What is the Secret of Building Brands in a Developing
Apple got it wrong, Samsung got it right.
Feyi Olubodun, General Manager and COO of Insight Communications & International
Associate of the Creativity Marketing Centre was invited to speak
Europe's London Campus. He shared his
experience in the Nigerian market with participants from the MSc in
Marketing & Creativity (MMK) and Executive
Master in Marketing and Creativity (EMMK)
Feyi Olubodum said "Nigeria is currently recognised as the
largest economy in Africa, larger than South Africa".
We have seen so many clients that have tried to come into the
market without succeeding and then they pull out. Over the years I
have discovered that this real secret is being able to arrive at
the confluence of commerce, culture and the consumer.
In terms of commerce, I am referring to understanding the market
structures that you are going into. Is it a monopoly? Is it an
oligopoly? Or is it a market that is perfectly competitive?
The Nigerian Beer Market
Today the beer market in Nigeria is not a perfectly competitive
market. It is a market that is an oligopoly, which means that we
have a few players that have very strong market power and control
The spectrum of brands available to appeal to the palate of
consumers is not broad. If you have that kind of market from a
commercial point of view and you want to take a beer branding into
that market, you have to worry about the structure.
In a structure like that collusion is possible. If you have two
to three strong players controlling any market they can decide and
change pricing as they will. They can raise entry barriers very
significantly and make it difficult for anybody else to enter into
that market. If you had this kind of market, how do you break into
it? You break into the market typically by influencing government
policies, because whenever you see such a market anywhere in the
world, it is typically because there is some government policy
involved that is allowing that structure to exist.
If you are going to a similar market you need to find a way to
get government to create policies that would diffuse the power
within that market.
flip side: How to control the market
If a country is not suitable to develop in terms of their
economic policies, you can actually control the market. A good
example is MTN Group which is the No. 1 telecommunications
provider in Nigeria. When they looked at the Nigerian market nobody
wanted to go there as it seemed like the price of mobile phones was
too high for Nigerians to afford. It's a mistake that a lot of
people regretted since then, because they missed a fundamental
cultural insight:Nigerians talk a lot.
MTN paid such a high licensing fee to the government that one of
the things they got the government to do was to introduce a policy
that made it very difficult for any other player to come in, and
within their first year they made back all the investment. As a
result, the total profit after tax made by MTN was more than the
entire profit after tax made by all the banks in Nigeria put
together. Simply because Nigerians talk a lot! So understanding
that structure and what is going on there is very important.
The second key thing that you need to understand is "culture".
There are several cultural nuances and many experienced marketers
ignore this. Being aware of these cultural nuances and how these
influence buying behaviour is very important.
Audi in China
Audi tried to launch their sedan cars in China,
which was a total failure and they had to pull out.
They did some research to understand why they failed. The answer
is very simple - the Geert Hofstede cultural dimensions show that
one of the things typically characteristic of emerging markets is
that there is huge power distance which is very important.
In China, the owners of the luxury cars felt insulted because
the distance between them and their drivers was too short and that
is why they didn't buy the Audi.
Audi figured it out and changed their models, so the Audi Sedans
in China are longer. So there is a bigger distance between someone
sitting at the back and the driver. Immediately their sales went
through the roof because of this very basic insight.
It is important to understand such insights, and to look at them
from an agnostic point of view.
If you go into a developing market, the question is how
consumers relate with each other. In a culture where there is a lot
hierarchy, your position within the society is a very key component
of your personal identity. This means that your consumption
behaviour and consumption habits will be influenced by the role
that society has allocated to you.
The African Consumers
It is very important to look at the consumer through the right
lenses. Quantitative data just gives you the best snapshots. You
have to look at other things, quantitative data is useful but you
do not get everything.
The birth position is very relevant in Nigeria and determines
how you relate with other people. If you are the first born in the
family that role defines the rest of your life. The same can be
said if you are the middle or the last child.
Most handset manufacturers will see that phones below USD$100
will be for consumers in the lower classes, phones between USD$150
to USD$200 will be for the middle class and phones of USD$300 and
above will be for the upper class. In Nigeria is totally different-
phones priced at USD$300 and above are used by the lower class and
those who have the income use handsets of about USD$200. What is
going on here?
Apple got it wrong, Samsung got it right
For many years Apple overlooked the Nigerian market
because the quantitative data said that 70% of the population is in
the lower class, which means they cannot afford to buy an
Samsung took a different approach, they figured
out that in the African society if you are the first born it is
expected that you will continually maintain the life style of
If you are the wealthiest family member, you must be benevolent
to the others; there should not be much of a gap between your life
styles. For example, the youngest born in the family will have
different sources of incomes. If he wants to buy a phone, he will
first go to his parents who can only afford $100, which he takes.
He goes to his brother who can give him USD$150, so he now has
USD$250. He then goes to the uncle who gives him USD$100, so he has
got USD$350 now. His auntie gives him USD$200 more. He can now
afford to buy an iPhone.
The wealthiest member in the family has many others connected to
his income; he has one source of inflow and multiple sources of
outflow. Thus he is careful with his money and does not buy a phone
that is worth more than USD$200.
Apple missed the cultural nuances and Samsung got it right. They
found young consumers with scarce resources buying the Samsung
Galaxy phones and the others with higher incomes were buying the
Samsung Grand Duo phones, which is a cheaper option. Eventually
Apple figured it out and now there is an Apple store in
If you would like to uncover more case studies and key insights
shared by distinguished guest Feyi Olubodun, the full presentation
and its highlights will be available online soon.
Feyi is also a Guest Lecturer at ESCP Europe
Business School in London, he is a valued contributor to
our postgraduate Executive Master in Marketing and Creativity
and MSc in Marketing and Creativity.
The Do's and Don't's of Cross Cultural Marketing
The African Consumer
"Autumn Open Day Event"
Where: ESCP Europe's London Campus
When: 29th October at 10:30 - 16.00
To register, please click here
To keep up-to-date with our activities, follow us on twitter @CreativityMktg and LinkedIn Creativity Marketing at ESCP Europe.