x Abu Dhabi, UAETuesday 25 July 2017

What’s in a name? Just about everything

African consumers are more likely to convey good product experiences to the people around them than buyers in other markets.

Translating an international brand into a household name is vital to a company’s success in Africa, particularly as brand loyalty is typically high in the continent.

“Once companies win over an African customer, they will likely hold on to that customer for life,” says a report from the consulting firm McKinsey & Company.

There are regional differences. McKinsey found North Africans were loyal to a selection of brands, while people in sub-Saharan Africa tended to be loyal to specific ones and were more conservative about trying new things.

In a bid to encourage consumers to try new products, many companies have relied on offering samples of their products. When successful, this has proved particularly effective because brand loyalty typically extends to the family and friends of consumers. African consumers are more likely to convey good product experiences to the people around them than buyers in other markets.

Marketing efforts need to be tailored to specific consumer sectors in Africa. As internet access becomes increasingly prevalent, many companies are choosing to focus on online marketing campaigns over traditional methods. Many customers’ product knowledge comes from supermarkets, which are growing in popularity in many countries. Companies are increasingly using in-store promotions to allow customers to try their products and build awareness of their brands.

“Nokia has invested heavily in sponsorships and activations across malls, university campuses and other high traffic areas,” says a spokesman for the mobile giant based in Finland.

“Awareness of the Nokia brand is almost 100 per cent in most African countries, with strong brand loyalty and preference.”

Some products do not need trials at all. Boston Consulting Group’s (BCG) latest survey shows Apple is a very well known and loved brand in Africa, particularly among younger people.

“The younger consumers are really into Apple products. That’s their favourite brand,” says Lori Spivey, an emerging markets expert at BCG. “The older consumers are into Nokia products. You can see that the new, young, hip brands are the ones that the younger consumers have an affinity for whereas some of the older, more established brands that are perhaps less exciting are less [appealing] to the younger generation. [Younger people] want what’s new and what is getting the hype globally.”

A brand’s international credentials can also work in its favour.

“African consumers know, love and purchase international brands,” says BCG in its report. According to McKinsey, most North Africans desire international brands with 60 per cent of the respondents in its survey agreeing with the statement: “International brands are more fashionable than local brands.” Sub-Saharan Africans tend to be more accepting of local brands. In Nigeria, only 11 per cent of respondents agreed with the same statement.

Nigerian pharmaceutical companies have been successful in building brand identity in the country. However, McKinsey’s study found 80 per cent of Nigerians would consider buying local brands but were held back by concerns about quality, the perception of friends and family, or a lack of product range.

Once a brand is firmly established, it can be difficult for other brands to displace it. Some international names have become the common terms to describe the product associated with it. For instance, detergents in general in Morocco are frequently referred to as “Tide” and razors in the Democratic Republic of Congo are commonly called “Gillettes”.

While some luxury brands are beyond the means of the vast majority of people, creating brand identity now may pay off in the future as the middle classes grow in Africa.

“We asked a lot of people what brands they like and what brands they buy,” says Ms Spivey. “When we asked about beer, a lot of people mentioned Amstel and Heineken. When we asked about cars, a lot of people said they didn’t necessarily buy BMWs but it was a brand they really liked.”

However, it can still be difficult for international brands to break into African markets – and each one is different. Therefore, it is important for companies to match their products to the right countries. Targeting some of the largest cities such as Cairo, Johannesburg and Lagos is tempting. But McKinsey recommends looking at “middleweight” cities such as Abidjan in Ivory Coast, Khartoum in Sudan and Rabat in Morocco as there is less competition and potentially greater profit margins on offer.

While there are greater hurdles to creating brand awareness in African countries than in many other emerging markets, the effort can pay off.

In BCG’s survey, 67 per cent of Africans agreed with the statement: “Brands say something about who I am, my values and where I fit in.”

In emerging markets more generally, the figure was 34 per cent and just 24 per cent in developed markets.

Brands matter in Africa.

business@thenational.ae