer

Population - 151.3m

Urban 35%

Life Expectancy –

47 Years

Literacy – 71%

FDI - US $20.3bn

Nigeria – Overview

Source: The African Report

Socio-Economic Pyramid

• Over three quarters of Nigeria‟s population is in Socio Economic Class DE.

• However the urban picture is more encouraging…but still disheartening.

86%

9%

4%

1%

70%

17%

8%

5%

C2

C1

DE

AB

C2

C1

DE

AB

• Meaning about 120,000,000 people in Nigeria are low income consumers

who are struggling daily to make ends meet.

• This is our “market”…and we must understand it better.

National Picture Urban Picture

• The majority of these consumers are self

employed:

– They earn their income daily (without certainty)

– Earn N200 per day on average

– Multiple income earners among family members

– (30% claimed have 2 members earning

income)

• Significant proportion has reached secondary

school

– linear and simple thought processes

– abstract logic goes over their heads

The DE consumer …

Sources of income and literacy

• The majority of Nigerians are in the rural areas: 60 to

65%

– 51% of Nigerians do not have daily access to TV

– Only 50% of Nigerian have NEPA

• Living in a city remains aspirational for rural folk

• However cities are fraught with problems and stress

– High rent

– Pollution & Traffic (Hold Up)

– More time on commuting (less for family & friends)

The DE consumer …

Predominantly Rural……

“Collectivist” as Opposed to Individualist

Adhere to prevailing social norms

Enjoy social gatherings

Spend free time chatting and gossiping with neighbours

Suspicious of people from outside the community

Participate (mostly as spectators) in mass sports

Follow the advice of opinion leaders

Very religious – and respect the opinion of views of

religious leaders

Strong belief in “fate” , “luck” and “superstition”

The DE consumer …

Locus of Control……

Family and Housewife’s Role

Housewives manage household & decide on

needs

Males dominate, largely patriarchal society

Yet, housewife establishes her territory

Power is unequally distributed

Family is at the core; self is less important

Children at the centre of the housewife‟s life

Housewife is frustrated in her own ambitions &

craves an identity of her own outside the home

Children are the future (and the source of a

pension)

The DE consumer …

Power Distance……

Socially acceptable aspirations for the Housewife:

• When – husband is considerate, involved, appreciative, helpful, spends time with

kids.

– she can stand up to the mother in law without being disrespectful

– she earns income of her own

– the children excel in their studies

– the son sends money home from the city to village

– she exercises her own choice in brands, occasionally allowing herself a minor indulgence

– a prestigious consumer durable is brought home

• The “Naughty” Side of the Housewife:– enjoys sitcoms, local and foreign that depict scandalous and often

adulterous lifestyles

– secretly harbours a desire to dress “appealingly”

The DE consumer …

The Housewife’s ambitions……

• Attitudes towards value and size:

– Buy „penny packs‟ frequently – high shopper traffic

– Main staples are bought at the weekly markets in bulk

when achievable

– More concerned about volume than „quality‟

– Will search for acceptable quality at reasonable

prices

• Attitudes Towards the trade

– Build personal acquaintance with neighbourhood

retailer

– Frequently get credit from retailer

– Take advice from retailer

– Often feel threatened by large and formal shops

The DE consumer …

Shopping Behaviour

• Word of mouth very important and credible

• Buy products that are perceived to be popular

• Strong creatures of habit (avoid risk)

• High awareness of brands - but low propensity to actually purchase premium brands

• influenced by popular idols and role models

The DE consumer …

Attitudes towards brand choice

DE: Household Expenditure

Growth in Noodles and Mobile Vouchers

Source: RMS Nigerbus Omnibus

Total Oct 2008 Feb 2009 Oct 2009 Feb 2010 June 2010

Rice 95 94 92 92 94

Bread 88 87 86 88 90

Toothpaste 86 85 93 92 93

Sugar 80 83 80 83 84

Detergent 79 81 80 77 80

Biscuit 70 65 67 72 74

Powdered Milk 70 70 69 67 70

Tomato Paste 62 56 51 61 63

Mobile phones 60 56 69 65 67

Noodles 50 58 58 55 59

•

2007-2009 Trend

Consumer Confidence Index

130

146

171

157

138

148 145

163161164

169

184

190 193 194

201

213

160148

159150

158

100

120

140

160

180

200

220

240

Feb '07 Apr '07 Jun' 07 Aug '07 Jun '08 Aug '08 Dec'08 Feb '09 Jun-09 Oct-09 Feb-10 Jun-10

Consumer Confidence Index Consumer Price Index

15

20

15 15 15

20

15 15

20

15

25

5 5 5 5 5 5 5

7.5

5

7.5 7.5 7.5

15

0

5

10

15

20

25

30

Feb '07 Apr '07 Jun '07 Aug'07 Jun '08 Aug '08 Dec '08 Feb'09 Jun-09 Oct-09 Feb-10 Jun-10

Household income ('000) Personal Income ('000)

Source: RMS Nigerbus Omnibus

• Decline in collectivism

– shift to nuclear families

– influence of western lifestyles

• Women are getting into the mainstream

– enhanced responsibility as mother, wife & homemaker

– newly enhanced status as wage earner

• TV has become a companion, and is leading to the bottom-

of-the-pyramid becoming more sophisticated

The DE consumer …

However things are changing….

What are the implications?

“When the

music changes,

so does the

dance”

African Proverb

Implications for strategy

Value is a strong motivator

Value can be expressed in several ways:

Multiple uses from the same product

Multiple benefits from the same product

Aggressively advertise small packs with low unit packs

Why pay more? Price can drive behavioural loyalty.

The bottom of the pyramid consumer is sensitive about being

portrayed as poor

Implications for strategy

Appropriate use of opinion leaders will bring wonders!

The use of credible opinion leaders: traditional, religious

and entertainment will build trust in the brands.

Endorsement activities play a strong role

Public relations activities which feature such opinion leaders

are more acceptable.

Brand activations and launch activities which include opinion

leaders are likely to be more effective

Implications for strategy

Escapism…give them a joyride!

Allow the consumers to escape from the hard reality through

brands and communication activities:

Song and dance

Use fantasy

Use humour

caricatures if done well are enjoyed hugely

simple uncomplicated humour works best

avoid sarcasm or excessive subtlety

exploit differences in dialects, accents, and mannerisms across different

regions of the country (particularly on radio) (But avoid offending consumers

!)

Implications for strategy

Challenge the norms….

Give the housewife another perspective

Let the housewife be herself (an individual)

Let her escape

Let her be appreciated

Let her lose her inhibitions

Implications for strategy

Leapfrogging…it is the only chance

Do not assume that because consumers do not have access

to some basic commodities they do not desire to access

luxurious products and brands:

Products that may have taken long to take off in other markets

may take off quickly as consumers try shortcuts to success

Low income consumers may be motivated by those products

which add value to their life rather than those that restore

value...hence the participation in lottery promotions and related

activities.

Implications for strategy

Be realistic – don’t overstretch them

Depict characters & families that are aspirational yet real

use characters that are aspirational but still within the grasp of

the low income consumer

use characters that are real and loveable, with their minor

weaknesses, rather than “model” members of society (plastic

depictions reduce empathy)

characters must not be too challenging or threatening

avoid being too freaky or westernised

Implications for strategy

Don’t forget the rural folks!

Develop special communication for rural consumers who are

not reached by other mass media

keep the communication very simple indeed

use longer commercials if necessary

add a social message in a manner that will earn goodwill

use local dialects/ pidgin

Use visual and strong non verbal cues

use clever & catchy slogans & jingles

adapt dialogues from popular films / sitcoms

Implications for strategy

Remember the importance of popularity and the “herd mentality”

Portray masses and many people in your communication

Use popular mass sports and activities for sponsorships and

sales promotions.

In conclusion

Why not the consumer?

In the Words of Gordon and Valentine (2000):

“…something is not right with the way the word „consumer‟ is

used nowadays. This word must surely be one of the most

frequently used in the lexicon of advertising, marketing and

research language. Yet it has not been subject to the huge

attention or to the rigour of analysis as has the word „brand‟...”

There is need to do more to understand our most important stakeholder…the

CONSUMER.

If You want to go

quickly,

go alone.

If you want to go

far,

go together.”

- African Proverb