An emerging enterprise
post-financial crisis, suffers business-continuity under the harshest
unregulated and heavily monopolized markets.
For any business no matter how big or small to thrive in any market-economy,
it has to have promising and preferably already existing prospects. Prospects are the company’s target
market. There are two main factors that
divide the purchasing and consumptions habits of the consumer market: geographic
and economic diversity. The Zimbabwe
Advertising Research Foundation (ZARF) provides a tool to cope with this
diversity in order to facilitate market research. The Living Standards Measure
(LSM) is a wealth measure based on standard
of living rather than income. It divides the population into 10 LSM groups,
10 (highest) to 1 (lowest). The ZARF LSM is a unique means of segmenting the
Zimbabwe market mainly since it groups people according to their living
standards (or socio-economic status) using universal criteria such as degree of urbanization and their ownership and use of 29 goods and
services. However, the most recent LSM figures available for research are
2004 prior to dollarization. Therefore,
without recent LSM figures including the impact of dollarization, it proves
challenging to base any understanding of the Zimbabwean target market in
general. As a result, we rely on the LSM
2004 average monthly household income
as it has an impact on the consumers’ purchasing and consumption behavior of products
in Zimbabwe.
The average monthly
household income in 2004 was $2,519 (ZARF AMPS, 2004). Figure 1: Average monthly
household income (2004) shows that both marginalised
and emerging consumers earn less than
the average household income, with only 6% of the population (established consumers) earning above the
average monthly household income. These statistics are representative of a much
skewed market in terms of income potential, with over 23% of all household
income earned by 6% of the population; whereas 11% and 17% of all household
income earned by 27% and 32% of population respectively, (ZARF AMPS, 2004). So, as a local
practitioner, emerging or established, which area of the population would you
seek your product to reach?
Generally, local industries
show a specific lack of knowledge about the emerging consumer, post-financial
crisis by focusing merely on brand-driven
strategy, as opposed to customer-driven
strategy. Brand-driven strategy, is
the value of the brand attached to the product. The old traditional approach
focused on marketing the products with very little interaction with the
customer; whereas, customer-driven strategy focuses on cultivating customer
relationships, i.e. building long-term prospects. Research
shows that the degree of high urbanization correlates with a high LSM. Hence, if an industry is brand-driven in Zimbabwe
it is focus’ on only 11 per cent of the population (LSM 7 & 8); and since
the target market is so small why spend so much more in in not so thought-out advertising campaigns, to target on 11
per cent of the population? Marketing
communication strategy to LSM 7 & 8 target market is more likely to be more
receptive to advertisement such as print media.
Local brand marketers need to
have a behavioral scientists approach
to the emerging and established consumer and they largely overlook the power of
print media in this segment especially among LSM 7 & 8, for whom information seeking is an important part
of their social life and an integral part of cultural heritage. In addition, research seem to suggest that
this group is mostly likely to experiment with other brands, hence are 50% less
likely to make a choice to purchase a product based on image of the brand. Whereas in contrast, 72 per cent of the
population in Zimbabwe are rural and low disposal income earners, classified as
LSM 1 – 3. According to a market
research study conducted by University of Stellenbosch in 2010, rural
communities are most likely to be loyal to brands, as low-disposable incomes
coerce them to buy products they perceive are reliable and permanent; hence
trusted brands are still preferred.
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The Print Media Tradition: Newspapers
It is essential for Marketers to acknowledge that
print-media is embedded in a industrialized culture. The degree of industrialization present in a
country is correlated by the type and dominance of mass media communication
channels: print media. Industrialization
continues to have a deep-seated influence on how Zimbabwe continues to be economically
viable. Most research has found that
countries with a high level of industrialization prefer to rule via mass media
communications. However, as a result of local
growing readership in the media-business locally many Advertisers may place
increased value in the newspapers. Print
media communication still has a major place in the Zimbabwean lifestyle.
Research shows that products that command huge budgets
for adverts in Zimbabwe are a) alcohol – National Breweries b) condoms
- Population Services International and c) cigarettes – South Pacific
and according to Revenue Report of the Herald and the Sunday Mail, Delta
Corporation is the number one newspaper advertiser. This is because newspapers have a wider
circulation figures than any form of mass media communication. Whilst Radio and TV are dependent on
installation of satellite technology to be able to access consumers located in
remote geographic areas. Newspapers
still possess the upper hand in ability of distributing to geographic areas
where technology is yet to see the light of day. This illustrates the strength of print media
among Zimbabwean advertisers and their general reliance on newspaper as a
trusted source of advocacy, entertainment, news and public service
announcement. However, does this mode of
communication strategy translate to USD$ revenue? Favorable, advertising
revenue for those in the publication sector will come to pass but not
necessarily for the advertiser seeking to sell their products via this
communication strategy. So, what’s
missing?
Customer-Cultivating
Focus
While the traditional marketer is more aligned with
the conventional selling mind-set (develop product, seek customer), the
marketer of today pursues the customer first to find out what they need and
fulfill them (find customer wants; fulfill their need). Fortunately, Zimbabwe is full of those state
of affairs in the public service sectors: water, sanitation, energy, public
housing, renewed and improved road network system; internet banking, technology
innovation for agri-business and manufacturing; etc., the list is endless. Hence, private sector development solutions
are required in our local market-economy.
Whilst the unemployment rate is bordering on 93% (2011); and Zimbabwe is
said to be on the verge of political change regime, SMEs/private sector
solutions are detriment to the survival of Zimbabwe’s market-economy. Therefore, the answer lies in understanding
the domestic markets specific basic and advanced needs and seeking to provide
solutions that meet their needs. It’s a
win-win solution. However, Zimbabwe’s
solutions can no longer continue to be isolated from its socio-economic
status. Thus, failure and
procrastination to being customer-cultivating agents at a private sector level
is bigger than the SME/private sector itself, it is also a national
crisis. Figure
2: Customer Marketing Department proposes what the new marketing department
should look like both at a public and private sector level (Harvard Business
Review, 2010).
Customer
Relationship Manager (CRM) – is a tool for
weighing customer needs and behaviors.
Currently this role sits with IT, HR MIS departments in the banking
sectors locally, regionally and internationally.
Market Research
– Traditionally, this function focus’ on examining the
media management statistics associated with the company’s product, brand usage
behaviour and brand discussions in communities, (Harvard Business Review,
2010). Market research in a
customer-centric organization will have a broad understanding of the firms and
its product, and a deep understanding of each customer segments.
Research and
Development (R&D) – The mistake that
most start-up make is seeking advice about the best product to market from the
producer and not the customer. For
example, if we decided to diversify our portfolio by opening up a restaurant in
Harare, would I seek to get advice on the best food offering to market from the
Chef or from the customer, particularly from the location we would have chosen
to operate from? Most times, the Chef is
the one who is approached in answering this very important question. When a product or service is about easier
preparation and crafty production than it is about customer needs, revenue can
dwindle. So make sure that the product
or service you offer, offers real-world need by bring the customer into design
process. Combining marketing with
R&D is not only practical but more sustainable.
Customer Service
– Cultivates long-term relationship by keeping track of
your customer’s purchasing habits. I recall once some years ago visiting a
video store in Johannesburg. I had
registered myself a member at this particular video store and when I came to
the till the check-out my video collection, the till-operator/sales person,
about 17 in age, smiled sheepishly, I inquired why the sudden giggles they
indicated that one of their colleagues had put details under my customer
profile that ‘I was very x10 extra nice customer.’ That was their lingo to take
exceptional care of this customer as they create value to their company. Honestly, I can’t recall how many times I
patronized that particular video store, so it was a wonderful surprise to note
that a reminder had been ingrained in their CRM system to ensure that they keep
track of me, the customer, though additional information may need to be
inputted to be able to gain meaningful insight on the type of videos I liked to
check-out the most!
In conclusion, identifying a
company’s marketing communication strategy is important, gauging what your
customers’ needs are is critical to business-continuity. The post-financial crisis no longer has room
for conventional advertising that is purely applied across the board, instead
of taking advantage of different customer profiles inherent in communities
which would make it simpler to cultivate relationships with specific communities. However, we understand that this
transformation will come at a price where brand managers will fight for the
relevance of their job functions; R&D/Market Researchers will battle to
keep some autonomy and most important IT personnel will want to cling on to
CRM. This is because transformation in
itself requires overcoming imbedded interests, hence will not happen
organically. Change can only come from
top down.
Copyright
@ August
19, 2012. This article
was first published online on BlogSpot
by Tambu Ndoro, Revenue Strategist & Business Owner at Hanga Consulting
Private Ltd©2011. www.hangaconsulting.com. Hanga
Consulting is also a premier member of
the SME Association of Zimbabwe: www.smeassociationzimbabwe.co.zw
