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Marketers must live their brand positioning

South Africa’s banking sector is facing significant disruption from new technologies, changing consumer habits and aggressive newcomers. Perhaps innovative marketing is the answer. Mike Simpson chats to Nedbank’s Khensani Nobanda.

As South Africa’s traditional ‘big four’ banks struggle to meet the challenges being posed by multiple disruptors – ranging from upstart Capitec to the digital-only branchless offering of TymeDigital and the impending launch of Discovery Bank – there is one key strategy that the bank’s marketing teams should follow. They need to live their brand positioning.

Khensani Nobanda, Group Executive: Marketing and Corporate Affairs at Nedbank, believes that the biggest reason banks tend be mistrusted and poorly perceived by consumers is the gap between what they promise and what they deliver.

“The problem is that the things we promise [as an industry] … this beautiful, creative advertising … are not always delivered on,” she says. “We work on a great proposition, but then we change this and change that to get it almost to the lowest common denominator because we’re trying to manage our margins. There is a gap between expectation and reality. The minute we close that gap, the banking industry will be in a much better place.”

A career marketer with experience in sectors such as alcoholic beverages, tea, skin care and telecoms, 39-year-old Nobanda made her first foray into banking in September last year when she joined Nedbank as Executive Head of Group Marketing. Barely eight months later she was promoted to her current role, which also includes responsibility for transformation and corporate affairs.

Although a relative newcomer to the banking space, she clearly has strong opinions about the way that the traditional big players – FNB, Absa, Standard and Nedbank – operate, market themselves and interact with customers.

“Sometimes in banks we end up being driven by the numbers. It’s important, but at the heart of it we should think about why we do what we do. Whatever your positioning is, you have to live it. It applies to Absa with its new ‘Africanacity’ positioning and it applies to Nedbank and everyone else too,” she states.

Nedbank’s positioning of ‘See money differently’ was unveiled in early 2017 and Nobanda believes that it’s a brand journey which is still very much a work in progress. “Many people feel that money is the root of all evil and that they can’t manage their money. But, fundamentally, money well managed can make a real impact on lives. We are trying to say to consumers that at Nedbank we will help you to achieve that.

“That’s our proposition. But to be honest we’re not living it at the moment in the way we should. We have to challenge ourselves about what it is that we’re offering people to help them see money differently.”

Nobanda views her role as helping the organisation to live its purpose and wants to be seen as the “soul and anchor” of what Nedbank is as a business and a brand. She explains that there’s a massive culture change, and innovation drive underway within the organisation. How those dots are connected, and relevant ideas implemented will determine how well the brand proposition is understood and accepted by the market.

She declines to be drawn on the merits of Absa’s Africanacity positioning, but describes it as a “bold” thought.  “As marketeers in South Africa we are not being bold enough. We need to have more impact. There’s also a lack of depth and substance. I believe we have lost depth over the past few years.”

Challenges and opportunities

Apart from the seeming inability to walk the walk when it comes to living their brands, the big banks are facing other challenges too. These include a lack of agility due to their sheer size, plus a cost structure which Nobanda describes as “sometimes prohibitive”. The cost-to-income ratio for both Nedbank and Standard Bank, for example, are above 60%. By comparison, the figure for challenger brand Capitec is below 50%.

But there are opportunities too. At the lower end of the market, where consumers are unbanked or tend to use only the most basic of banking services, Nedbank has recently launched its MobiMoney product.

“In under a minute you can open a bank account on your cell phone and your cell phone number becomes your bank account number,” Nobanda enthuses.  “We have looked at how people at this level of the market want to use a bank account – it’s to buy data, pay electricity, transfer money etc. So, it’s a very simple and basic account. We see this as a big opportunity to get new people into the Nedbank brand and we hope that, as their situation improves, they will stay with the bank and use other, more traditional, banking products.”

Digital media is also an exploitable opportunity. While digital is enabling the disruptors of the banking status quo, it is simultaneously creating new ways for the likes of Nedbank to engage with consumers.

“Currently our ratio of paid media to earned and owned media is 80% paid, 10-15% earned only about 5% is our own channels such as social media and website platforms. That’s ridiculously low,” she observes. “We need to get our owned media channels to perform a lot better. Social media is an example: we have only about 100 000 followers, yet we have 7-million customers. We can do better. We are not interesting enough. So, we are doing two things: beefing up the social media team and ensuring that we have the capability to quickly generate our own content internally.”

Would-be astronaut

Although she’s enjoyed a varied marketing career, Nobanda’s original professional aspirations were somewhat different. Born in exile in Swaziland to a father who was a member of Umkhonto weSizwe (MK) and a school teacher mother, she originally wanted to be an astronaut as it “looked really cool”.

Later she harboured aspirations to be lawyer and only stumbled upon marketing while in her second year at university. “I was already studying information systems, and someone suggested that marketing would suit me. I soon realised that it was what I wanted to do,” she recalls.

What’s the appeal of marketing for her? “I love the balance between logic and creativity. I love data, numbers, thinking about where the opportunity lies and planning for market growth and how to increase market share. But I also love that a lot of things we do in order to grow market share are very creative. I find it special that I’ve got a job that plays into both of those spaces.”

Nobanda kicked off her career with Brandhouse Beverages, marketing Smirnoff RTD (ready-to-drink) products, then moved to Unilever to market tea. She subsequently relocated to Dubai to become the Category Director for skin products, with responsibility for Africa, the Middle East and Turkey.

It was here that she enjoyed her greatest career highlight to date. “We launched the Ponds brand in the Middle East and the company really committed. Overnight we built the shelves and made the product available in stores. The billboards went up overnight too. We worked really hard and grew market share from zero to 10% in one year. I am very proud of that,” she recalls.

Nobanda then moved to SAB to become Executive Assistant to Marketing Director, Ian Penhale, and then General Manager for the Hansa brand. It was during this period that she also studied part-time to complete her MBA at GIBS. “I love studying and I thought it was useful from a long-term perspective to have a broader qualification,” she explains.

It was also time to move out of the FMCG environment. “I’m an FMCG marketer at heart, but the opportunity for real innovation is limited – you might revolutionise margarine once every 100 years,” Nobanda observes. She fancied the challenges being posed in the telecoms and banking sectors, both of which are experiencing significant disruption.

A move to Vodacom followed, where she was Executive Head of Post Paid for nearly three years before taking the plunge into banking.

How does she view the future for big corporates in South Africa? She believes it’s important to contribute to society and points to Nedbank’s ongoing support of efforts to protect the nation’s water resources (almost R50-million donated to date), as an example. “We can’t be successful in an unsuccessful country. If South Africa succeeds as a country, the bank will grow. So we have to get involved. Organisations don’t exist in a vacuum. They exist in societies where there are challenges to be solved.”

In under a minute you can open a bank account on your cell phone and your cell phone number becomes your bank account number.

While digital is enabling the disruptors of the banking status quo, it is simultaneously creating new ways for the likes of Nedbank to engage with consumers.

A career with variety

Why is marketing a great career to pursue? Nobanda believes the enormous variation is what makes it exciting.

“When I was a 23-year-old brand manager for Smirnoff Vodka, I used to say to people: ‘I don’t know why they pay me to do this job; I’m having so much fun’. For me it’s amazing that you can create something that influences people and how they think.”

She also loves the big challenges. For example, management may want to grow usage of the product. Then it’s up to the marketing team to strategise as to how to achieve it.

“The week after that, you could be in Durban attending the Loeries. With that sort of variety, why wouldn’t you love marketing?”

Know the context

Nobanda’s advice to young marketers is to ensure they appreciate how marketing fits into the overall context of the business.

“Never think of marketing as just pretty pictures,” she urges. “The minute you do that you will never consider the big-picture things like ROI. From the outset, make sure you are thinking about how you can have an impact on the business.

“Certainly, it is a skill to create great advertising briefs and to get agencies to do great work. But if you believe that’s all there is to marketing, you’re not going to reach the heights.” 

Two key challenges

There are two key challenges that modern-day senior marketers face, says Nobanda. The first is to have a good in-depth grasp of digital marketing. The second is to ensure they have strategic influence within the organisation.

“If you’re a senior marketer and don’t have good digital knowledge, then you’re going to fail – because you don’t know what you don’t know. You have to learn the digital world. You have to be able to challenge your digital team and your digital agencies.”

When it comes to having strategic influence, she believes you shouldn’t simply be the person who gets asked to do an advertisement when a product has been developed.  “You must influence the product. You should be able to ask questions such as: ‘what is it that our clients actually need?’ ‘What are we trying to achieve with this product? ‘Does it make sense, based on our brand essence?’ As a senior marketer, you should be able to have broad influence within the business.”

Interview with Pepe Marais

Co-founder and owner of South Africa’s largest independent advertising firm Joe Public, Pepe Marais’s recently published book Growing Greatness is part autobiography, part account of the rise, fall and rise of Joe Public, and part how-to guide to discovering the deeper purpose of a business.

Tracey McDonald proposed I write a book about entrepreneurship. One of my firm beliefs is that you can’t close the poverty gap in SA without creating more entrepreneurs…[so] the broader intention of this book was to inspire people towards entrepreneurship. But there is a deeper reason behind the book, and that is to inspire any entrepreneur out there to find greater purpose to their business. A reason beyond money.

I attribute Joe Public’s success to this sense of purpose, and to the diversity that has developed organically as a by-product of it. Our purpose is growth: to be the fertile soil which grows our people, our clients, and our country. We’re a small to medium enterprise, with 300 people, but our diversity is amazing. I believe that at the heart of diversity is creativity.  If you’re selling creativity and you’ve got one section of the market’s point of view, in a market where you’ve got eleven different points of view – just culturally, let alone taking gender into account – that’s not going to work.

There’s a quote that says it takes 17 years to become an overnight success. We only began to see returns on our blood, sweat and tears 16 years after the inception of Joe Public. We didn’t go: “year two, drive a Porsche”.

My advice for people wanting to start their own business: START. I find that people dreaming of starting a business tend to overthink it, instead of letting it run and seeing what happens, and maybe failing quicker. We’d rather over-strategize and business-plan it to death, which creates so much angst and fear that we never actually get out of the starting blocks.

My other piece of advice is – if you look at Phil Knight from Nike or Giovanni Ravazotti who runs one of the best performing shares on the stock exchange, the Italtile group – both those men know now that it’s not about money. At school now, entrepreneurs are being taught that the purpose of business is to make money. I think that’s wrong: if entrepreneurs know that money is a by-product, and the purpose of business is something far greater, they might just have a better chance of succeeding.

My advice to someone wanting to succeed in marketing: become product obsessed. The most valuable company in the world, Apple, is product obsessed. In any business, you’ve got a product and you’ve got service, and you need to deliver both to the highest level possible – but always product first. Exceptional, excellent product will create sustainable business over time.

Some of the many books that have inspired me include:

  • Time to Think: Listening to Ignite the Human Mind by Nancy Kline
  • The Art of Possibility by Rosamund and Benjamin Zander
  • Good to Great by Jim Collins

I started One School at a Time in 2008. I’m aiming to change education… I learnt that some 22 000 schools in SA are dysfunctional, so I started with one. It’s been ticking now for 11 years: the results are slow, but significant – the Soweto school is today ranked as one of the top 3 township schools in Gauteng.

I love advertising. It’s one of the few means to counter the negative news out there. It can also be used to inspire people towards greatness. And it can assist brands to play a more meaningful role in the lives of the man on the street. Through this lens, it is perfectly aligned to my purpose in life.

Pepe Marais, Growing Greatness: A Journey Towards Personal and Business Mastery is published by Tracey McDonald Publishers and available in bookshops from August 2018.

To disrupt or not to disrupt? That is the question

We are living in times of change and unpredictability, and this social milieu translates into a drive to disrupt. Disruption is in vogue within the marketing fraternity and is frequently the go-to for almost every brand strategy. This creates hype, but how many brands actually disrupt their market landscape? More importantly, is it in every brand’s best interest to disrupt, asks Maria Petousis.

If we think about how society experiences disruption, it leaves us feeling a little confused, unfocused and disengaged. Disruption brings chaos and uncertainty. It is not closely linked with trust and loyalty, yet brands want loyal consumers and consumers want brands they can trust.

Brand image is often sexy, but it’s not real – and we need to start considering what is real for us as human beings and about sustainable impact, instead of co-creating a lack of trust and loyalty through double standards.

To better understand disruption, we can look at leaders as brands. Nelson Mandela and Kofi Annan were iconic leaders: they stood for the greater good, representing loyalty, stability and predictability. These leaders represent true Icon Brands.

There are disruptors who disrupt for the sake of disrupting. They shout for attention and make a lot of noise – for example, United States President Donald Trump. Similarly, wannabe disruptor brands may include telecommunications companies and banks with similar product and service offerings that are not really doing anything to change the market landscape.

Real disruptors stand for sustainable change, clear direction, reconsidering assumptions, making sound judgment calls, and doing what’s right and good. They are courageous and don’t mind not following a mainstream view.

Examples of real individual disruptors include New Zealand Prime Minister Jacinda Ardern, Canadian Prime Minister Justin Trudeau, or former US president Barack Obama, and Jack Ma, a Chinese business magnate, investor, philanthropist and the co-founder and executive chairperson of the Alibaba Group.

Real disruptor brands include Airbnb, Uber, Netflix and Google – these brands have fundamentally changed the way things are done within their product categories and provide an enhanced product or service to consumers.

Ask Afrika’s Icon Brands are loved and used loyally by South African consumers across the entire demographic spectrum. The Icon Brands survey measures 158 product categories, and only 40 brands in 19 product categories achieved Icon Brand status.

 

Not all brands should be disruptive

Some brand marketing strategies strive to disrupt, but the reality is that not all brands can or should be disruptive. Icon Brands are established leader brands in their product categories, with a loyal consumer base. The job of the brand owner is to entrench and grow this loyalty and market share, since brands can’t be both the incumbents and the disruptors.

Icon Brands are defined by solus usage: consumers are loyal to only one brand in the category and most will choose the same brand every time. The general trend is towards increasing non-solus usage – or an expanding repertoire of brands that consumers choose between within a category, driven by convenience. Certain product categories have a narrower brand repertoire, while others have a broader repertoire that consumers switch between.

The change in loyalty has altered the philosophy of buying. A brand manager’s job has become increasingly difficult. Loyalty goes beyond quality, price and reliability. It is about innovatively combining many strategic elements and touchpoints to work together, creating a memorable brand experience that is relevant to its target audience on a deep emotional level.

Brand owners want loyal consumers, yet they often target non-loyalists with disruptive marketing strategies. The psychographic profile of loyalists makes them seem boring, with traditional life values, while non-loyalists appear exciting, with utopian life values. Marketers aspire to reach non-loyalists because they can craft a more “attractive” brand personality when aligned with these attitudes, yet it is the loyalists who actually buy and use the brand. Icon Brands exist precisely because of loyalists. There is a disconnect that needs to be considered when crafting a marketing strategy.

Loyal brand consumption (or lack thereof) can inform meaningful marketing campaigns through integrated media strategies that drive relevant product/brand strategies to different target markets. This can also inform marketers about whether a disruptive brand strategy is appropriate.

 

Advice for marketers

The overall take-out for marketers is: don’t raise your voice – rather improve your message. Don’t create chaos with different marketing messages and disrupt for the sake of it. Innovation needs to be linked to scalability. Decide on who you are in terms of brand personality, then think about purpose and sustainability. Educate consumers and heed their call for loyal and trustworthy leadership.

Loyal brand consumption (or lack thereof) can inform meaningful marketing campaigns through integrated media strategies that drive relevant product/brand strategies to different target markets. This can also inform marketers about whether a disruptive brand strategy is appropriate.

Change is inevitable (except from a vending machine)

Boardroom Bingo relieves the tedium of those seemingly aimless and endless management meetings like nothing you’ve tried before – other than a Valium smoothie.

The Boardroom version is just like regular bingo, except that instead of someone calling out random numbers printed on ping-pong balls, you mark your card whenever a piece of hideous business jargon escapes from the lips of one of the overly keen yes-men managers smugly sipping their skinny soya cappuccinos around the boardroom table. And believe you me, in this age in which superficiality is admired more than substance, it doesn’t take long for your Boardroom Bingo card to fill to the brim. The jargon just flows, relentlessly, like a river of utter meaninglessness.

The words and phrases that score you points are things like “disruption”, “paradigm shift”, “game-changing”, “swimming upstream”, and “zigging when the others zag.” These are just a few of the dozens of entries in the Boardroom Bingo lexicon, but they are certainly among the most frequently used. And the eagle-eyed among you may have noticed that these expressions all allude to that much-praised business strategy of having an appetite for risk and challenging the status quo.

So why (to use another couple of BB front-runners) do we not “walk the talk” or “put our money where our mouths are”? After all, we’re more than up for a bit of risk-taking in our personal lives – think about the experimentation we enjoy with clothing (my gold sequined cat-suit springs to mind), restaurants, travel, adventure sports and so on. Yet the moment we park the company car in our designated bay at the office, we become another of those obsequious cowards whose only war cry in business is “steady as she goes, captain”, and whose only strategy for forward planning is “last year plus ten percent.”

Perhaps it’s human nature to resist change and to seek comfort in the familiar. Just look at the outcry whenever a well-known brand adopts a new identity – Absa being the most recent in a long line of new visual identities that have been pilloried for no better reason than being different from what we’re used to. This is somewhat ironic when we consider that the one thing that is beaten into every aspirant brand manager’s brain is the importance of differentiation.

There’s a further irony in the fact that attitudes to novelty evolve over time. What began as a knee-jerk “I don’t like it” reaction at launch, matures to tolerance and then from acceptance to outright preference. So hang in there, marketers, let a little time go by and everyone will be wondering what the fuss was all about.

But the most important lesson to be learnt about creatively-driven change is simply that it works. The debate is over; it has been proven in countless empirical studies that brands that embrace responsible risk-taking outperform those that watch cautiously from the sidelines. We need to grab hold of that willingness to experiment in our private lives and bring it into the boardroom. We need to behave like the brands are our own possessions, built or destroyed by our own actions.

We need to have some “skin in the game”.

Bingo!

A highly regarded and influential strategist, speaker and writer, Andy Rice is one of South Africa’s best-known branding and advertising experts. He headed up Ogilvy Johannesburg’s account planning department before founding specialist brand strategy consultancy Yellowwood.

The critical need to improve South Africa’s logistics

The heads of IMM Graduate School’s supply chain and export management believe the future could be in the hands of the young logistics professionals, a view backed up by experts speaking at the recent Transport Forum held at Stellenbosch University.

 

“Can a logistician be referred to as a professional?” ask Dr Beverley Waugh and Dr Myles Wakeham from the IMM. “We seek to equip school-leavers, and employees and employers already in the workplace, with knowledge and skills to perform their specialised tasks and fulfil their professional roles in the supply chain, in the best possible way for their own development, the profitability of their organisations and the value of the supply chains in which they operate. To do this, they need to be professionals in logistics!

 

Logistics affect national and global wellbeing

And it doesn’t end with the individual, the organization or their overall supply chain. National and global economic wellbeing is also impacted. Speaking at the Transport Forum held at Stellenbosch University in August 2018, Professor Lauri Ojala asserted that logistics performance is critical to the national performance of economies, and that trade logistics are a key element of global economies.

He noted that logistics should thus be a cross-cutting policy concern in all countries, focusing inter alia on measuring supply chain efficiency, identifying problem areas, and providing key information necessary for supply chain managers. South Africa, for example, could benefit from raising logistics competence levels. Ojala pointed out that although performance with regard to costs and processes was very important, reliability within supply and service delivery was ranked even more important by logistics professionals. While cost-cutting was always on the agenda, concerns regarding sustainability, service, and competence were higher on the agenda. Traditional trade and transport facilitation remained at the core of logistics performance.

At the same meeting, Professor Jan Havenga identified the rising cost of logistics as a major concern for South Africa. He noted that government needed to be aware of this and involved in addressing various issues in the inefficient supply of logistics. South Africa has a “built-in” problem because of the overland distances involved in local logistics, and the fact that economic density is spread and mostly situated away from the ports: “South Africa is a spatially challenged country and its ton-kilometre productivity is among the worst in the world,” said Havenga.

Logistics management in South Africa therefore involved “more effort to do the same thing better!”. Havenga asserts that as a result of much South African transport usage being outsourced to blue-chip logistics service providers, the country has up until now been able to achieve and sustain fairly good logistics statistics. The South African logistics service provider industry has achieved excellent results and logistics managers have been well trained. However, he noted that skills in South Africa was becoming one of the greatest challenges, especially the shortage of logistics service provision skills. It was agreed that a stronger concentration on a few strong centres of excellence was necessary to address this.

In addition to these points, Professor Stephan Krygsman identified the need for governments to create an enabling environment for education and research, long-term planning, infrastructure for transport, for example, and so on.

South Africa needs skilled logisticians

Krygsman noted that South Africa is underperforming, not necessarily because of infrastructure, but due to inadequate skills, needed in part to “translate the benefit of infrastructure to increased economic output”. Transport infrastructure is a necessary but insufficient condition for economic development: An educated and trained labour force is also needed. In addition, Krygsman identified key problems in the supply chains of organisations in South Africa as including unnecessary regulations and documentation, and inadequate coordination between industry and ports – leading, for example, to congestion in ports resulting in unnecessarily high capital and other costs for the organisations involved. The cost of doing business and inefficiencies were unnecessarily and unacceptably high.

All role players in the South African supply chains must focus on making it easier and more efficient to do business. Adequate skills are needed for this, and these requirements are urgent for the welfare of the country and its people overall.

Creating sustainable relationships with key clients

Relationships are the key differentiator in the 21st century and brands failing to respond to this will ultimately succumb, write Professors Mari Jansen van Rensburg and Angelo Nicolaides.

 

Gone are the days of closely guarded designs and confidential pricing structures. Today, it takes a few clicks to download and compare. Markets are global and unhappy clients no longer share their experience with eight friends; instead, they utilise social media and if there is a good story to tell, it may go viral.

Transformation is not an option if companies want to evolve so as to thrive in a dynamic market environment. Changes have to do with every feature of business and are not limited to any single aspect of a company’s operation. The traditional 4Ps can no longer solely guide marketing efforts, as the focus has shifted to fostering client relationships.

Relationship management holds the key to designing effective marketing and communication strategies. Relationship marketing acknowledges the human interface in marketing and extends the traditional inward focus to include the specific needs of clients. In the literature, relationship marketing is inter alia also referred to as ‘direct marketing’, ‘loyalty marketing’, ‘client marketing’ and ‘micro marketing’.

Essentially, relationship marketing follows a match-making process where customers will enter a relationship with a business only if they discover value in what a company offers. The expected outcome of the process is client retention and loyalty. The focus is on building a relationship with a client based on specific needs and expectations and the approach acknowledges the shortcoming of a one-to-many tactic.

Thus, companies pursuing clients and sustainability need to follow a need-based segmentation approach to determine which segments to target and which stratagem and theoretical paradigm to adopt to build the relationship. Value begins in the customer’s mind with insight about the product and/or service, as well as the company.

This is followed by mutual consensus that a connection can, indeed, add value. In this scenario, the product/service becomes a screening consideration as, without a match between the offer and the clients’ needs, there is no reason to enter into a relationship. The hard work, however, only starts once the two parties agree that connection would be of mutual benefit. Relationship marketing is thus about maintaining the relationship through creating connections beyond the features and benefits of the product.

For the purposes of this article, we will assume that the quality of products and performance of rivals are on a par; that the courting period is concluded; and that there is an existing relationship between company and client. Our focus is on effective relationship marketing to create sustainable relationships with key clients. Specifically, we propose four key considerations that we found to be significant in our earlier research done on this topic.

 

  1. Client satisfaction. Satisfaction is a key requirement of client retention and retention is known to yield several economic and non-economic benefits for both parties. There is, for example, an overwhelming argument that it is cheaper to retain than to acquire new clients. Satisfied clients can be a vital source of referrals; can yield higher revenue as they tend to spend more; and do not usually wait for promotions or price reductions before deciding to purchase. Companies are obligated to interact with clients to understand their changing needs. It is key to avoid complacency and not to compromise on excellent quality and performance.

 

  1. Collaboration and coordination: Clients want to participate in seeking solutions for their problems. This requires sharing of information, joint development of solutions and coordinated actions. Some may argue that this consideration is more relevant to the services industry, but we found that companies such as Nike have employed very successful strategies to allow for collaboration (i.e. consumers are able to design their own signature shoes).

The key to this is good communication, which includes considerations about the frequency of communication and the mediums used to share information. Important here, is to create a platform for two-way communication to be realised. Using technology and social media can bring customers closer to a company and allow them to interact with other customers.

 

Today’s customers are well aware of their relative stronger position and the influence they can exert on the Internet. When used properly, the Internet offers huge positives for relationship marketing. It is, however, a double-edged sword, given that information dissemination and interaction happen on a live platform. Given that a customer’s reaction can be spontaneous and instantaneous, this may pose problems for a company, as they need to be alert to redress any mistakes and avoid negative customer-driven word-of-mouth campaigns that can seriously damage them.

 

  1. Trust: Trust is earned, and only established once clients have confidence that the company will act with goodwill. Companies thus need to establish credibility when it comes to honouring warranties, product exchanges and keeping brand promises. Trust also extends to the way the company safeguards clients’ information and provides secure transaction platforms.

 

An aspect that is often not on the radar is the effect of business linkages on trust. An example here is the collapse of British PR firm Bell Pottinger following their business relationship with the Gupta family – a business linkage that proved to be highly toxic.

 

  1. Commitment: Commitment is an essential element of any relationship and only exists when both parties consider the relationship as being important enough to warrant maximum effort. People stay in relationships either because they want to or because they have to. Clients wanting to stay will do so because they like doing business with the company.

 

Effective commitment is the result of a good working relationship where both parties are sincere and concerned about the other’s welfare. In these cases, clients and companies treat each other with respect and often share the same philosophies. On the other hand, clients may stay because of a high termination cost associated with ending the relationship. Here, the motivation of the captured clients stems from contractual commitment or a lack of alternatives. Given another viable option, it is unlikely this relationship would continue

Today, customers expect nothing but the best when it comes to service quality excellence and relationships with businesses. The best is no longer expressed through features and benefits of products, or even through the lowest price. Instead, customers demand customisation and good relationships with all their business partners.

Indeed, customers no longer consider service providers as mere suppliers of goods and services, but rather as ideal lifelong partners. As such, relationship marketing is the key to sustainability. Establishing and maintaining relationships requires good matching, consistent effort and, ultimately commitment to ensuring customer retention and loyalty.

Technology and convenience define the new face of retailing

Retailing in South Africa is changing dramatically, with the evolution being led by technology and a greater need for convenience. The ‘IMM Journal of Strategic Marketing’ reports in its latest issue (Issue 2 2018) that, in an environment where consumer demands are becoming ever more sophisticated, retailers have turned increasingly to digital technology for solutions.

“Digital technology will be the biggest driver of change in retail for the next five to 10 years,” predicts Doug Murray, CEO of The Foschini Group (TFG). Among the group’s brands are clothing chains Foschini and Markham, sports retailer Totalsports, and homeware retailer @Home.

Indeed, TFG has prioritised the adoption of technology and Murray notes that two group directors are charged with keeping track of the latest technological developments and their application in areas relevant to the group.

Among these is the efficient use of big data gleaned from sources such as loyalty programmes and shoppers’ in-store and online product-buying preferences. “Our marketing is highly targeted to the preferences of individual customers,” explains Murray. “Using data analytics to understand our customers and communicate with them in a meaningful way is a key element of our strategy.”

There are other challenges too. Clicks, for example, is working to resolve the often lengthy queues at its in-store pharmacies. “They are the biggest source of complaints we have from customers,” observes CEO David Kneale.

Turning to technology for a solution, Clicks has recently introduced a mobile app which enables pharmacy staff to inform in-store customers when their medication is ready for collection.

Other articles in the latest edition of the magazine include an analysis how artificial intelligence (AI) may impact the future of advertising, and a look at breakthroughs in neuroscience that will benefit marketing and sales professionals.

The ‘IMM Journal of Strategic Marketing’ is published by the IMM Graduate School and is available in print and digital formats.

MTN remains SA’s most valuable brand

MTN’s brand value has grown by 8% over the last year to R44.2-billion, maintaining its leadership as South Africa’s most valuable brand, according to the latest report by Brand Finance, the independent brand valuation and strategy consultancy.

MTN’s brand value grew primarily because of customers spending more on data services, consistent with a global trend of mobile phones being used to transmit more data at the expense of traditional voice traffic. As a result, MTN’s overall revenue grew by 7.2% last year, with data revenue growing by 34.2%.

David Haigh, CEO of Brand Finance, commented: “MTN is South Africa’s most valuable brand because of their industry leadership, both domestically and further afield. They are increasingly recognised throughout Africa by their customers as providing a high-quality service, because their brand image is deeply rooted on more than just marketing campaigns.”

First National Bank was the big winner over the last year with its brand value rising 22% to R19.4 billion. This earned First National a jump from being South Africa’s 7th biggest brand to now becoming the 3rd most valuable brand in the country.

In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Along with the level of revenues, brand strength is a crucial driver of brand value.

According to these criteria, Capitec Bank (brand value up 35% to R6.8 billion) became South Africa’s strongest brand, taking over from First National Bank. Capitec’s brand strength has benefited from positive perceptions amongst its core customer base, which is consistent with their introduction of more unsecured credit offerings with interest rates as low as 12.9% in some circumstances. A focus on reducing legal and administration costs are particularly.

South Africa’s top 10 brands by brand value are:

  • MTN
  • Vodacom’
  • FNB
  • ABSA
  • Standard Bank
  • Woolworths
  • Sasol
  • Investec
  • Nedbank
  • Multichoice

What matters when marketing to modern moms

Mothers are a powerful and discerning group of consumers, whose diversity demands nuanced consideration by marketers. But, asks the ‘IMM Journal of Strategic Marketing’ in its latest issue (Issue 1 2018) are brands listening to moms?

While statistics are hard to come by and consumers are still regularly presented with clichéd images of smiling, supportive moms, Dr Sarah Britten, of marketing agency Labstore South Africa, says that change is afoot in this sector. “Behind the scenes there’s a lot of research into how mothers see the world and what matters to them,” she observes.

An example is research undertaken every 2-3 years by clothing retailer Ackermans into the evolving priorities and challenges of mothers in the mass market. “What became evident to us is that many marketers are guilty of tailoring their communication to mothers based on outdated ideas about what it means to be a mom,” says Customer Marketing Manager, Karin Lombard-de Kock.

Part of the challenge for marketers, she believes, is to stop thinking of moms in traditional or one-dimensional roles. For example, whereas marketers regularly trot out the hackneyed and patronising phrase, ‘Motherhood is the toughest job in the world’, mothers argue that they do not think of taking care of their kids as another job. The trick, advises Lombard-de Kock, is to remember mothers are multifaceted individuals.

The most effective way of communicating with mothers, believes Britten, is by using an omnichannel strategy through which some touch points communicate the brand message. Other touch points ensure products are available and visible at the point of purchase, while further touch points allow for more meaningful engagement. “This is where social media is really useful,” she says.

Mothers and expectant mothers rely on social media for information and support – particularly when they are on maternity leave, observes Britten. In addition to sharing updates and asking for advice on Facebook, mothers are also influenced by so-called ‘mommy bloggers’. “More and more budget is shifting to influencers, and this is especially true of brands that want to reach mothers,” she says.

CHOOSE THE RIGHT DISTRIBUTION PARTNER ON THE CONTINENT

Companies looking to choose a distribution partner in countries on the African continent face a number of notable challenges – but none of them are insurmountable, the ‘IMM Journal of Strategic Marketing’ reports in its latest issue (Issue 1 2018).

Quoting from a Boston Consulting Group study entitled ‘Drawing a Route to Market for Multinationals in Africa’, the magazine says that companies need to be clear on what they expect and must determine the type of partner and type of arrangement they want to pursue. Options that suppliers should consider include the following:

  • Do you opt for end-to-end distribution or last-mile delivery only? Most multinationals and other big companies require partners for at least last-mile distribution, which is very costly. Some, however, want partners to handle the full distribution ch
  • ain. Product and brand development efforts or pure trading? Some partners have the capability only to push products into retail distribution; they lack the relationships or resources to support retailers or engage in brand building or promotional efforts.
  • Do you use the company’s own infrastructure or rely on the distributor’s existing assets? If a company wants its own infrastructure – such as warehousing and transportation – it will require significant investment and distributor support.
  • Large distribution network with existing relationships? Typically, only large companies with their own capabilities on the ground can grow and develop smaller distributors.
  • Do you opt for direct employment of a sales force? The size and exclusivity of the sales force, route planning and level of sales force training are all subjects for negotiation.

“In Africa, opportunity and complexity go hand in hand. Companies need to master the latter to take advantage of the former. Taking the time to understand the continent’s individual markets, choosing the right partners and establishing an effective structure and distribution setup can make the difference between a failed experiment and a successful long-term business,” concludes the study.