Thursday, 01 December 2016 07:58

The ethnic doll going from Nigeria to the world

Entrepreneur Taofick Okoya made headlines when his African dolls outsold the legendary Barbie in his native Nigeria. Now he is focused on the rest of the world, not least the huge North American toy market. ‘Strategic Marketing Africa’, the magazine of the African Marketing Confederation (AMC), reports in its latest issue that Okoya began the Queens of Africa doll collection in 2007 after he could not find a black doll for his niece. Today his company, FICO Solutions Nigeria, has two ranges: Queens of Africa is targeted at both the African and global markets; and the more competitively priced Naija Princesses, which is focused on the local Nigerian market. Apart from the dolls themselves, there are brand extensions such as books, comics, music and an animated series. In 2014, he began exporting to various countries with children of African heritage, and has also created an international online portal. Customers can buy the dolls from the Queens of Africa website, or through global online retailer Amazon in the US and in five other countries. He is also in talks with other e-commerce sites and the brand now has representatives in Senegal and Benin, as well as Europe and Australia. Okoya believes that, so far, Queens of Africa has only scratched the surface. “As people get to know more about our products through word of mouth, sales have grown. But significant future growth is dependent on securing new customers in other parts of the world.” He recently completed a roadshow in the US to meet with potential buyers in an effort to expand the brand footprint. It was, he says, largely driven by a desire to have a meet-and-greet with the dolls’ growing fan base. ‘Strategic Marketing Africa’ is published quarterly and distributed through AMC member organisations. It is also available in selected airline lounges.
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Thursday, 17 November 2016 08:01

Hugo Boss to refocus its brand strategy

Hugo Boss, the prominent international fashion brand, is to refocus its strategy away from luxury products and instead return to its roots as a classic, good quality and value-oriented brand. The German company is one of many high-end brands that have been hit by a global slowdown in demand for luxury products of all kinds – among them Burberry and Richemont. The latter has the likes of Cartier and Montblanc in its portfolio. According to the Financial Times’ newspaper, Hugo Boss went on a rapid expansion drive as fashion markets picked up in the years following the global economic crisis. At the same time, the company best known for its men’s suits sought to challenge higher-end luxury brands and expand its womenswear operations. “As the market has become more competitive, the need for differentiation has become more pronounced. But Hugo Boss moved too quickly from its core DNA of being a classic, relatively conservative, value-oriented menswear brand into areas like luxury that were too far away,” the newspaper quotes a market analyst as saying. “They also diverted a lot of resources into trying to build up a womenswear business. [The bulk] of their marketing spending went into an area that yields just 11% of their sales. But the benefits for their core brand from this were limited – having a high-profile womenswear brand doesn’t create much of a halo effect for menswear.” Reuters news agency reports that yesterday (Wednesday), new CEO Mark Langer announced Hugo Boss would now be cutting brands and seeking to appeal to fashion-conscious younger customers. It would focus on two main brands: one higher-priced premium line and another at lower prices for younger consumers, seeking to complement its smart business suits with more casual and sports outfits.
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Like the independent corner store that offered personalised service, informal credit and home delivery, the local pharmacy is on the way out in South Africa and being replaced by hard-nosed retail businesses. Indeed, the entire sector is undergoing a sea change, reports the ‘IMM Journal of Strategic Marketing’ in its October 2016-January 2017 issue. Deregulation in 2003 has progressively seen the growth of corporate-owned pharmacies and the once-traditional ‘corner chemist’ is now struggling to survive. Clicks was the first to see the new opportunity and by the end of February this year had 384 in-store pharmacies. It represented an increase of 23 pharmacies over 12 months, and 60 new outlets over 36 months. “We have a leading 19% share of the retail pharmacy market by sales,” says Vikesh Ramsunder, Chief Operating Officer of the Clicks stores division. It is a market share edging up steadily, having grown from 18,5% in 2015 and 16,5% in 2013. Overall, says Ramsunder, corporate pharmacies tied to the major retail and supermarket chains now account for about 46% of total sector sales. Other corporate players include Shoprite with145 in-store Medi-Rite pharmacies, Dis-Chem with 100 big-format drug store-type outlets, and Pick n Pay with 26 in-store and three stand-alone pharmacies. Spar Group has also joined in the fray. But, in keeping with the Spar model, pharmacies remain stand-alone businesses in the hands of their owners. The attraction of the pharmacy ‘superstore’ model is not that dispensing prescriptions makes money, it’s that pharmacies attract customers who will then shop for more general merchandise elsewhere in the store. Clicks, for example, generates about 25% of sales in the pharmacy and 75% in the so-called ‘front shop’.
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No matter how tight the economy, it seems that South African consumers can’t get enough of brands offering fast food or sweet treats. US-based glazed doughnut chain, Dunkin’ Donuts, opened its first outlet in the country yesterday (Thursday) and plans to establish 290 over the next decade. The first Dunkin’ Donuts is located in Cape Town, with a further four stores due to open in the city by the end of 2016. Thereafter, the brand intends to expand into the Gauteng market. This means that two American-style doughnut-focused chains are now in direct competition with each other in South Africa. Rival brand Krispy Kreme opened in the country in late 2015 and has five stores in Gauteng. It plans to establish 35 outlets nationally over five years. In an interview with news agency Bloomberg, Alan Keet of Grand Parade Investments – the company which has brought Dunkin’ Donuts to South Africa – said one of the challenges would be to make local consumers aware that the brand offered more than just doughnuts. It also sells bagels, wraps, a variety of coffees and a selection of cold beverages. According to Bloomberg, a medium-sized cappuccino costs R26, and six doughnuts R70. “Dunkin’ Donuts, despite its name, is internationally seen as more of a coffee offering,” Keet told ‘Business Day’ newspaper earlier this year. “The coffee market is growing and it has a very aspirational element. You see people in New York walking with their coffee cups – it’s very trendy and it’s on TV too. Our population are in a rush because of time pressure and commuting, so they are really in a grab-and-go mode.” Grand Parade Investments also holds the licence for the Burger King brand in South Africa, as well as for ice cream offering Baskin-Robbins. The latter is not yet operational.
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In another boost for the emerging African car industry, South Korean auto company Kia has confirmed that it is to assemble passenger vehicles in Ethiopia and is also considering other plants elsewhere on the continent. The announcement comes just weeks after Volkswagen said it would be producing the Polo Vivo small passenger car in Kenya in an effort to achieve more market penetration for the brand in East Africa. Both moves are good news for consumers and the regional economy, as well as an affirmation of faith in Africa’s future growth by two of the world’s biggest automotive brands. Speaking in Addis Ababa recently, senior Kia executive Soon Nam Lee told Reuters news agency: “It is important to penetrate the African market. We are also looking at the prospects of opening similar plants in Algeria and other countries.” The company already has a plant in Nigeria. The Ethiopian project is a joint venture with local company Belayab Motors and 3 000 vehicles a year will be produced, with the potential to rise to 9 000 depending on demand. According to Reuters, Ethiopia produces about 8 000 commercial and other vehicles a year for the home market, about a quarter of which are cars. Among those present are Chinese brands Lifan and Geely. Speaking at the announcement of Volkswagen’s new assembly plant in Kenya in mid-September, VW executive Thomas Schafer noted: “We believe that Kenya has got the potential to develop a very big fully-fledged automotive industry. The East African Community has got the potential and today is the first step in this direction that we want to take with our passenger cars.” South Africa is the biggest producer of vehicles on the continent, with many of those being exported to other parts of Africa.
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Thursday, 08 September 2016 08:36

Coffee shop chain plans African expansion

Vida e Caffè, the South African-owned coffee shop chain, has announced that it is looking to increase its footprint in other parts of Africa and build on the outlets that it already has in Mauritius, Kenya, Ghana and Namibia. To date it has 17 stores in those countries, with four more planned by the end of 2016. Mauritius and Ghana are proving to be the regions with the best growth opportunities and the most popular non-SA store is in the Mauritian capital of Port Louis. Outlining the Vida vision for further African expansion, Business Development Manager for International and Corporate, Craig Gravett, says the brand has “noted some significant opportunities with partners in Africa that had originally been based in South Africa”. All rest-of-Africa stores are franchises with a joint venture partner or master franchisee. “Understanding that each country and culture is unique is imperative,” says Gravett. “As an example, while coffee is traditionally perceived as a morning thing, in Ghana it’s an evening pastime – with the majority of stores trading to 10pm-11pm.” Referring to the planned expansion into other parts of Africa by giant US-based coffee chain Starbucks, Gravett notes: “[It’s] no secret that our environment is hotting up. But we have been strategically planning ahead for several years and our hard work is really coming to fruition. We have the first-mover advantage in a number of new business development areas.” In June, Starbucks’ founder Howard Schultz predicted the brand would move into other parts of the continent following its successful launch in South Africa in April. “I think Nigeria will be at some point an interesting opportunity for us … “I look at the opportunity here [in Africa], which is really unexploited, to significantly add to the revenue and gross margin of the company.”
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Despite the lack of a doughnut-eating culture in South Africa, the Krispy Kreme chain is already selling 600 000 doughnuts a month in the country through its four Gauteng outlets – a figure that will increase markedly over time as the brand aims to open 35 outlets nationally within five years. According to Nick Eleftheriadis, Executive Director: Marketing with responsibility for Krispy Kreme in South Africa, more outlets are being rolled out in Gauteng in 2016 (the Sandton City store opens this week), with KwaZulu-Natal beginning its roll out next year and the Western Cape in 2018. He was speaking to an audience of professional marketers, students and alumni at an Institute of Marketing Management (IMM) event in Sandton last week. The gathering – held at Katy’s Palace Bar in Kramerville – was the first of a series of new-look networking and information events being arranged by the IMM. Eleftheriadis said the ethos of the Krispy Kreme brand was to bring emotion and joy to customers. “It’s not just about eating a doughnut: it’s about the whole experience,” he emphasised. Part of the marketing strategy is to promote the idea of ‘sharing’ – encouraging people to buy the product to share with family, friends and work colleagues. Therefore, customers are just as likely to purchase a dozen doughnuts as they are to buy a single one. In terms of customer experience, the brand concentrates on five factors: taste, touch, sight, sound and smell. “We drive it into our brand and to the people who look after our brand,” Eleftheriadis said. The event included entertainment by singer/musician Jacques Lagesse, an address by IMM Director, Helen McIntee, opportunities to sample the doughnuts, and a fun competition in which guests were asked to take selfies with Krispy Kreme products and tweet about the experience. The MC was acclaimed speaker Zipho Sikhakhane.
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Customer service, a strong social media presence and increased smartphone penetration are all helping to attract customers to Kigali’s own two-wheeled version of Uber, reports ‘Strategic Marketing Africa’, the magazine of the African Marketing Confederation (AMC), in its latest issue. Kenyan Peter Kariuki and Canadian Nash Barret have created a smartphone app-based business called SafeMotos that is changing the way people travel in the Rwandan capital. They are also improving safety when travelling by ‘moto’ taxi (motorcycle taxi) in a place where 80% of road accidents involve motorcycles. At the same time, they want to offer outstanding customer service and convenience in a taxi industry that has never held these as high priorities, Barret says in an interview published in the Issue 3 2016 edition of the magazine. According to Barret, basing the business model on an Uber-style smartphone app is viable in Kigali because of the extraordinary enthusiasm that people have for smartphones and the fact that prices are plummeting. “In Rwanda, there was a 30% year-on-year increase in smartphone penetration in 2015, and today you can get a good Android handset for US$40 to US$50. Twelve months ago that would have cost US$300. In a year’s time they will cost US$25.” He adds: “Apart from affordability, there is really good infrastructure here. By this October, 95% of the population will be within a 4G/LTE sphere and right now all of Kigali has LTE (high-speed data) coverage.” SafeMotos encourages safe driving by using telematics from drivers’ smartphones to track their road habits and then only connect customers to the safest operators. The worse a driver behaves, the fewer clients they receive. To market itself, the company uses word-of-mouth and has a strong social media presence. Facebook is by far its most powerful promotional platform, says Barret.
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When global doughnut and coffee chain Krispy Kreme opened its first South African store late last year, eager customers queued overnight to be among the first to sample the brand’s wares. Since then, Krispy Kreme has opened four outlets in Gauteng – the latest being Clearwater Mall in Roodepoort at the beginning of August – and has plans to continue opening stores across the country over the next five years. The brand’s story began in 1930s America, when Vernon Rudolph bought a secret recipe for yeast-raised doughnuts from a French chef in the city of New Orleans. He then rented a building in the town of Winston-Salem in North Carolina and started a wholesale business selling the doughnuts to grocery stores. However, the delicious scent of cooking doughnuts drifted into the street and was too difficult to ignore, causing passers-by to stop and ask if they could buy hot fresh doughnuts. Vernon saw this as an opportunity to create a retail business and cut a hole in the wall of the building to sell directly to customers. The brand has continued to grow and the number of outlets worldwide now exceeds 800. It has become an American icon, with Krispy Kreme featured in the National Museum of American History at the world renowned Smithsonian Institute in Washington DC. On 1 September, the IMM Institute of Marketing Management will be hosting a discussion on the Krispy Kreme brand in South Africa, with Marketing Director Nick Eleftheriadis as the keynote speaker. The venue is Katy’s Palace in Kramerville, Sandton. For more information about this exciting event, contact Catherine Long at This email address is being protected from spambots. You need JavaScript enabled to view it. or visit the IMM Institute website (see ‘Upcoming Events’) or Facebook page.
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When Yunus Masaba saw that Uganda’s informal taxis weren’t providing a suitable delivery service to the growing number of online shopping businesses in the city of Kampala, he came up with a solution – and a new business model. Initially it was e-commerce operations such as Hello Food, which partners with restaurants to home-deliver food orders to consumers, which provided the impetus for Masaba to co-found the business called Transporter Corporation. “Until we entered the market, Hello Food and other [online sales] companies relied heavily on the ‘boda-boda’ taxis (motorbikes and bicycles which serve as taxis) for deliveries. However, due to their informal nature, it wasn’t working and we saw an opportunity that nobody else had noticed,” he says in the latest issue of ‘Strategic Marketing Africa’, the publication of the African Marketing Confederation (AMC). Transporter Corporation subsequently provided a delivery service for several other e-commerce businesses and then moved on to deal with supermarkets and set up its own platform called ‘Your Supermarket’. This allows customers to shop at different supermarkets and Transporter Corporation will deliver. “[But], with our exposure in transportation, we did not want to stop at only transporting goods. We have now extended our offer to a chauffeur service, which mainly provides executive transportation,” Masaba tells the magazine. Given that the business is heavily dependent on interacting with customers online, he concedes that the high cost of data is one of the threats. “New players have entered the market, so we are hoping the prices will be drop. Costly Internet limits the number of customers we reach, so our expansion is limited. We find people have to make a trade-off; would they rather physically go the marketplace, or incur the high costs of Internet in order to use our service?”
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