Editorial Team

Editorial Team

‘Going to the mall’ in South Africa has become a lifestyle activity as well as a shopping necessity. But for how long can we keep building new malls and expanding existing ones? This is one of the questions examined by a cover story in the August-September 2016 issue of the ‘IMM Journal of Strategic Marketing’. The story analyses the country’s strong mall-based consumer culture. Recognised malls (30 000 sq. m and up) in SA now number more than 160, with a combined retail space of over 8,5-million sq. m – one of the highest in the world. Two decades ago SA had only 36 malls with a combined retail space of 1,9-million sq. m. Given the frenetic pace of mall development, the question is: has the sector reached saturation? The answer is both ‘yes’ and ‘no’. “You have to look at supply on an area-by-area basis,” says property analyst Neil Stuart-Findlayson. “Pretoria, Klerksdorp and Port Elizabeth are examples of oversupply.” Where new malls are not being built, existing ones are expanding. The 36-year-old Menlyn Park Shopping Centre in Pretoria East is an example. It is adding 50 000 sq. m which will take it to 178 000 sq. m. Looking at the long-term potential for malls, research firm Urban Studies is optimistic. Population growth and increasing disposable income will drive demand for an additional 1,5-million to 2-million sq. m of retail space over the next eight to 10 years, it predicts. Right now, though, the pace of mall development is falling sharply, with major mall owner Redefine Properties confirming it has shelved two developments due to inadequate returns and concerns about waning consumer demand. Also in the August-September issue of the magazine is an analysis of the brandy industry’s urgent need to rebrand itself, a breakthrough in the measurement of out-of-home media, and a look at brand strategies in the franchise sector. Published five times a year by the Institute of Marketing Management, the ‘IMM Journal of Strategic Marketing’ is available in print and digital formats and is read by professional marketers and those working in related fields, as well as business executives and IMM students. The print edition sold in selected CNA and Exclusive Books outlets, or is available via subscription. Copies are also distributed through a targeted professional mailing list and through selected airline lounges and the IMM Graduate School’s student support centres.
A touch of nostalgia, it seems, is never out of place in a marketing campaign. Glass manufacturer Consol certainly seems to think and has unveiled a campaign that harks back to the days when a milkman delivered fresh milk in glass bottles to many homes in South Africa. For the uninitiated (or those too young), consumers placed a plastic token in each of their empty milk bottles, left them outside the door or gate – and in the morning lovely new bottles of fresh milk were waiting to be added to the morning tea or coffee. It’s an idea that now seems quaint in an era when anything left outside your property is likely to be stolen before dawn! Consol’s campaign – dubbed #BringBackPure – has seen glass bottles full of milk being delivered to selected homes of surprised consumers in Johannesburg and Cape Town. As an added twist, those who receive a bottle can also nominate a friend to be given one as well. The idea isn’t to promote a return to the ‘old days’ of milk delivery, but to emphasise that things taste better in glass. “Put it in a glass bottle and suddenly it’s more delicious, fresher and dare we say, more magical,” the company says. “There’s just something special about glass. It keeps what’s inside it cooler and fresher; and because it’s pure packaging it contains no chemicals [and] so it never alters the taste of its contents.” Consol’s campaign has involved bloggers and social media, as well as traditional media. Many consumers have taken to the brand’s Facebook page to share their own memories of having bottles of fresh milk delivered to their home.
Social media marketing has become not only a fundamental interactive communication channel, but also a pillar of distribution for the retail industry. As a result, many brands use social media to drum up engagement and purchases. Most brands, therefore, try to maximise their follower bases with the idea that the more followers they get, the more interaction they will inspire and the more their sales will grow. But according to Matteo Altobelli – a European business consultant writing on the website of the Insead international business school– there could be a limit to the effectiveness of social media once a critical mass has been achieved. He cites a study of 51 international Italian shoe brands, which ranged in size from niche craftsmanship brands to large manufacturers with massive revenues. Each brand had a presence on an average of three social media networks, with Facebook and Instagram being the most popular platforms. The brands posted on these platforms once every working day, on average. The study found that the relationship between followers and brands intensifies as people move from passive follower status, to investing time in viewing, ‘liking’ and then commenting on a given post. However, once 50 000 followers are achieved, engagement plateaus and tapers off. This can be explained by two factors. Firstly, niche brands focused on craftsmanship get a more devoted following because their customer base makes an active effort to ‘join’ their brand on social media. Secondly, brands with a very high level of awareness are considered as ‘must follow’ by consumers, but they do not necessarily engage deeply with the brand. The answer for big brands is to engage more with their existing followers, rather than actively seeking new ones. Small brands should seek slow, organic follower growth.
Econet Wireless, the mid-size African mobile network, is to pre-install ad blocking capability for approximately 40-million subscribers across Zimbabwe, South Africa, Burundi and Lesotho. Econet and its technology supplier – Israeli-based Shine Technologies – said in a media statement last week that this would be the first network-level ad blocking on the continent. While individual smartphone users can download their own ad blockers, it is still uncommon for mobile networks to supply this to all customers, although a network in the Caribbean and another in Europe already do so. According to Econet Zimbabwe CEO Douglas Mboweni, the deal will help customers save on their data costs. “We are delighted that we have taken the lead in ensuring that customers have control of unsolicited ads,” he said. “This will lead to quicker-loading and cleaner-looking Web pages free from advertisements, [as well as] lower resource waste in terms of bandwidth and memory. This goes a long way in solving the issue of ‘bill shock’ resulting from unsolicited adverts. In addition there are privacy benefits gained through the exclusion of the tracking and profiling systems of ad-delivery platforms.” Ron Porat, Shine CEO, added: “[Advertising technology] abuse is a global phenomenon and, in Africa in particular, it is devastating to consumers’ limited data plans.” Under the terms of the agreement the first roll-out will take place in Zimbabwe, with ad blocking coverage turned on automatically for all subscribers. All remaining Econet Group regions – South Africa, Burundi and Lesotho – will follow. “The deals come as the growing worldwide popularity of ad blockers has locked the media and advertising industries in a heated battle with the makers of the software that drains their revenue,” noted ‘Mashable’ the US-based digital media website. It called Shine Technologies “a long-time tormenter of the ad industry”.
Wednesday, 24 August 2016 08:37

Sponsors dump disgraced Olympic swimmer

Big-name brands such as swimwear maker Speedo and luxury fashion company Ralph Lauren have moved quickly to distance themselves from top US Olympic swimmer Ryan Lochte after a scandal in Rio de Janeiro in which he falsely claimed to have been robbed at gunpoint. Lochte has also lost lesser-known sponsors such as Airweave, a Japanese mattress manufacturer, and Syneron-Candela, a skin care company. According to a report by Reuters news agency, all major sponsors have now severed their ties with him. “Sponsorship and endorsement deals typically include ‘morals clauses’ that allow sponsors to terminate deals early if they feel the athlete has behaved poorly in public,” Reuters said. The 32-year-old is the second most decorated male swimmer in Olympic history after Michael Phelps and has 12 medals, including six golds. Lochte and three team-mates were involved in a drunken altercation over alleged vandalism at a petrol station in Rio. He then falsely claimed to police that they had been robbed at gunpoint. Commenting on its decision to discontinue sponsoring Lochte, a Speedo spokesperson told the ‘Financial Times’ newspaper: “While we have enjoyed a winning relationship with Ryan for over a decade and he has been an important member of the Speedo team, we cannot condone behaviour that is counter to the values this brand has long stood for.” As part of the decision to end its relationship, Speedo will donate US$50 000 of the swimmer’s fee to a Brazilian charity called Save The Children. The ‘Financial Times’ noted that the controversy would be a particular blow to Lochte. “Athletes so closely associated with the Olympics – but without global renown such as sprinter Usain Bolt – often only have a short window with which to win potential endorsements,” it said.
Kenya’s youth market – which accounts for around 32% of the population and 60% of the workforce – is economically highly active and continually driving change in the marketplace. Among these changes is the growing use of social media influencers as key drivers of Kenyan marketing campaigns. Specialist youth and family research agency, Youth Dynamix, says its studies show that 42% of the country’s young people are accessing the Internet daily, mainly to interact on social media platforms such as Facebook and Instagram. Increasingly, youth-related events are now being marketing solely via digital channels and many are sold out. “This online infiltration and reliance demands that brands become active in the youth’s space,” the agency says. “But, it’s not just being active that counts. [Young people] demand customised solutions, to be engaged and to form part of the campaign and the brand.” Therefore, companies that give young Kenyans a strong voice by enabling them to create digital content are more likely to win over this demanding audience. Encouraging the writing of online reviews – particularly of electronic goods – is one such example. Peer reviews of this nature can become a trusted source of product recommendation. Another notable trend is that gimmicky marketing give-aways are becoming less impactful, while well thought-out lifestyle improvement (CSI) initiatives that make a sustainable difference in their community are respected by young people. “It’s becoming ever more evident that the youth’s needs are continuously changing because of their heightened level of exposure. To remain in tune with the youth, brands need to play in their space without being intrusive,” notes Youth Dynamix.
Despite the high cost of data and the relatively small number of South African consumers with smartphones, video is increasingly being used by local brands as a marketing tool and a way to tell unique brand stories. One of these is auto giant Mercedes-Benz, which has produced a series of short local films to promote its GLS range of sport-utility vehicles (SUVs). A total of five films have been produced, each suitable for broadcast on social media platforms. Called #EveryTerrain, the company says the campaign aims to create credible, character-driven content that is engaging to a broad audience. “We’re highlighting the encompassing beauty of our country and bringing home what South Africans love about our lifestyle while we position Mercedes-Benz SUVs as the best on every terrain,” explains Selvin Govender, Marketing Director for Mercedes-Benz Cars. Filmed in a reality/documentary style, the campaign takes a duo of unlikely characters and asks them to travel in the GLS to an interesting part of southern Africa. Within 48 hours they also need to combine their talents to produce a one-of-a-kind creative work. The latest video – released this week – pairs legendary trumpeter, composer and singer Hugh Masekela with J’Something, frontman for chart-topping band MiCasa. The musicians explore the spectacular Tsitsikamma region on the Garden Route and create an original song called ‘Heaven in You’. In a recent article, ‘Forbes’ business magazine calls video marketing “the next big thing in business”. The publication advises marketers: “Your strategy should always revolve around people not products. Yes, it’s important to explain your products, but if you are not creating a compelling story behind it nobody is going to care. People identify with other people not objects.”
Wednesday, 17 August 2016 09:29

Global marketers lacking in digital skills

Today’s marketers do not have all the skills they need to operate in a digital world – and the gaps and shortfalls are bigger than companies think. The warning comes from the international Boston Consulting Group, which says many organisations have failed to realise that modern marketing is, in many instances, a technology-driven enterprise. Boston believes the signs for the future are even more troubling, as marketers seem focused on catching up on yesterday’s needs rather than embedding into their organisations the capabilities and expertise that will be required tomorrow. Referring to a 2015 study of 1 100 marketers in 57 European businesses – which found there was below-par capability in areas such as customer data, mobile advertising and video-based marketing – the researchers note that this is despite almost 30% of global advertising spending in 2016 likely to be on digital strategies. “So far, marketers have managed this lack of skills the old-fashioned way; by outsourcing campaign development and execution to their agencies, just as they have long outsourced creative development and media buying,” Boston says. “But digital campaigns are different. They are continually modified and adjusted in real time based on real-time results. Marketers [who] are not actively involved in the ‘test-learn-adapt’ process soon lose touch with both their campaigns and their digital consumers. They don’t know whether their strategies are being faithfully executed or how their budgets are being spent. And they are hard-pressed to explain how or why success, or failure, occurred.” To address this, the researchers believe that marketing departments must nurture talent with expertise in areas such as programmatic buying, branded content, using big data to better understand consumers, marketing-effectiveness analytics, marketing innovation and agency management. Organisations that aren’t able to build these capabilities will fall behind their competitors, they warn.
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.
Given the supply chain challenges inherent in reaching consumers in Africa’s far-flung rural areas, increasing urbanisation brings many benefits. But marketers who focus only on the major centres and ignore the growing towns and secondary cities do so at their peril According to Issue 3 2016 of ‘Strategic Marketing Africa’, the magazine of the African Marketing Confederation (AMC), surveys by international consulting firms tend to focus on the capitals of African countries. But they miss the fast-growing towns and secondary cities, as well as the advent of new city nodes and quality urban developments on the outskirts of the biggest metro areas. “The emergence of tailor-made new urban developments is a definite trend, despite the cost of establishing them. They have become necessary because of the difficulties that rampant urbanisation is causing in the traditional big cities,” the magazine says. For example, Kenya has plans to decentralise its urban growth and has six new cities on the drawing board. Already, a private initiative – Konza Tech City – is breaking ground about 60km of Nairobi. Konza draws on the success of Ebene Cyber City in Mauritius, a purpose-built metro near the capital of Port Louis. In Egypt, the government has plans for a new capital adjacent to Cairo. It will have 1,1-million homes housing at least five million residents. In Nigeria’s oil hub of Port Harcourt, a new city is being built around the edges of the old to provide infrastructure for the future. The original city was built to accommodate 5 000 people but now houses around two million residents. “Marketers who can look beyond the biggest cities will often find ample opportunity in the new urban centres – where consumers are frequently more affluent and better urban planning makes for better logistics,” the magazine says