Marketing Mix Jan Feb 2009

MarketingMix M E A S U R A B L E

M A R K E T I N G

I N S I G H T S

I Vol 27 Issue No. 1/2 I 2009 I R25.00 incl. vat

MarketingMix

Contents

I 0 2 I Ed’s note

I 2 1 I Expert opinion: Bryan Pearson

I 0 3 I Retail marketing: the spend and the trends Find out what the big retail trends are for 2009, based on the findings of Marketing Mix’s Spend and Trends survey.

Bryan explains why marketers need to look beyond the plastic, when it comes to customer loyalty.

I 2 2 I Brand anatomy Pick n Pay’s Fresh Living magazine leads the way.

I 0 5 I Shopper marketing Pedro De Gouveia explores shopper marketing, and the need for greater collaboration.

I 2 4 I Soccer marketing guide With the 2010 FIFA World Cup creeping closer, marketers need to understand the local soccer scene, as well as the huge marketing opportunities that soccer holds.

I 0 6 I Retail marketing: why it’s hot Find out why brands should be investing in the retail marketing space.

I 3 1 I Expert opinion: Keith Wiser Keith’s third column has us sitting on the edge of our seats, contemplating the way forward.

I 0 8 I Current trends and challenges Experts discuss the big obstacles and the big trend in retail marketing.

I 1 1 I The township market The township/lower LSM retail environment is unique – understanding of the nuances and dynamics at play here is crucial to planning and execution.

I 3 2 I Outdoor media Find out which are the biggest challenges facing outdoor media right now.

I 3 6 I Community media Holding strong in the face of economic pressure, community media is giving traditional media a run for its money.

I 4 4 I Discovery Species I 1 2 I In-store media Marketing Mix discusses the various in-store media available to marketers, and how they should select and integrate these.

Marketing Mix gets the low down on the Discovery Channel’s latest study into the brawnier member of our species.

I 4 6 I Eastern Cape intelligence I 1 4 I Shopper intelligence Shopper research is key to clever retail marketing. Find out how to go about doing research, and what the specialists have learned thus far.

I 1 6 I Expert opinion: Richard Duncan

Getting to grips with the Eastern Cape marketing and media landscape.

I 4 9 I Expert opinion: Walter Pike Walter explores the power of a little micro-blogging platform called Twitter.

Richard talks survival marketing.

I 5 0 I Expert opinion: Benon Czornij

I 1 8 I Luxury Marketing Summit: reportback

Hello Computer’s third article explores the technological considerations that should be top of mind during website planning and creation.

Marketing Mix reports back from the first ever Luxury Marketing Summit, with a better understanding of how to get the top end (and the aspirational upper middle class) to spend luxuriously.

I 5 1 I Expert opinion: Nicci Columbine Nicci discusses what SA needs to do to improve its ranking in the global measures of customer service.

I 1 9 I Expert opinion: Nici Stathacopoulos Nici has a new perspective on customer service, thanks to the mountain.

I 5 2 I Marketing 2009: understanding the challenges and the way forward The Services SETA team get together to discuss the issues critically.

I 2 0 I 7 Day [B]itch Olivia Leitch, executive producer at Ola Films, tries out new methods of connecting with her clients.

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I 56 I Law column: Rachel Sikwane Rachel discusses the impact of the tobacco products control act.

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PROPRIETOR AND PUBLISHER: Systems Publishers (Pty) Ltd. Tel: (011) 234 7008 North Block, Bradenham Hall, Mellis Road, Rivonia, Johannesburg PUBLISHER: Terry Murphy MANAGING EDITOR: Michelle Sturman [email protected] EDITOR: Fulvia Becatti [email protected] ADVERTISING MANAGER: Lethabo Tloubatla [email protected] PRODUCTION: Spencer van Graan [email protected] EVENT ENQUIRIES: Daisy Mulenga [email protected] SUBSCRIPTION ENQUIRIES: Bernice Tloue [email protected]

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Ed’s note

It could be simple… T

he beach holidays are long gone, and we are back into the swing of things here at Marketing Mix. The magazine boasts a fresh new look to take it into 2009 with style. Our website, www.marketingmix.co.za, is almost a year old, and we’re enjoying aggregating content across our print and online platforms. In fact, in our print articles you will notice the following graphic:

www.marketingmix.co.za

This graphic directs you to the website to find more information and extra content. I had the pleasure of researching the retail marketing sector over the past few weeks, and the fruit of this research is the very informative Retail Marketing Guide. After investigating the challenges and trends in the retail space, I have decided that it has got to be one of the toughest marketing disciplines. It could be simple: store + shopper/money + brand = sold. But it’s not. The shopper is complicated and unpredictable, and the store environment has evolved to become a dynamic and very competitive place. Plus, researchers have not decided whether they believe what we say about the manner in which we shop, which makes things a little fuzzy. I will be watching closely to see how both brands and retailers cope with recessionary pressures. I suspect that the top-end stores and brands will find it a very difficult time, especially as the upper-middle-class shopper downgrades to stretch rands further. The stores that have succeeded in creating tiered ranges, aimed at different market segments will probably catch the largest shopper market – as long as the store brand itself can meet the expectations of a range of shopper profiles. We can expect interesting times ahead. Also on the radar, is the 2010 FIFA World Cup and all things related. The Soccer Marketing Guide answers questions around how to leverage this prestigious event. At the time of going to press, I had tried to get a response from FIFA to some very tough questions – such as, where can marketers find out which service providers FIFA still needs to sign on locally? Or how can small and medium brands get involved as third-party partners to official partners, exhibitors and service providers? And how will FIFA enforce the rules that it has put in place to protect its rights holders, for example, how will it educate local supporters about the fact that if they arrive en masse at the stadia, wearing the branding of official sponsor competitors, they could be turned away? Sadly, FIFA and the Local Organising Commitee (LOC) have yet to get back to me, despite repeated requests for a response. Perhaps it’s time that local marketers joined forces to rally the LOC for some real answers. And so the first issue of Marketing Mix for 2009 gets off to a robust and exciting start. Be sure to pen the Marketing Mix events into your diary with a stellar line-up of conferences and workshops planned to help you navigate marketing challenges and make the right decisions. And with that, I wish you all the best for this year; happy reading. 

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Retail marketing guide

2009 retail spend and trends D

elegates who attended the Marketing Mix retail conferences, which included brand marketers, retailers, POP service providers and ad agencies, were asked late last year to complete the Retail Spend and Trends questionnaire in which they rated the importance of media categories (both in and outside the store), POP promotional tools and advertising displays in 2008. They then had to rate the importance these media categories and tools would have in 2009. Respondents also had to indicate what percentage of total marketing budget went to each of these in 2008; then what the percentage would be in 2009.

Brands will need to work closely with retailers and shopper insight specialists, to first, understand their shoppers better and, second, develop the campaigns and activations that

The results Marketers were asked to rank which media were a priority in 2008, and which will be big in 2009.

Media preference

actually work. The proof will be in the sales data.

Rank

2008

2009

1

In-store

In-store

2

TV

Mall media

3

Mall media

TV

4

Radio

Outdoor

5

Experiential

Magazine

6

Outdoor

Mobile

7

Magazine

Radio

8

Community newspapers

Experiential

9

Community radio

Press

10

Commuter media

Community radio

11

Direct to home

Social marketing

12

Community TV

Commuter media

13

Press

Community paper

14

Mobile

Online

15

Social marketing

Direct to home

16

Online

Community TV

Analysis The Retail Spend and Trends survey found that in-store media advertising was a major priority in 2008, and remains so in 2009. This is in keeping with the trend towards retail marketing, which is highly measurable, and provides the ‘moment of truth’ where the brand comes into contact with the consumer. See page 6 for a more detailed explanation. At a glance, the results indicate that marketers are going to move their focus away from the mass giants (TV and radio, specifically), towards malls, mobile and digital media, which strengthen the cause of marketing at-retail. The rise in the ranks of mall media reflects the realisation that malls have become destinations in their own right – going to the mall is part

of the urban leisure experience. Plus, the malls are investing in strategies that make their environment more attractive to consumers, and encourage them to linger and window-shop; and also to make the visit a regular fixture. Brands have wised up and are using the mall environment to interact directly with consumers through sampling, demos and branded entertainment. This experiential marketing tends to be well received in the mall environment, precisely because shoppers are in the right frame of mind and these activations create the brand desire that gets the consumer into the store to buy. Despite the success of experiential methods, they have dropped down the ranks; perhaps these methods are not seen as a must-do within the current economic climate. Based on the assumption that a climb in rank indicates a correlating increase in intended spend, then mobile media could see quite a boom in revenues. This reflects the reality that mobile marketing is picking up ever more momentum in SA. Not only is this medium cost-effective, but it has great reach and can be very powerful as either a branding tool or a call-to-action sales driver. The potential for couponing, discounts, and also greater measurability and campaign feedback are all attractive in the retail environment. Online media climbs the ranks. Brands are clearly taking cognisance of the fact that consumers, especially those with higher incomes, are online. Retailers are expected to uplift their home/ online shopping services, and start making this service more attractive to the busy housewife (and not just businesses that buy in bulk once a month). Community media has fallen a few spots; these media are reaching particularly small niche markets and perhaps don’t have the reach that brand marketers are looking for in the current economic situation. The fall in rank of direct-to-home media may indicate that respondents find this media option too remote from the store space and mindset. However, the challenge for stores and retail brands is to think more creatively about the potential that this media has got for taking coupons or special offers directly to the housewife’s door and enticing her into the store.

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Retail marketing guide

The results

Rank

2008

2009

1

Permanent displays

In-store screens

2

Sampling

Digital signage

3

Pricing

Permanent displays

4

Temporary displays

Gondolas

5

In-store screens

Temporary displays

6

Digital signage/branded counters

Coupons

7

Movable displays

Kiosks

8

Gondolas

Sampling

9

Shelf-edge systems

Movable displays

10

Kiosks

Shelf-edge systems

11

Refunds/rebates

Pricing

12

On-pack communications

Refunds/rebates

interest in 2009; this might be because a trial does not guarantee future purchases and is not an easily measured activation, making it a risky proposition. It is clear from the results that more flexible, short-term solutions are required in 2009; consider that screens (which claimed the number one spot) allow offers and content that is easily tailored to store, region and even time of day. Digital signage too, ranks high on the list for 2009, for the same reasons. However, the cost of this technology may be prohibitive for smaller brands with limited budgets. Gondolas climb the ranks for 2009, and this may be due to their effectiveness in creating brand visibility in the aisles (essential in driving conversion). Coupons will see much greater use in 2009 as part of in-store marketing campaigns. The shopper’s budget is tighter than ever and coupons not only make the product more affordable (value for money), but also makes it viable for the shopper to continue to purchase that particular product above all others on the shelf. And since couponing is not a direct price cut, there is a less danger of eroding brand equity. Ceiling hanging boards ranked low in the results; research shows that shoppers do not look above eye level or shelf height while shopping, which means that anything that’s above their heads is simply not noticed. Movable displays and branded counter tops are also ranked lower for 2009.

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Ceiling hanging boards

Branded counters/on pack

In-store advertising displays

14

Coupons

Ceiling hanging boards

15

Coupon holders

Stack cards/coupon holders

16

Stack cards

Games/sweepstakes

17

Games/sweepstakes

Marketers were asked to rank the importance of in-store promotional tools in 2008 and then in 2009.

POP promotional tools

4

-

Analysis Overall, the results indicate that within the store environment, brands are moving towards media that break through the clutter and offer high visibility – in-store screens, digital signage, gondolas and permanent displays. Interactive media is also high on the agenda. For this reason, kiosks should see greater rollout: they allow the shopper to find out much more about a product/product range than they could ever find out from an advertisement or a store salesperson, while also allowing a brand to dominate the aisle space. Research shows that demos and kiosks have the greatest interruption impact in the store and are responsible for many a brand switch at the shelf. Price promotions fell hard: consistent price cuts and price-based promotions destroy brand equity in the long term and train a shopper to buy only when pricing is lower. In-store sampling too, sees declined

Respondents were asked to indicate which categories of in-store advertising displays are regarded as most effective. In descending order, these are:  Gondola ends  Counter displays  Hot spot shelf displays  Mobiles  Floor-standing units  Floor displays  Pre-pack displays and trolley marketing  Shelf talkers  Wall-mounted POS  Dump bins  Clip strips  Case stackers.

What does it all mean?

Expect a tactical shift away from mass media advertising to niche media advertising and integrated campaigns that deliver on short- and long-term brand building and sales. Look out for greater innovation in the store environment, with mobile, digital and in-store screens promising to make the retail space a much more flexible and impactful medium. This also requires media owners to develop packages and pricing that is more adaptable and affordable. Brands are going to be measuring and evaluating media spend and ROI; Other survey findings accountability is the name of the game, and every cent must be justified. The concept of destination shopping is becoming ever more relevant, especially This, of course, means that the retail environment is going to as brand marketers and retailers look for effective means to keep shoppers in become more competitive. Brands will need to work closely with store for longer periods, while also driving loyalty to the store or destination. retailers and shopper insight specialists, to first, understand their The study has noted that there has been a marked increase in consumer shoppers better and, second, develop the campaigns and activations awareness of green issues, yet it is not clear whether this will have a major that actually work. The proof will be in the sales data. impact on local retail marketing strategy. Whether consumers will worry about For a more in-depth analysis of the results and the current the environment when they have the much more immediate need to stretch market trends, visit www.marketingmix.co.za.  their rands is questionable.

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Retail marketing guide

Shopper marketing: the super glue that strengthens relationships between retailers and manufacturers

F

or years retailers and manufacturers have enjoyed a love-hate relationship with regard to prioritising their sales, marketing and business objectives and, more importantly, defining their ownership of the relationship with the consumer.

“Out-of stock situations need to be identified quickly. Their root causes need to be jointly analysed and corrected so they aren’t repeated.”

The eureka moment? In the past three years a new buzzword has entered the already wordy marketing lexicon – shopper marketing. As with many groundbreaking marketing and retail developments, it was encouraged and endorsed by respective global marketing and retail leaders – Procter & Gamble (P&G) and Wal-Mart. On 21 September 2005, a front-page article in the Wall Street Journal spoke about ‘P&G’s most recent concept for further conquering the world of fast-moving consumer goods.’ It was called the First Moment of Truth and dealt with the first three to seven seconds after a shopper first encounters a product on a store shelf. P&G contended that in these first vital seconds, marketers had the best chance of converting a browser into a buyer by appealing to their senses, emotions and values. Soon, websites and blogs from across the world were commenting on this ‘novel’ marketing tool that focused entirely on the shop floor.

So what’s the fuss? The USA’s Grocery Manufacturers Association (GMA) defines shopper marketing as: ‘All marketing stimuli developed and based on a deep understanding of shopper behaviour, designed to build brand equity, engage the shopper whilst “in shopping mode, and lead” him/her to make a purchase’. Seventy per cent of purchase decisions are made in the store. In the US, shopper marketing is growing at 21 per cent with manufacturers and 26 per cent with retailers, versus overall marketing budget growth of two per cent. It is estimated that between 2004 and 2010 shopper marketing will have increased its share of manufacturer marketing investment from two per cent to 12 per cent; that’s faster than digital marketing’s two per cent to eight per cent over the same period. If I could offer you one tip for shopper marketing, collaboration would be it.

1) Share your valuable information and insights South African manufacturers and retailers should share the heaps of valuable sales and consumer data they collect. One true consumer insight is worth more than 999 pages of sales figures. Take a page out of the 20-year-old information-sharing relationship between P&G and Wal-Mart. Both share real-time information across their common supply chain to ensure just-in-time delivery of stock by shortening the order cycle time and increasing stock turns. On average,

P&G products spend less than eight hours in Wal-Mart’s warehouses, and are usually sold within 24 hours of arriving at a store.

2) Work together when developing new products/ product innovations US research shows that up to 80 per cent of new products fail in their first year. The failure rate in SA can’t be too far off. Manufacturers and retailers are now seeing product and systems innovation as key to differentiating their brands and consumer offerings. Manufacturers should consult retailers to find out what their customers are looking for. Then jointly establish what type of packaging, visual graphics, pack sizes and shapes will work in terms of display space, customer appeal and convenience. If you supply Shoprite Usave, the billion rand limited assortment format, provide them with cutaway shipper packaging. This packaging innovation allows its small store staff complement to wheel out, cut out and display products easily.

3) Deliver availability Nothing irritates a retailer (and customer) more than a manufacturer’s inability to supply it with stock at the right time so shelves remain full. Out of stock is an anathema to retailers. They often lead to a lesser sale, a lost sale or a lost customer. On-shelf availability shouldn’t just involve the buying department of the retailer and the sales department of the manufacturer. It should constantly be addressed at both board levels to ensure that all stakeholders share the common goal of correctly producing, supplying, warehousing, delivering, displaying and ordering product across both organisations. Out-of stock situations need to be identified quickly. Their root causes need to be jointly analysed and corrected so they aren’t repeated. These three steps will help to deliver growth in a planned and sustained manner through the support of ongoing shopper-led insight.  Pedro De Gouveia general manager Salient Strategic Advertising (021) 506 9300 [email protected]

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Retail marketing guide

Retail marketing: why it’s hot T

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he store is that magical place where the shopper/ consumer, armed with money, comes into direct contact with brands. Ultimately, it is the shopper who makes it possible for brands to be consumed and experienced. And it is this experience that (hopefully) leads to a repeat purchase and consumption pattern. It’s not surprising then that marketers are investing more heavily in the retail space. Among the factors that are driving the growth in retail marketing spend, is the increase in consumer How do we compare? spending (where there is consumer spend, there will Compared to the US or the UK, says Riaan Labuschagne, MD, Zapop, we have a be increased marketing spend). However, this varying supplier buy-in proportional to sales turnover. “Some suppliers allocate a high consumer spending is set to slow, thanks to the recession. percentage of their marketing budget to in-store, whereas a large majority of the “The consolidation of a large range of products, multinationals are growing their budgets in-store at an ever-increasing pace,” he says. even financial services, into super or larger stores has Both the US and European markets have a greater appreciation and progressive consolidated marketing spend,” says Riaan approach in terms of investment within the retail environment, says Elton Scheepers, Labuschagne, MD, Zapop. Plus. He adds, there is a commercial accounts director, Todwil. “SA is relatively new to marketing and dialogue direct correlation between media spend and sales, within the retail environment and its spend reflects this.” which has justified an ever-increasing demand from retailers.

“Global retailers never used to have marketing teams. Now, they are poaching some of the finest brand marketers and are embracing the power of marketing hype. They are using branding to elevate their stores and ensure that the shopper experiences the brand”

Media measurement has become more scientific, thanks to research methods that measure impact to bottom line (and not just how many brand impressions the consumer can recall), and budgets are more easily justified. Since retail marketing is very results oriented – it either sold more, or it didn’t – it is undoubtedly going to grow. “The store space is all about conversion,” says Kristina Couzyn, director: Shopper

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Marketing, Ogilvy. Shopper marketing delivers the bottom line. Consider too, that globally, retailer strength has shown steady growth. A case in point is the successes of US giant, Wal-Mart, which is the world’s largest public corporation by revenue, according to the 2008 Fortune Global 500, with stores and chains across the world. For store giants, consolidations and global expansions are the name of the game. Elton Scheepers, commercial accounts director, Todwil, notes that a consumer/customer-centric marketing approach has been adopted by brands and retailers as opposed to the conventional brand-centric marketing approach. “Organisations and brands have realised that to deliver on the requirements and value needs of customers/consumers they need to have these consumers adopt, as opposed to accept, their proposition,” he says. Retailers have realised that they are onto something, and that their stores are the brand. “Global retailers never used to have marketing teams. Now, they are poaching some of the finest brand marketers and are embracing the power of marketing hype. They are using branding to elevate their stores and ensure that the shopper experiences the brand,” says Couzyn. Given all of this, it’s not surprising then, that service providers like Zapop are reporting a fast-growing emphasis on the promotion of products at the shelf. It’s all about interrupting the shopper in the right space, at the right time; and when they are in the store and in a frame of mind that finds them receptive to clever marketing. However, retail marketing has become very complex and requires a very strong campaign strategy as well as realistic measures and evaluation. “Retail marketing is affordable and yields the required returns, but significantly most brands fail to complete a qualitative or quantitative analysis after a campaign and therefore most often are not able to justify the total delivery of the executions,” says Scheepers. Looking ahead, brands, manufacturers and retailers to intensifying their focus on the retail space. But it won’t be easy. 

Retail marketing guide

Current trends and challenges T

8

he current economic recession is changing the retail marketing environment in terms of an increase in retail marketing spend even as consumers tighten their purse strings and overall marketing budgets shrink. This dichotomy has come about as the realisation of the ‘moment of truth’ drives more focus into the retail environment. However, in light of the current economic climate, there will need to be much more retail marketing and shopper insight research carried out to push brand sales. “If we review what is happening in the US and use this as the base case, spend within the retail marketing environment will continue to increase year on year,” says Elton Scheepers, commercial business director, Todwil. With marketing budgets shrinking, the trend is moving towards more tactical below-the-line campaigns, though not necessarily at the expense of above-the-line branding. “With over 60 per cent of shopper decisions being made in the outlet, this trend is here to stay. As always, when volume and profitability come under threat from weak economic conditions, more knee-jerk-type activities find their way into the marketplace,” says Scheepers. Manufacturers too, are trying to cut their costs. Marne Dirks, MD, Executrac, finds that to keep margins intact, manufacturers are focusing on making

Premium store brands and private brands: A study carried out by Ipsos MORI in the US in 2007, found that 41 per cent of shoppers identify themselves as frequent buyers of private labels, with 70 per cent of respondents believing that these private label items are as good as, if not better than, national brands. Today, private labels often mimic the category leaders, but are still available at a lower price. In recent years, the emergence of premium store brands changed the face of retail yet again, allowing retailers to generate higher profits and position themselves differently. According to stats quoted by Millward Brown (What’s in Store for Store Brands, July 2008), private label penetration is estimated to be growing by five per cent per annum, while for manufacturers, the figure is closer to two per cent. Plus, retailers have been very clever with customer insights and have developed product ranges that meet the needs of their shoppers; as a result, shoppers have grown to trust the store and its own brands far more.

So what can marketers do to protect their brands? Millward Brown’s report suggests that marketers increase consumers’ perceived risk of switching (ie focusing on quality and not price). This is not something that will be achieved easily across all categories during the current recession; it is only in a few categories and industries that quality will outweigh price as a purchase driver (for example, in the fashion and clothing sector; parents will pay a premium for school uniforms that are going to last longer and wear better). They could also break through the clutter with deals that the private labels cannot match, or they could offer a unique brand experience that private labels are unable to.

business processes more efficient and cutting costs, although it seems to have only a limited impact. The only bright light on the horizon is the drop in fuel prices.

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Retailers are also under severe pressure to cut costs while meeting profit targets and retaining shopper loyalty. Reports (www.tradeintelligence.co.za) indicate that retailers had better than expected December trade, but that January is off to a slow start. The bottom line is that this year will be tough. To maintain profits, stores are going to have to work hard at creating the right shopping environment; service delivery is key, and a simpler, more pleasant shopping experience must be created. Brands and retailers are going to have to work more closely together as a key component in maintaining profits for both parties is to keep the shelves stocked with the right brands, at the right price. All too often, shoppers are faced with empty shelves and products missing for inordinate amounts of time, eroding loyalty and confidence in product, brand and retailer. Stephen Mawby, managing director of Glendinning Management Consultants, compares SA’s retail market to those of more developed countries, where the average store product range is very complex, and all aspects of the service and supply chain have been refined. Locally, he says, there are still issues around supply, store range, store layout and so on; retailers need to drive the research that exposes the weak spots and highlight new opportunities. As stores try to achieve this, we may see continued focus on ready to eat, prepared meals, and also on healthy or organic foods; however, pricing needs to be carefully considered (even premium shoppers will be cutting back and looking for value). Another result of the tightening of purse strings will see the loyalty of high-end retail shoppers being eroded as they switch to mid-range

Retail marketing guide

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stores. In fact, shoppers are going to be planning shopping trips more carefully to avoid the unplanned top-up shop that is rife with impulse purchasing. Retail in 2009 They will also be more careful about what they buy, The 2009 Consumer Shopping Intentions Study carried out by Cavallino LLC in the US, and where. This may result in shoppers visiting a determines where and how much consumers plan to spend in 2009. The results reveal greater variety of stores to take advantage of better that about 69 per cent of US adults plan to spend less at retailers than they did in pricing, but buying fewer items in each. Certain 2008. The younger shoppers (18-24) plan to spend the same or more, especially at luxuries will simply be left off the shopping list (or mass merchants. These stores offer consistent value and low prices. replaced by ‘the next best thing’), and bargain hunting If this trend is true in SA, it means that stores like Shoprite (which offers a wide range of is going to take on a new meaning. products and categories, consistently, at low prices) is well positioned. “I have found that people are shopping less frequently, and are doing larger, more planned and controlled shopping trips,” says Siemon Scamell-Katz, founder, TNS Magasin (international shopper strategy consultancy), and global director of TNS Retail and Shopper. “The typical list has around nine items on it, so there is still According to research, a significant number of higher LSM customers room for marketing to influence what people do and what they buy.” are beginning to ‘shop down’. “Luxury, high fashion and extensive Innovative loyalty mechanisms may prove invaluable, and we’ll be entertainment are being replaced by basic consumables and semi-durable closely watching Pick n Pay as it joins forces with Discovery healthcare, essentials by many of these customers. The introduction of the National to offer bigger discounts to the health insurer’s clients and gives these Credit Act also means that less credit is available and so people cannot spend money they do not have,” says Steyn. This is, of course, good shoppers value, where it counts – in their pockets. news for the cash-based discount retailers that will see a boost in Private labels and store brands will find themselves perfectly business. Indeed, Labuschagne reports significant growth in the positioned to take greater share of store spending – especially those non-credit food sector, while the higher LSM sector is taking a hit. store brands that offer comparative value at a lower price – which In the townships, the spazas and informal traders will be battling strangely doesn’t always happen. And national brands will increasingly personal financial pressures, but are likely to enjoy increased sales as be defending their spot on the shelf. “The tussle between the retailer’s township shoppers seek out more affordable pricing and flexible private labels and the national brands is very good for the consumer, shopping. Brands and distributors can make the most of this channel by who gets greater choice and more honest pricing,” says Kristina working closely with the informal traders to match their needs, and Couzyn, director of Shopper Marketing, Ogilvy. develop packaging and pricing that works. When it comes to the clothing and fashion retailers, we can expect Shopping centres based in and around townships will also need to shopping to slow somewhat, as consumers steer away from unnecessary create positive experiences for these shoppers as budgets shrink. impulse buys. Stores that sell good quality fashion staples at affordable Shopping mall retailers will need to provide serious value for money and prices will fare well – if the store brand is positioned well, that is. The responsible cost saving. high-end luxury brands will be unlikely to suffer too much (their consumers have more cash to spend), but may well feel the loss of a chunk of aspirant consumers who simply cannot afford luxuries anymore. A proliferated marketplace The shopper is under tremendous pressure from all sides, and loyalty A further marketplace challenge is the intense proliferation of brands to any store, and any brand is now at its most fragile. Shopping habits on the shelves. Consider the finding of the TNS Retail and Shopper are changing to meet needs, and the factors that drive the purchasing division: the average global total FMCG offer is between 200 000 decisions have also changed. “High food inflation definitely impacted and 400 000 SKU, but the average household FMCG usage over one on the spending power of consumers. Customers have shied away from year is between 250 and 350 SKU. This range complexity has led to luxury and expensive items and are more anxious about creating debt,” range blindness, says Peter Wilson, business manager, TNS Research says George Steyn, managing director, PEP. Surveys: Client Services. Shopping is no longer a simple task and shoppers don’t have the time to linger in the aisles checking out the store’s range. Wilson finds that while people are shopping more frequently at more stores; they are spending less time shopping. In 1995, he reports, the average shopping trip lasted 45 minutes; Influencing purchase decisions in 2005, it lasted just 30 minutes. It’s no wonder then that shoppers are quickly learning store layouts to save time when they shop. According to a Millward Brown Knowledge Point report (What are Unfortunately, there is little data available for the South African retail the main influences on purchase decisions), researchers find that it environment. is the out-of-store experience that generates desire for a brand, but “The proliferation of new SKUs across all major categories in an that this is strongly affected by in-store activity. The report also states attempt to meet consumer needs has led to massive complications for that the balance between out-of-store desire and in-store activation the entire value chain,” says Dirks. Shorter production runs, which are differs by country, and across categories and brands. increasingly unprofitable, are giving warehouses and distributors bigger Price promotions are found to have the biggest influence in-store. challenges. The impact on marketers is a portfolio that doubles every Launches and challengers will want to disrupt the category, while few years, and greater difficulty in allocating marketing budgets.” Plus, brand leaders will want to emphasise their familiarity and aid quick direct marketing expenditure in absolute numbers is increasing less than recognition and brand-buying routine. CPI,” says Dirks. The report finds that in-store experience can evoke associations from Brand and marketing clutter are huge challenges; so too is the proliferation of private labels. Stock returns increase daily, says Dirks, advertising, generating stronger interest in the brand. while receiving bays become more complex. The administrative burden of these developments has increased the cost of these activities. 

marketingmix.co.za / vol 27 / issue 1/2 / 2009

Retail marketing guide

The township market T

he township market is seen as a high growth area for the retail sector because of the growth of the middle class and its respective spending power. Getting the retail marketing right in townships is about understanding the township shopper, and the unique and complex market dynamics of the environment. “Understand the market: the language they speak; their culture; travelling habits; source and type of income (weekly or monthly); gender; access to water and refrigeration; and so on,” says Riaan Labuschagne, MD, Zapop. Obtaining and maintaining an effective distribution chain is also essential

A few trends and tips from the experts: 







Zapop has noted a few major differences between retail marketing in lower LSMs and that in urbanised higher LSM environments. “The more rural the retail environment, the less influence children have on buying patterns,” says Labuschagne. It will be interesting to see how the rise of child-headed families (a social phenomenon that has emerged thanks to the Aids pandemic) affects retail trends. Another major difference is that these customers shop because of an immediate family need. After all, they have low income levels, and an almost nonexistent disposable income. and cannot shop as freely as upper LSM markets do. “Every cent that our customers have counts, therefore shopping decisions are based on best value (low price + acceptable quality),” says Marcus Banga, marketing director, PEP. Priority is given to kids and home essentials (stylish products, at a good price, are a winner). Word-of-mouth communications is huge in the townships, and these consumers have large social networks. Radio and TV are the most accessible and effective media for raising awareness in this market, and certainly there is access to the mass media in the townships. However, seeing as the demographics of consumers and their access to media varies from one township to the next, it is important to do homework before assuming this is true across the board.

11









 

Top tips for ensuring retail marketing works 1. Ensure you have sufficient stock. Most campaigns fail because



they kick off with a bang and then have lacklustre results because of a lack of stock. 2. Differentiate in the store. In most categories today the consumer has a few options, if the promotion does not differentiate the product from those competing lines next to it, the campaign will have mediocre results. 3. Offer the customer value. This does not relate to price at all, but rather to the perceived value for the customer.



Knock-and-drop leaflets are used to communicate more directly with customers. “This is particularly effective in communicating our range as well as special offers. It works well with our customers who have limited education as pictures say a million words,” says Banga. The township community is hungry for marketing and media innovation, so brands need to be more adventurous. Integration with new media is a good idea, and so is experiential activation. Malls and shopping centres in the township can see foot-traffic in the millions each month, so brands need to be there. Newspapers should be used as a call-to-action tool, while magazines promote fashion merchandise, for example. Outdoor media should be used to create long-term brand awareness. Giving back to the community in a meaningful and sustainable way is good for business and branding. Promotions in-store help customers to identify best value items or weekly deals and promotions. “POS material also assists our customers to navigate our stores easily, which simplifies matters for them and adds to the service levels within our stores. Lower LSM customers are just as particular about service as their wealthier counterparts,” says Banga. In the township markets, product packaging can be used to deliver POS solutions. “Don’t just give them a bulk-pack brown box, give them a branded pack in which the store owner can display your product in the store. Understand that these different channels require different pack sizes,” says Kristina Couzyn, director: Shopper Marketing, Ogilvy. 

vol 27 / issue 1/2 / 2009

marketingmix.co.za

Retail marketing guide

In-store media T

here is a growing repertoire of media options available in the store space and while no particular media stands out as the number one in-store medium, understanding each available media and careful selection must be undertaken to ensure a successful campaign. There is no blueprint for success, though in-store campaigns need to be supported in the mass or niche media. “If you are targeting the broad public with a nationally available brand, TV and radio still remain good options to get your message across efficiently,” says Geoff Whyte, commercial director, Cadbury, Africa and Middle East. Interestingly, dominance outside the store does not guarantee sales in-store. High-profile TV campaigns, for example, can drive sales for

When shoppers buy impulsively, what drives the purchase? Ogilvy Activation’s global research has found that the following media and marketing tools drive impulse purchases in the store:  24 per cent: off-location display  18 per cent: demonstration  17 per cent: price promotion  12 per cent: retailer recommendation  11 per cent: consumer promotion Visibility and engagement are major drivers of impulse buying (price is a driver, but its importance can be overestimated). “Price promos simply encourage your existing shoppers to pantry-load; it doesn’t always get you new consumers or shoppers,” says Kristina Couzyn, director, Shopper Marketing, Ogilvy SA.

What influences shoppers’ brand decision? Ogilvy Activation’s global research has found that the following POP promotional tools influence the shopper’s brand decisions in the store:  31  28  27  26  25

per per per per per

cent: cent: cent: cent: cent:

demonstration price promotion consumer promotion retailer recommendation off-location display

“We claim that it’s price that has the biggest influence on our purchases and we like to think we are logical in our decisionmaking, but the truth is, we’re not,” says Couzyn. Brands that

12

engage the shopper, win.

POS design tips Wayne Elsom, CEO of Todwil, gives marketers a few tips for the design of point-of-sale (POS) marketing material:  Find out what your competitors are busy with, and make sure that you familiarise yourself with their respective positioning and attributes.  Research trends in foreign markets to get a fresh perspective.  Be different: your display should have its own visual equity and a strong personality.  Keep your POS display simple. Make it easy for the customer to find what they are looking for or to understand your promotion.  Protect your display unit in terms of trademark law and copyright, and ensure that you are not infringing on your competitors’ rights.  Pre-test your display in-store, alongside your competition’s displays.  In designing your display, consider future design trends to prevent your display from dating too soon.  Your product should be placed close to eye-level and as close to your competitors as possible (preferably to the right as consumers scan for products from left to right). If people are instinctively drawn to the leading brand, there will be a greater chance of switching to yours if it is competitively priced.

marketingmix.co.za / vol 27 / issue 1/2 / 2009

rival brands by sending consumers to the corresponding aisle in the store. “This gap between awareness and sales conversion is one of the biggest challenges facing marketers today,” says Kristina Couzyn, director: Shopper Marketing, Ogilvy. As a general rule, it is high visual impact that sets brands apart in the store, but also depends on the brand and its status within the market. “If you are talking about a well-known brand with well-known advertising, a shelf talker may be a great solution. If you are the new kid on the block you probably need to invest more to make a statement and get consumers’ attention,” says Whyte.

Media options Digital/LCD screens Digital screens offer flexibility as content can be easily tailored to the individual store, its location, the time of day, special events, etc. They also have the power to catch the attention of the shopper with content that is more compelling than a simple static display. Consider that in the US, researchers and retailers have teamed up to test a new wireless screen (the ShelfAds system), that automatically broadcasts a 10-second ad when a shopper walks by. The batteryoperated devices cost around US$300, and are easily attached to the shelf edge. They are able to dispense scents, which means brands or categories can engineer brand experiences more easily. Locally, TV screens and production costs are an expensive investment. “Digital screens definitely have a justified share of the in-store media space but the large capex required limits rollout,” says Riaan Labuschagne, managing director, Zapop.

Mobile The integration of mobile marketing into a retail strategy has not really taken off as yet. “I believe the concept is exciting and will have a role to

Retail marketing guide

play within our market,” says Elton Scheepers, commercial business director, Todwil. However, mobile couponing is seeing growth, and should be used more extensively once the POS systems on the retailer side have been upgraded and redemption is easier to manage. For mobile to be successfully integrated into store campaigns, there should be a very strong call to action, while mechanics of the campaign must be clear. “This is normally done by means of a cartoon-type explanation and is particularly valuable in the illiterate market,” says Labuschagne. A US-based research firm, ForeSee Results, found in its December study into mobile applications and shopping (www.mobilemarketer.com), that one in four people used their mobile phone to look at price comparisons; 15 per cent used their phones to go online and check product reviews. The study also found that people who use their mobile phones to shop are more likely to buy products offline not via online shopping.

Displays Display advertising can be very effective in the store space, especially larger displays and free-standing units, although they do cost considerably more. Since 2006 in-store media turnover in Shoprite and Checkers stores has grown seven-fold, thanks to the growth of the display advertising sector in-store. “This growth rate is attributed to the fact that we sign contracts four to eight months in advance, and it is not showing any signs of slowing,” says Labuschagne.

Trolley advertising Trolley branding and advertising is old hat. Or is it? DStv has just partnered with Icon Media to create branded trolleys in an attempt to communicate with shoppers. The tagline, Come play with DStv, inspired the design of the trolleys, which are branded with their favourite TV characters, and styled like racing cars. They are also great for advertising to kids. So let’s rephrase: boring trolley branding is old hat.

Coupons Packaging Packaging plays a very important role in the retail space in terms of allowing the shopper to recognise the product as well as converting the shopper. “Packaging is the first moment of truth,” explains Couzyn. “So brands need to know what the cues are in the category, and then design the right packaging,” she says.

Coupons have the potential to drive sales; they would be useful in driving a trial of a new product, for example. They also allow a brand to sell its products at a discounted rate without resorting to price cuts and price promotions. “Coupons are a great reciprocity tool in the store. If they are distributed by a promoter or a dispenser in the store it tends to work well,” says Labuschagne. 



We supply fast, cost-effective, high quality retail surveys so you get the full picture



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Retail marketing guide

Shopper intelligence S

14

pecialist shopper research must be carried out to make sense of the retail environment, and to gain an understanding of what motivates the shopper’s behaviours and decisions in the store. “Global research spend allocated to retail, including the shopper, is between 15 and 20 per cent. In South Africa only five per cent of spend goes to retail, but it’s what everybody is talking about,” says Siemon Scamell-Katz, founder, TNS Magasin, and global director of TNS Retail and Shopper. The shopper retail/marketing industry is said to be worth R130 bn (and that’s just the FMCG categories), according to Michael Broughton, acting CEO of the Consumer Goods Council of SA (CGCSA). The good news is that there is a lot of research innovation taking place. “There are a greater number of store pilots and targeted shopper research going on. Retailers are waking up to it and they want category insights. They are thinking about their competitors,” says Andrea Ellens, associate brand director, Added Value. Shopper research can be a costly investment, so brand owners are encouraged to start small and be very particular about the type of research methodology used. “When companies don’t know what research to buy, we actually recommend that they begin by studying existing in-store data and use it to get their basics right, including supply chain and merchandising. Once this has been achieved, they can start asking the more complex questions around shopper insights,” says Stephen Mawby, managing director of Glendinning Management Consultants. He points to tech-

“The experience of the shopper both before and during the shopping process as well as during consumption postshopping will feed back into the pre-shop motivations, and will inform future shopping missions and decisions.” nology and software available in the UK, which allows the marketer to input sales data obtained from the retailer, and then slice it up and analyse it in many different ways to get a holistic understanding of the performance of its brands. Locally, sales data is available, but there is a shortage of standardised software or tech systems. Very important is that the research itself be integrated into marketing strategy to address the business goals and problems of a brand or store, and should be accompanied by both pre- and post-testing to determine its effectiveness. Yet fewer than five per cent of brands globally are confident that shopper research has been integrated into their strategies, according to Peter Wilson, business manager: TNS Research Surveys Client Services. “I have seen very little evidence of shopper research finding its way

marketingmix.co.za / vol 27 / issue 1/2 / 2009

into retail trade by way of a coherent shopper strategy,” says Marne Dirks, MD, Executrac. A lot of rich shopper and activation insights never make it into the store, due to a lack of execution capabilities. “Research firms tend to complicate research feedback in this area and I have seen as many as 18 shopper demographic profiles for one FMCG company in the same channel, making it near impossible for a sales rep to execute a strategy,” says Dirks. Classifications should be kept to a simple two to three shopper types per channel, based on in-store observation. It should also be kept in mind that a store owner is the best source of free information about the shopper, category routes and pricing levers, so working more closely with them will provide simpler, more cost-effective insights.

Shopper research: step by step Shopper research begins by understanding what happens before the shopper enters the store. At this stage, the researcher is investigating the brand equity pre-disposition (whether the shopper has a positive perception of the brand, as created by previous consumption and advertising), as well the different shopping missions that the shopper plans and their impact on in-store behaviour. The next stage of shopper research investigates how the shopping mission has motivated the choice of store, the behaviour in the store and the impact of different marketing media and messages. As says Kristina Couzyn, director: Shopper Marketing, Ogilvy, it’s overly simplistic to say that 70 per cent of decisions are made at the point of sale without understanding what kinds of decisions are made. The experience of the shopper both before and during the shopping process as well as during consumption post-shopping will feed back into the pre-shop motivations, and will inform future shopping missions and decisions.

New technology The use of technologies like infrared and radio frequency identification (RFID) have not seen extensive rollout locally. “SA is essentially a follower in terms of international technology developments. We do not

Retail marketing guide

anticipate much before 2011,” says Broughton. Coca-Cola SA, however, is reportedly using GPS trackers in trolleys to get maximum exposure in-store by tailoring its execution standards by channel, geography and shopper type. This allows Coca-Cola to ensure that the correct brand and pack mix is available at the correct price and is communicated effectively in every outlet. “This means moving away from a one-size fits all approach into a segmented approach where the picture of success is altered for every outlet based on the variables. The caveat, as always, is the capability of the sales and trade marketing folk to execute against multiple pictures of success in various outlets,” says Dirks. The ultimate goal will be for South African companies to manage day part marketing on this level.

Video mining In the US, technology that was developed by homeland security is being used to ‘watch’ video recordings of the shopper in action and anonymously record their demographics, while also analysing which store elements the shopper engages with (www.videomining.com). However, shopper privacy is an issue.

Eye-tracking

New research methodologies and technologies:

Eye-tracking could be useful for understanding what the shopper sees in the store. But researchers say that there is a disconnect between what the shopper looks at and what that actually does for decision-making in the store. This form of observation must be layered with other methodologies for better insights.

Radio Frequency Identification

Marketing at Retail Initiative (MARI ) research

RFID tracking sees the trolley being fitted with a device which tracks its path through the store, as well as registering where the shopper lingers and for how long. This is helpful in identifying the store hot spots from the shopper’s perspective.

MARI research is endorsed by the Point of Purchase Association (POPAI), which has been established locally (www.popai.co.za). The MARI research aims to measure engagement with in-store media and marketing messages. A sample of shoppers is fitted with a clipcam (surgical camera, attached to their glasses, or a dummy pair of glasses). This camera records what the shopper sees, and which brands and marketing messages they interact with, to determine what sort of marketing works and where it is best situated in the store. There are concerns, however, that the cameras will impact shopper behaviour and will compromise the research. 

Infrared-assisted research Infrared technology was used by Nielsen’s US offices in the PRISM project to provide traffic counts for different parts of a store; this allows the store to be rated a medium for marketing. However, the project has been shelved due to lack of funding (Wal-Mart pulled out of the project in late 2008, according to reports on www.adadge.com).

Expert opinion

Desperate times, desperate F

Whatever you believe about the sense 16

and sensibility of promotional discounting, one thing is for sure, it doesn’t always work.

or many people Christmas came early last year, literally. The windfall of retail promotions that spread like wildfire in December in places like the UK, France and Australia were a clear sign of the desperation being felt in boardrooms across the world following the sharp economic downturn experienced across the globe in the second half of last year. I spent December last year travelling in Europe. Much of my time was dedicated to walking the high streets, window-shopping and bargain hunting. My timing couldn’t have been better as the pound weakened by 20 per cent against the euro and high street retailers and shopping centres alike went into promotional overdrive. This selling frenzy was further fuelled by Woolworths UK’s closing-down sale that flooded the market with ludicrously discounted toys, CDs, DVDs and Christmas bounty. Everywhere I looked, the signs of desperation stared back at me in the form of red ‘Sale’ and ‘Clearance’ signs, large discount banners and multi-buy deals of one form or another. The traditional ‘bogof ’ (buy-one get one free) promotional offer was replaced by its eager successor ‘buy one and get two free’ as retailers resorted to generous incentives to lure shoppers out of the cold, and prise open wallets and purses that threatened to remain resolutely shut. No sector was immune from the clamouring for consumer spend. Broadspeed.com, an online car broker, stunned the UK motor industry by offering a bogof offer on a car. The offer for two Dodge Avenger SXT 2.4i models for £20 000 generated a consumer response that crashed its website and delivered 22 000 customers. Another example of clever marketing or was it more a case of crisis marketing? The company’s management seemed happy enough but will it really be happy with the longer-term effect of its cut-price marketing? For now, the managing director seems happy to be clearing his stock and making a modest profit when his

Digital and Mobile at-Retail www.marketingmix.co.za marketingmix.co.za / vol 27 / issue 1/2 / 2009

competitors are unable to move stock at a cost of £500 per car each month. With new car sales in the UK down by 23 per cent in October last year, the biggest fall in 17 years, the car industry is facing its worst crisis since 1966, with unsold stock burning a deep hole in the pockets of car traders. In November 2008, four major car dealerships called in the administrators with a loss of 400 jobs. So perhaps its initiative should be regarded as necessary and the term we should use is ‘survival marketing’. The car industry is but one of the multitude of sectors struggling to stay in business. I got talking to one London mini-cab driver and learnt that I was one of his first customers and that he was actually a mortgage broker; with the dramatic downturn in house sales was forced to get behind the wheel of a car to earn a crust. This prompted me to turn my attention to the estate agent business. When I paid a visit to one of the UK’s greatest estate agent success stories, Foxton’s, the picture was no less bleak: one cash-strapped business executive even threw in his nearly new Bentley to try clinch a deal. There were no takers. Taking to the air on more than one occasion I observed how the retail squeeze was being felt in the various duty-free shops and numerous airlines. Not everyone was suffering as much as the others though. Europe’s original and largest low-fares airline, Ryanair (carried 58 million passengers last year on 800+ low-fare routes across 26 European countries), seems to have bucked the recessionary trend with an 11 per cent increase in its December traffic. Flying with the airline last month I noted with mild amusement that in addition to the usual in-flight refreshment sales, it was sweating its asset in all sorts of promotional ways, from selling instant-win tickets, discounting duty-free sales and heavily promoting sales of its 2009 Stewardess Bikini Calendar. Who says sex doesn’t sell! Even the UK Chancellor of the Exchequer, Alistair Darling, was drawn into the retail fray

24 February 2009

Expert opinion

measures when he boldly dropped the country’s VAT rate for 13 months by 2.5 per cent to 15 per cent to help stimulate the economy. While the intention was clear, the wisdom and full impact of his decision is still to be seen. The short-term implications included widespread retailer and consumer confusion at the till, substantial operational expenses for UK retailers who were forced at short notice to re-program their internal accounting systems, tills and price lists. The cost to retailers has been estimated at £300 million and the change is expected to cost the Treasury £12.5 billion. The actual saving to the average UK shopper has been calculated to be a modest £170. Was it really worth it and will it really stimulate the economy? Many fear not. The financial pundits are predicting that the full impact of the global recession will not be felt for the next six to 12 months. Britain’s Chancellor of the Exchequer agrees: “The economic times we are facing... are arguably the worst they’ve been in 60 years. And I think it’s going to be more profound and long lasting.” This bleak outlook is one shared by the US market where consumers are in full-scale retreat and major retailers Macy’s, Abercrombie & Fitch and GAP reported sales declines of more than 10 per cent in November. While total sales volumes in the UK climbed 0.3 per cent in November from the previous month, the net profit levels have been hit hard, absorbed and indeed surpassed by the deep discounts. In fact, the UK’s retail sales values fell 2.6 per cent on a like-for-like basis. This was the first time since 1995 that retail sales declined for two consecutive months. Furthermore, the long-term effect in the high street of the high profile price-cutting strategy has still to be seen. I suspect that the way we shop has changed irrevocably forever. While I understand the natural predilection to rely on fire sales, dramatic deals and banded offers, I question the sense in discounting brand value. I believe that any short-term gain will be paid for dearly in the long term. Good old-fashioned loyalty marketing and customer

service seem to have been largely ignored as retailers chase new blood rather than protect, retain and reward their existing customers. This can only end in tears as loyal customers are trained to only buy on deal. The simple truth is that shoppers don’t pay full price that often anymore, unless they absolutely have to. It’s not that long ago that this discount principle was proven in SA by the trials and tribulations faced by the management of the juggernaut Edgars on the back of its discount track record. I may be wrong and hope that I am. Abercrombie & Fitch, however, will be hoping that I’m right and that its brand will help it through the bad times as its brave decision to refuse to join competitors in aggressive discounting in November cost it a 28 per cent drop in sales in the US. Whatever you believe about the sense and sensibility of promotional discounting, one thing is for sure; it doesn’t always work. If consumers aren’t desperate for something, or the financial motivation isn’t strong enough, there is no guarantee that even the best promotional offers will get them to open their purses. And if retailers go too far, all they will end up doing is surrendering margins and chasing bad money for little return. This has been proven in the UK where the heavy promotional activity last month in the high street failed to arrest the decline in retail sales. According to the BRC-KPMG Retail Sales Monitor, the UK’s December trade was the worst in the history of the survey. The first half of the month was extremely difficult for most retailers: Christmas buying came later than usual, with consumers waiting for discounts and early clearance sales. Have we seen the end of the retail discount insanity? The experts fear not. Helen Dickinson, head of Retail at KPMG stated in a press release recently that: “December’s performance has historically set the scene for the year ahead, so the outlook is indeed bleak.” Judging by the January sales we are witnessing across the globe, it’s clear that only the strong will survive. 

3rd Interactive Marketing Summit

17

Richard Duncan The Partnership Sydney, Australia 61-411-549-791 [email protected]

4-5 March 2009

www.marketingmix.co.za vol 27 / issue 1/2 / 2009

marketingmix.co.za

Luxury marketing

Capturing a larger share of the big spender’s wallet On 12 and 13 November 2008, Marketing Mix held the first ever SA Luxury Marketing Summit

“W

18

hat one person looks for in a luxury brand, another often doesn’t see. This means it is subjective, which means that understanding your target market is crucial,” says Gaby de Abreu, creative director, The Switch Group. The difficulty in defining this market, says Rudo Maponga, black diamond manager, TNS Research Surveys, is the fact that it is notorious for refusing to disclose income data. Greg Furman, chairman, Luxury Marketing Council USA, defines the luxury consumer as an individual with a liquid portfolio of financial or other assets worth US$1 million or more. Some models will differentiate between the actually rich and the big earners who have a large credit spend. BrandEQ’s founder, Kim Aardweg, segments the market into one of five categories:  X Fluents: extremely affluent.  Butterflies: looking for new experiences rather than material things.  Luxury Cocooners: spend their riches on health and home.  Aspirers: they haven’t achieved the level of luxury to which they aspire. Believe luxury is expressed by what they own.  Temperate Pragmatist: newly emerged luxury consumers, not that involved in luxury spending; in fact, they are careful spenders.

How big is the luxury market and how much is it worth? Maponga believes that globally, there are between 75 and 100 million people that fall into the super-rich category. Despite the economic downturn this segment is still growing. “In 2005, we found that there were only 41 000 super-wealthy consumers and in 2008 there were 104 000,” she says. Locally, she says, we can expect that figure to be around the half million mark. This may not sound substantial, but as Anina Malherbe, founder, Vivid Luxury Marketing says, the

market is definitely big enough. “It’s not only about the numbers and volumes. It’s about the handful of customers who spend a lot regularly,” she says. According to Millward Brown marketing science director, Hendrik van Vuuren, the global luxury market is worth around US$400 billion, but is growing at a rate of approximately 24 per cent; it’s estimated that the value of the market will reach around US$2 trillion by 2010. The emerging countries are driving growth of the luxury market, and so is the new middle class.

General marketing tips 

What do they want and how should brands speak to them? Malherbe says that it is paramount for these brands to have a very strong, global strategy in place to guide every activity. When launching in a new country or market, local partners advise them of any cultural differences which might have an impact. Clever PR, marketing and advertising ensures that their brand is top of mind. “Your brand must be a necessity and part of their lifestyle, not just a luxury buy,” says Malherbe. “Smaller boutique or niche agencies are often more suited to the job. Find someone who relates personally to your brand or who is the customer,” she says. Furman suggests that brands observe the trends towards concierge and in-home services, which bring the store or the goods to the home of the elite shopper. Also, there is a trend toward brand partnerships: two luxury brands with similar customer profiles will share their best customer databases and partner to create unique events to get the customer talking and expose them to the brands. Highly sophisticated loyalty programmes are also evolving, with rewards described as ‘once in a lifetime experiences’. Mark Angus, CEO, Innoviate, illustrated the power of one to-one marketing, which allows for multiple touchpoints to be created

Retail Marketing Mix www.marketingmix.co.za marketingmix.co.za / vol 27 / issue 1/2 / 2009

across media platforms to really add value. Personalised magazines, e-mails and even websites can be created with this new, personalising technology; these reduce print costs and make communications more targeted. A Web-to-print interface allows the customer to choose which marketing collateral they wish to receive, and in what format (which also means that marketers learn the preferences of each customer). Look out for personalised video, says Angus.





 











 

Outstanding service and customer loyalty are greater than brand awareness. Offer membership of a very select group to create exclusivity and status. High personalisation and individualisation; bespoke customisation is a great tool. Emotional triggers are key. They like to have stories to tell and they like to be the first in their group of peers to tell them. Educate them about the brand (and about luxury) so they can make their own decisions. They are highly networked – use this to leverage word-of-mouth marketing and brand advocacy. Give something back, for nothing (a gift or a handwritten note). Time and wellness are luxuries. Help them to get more of either (or both). Beware of your pricing: they shop around the world and are aware of the pricing and value of each item. Quality is crucial – it’s what they pay for. Mass media creates awareness, but niche publications really have an impact. Go for niche markets too (such asthe gay market). 

Visit www.marketingmix.co.za/pebble.asp?relid=4387 for an exclusive interview with Greg Furman.

18-19 March 2009

Expert opinion

The one to one myth I

have the rare privilege of working at Woolworths for the next seven months. My role encompasses anything that touches the customer – insights, data, research, rewards, loyalty, financial services etc. It is early days but I can see how the information at hand is used to improve the offering to the customer, new and existing, and I am seriously impressed with how the business treats what our department does on a daily basis.

My message right now to the marketers facing serious budget cuts and financially strapped consumers: The one-to-one myth is not a myth – it’s the most powerful tool in your quiver of arrows.

This got me thinking about the reality of business in the customer relationship management space. What is possible, what is hygiene and what is blue-skies thinking? Hygiene factors are the bare essential offering. Service, great service, cleanliness, product availability and acknowledgement – these are essential to the basis of any relationship (think of Maslow’s Hierarchy of Needs). Possibilities through great technology deployment and employment of smart strategic thinkers are then endless. Creating new product lines; cross selling and up selling then become nursery school work – very easy. If it were possible and if blue skies could be nudged a little, every customer in SA would have a store designed just for them. I want my food displayed in a certain way, I want certain grocery products always available, I want to

buy boutique merchandise and I want Guerlain cosmetics to be available. Oh yes, and can you sell me a toy boy while you’re at it? The reality is, no one can customise to the extent that we as individuals would like, so organisations adopt a one to few or more likely a one to some and most likely a one to many approach in store. We can, however, get closer to one to one through our communications especially as we get more digitally in tune we can be very conditional and very clever. But while we are doing this segmentation and honing our messages to give the customer exactly what they want, we face the reality that we could send them 15 marketing messages a day – come in and buy your baked beans on special (they buy this product weekly), we’ve just launched a new fragrance range, come in for your sample, back to school, back to work, Easter, Valentine’s Day, the list is endless. Marketers need to step up to the plate and be realistic; what message is going to drive the customer into the store to purchase and deliver a profit to the business? It’s not the information in hand that is questionable but the insights we apply to this information. While marketers need to be revenue and profit minded I believe the customer (all over the world) also needs to be realistic. For a brand experience to be sustainable, a relationship needs to be established – both parties have to give and take. More and more I find customers unreasonably demanding of a brand, and fickle to the extent that marketers are also unable to perform in their communication tasks. If I want to be treated as a high-volume, most-valuable customer, I need to behave consistently with the brand. I should update my data (oops guilty, I have yet to change my e-mail address with any brands I engage with); I should provide information and I should guide the brand. And in tough times, as a customer I should display loyalty. My message right now to the marketers facing serious budget cuts and financially strapped consumers: The one-to-one myth is not a myth – it’s the most powerful tool in your quiver of arrows. Pour your efforts and resources into building your digital base – quickly and robustly – and then use this data effectively. Innovatively and uniquely communicate with customers, prospect and existing; engage them, create a relationship with them, and work towards a strong loyalty coefficient. In return they will reward you with less fickle, more sustainable behaviour. 

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Nici Stathacopoulos The Tipping Point [email protected]

vol 27 / issue 1/2 / 2009

marketingmix.co.za

7 Day [B]itch

Olivia Leitch executive producer 5/01/2009

T

he first day of the week is always about planning for the week ahead. We plan everything during the day in a series of meetings. Seems to be the longest day of the week. After that we are A-for-away. (I interviewed someone today – so hold thumbs for her.) I have a team building constructive feedback session with one account team to try and help it to achieve what it needs to with the least amount of hassle. To end off my day I go with a colleague (who I admire greatly) to debrief a digital company that I admire on our website. It’s going to be awesome that everyone will be using it – everyday! Here’s to creativity – and to my best TV night ever. Two And A Half Men, followed by Will and Grace, ending with CSI Las Vegas. (My client, SABC 3, has great Monday nights).

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6/01/2009 I start my day beautifully with a Vida coffee to go. Yum. Have a day full of internal meetings, to get the best creative out for our clients. I love working with creative minds. We get to develop breakthrough work for a lot of our clients (challenging brands within their respective categories), which is very rewarding. Also interviewed another two people – so hold thumbs again. (Yesterday’s chick has been accepted). My day ends with dinner at the Codfather with two of my close friends.

07/01/2009 Woke up to beautiful weather that has now turned quite sh#@&y. Today I hope to sell a really innovative idea to one of our clients; something that is not traditional above the line. We are always trying new ways (they don’t always need to be ads) to connect with our consumers. We meet to discuss our potential new client. Lots to do – will keep me busy and challenged. It’s very motivating to discover what it is that new industries do and how they do it – good marketing lessons. I’m off to a friend’s house-warming tonight… love to see new spaces and the positive energy they create.

08/01/2009 I wake up tired, as I realise that I am feeling that ‘one too many’ glasses of vino at the house-warming… For a moment, I contemplate a quick trot round the block to clear my head… think better of it. Up, put the kettle

marketingmix.co.za / vol 27 / issue 1/2 / 2009

Ola Films

on, quickly put the hand sprinkler on as the irrigation timer is still not fixed (oh, when is it going to rain!) Oh no… today is Trash Day. Drag the bins outside, looking frightfully attractive to the neighbours, in my holey nightie! Shower, and oh no – no more cat food! Oh well, cat biscuits and the rapidly multiplying moths will have to suffice till I can hit the Spar. Check in with my partner, (director) Amy. She is stealing a quiet moment to go to the dermatologist. Thursday is not looking up. Ok, what have we got: Preprod at 1pm, casting cut down done? Shotlist? Storyboard? Props boards ready? Quick, grab porti bag, and run! They are across town… please, oh please, let there not be any roadworks or lights out. Amy and I pile into the car (have a quick moan at her that I always have to drive, when we both need to put on make-up). Amy puts her director’s cap on, wows them with her colourful treatment and great visuals. Exhale – they are comfortable and confident about us. All good, back to office… confirm cast, wardrobe fitting… sign off on art department budget… and think about the next pitch.

09/01/2009 Friday is possibly the best day of the week. You know it’s almost the weekend… Perhaps it’s because you feel that it will be a slightly more chilled day when compared to the mayhem of the past four. As is the Friday routine, I begin with a client breakfast at 7.30am. I have to ‘bribe’ my team members to attend as 7.30am is a tad early for my crew. My day is slightly uneventful which means that all should be happy. Tonight I am off to watch the Lions play the Waratahs at Ellis Park – good South African fun!

10/01/2009 Ahhhhhh, Saturdays are generally spent shopping; personal grooming; shopping; chores; more shopping; and seeing my fabulous friends. Today is no different – hairdresser; shopping; getting quotes to do maintenance on my deck at home and lunch at Bellini’s with my mates. It’s an absolutely stunning day, ending with a friend’s birthday party.

11/01/2009 Sundays are family days; special, soulful, rejuvenating days. Love them stacks. 

All good, back to office… confirm cast, wardrobe fitting… sign off on art department budget… and think about the next pitch.

Expert opinion

The global loyalty infusion W

e’ve seen a burgeoning trend in which marketers have outsourced loyalty value proposition design to their customers. In 2006, Turkey’s Garanti Bank launched the Flexi credit card, which allowed card applicants to craft a custom-made reward card by choosing from a menu of rewards, repayment schemes and interest rate options, and even designing the look of their card. By bringing customers in on the value proposition design, these card issuers are front-loading their rewards programmes with personalised and relevant offers that differentiate them in a crowded market. Open-source marketing also extends to reward redemption. In the United Arab Emirates, Ehitad Airways’ Etihad Guest programme features a website slider that allows members to create personalised cash-plus-miles awards. The cost of entry? Just a single mile.

Partnership marketing Coalition loyalty programmes, in which a group of sponsor companies works with a third-party operator to issue a common loyalty currency to members, thrive around the globe. Programmes like Canada’s AIR MILES Reward Programme, The UK’s Nectar and Brazil’s Dotz have all enjoyed sustained success. In the US, a national coalition programme has yet to launch, but partnership marketing is taking root. Citi’s ThankYou Network recently partnered with Expedia to create a new layer of travel earning and reward options for ThankYou members. Such loyalty partnerships will help more companies to achieve critical mass and create additional value for members, partners and stakeholders.

The colour green In Europe and North America, green marketing is red-hot. Since April 2007, when Wells Fargo made renewable energy certificates available for redemption in its Enhanced Rewards programme, green rewards options have proliferated. No fewer than 20 loyalty programmes added environmental rewards and benefits to their mix in 2007. Other forms of altruism, such as the collegesavings themed coalition programme Upromise in the US, paved the way for new-generation programme offers. Taking altruism a step farther, the uTango coalition in the US allows young married couples to apply a percentage of their purchases to a savings fund that promises a payout of up to US$1 million – if the couple can stay married for 30 years.

While altruistic and community-minded benefits certainly carry consumer appeal, the broader trend is the use of database segmentation to target green and altruistic rewards to those customers most likely to respond.

The data difference In the retail sector, UK companies such as Tesco and Boots lead the effort to analyse and segment the purchase patterns of loyalty programme members and to deliver relevant offers. North American companies, meanwhile, are also entering the data game more aggressively. The US grocer Kroger Co. and health-and-beauty retailer CVS/pharmacy are attempting to replicate Tesco’s success across the Atlantic. In Canada, two AIR MILES Reward Programme sponsors, health-andbeauty retailer Rexall/Pharma Plus and DIY retailer RONA, are mining collector data across multiple dimensions to predict and respond to attrition, proactively influence segment migration and create relevant offers.

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Relationship banking In 2003, Puerto Rico-based financial services company Banco Popular pioneered the concept recognising and rewarding its customers across their entire relationship with the retail bank. Designed to build loyalty to the brand, its Premia programme has allowed the bank to gather actionable customer data that delivers bottom-line benefit. This concept was replicated in the US with such launches as Citi’s ThankYou Network and National City’s Points programme. In Canada, Bank of Montreal likewise rewards AIR MILES across banking lines. The future of financial services loyalty lies in the entire banking relationship as customers look for financial partners rather than mere credit providers.

Moving beyond plastic The days of having customers carry a plastic slice of your brand in their wallets may be numbered. Contactless payment systems such as MasterCard’s Paypass, Visa’s Wave and ExxonMobil’s Speedpass continue to proliferate – and you don’t necessarily need a plastic card to use these systems. But the true card-killer might be mobile payment systems that turn cellphones into credit or debit payment systems through RFID or SMS. Garanti Bank has already implemented this technology. Such systems are entrenched in Japan, and will soon proliferate in other emerging markets – in SA,

Bryan Pearson president, LoyaltyOne contributing editor, COLLOQUY [email protected]

more than half a million people use their cellphones to conduct their banking transactions. This new generation of tools will require marketers to create value propositions rich enough to create a desire to opt in – because without explicit customer opt in, you’re only creating more spam. Of course, loyalty marketers can ill-afford to throw these ingredients together at random. The culinary term for such ill-considered conglomeration is confusion cuisine. By paying attention to global practitioners honing the art and science of loyalty and relationship marketing, you can help move loyalty marketing forward. Listen to your customers, analyse their behaviour through effective segmentation, choose strategically aligned partners and leverage the latest in payment and communications technology – but do these things strategically, with your business objectives and brand strategy guiding your choices. 

vol 27 / issue 1/2 / 2009

marketingmix.co.za

Brand anatomy

Pick n Pay gets fresh P

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Who is the Pick n Pay target shopper? The Pick n Pay target market is mainly women in LSM 5 – 10, aged 30 -55 years; living nationally, in urban or suburban environments.

roudly South African retailer Pick n Pay launched Fresh Living magazine in November 2007 to complement its offering to customers. According to the magazine’s account director, Lisa Visser, “Fresh Living is the result of extensive and ongoing customer research, where shoppers identified the need for their own magazine. Given the international trend towards custom magazines and the size of the Pick n Pay retail chain, Fresh Living was a natural progression.” Through the magazine, the chain hopes to grow brand equity, entrench customer loyalty and increase size of basket, while also creating a platform from which to communicate with the customer in an ongoing dialogue. “Its core function is to promote the brand and highlight the diverse product offerings available at Pick n Pay,” says Visser. The magazine complements the brand’s media mix. Pick n Pay Media Services recognises that 67 per cent of purchase decisions are made at retail, and thus has a bouquet of in-store media channels to augment any through-the-line campaign, and provide statistical evidence of basket penetration and the success of in-store campaigns, says Visser.

Custom title There has been a growing trend towards custom publications the world over. “Custom publications are exploding in SA, and previous resistance to these magazines has disappeared and is being replaced by a belief that they deliver to their intended audience,” says Visser. However, magazines like Fresh Living will increasingly need to promote price promotions in the current economic climate. “Some sold custom magazines will be tempted, along with consumer magazines, to reduce their cover price in order not to lose market share,” says Visser.

marketingmix.co.za / vol 27 /

issue 1/2 / 2009

Fresh Living creates a dialogue with the chain’s shoppers, and immerses them in its branding. The magazine is food and lifestyle focused, and so covers mealtime solutions and recipes, travel, decor, entertainment and celebrity profiles as well as commentary on environmental and financial concerns. Feedback on the magazine is that the recipes are the biggest driver and the most popular content within the magazine – educating consumers about food choices and providing them with inexpensive and accessible mealtime solutions is the perfect stimulus for product sales, says Visser. “From the magazine, consumers can generate a menu and shopping list, all of which directs them to Pick n Pay’s stores and products.” Other sections of the magazine that are proving popular include the My Favourite and Slice of Life sections.

Target Women constitute the majority of the magazine’s readers, although the magazine does not specifically target them. Instead, the content reflects the interests of both men and women. “The content is based on a formula that ensures that there are food solutions for all occasions and needs,” says Visser. In fact, the magazine is intentionally positioned to appeal across the board. “Pick n Pay customers range from emerging market to high LSMs, depending on where the stores are located. Likewise, Fresh Living’s editorial is not intimidating; it’s inspirational and relevant to all age groups and both genders,” says Visser.

Advertising The bulk of advertising revenue comes from the food sector followed by the health and beauty sector. The fact that the magazine is also a lifestyle read means lifestyle brands (cars, finance and telecommunications) also have a place in the title. “Fresh Living is a conscious purchase made by consumers and this ensures that our readers are receptive to and engaged with content,” says Visser. This is in contrast to the unsolicited product advertising seen on TV, for example, which Visser insists does not drive brand loyalty. Advertising revenues have increased with each issue published and, according to Visser, the magazine’s first ABC figures placed its circulation at 48 012 (Jul-Sept 2008). “With our current position as SA’s top selling monthly food magazine, we anticipate even higher revenues and support from suppliers as well as lifestyle brands wanting to participate with the magazine,” she says.

Brand anatomy

Pick n Pay: the milestones 1967 – Raymond Ackerman returns to Cape Town after losing his job at Checkers in Johannesburg. He starts negotiations to buy four small stores in Cape Town, called Pick n Pay.

1969 – 1975 – 1983 – 1985 – 1986 – 1988 – 1996 –

Pick n Pay is listed as one of the Sunday Times Top 100’ companies. The first Pick n Pay Hypermarket is opened in Boksburg. Turnover exceeds R1 billion for the first time. Pick n Pay acquires a 50 per cent interest in Boardmans, a home décor store chain. Turnover exceeds the R2 billion mark. Pick n Pay celebrates its 21st anniversary and the launch of the ‘Part of Your Life’ campaign. Pick n Pay management board splits into two separate divisions. Vuselela (Nguni word, for rebirth or renewal) programme is launched, with a commitment to staff satisfaction and service excellence.

2001 – Pick n Pay Home Shopping is launched. 2007 – Pick n Pay is rebranded, with the new ‘Inspired by you’ campaign launched. Fresh Living is launched.

The involvement of brands via editorial endorsement is significant: whereas the traditional ATL format advertising is seen as a hard sell, editorial endorsement is seen as more valuable. “Fresh Living does not push Pick n Pay and its products at every corner, but rather nurtures the love of food and lifestyle solutions. In so doing, opportunities are, of course, available for products to be promoted,” adds Visser.

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Affordability and value Discount vouchers (which give readers R100 worth of discounts in each issue) distributed in the magazine have made it more appealing to customers, especially in the current economic climate. “The Coupons Clearing Bureau administers the tracking of these vouchers, and both anecdotal references and focus group research support our contention that having a return on a reader’s investment of 10 times the cover price is a significant contributory factor to making the entire Fresh Living offering a more compelling proposition,” says Visser. The affordability of the magazine – with its R9.95 cover price – has certainly helped to drive its adoption by the target market. This has placed the title well within the reach of the mass markets, so Visser is positive that while other magazine sectors will feel the impact of decreased luxury spending, Fresh Living will remain relatively unaffected. “We are, however, still actively investing in advertising the magazine to the media industry and to consumers through ATL advertising and in-store promotional tools. We will also continue to offer vouchers in each issue, which ensures that consumers get more than their money back by purchasing the magazine,” says Visser.

Getting a healthy dose Pick n Pay is actively involved in promoting healthy eating, from its 5-a-Day programme to the increasing range of organic products available in store, says Visser. The magazine, meanwhile, deals with such issues as sustainable fishing and the world food crisis. “We have a regular health column written in conjunction with Pick n Pay’s resident dietician, which looks at issues such as the red meat debate. medicinal food products and how to keep your body in shape during winter,” she says. The energy, protein, fat and carbohydrate content of each recipe is also indicated, to give readers greater control. A joint venture with Discovery Healthcare offers the medical aid group’s customers discounted prices on healthy foods at Pick n Pay stores, which further demonstrates the chain’s commitment to wellness and affordable shopping. 

vol 27 / issue 1/2 / 2009

marketingmix.co.za

Soccer marketing guide

The local soccer fan:

a desirable market

marketingmix.co.za / vol 27 / issue 1/2 / 2009

Courtesy: Soccer-Laduma

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Courtesy: Soccer-Laduma

T

aking a closer look at the soccer media’s consumer, it becomes clear that the South African soccer fan is a middle-class man in his 20s 0r 30s (ie, a large percentage of our population). Fahmeeda Cassim-Surtee, general manager of SuperSport at Oracle Airtime Sales, points out that 80 per cent of SA’s population is made up of black Africans, with 43 per cent in the LSM 5-7 category and 6.6 per cent in the LSM 8-10. “The core population in SA is soccer mad. Any brand can benefit from the adoration and emotion of this fan,” says Grant Hillary, managing director, ThirtyFour Sport. The team at Soccer-Laduma (which has 2.5 million readers, according to AMPS 2008) has found that compared with the general SA population, the newspaper’s readers are greater consumers of a wide range of products and are into technology in a big way. “For example, AMPS tells us that there has been an increase in ownership of digital cameras of nearly 300 per cent since 2006, compared with an increase in the general population of 93 per cent,” says Soccer-Laduma founder and editor, Peter du Toit. He goes on to say that 18 per cent of readers – almost half a million people – have a household income of over R10 000. This is a very desirable group, he says, as it is aspiring to move up into higher lifestyle levels and is also likely to be there in the next two years. “South African marketers should not confuse a predominantly black local soccer market with a downmarket, ‘hooligan’ and unemployed demographic/psychographic. The local soccer fan has a lot to offer brands that want to reach an economically active, aspirant and brand-conscious market en masse,” says Shaun Smith, marketing manager, SoccerLife. And this fan has evolved. Du Toit, finds that his readers’ psychographics have changed. “When DStv got the rights to the PSL, many more readers got DStv and were subsequently more exposed to European football, and to more sophisticated coverage and production values than the SABC had provided, so our readers’ expectations of quality all round were raised. Our writers have become more skilled and, in response to the greater sophistication of readers, they are providing many more layers of enjoyment,” he says. The good news for brands is that, according to the experts, the fan is in a positive, engaged state of mind when interacting with soccer or soccer media. “This upbeat positivity will rub off on the brands advertised in the soccer media,” says Clint Roper, deputy editor, Soccer-Laduma. However, there remains a lack of knowledge about and understanding of the local soccer fan, particularly among media planners and advertisers. “Media agencies are not often exposed to the culture of the South African soccer fan – whether it be how he SA: 2010 ready? lives, the products he consumes or his passionate According to market researchers, African Response, 63 per cent of South Africans following of the game,” says Smith. Roper, however, believe that the global economic crisis may lead to fewer visitors to SA. The good news believes that white people in general don’t understand is that a growing percentage of South Africans believe we will be ready to take on the the nature of the passion South African soccer lovers 2010 FIFA World Cup. According to the African Response 2010 Barometer 2008, in have for the game. Soccer is the best way to reach every December 76 per cent of South Africans believed we will be ready for 2010. This figure level of black society, he says. “If business is not sure is up from March 2008, when only 67 per cent of South Africans believed as much. about the value of investing in soccer, is it because it doesn’t understand the game, or because it doesn’t

Soccer marketing guide

Media selection A

26

n obvious factor to consider when selecting media is access; the lower LSM market has less access to the Internet, while print publications and radio are easily accessible. TV remains an expensive investment. Fahmeeda Cassim-Surtee, general manager of SuperSport at Oracle Airtime Sales, anticipates that the majority of ad bookings ahead of and during the 2010 FIFA World Cup will come from the partners and sponsors. “We price events based on audience delivery; demand, timing, team popularity and exclusivity. From previous experience of world cups, the most viewed matches are toward the end of the tournament, therefore these would be more expensive. Also, there are certain teams that have bigger fan bases, hence viewership will be higher, thus we would price accordingly,” she says. Pricing will be available from mid-February 2009. FIFA has set restrictions controlling who can buy airtime during the match broadcasts. “We have to first approach sponsors/partners of the event to take up airtime before going out to the rest of the market. Brands that are in direct conflict to sponsors/partners of the event cannot buy airtime within the event,” says Cassim-Surtee. There are, however, opportunities for clients to buy into the build up, highlights, player profiles and other world cup programming. The SuperSport website also offers clients new media options. According to Daniel Munslow, executive strategist, Newsclip Media Monitoring, print media appears to be the preferred medium when communicating sports news and results. He agrees that accessibility and availability of media impacts on consumption trends, but that there are also disparities between the number of mentions that different teams or leagues receive. According to Munslow, Bafana Bafana received 64 per cent of its exposure in print media and only 12 per cent from online media, compared to the PSL as a whole, which received 49 per cent of its exposure in print media and 42 per cent online. SuperSoccer (SuperSport’s soccer website) was the only obvious commonality between the two topics in the online category. The balance of media mentions were from broadcast media, with a bias towards radio content. “This is congruent with the accessibility and availability of media across the different LSM groups; where even in broadcast, radio is more accessible than television. In principle, there should not be such disparities in the media that cover the PSL versus Bafana Bafana’s coverage. It suggests a trend that sees the blurring of the lines between digital, broadcast and traditional media,” says Munslow. And while, generally speaking, it’s the upper LSMs that have greater access to online media, it cannot be assumed that the lower LSMs are not using online media; after all, he says, 42 per cent of the PSL’s media exposure was online. Plus, the number of publications – including those aimed at the lower LSMs – that are adding digital publishing to their offering speaks for itself. Diogo Peral, soccerladuma.com webmaster, finds that apart from an LSM skew relative to website usage, there is little difference between the users of Soccer-Laduma’s three platforms (the newspaper, website and mobisite). “What is different is the time at which they access them. The website gets the majority of traffic during business hours, which would lend it to certain categories of ads perhaps. After 5pm, the mobisite takes over,” he says. The mobisite is proving a valuable tool through which fans can access match logs and schedules as well as additional information (snippets from player interviews, for example). In fact, says Peral, mobile Internet is the real treasure for marketers and media. “Almost every South African has a cellphone. Soon all these cellphones

marketingmix.co.za / vol 27 / issue 1/2 / 2009

Sponsorship: Top tips Neil Jankelowitz, MD, MSC Sports, says that a sponsor must have a specific set of objectives prior to the sponsorship investment, and should seek out an agency with experience in that territory. “The recourse or the agency would then identify the relevant rights to achieve the objectives, and then secure these rights and implement strategically in order to gain maximum exposure from the investment. We have found that leverage spend, particularly in this area, is of utmost importance,” he says. Grant Hillary, ThirtyFour Sport, believes that sponsors should not have more than two objectives that the sponsorship should be linked to, and that these should be measurable. For example, if the objective is to drive sales, then the sponsorship must be activated in the relevant manner, and sales figures must be tracked (before, during and after the sponsorship activation).

will have WAP technology. We just need to get it across to our readers that all this is available on their phones,” says Peral. Challenges include the diversity of cellphone models on the market and consumer literacy; Soccer-Laduma has overcome these by offering an SMS service with step-by-step instructions for the downloading and setting up of the mobisite. Readers pay R2 for the download and installation. Shaun Smith, marketing manager, SoccerLife, says that soccerdedicated print titles are an obvious choice for planners wanting a print/electronic synergy. “Soccercheck Research conducted by Research Surveys shows the local soccer fan looks to TV and print for their soccer news,” he says. Meanwhile, SuperSport segments viewers into four groups: Experts, Enthusiasts, Fans and Selective Viewers. “It is our Enthusiasts and Experts that are always seeking more information; it is these segments that would be more involved viewers, hence consuming other media types to learn more,” says Cassim-Surtee. Peral urges advertisers to incorporate digital into any campaign from the beginning, so that the digital tools amplify the message more effectively. “The strength of each medium should be exploited: print’s strength is its longevity and physical presence; the Web’s is its interactive facility, and mobi is both interactive and has terrific reach in the emerging market,” he says. According to Cassim-Surtee, viewership of soccer varies depending on the event being broadcast as well as the teams playing. Current sample sizes on SuperSport 3 and SuperSport 4 are too small on the AMPS Peoplemeter panel for robust viewership data to be collated, but she is optimistic that with the launch of the DStv-i panel (the return path measurement system, which will measure a panel of around 4 000 households in SA), the lack of reliable data will be addressed. “According to AMPS 2007, there were 932 000 viewers who watched SuperSport 3 in the past seven days. Viewership has increased by 29 per cent – driven by the increased soccer content and the growth of compact subscribers,” says Cassim-Surtee. While it is the white, coloured, Indian (WCI) market that is the predominant audience for European soccer, SuperSport finds that viewership of European league soccer among black fans is growing. “Last season, UEFA Champions League viewership increased by 22 per cent, largely driven by the increase in black viewers,” says Cassim-Surtee. 

Soccer marketing guide

Clever ideas and opportunities:

F

or local marketers and brands, finding a suitable opportunity to leverage the 2010 FIFA World Cup is key. “Creation, creation, creation, is the name of the game in this regard,” says Neil Jankelowitz, MD, MSC Sport. He believes that there is a lot that a brand can achieve in spite of FIFA’s tight controls. “Due to the fact that the exposure and values are so high very few of our local brands see it fit to participate at this level,” he says. “Hospitality is the area where most local corporates are positioning themselves, and with over US$60 million worth of hospitality already sold we can see that this is where corporate SA will participate,” says Jankelowitz. Outside of this, the opportunities for brands to make the most of soccer fever are ripe. Those companies that have given up on the world cup as having no marketing leverage opportunity, have given up the ghost too early, says Grant Hillary, managing director, ThirtyFour Sport. There are interesting possibilities, such as a branded township tour. “You could brand the bus or the destination in the township where you could watch the game. It wouldn’t use any of the official logos, but would be associated with the World Cup and would have an African experience attached to it,” suggests Peter Du Toit, founder and editor, Soccer-Laduma. The official fan park concept is another possibility; however, brands need to keep in mind that the world cup will be taking place in winter. Plus, says Hillary, South African soccer lovers are primarily based in the townships and rural regions of the country, where there is no transportation system for them to get to and from the stadiums. Shebeens and township taverns will become the fan parks. Making life easier for the soccer fan is a potentially fruitful line of thinking. According to Du Toit, local soccer fans (and particularly those living in the townships) have no transport networks that would allow them to get to and from matches easily; ticket prices are also an issue. Brands could get involved in a positive way by sponsoring taxis or buses that would serve in an organised network, making the stadiums more accessible to these fans. “The more ardent a soccer fan is the more they will want to associate with brands that support soccer. But you have to be in it for the long run if you want to capture that passion,” says Clint Roper, deputy editor, Soccer Laduma. For a brand to jump in without breaking the rules it simply needs to consider the changes in social behaviours around the event, says Hillary; it doesn’t need to become a sponsor to achieve the similar successes. He refers to beer brand, Castle Lager, which cleverly leveraged the excitement around the 2007 Rugby World Cup, by speaking about specific games and players in its advertising, thereby tapping into the fan’s braai-side conversations. He also points to retailers who will promote special braai packs (buy the beer, the boerie, the chips and get a free vuvuzela, for example). Yet Hillary believes that brands are not doing enough to find the little marketing gems that would set them apart during the world cup. “For example, if I was an electronic goods supplier, knowing that an opposition brand was a FIFA partner, I would have spent the last six months getting people ready to watch the soccer on my screens.” On-pack communications need to be used more cleverly – consider Coca-Cola’s use of its own packaging as a canvas for soccer messaging. Hillary believes that the 2010 FIFA World Cup is not only about the thousands of visitors that will flock to SA; instead, he says, marketing managers should be looking at the 48 million local supporters, and should aim for sustainable marketing. Retail brands are able to track their promotions and activities, and so can measure and evaluate their progress. Of course, we must expect the retail environment to be

“The rest of the world is spending 70 per cent of its marketing budget below the line, while in SA it seems that 70 per cent of the marketing budget is still being spent above the line.”

cluttered with all things soccer, so for brands to stand out they need to do something unusual. “The rest of the world is spending 70 per cent of its marketing budget below the line, while in SA it seems that 70 per cent of the marketing budget is still being spent above the line. Brands need to adopt a 360-degree approach and should be moving their spend to BTL,” says Hillary. Look out for greater use of mobile channels to spread soccer fever. They could be used to drive sales, as long as there is no infringement on the rights of MTN (which is an official World Cup sponsor). 

Soccer mentions According to Daniel Munslow, executive strategist, Newsclip Media Monitoring, soccer (and Bafana Bafana) was the most mentioned sport over 2008. Almost 16 000 print articles, 6 000 broadcast inserts and 3 000 online articles mentioned the beautiful game to an advertising value equivalent (AVE) of R547 million. “There is no doubt that media mentions of soccer are on the rise. Interestingly, we find that news items about soccer, such as infrastructural developments ahead of these two major events, are also driving more interest in the sport,” says Munslow. Mentions of Bafana Bafana topped the scale at 24 500 media clips (excluding matches), to a value of R547-million. Measuring online mentions is somewhat of a challenge: “The first step is to establish the average advertising rate on a site and then work out the amount of space that is occupied by the average ad. We then calculate the number of words that would fit into that space and, coupled with the number of page impressions and weighting of the site, calculate a rand value for the space,” says Munslow.

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Soccer marketing guide

The soccer media: who’s who on the pitch Newspapers: Soccer-Laduma The numbers (AMPS 2008A) Ave HH income: R6 499 Ave age: 32 years RPC: 8.5 AIR Readership: 8 per cent (versus 6.7 per cent, corresponding previous period) Circulation (ABC July – Sept 08) 332 987 (corresponding previous period: 355 601)

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Soccer-Laduma has seen its circulation grow from an initial 27 000 copies in 1997 to 332 987 (ABC July-Sept 08). “In the early years especially we paid a lot of attention to distribution, and we mapped routes into previously inaccessible areas for our distribution partner, Allied,” says Peter du Toit, founder and editor, Soccer-Laduma. The newspaper’s readers are technologically empowered, and the newspaper has responded with the digital tools and platforms that entice this market. “Soccer-Laduma digital has been around for about six months, at the time of going to print, and we’ve only done what time has allowed us,” explains Diogo Peral, webmaster, Soccer-Laduma website (www.soccerladuma.co.za). Its policy is to push the technology that adds value and packages for mobile are being developed for specific groups of readers (for example, Kaizer Chiefs ringtones and downloads for team fans). “We’re also interested in mobile vouchers, which would allow our readers to get a free beer, if they had the right bar code or tavern code,” he says. The number of Soccer-Laduma readers who have a cellphone has increased by 63 per cent since 2006, compared with the total population increase of 37 per cent. The number of readers with a computer at home has increased by 86 per cent compared with a 59 per cent increase in the total population, reports Clint Roper, deputy editor, Soccer-Laduma. “We’re convinced things will get even better. It will become easier to get on the Internet. The lines will get faster, cheaper and cyber cafes will pop up on every street corner in the townships. It’s happening already,” he adds, reporting that Thunda.com (an online platform which sends photographers to social venues and special events) is increasingly getting calls from people in the township cyber cafes, wanting to find out how to access their photos. “Soccer-Laduma has a partnership with Thunda.com, whereby people photographed at soccer matches will be able to find their pictures and upload them to both the website and our social media site, Ayoba,” explains Roper. At the time of going to press, the Soccer-Laduma website had 52 000 unique browsers per month after five months (Nielsen). Peral reports that Google Analytics is showing that 85 per cent of visitors to the site return during a given month. “Soccer-Laduma is at an advantage compared with the general population in terms of Internet access. Our online members are very interactive,” he says. And as long as the print product covers the unique content and information that the website and mobisite don’t carry, readers will keep paying for their copy of Soccer-Laduma each week. “Our busiest traffic online is on Wednesdays, when Soccer-Laduma comes out. Readers buy the paper and then go online to comment, so the two media work hand in hand. Plus, we drive traffic to the website via polls and questions in the newspaper,” explains Peral. The Soccer-Laduma mobisite is Nielsen registered and, at the time of going to print, after just five months, it had 60 000 unique visits and 1.3 million page impressions a month. “It is in the top five mobisites in SA. Mobile is where we will see the biggest growth. We do not see a difference in profile between print and mobi users: they are young and technologically adventurous,” says Peral.

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Members use the mobisite to access live scores, for example. And since 92 per cent of the print readers fall into the 16-49 age bracket, the mobile offering is well targeted to their needs. “The marketing implications of this are huge,” adds Peral.

Magazines: SoccerLife The numbers (AMPS 2008A) Ave HH income: R8 589 Ave age: 32 years AIR Readership: 2 per cent (same as corresponding previous period) Circulation (ABC Jan- Jun 08): 35 384 (corresponding previous period: 34 847)

Launched in 2002, SoccerLife magazine is described by marketing manager, Shaun Smith as an upmarket, glossy read for the fan who wants not only local news, but also international soccer news and opinion, as well as lifestyle reporting (cars, fashion, gadgets, appliances, health and so on). “Sixty-eight per cent of the SoccerLife readership falls into the LSM 7-10 category, known for its savvy, brand conscious and aspirational consumer character,” explains Smith. He goes on to say that 60 per cent of the magazine’s sales are made up of loyal subscribers. “Circulation has stabilised but does experience great peaks around topical editions like Euro 2008 and December’s Top 100 Players in the World,” he says. Smith explains that the demographic of the magazine’s readers mirrors that of the average soccer fan –he is a 36-year-old black male soccer fan falling into the LSM bracket and moving quickly up the LSM ladder. “Research has proven that he is engaged when in ‘soccer mode’ – hence agencies need to understand how portals like SoccerLife provide a captive and engaged consumer with hard-hitting spending power.” He adds that as a middle-class South African consumer, this reader is feeling the pinch of the downturn, but that the magazine is not reporting any declines in circulation. Supplements, posters and sample products distributed via the magazine add reader value. “SoccerLife launched a mobile site in January 2009 that aims to service its audience with a unique and personalised approach to soccer data. The SoccerLife.mobi user will interface with news that is tailor-made to his needs and team preferences, and SoccerLife will ensure that the site is cost-effective and gives real value add to its user in the form of high-value giveaways and downloads,” says Smith.

Amakhosi Magazine The numbers (AMPS 2008A) Ave HH income: R5 946 Ave age: 31 years RPC: 40.1 AIR Readership: 3.5 per cent (versus 3.6 per cent, corresponding previous period) Circulation (ABC Apr- Jun 08): 22 775 (corresponding previous period: 25 590)

TV: SABC 1 Programmes: Countdown 2010 (a magazine show sponsored by FNB); Laduma on 1

DStv: SuperSport 3, SuperSport 4; Programmes: PSL Kings; Engen Premier Soccer; The Football League Show; Premier League World; PSL TV; Blitz Soccer; Soccer Africa; SuperDiski; Goalissimo.

Radio Metro FM: Discovery Sports Centre with Robert Marawa Radio 2000 (the official 2010 radio station) SAfm: Gameplan with Kwena Moabelo

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Soccer marketing guide

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Online This list is by no means exhaustive; these are just a few soccerrelated websites.  www.soccerladuma.co.za (the official website of Soccer-Laduma)  www.psl.co.za (the official website of the Premier Soccer League)  www.supersport.co.za/football  www.thesoccerpages.com (a South African online soccer community; results and news as well as discussions and blogs).  www.soccerlife.co.za (the official website of SoccerLife magazine)

CSI and soccer development If today’s soccer stars, with their high prices, are just out of reach, perhaps tomorrow’s stars are a better investment. Corporate social investment (CSI) is the most underrated marketing pillar and needs to be considered as part of the 360 degree marketing mix, says Grant Hillary, MD, ThirtyFour Sport and will be the next wave of marketing activity. “It’s really good for consumer branding,” he says. But when it comes to soccer development, maximising on it now means a brand has to have started investing in the project a few years back. “For real impact, it should be linked to retail activity with proceeds going to the project,” says Hillary. Brands need to remember that a sustainable longterm approach is about ensuring that the right facilities are in place as well as the right coaches and mentoring.

The Confederations Cup: a wasted opportunity? “The Confederations Cup is a test run, and tends to be overshadowed by the 2010 FIFA World Cup. I’m sure that now that the 2010 FIFA World Cup Organising Committee South Africa has launched the marketing and promotional campaign for the Confederations Cup things will start picking up. The job of media is to talk up the game and the players so that there are more eyes and ears on the game and hence more marketing opportunities,” says Peter du Toit, founder and editor, Soccer-Laduma. ‘I don’t think we realise how big the Confederations Cup will be,” says Grant Hillary, managing director, ThirtyFour Sport. “SA got the best possible draw, and yet no brands are tapping into it yet.”

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Soccer-Laduma tells us who SA’s biggest soccer teams and personalities are:

The business of soccer



Kaizer Chiefs (nickname Amakhosi, ‘the kings’)



Orlando Pirates (nickname the Bucs, from buccaneers)



Mamelodi Sundowns (nickname the Brazilians because their blue and gold colours are similar to the national kit and the type of football they play is said to be similar to Brazil’s)

The current economic downturn is having an impact on the business of soccer, globally. “Internationally, the economic impact has been more significant with concerns of team/jersey sponsorships being cancelled, as in the example of AIG and Man United. To date, no major local sponsorship has been terminated,” says Neil Jankelowitz, MD, MSC Sports. “Locally, we have found the market is exceptionally buoyant and the impact in this regard has been negligible.” The Confederations Cup and the 2010 FIFA World Cup are driving the industry forward. Luyanda Peter, senior marketing manager: SuperSport, says that since ticket prices for local soccer matches have not increased over the past three years (R20), consumer spending has not been negatively impacted by the current economic scenario. Meanwhile, Peter du Toit, founder and editor, Soccer-Laduma believes that everyone is feeling the pinch, but finds that his readers are somewhat more resilient, since they are not servicing debt. “There’s an argument to be made that in a downturn, the affordable ‘luxuries’ become even more important in people’s lives,” he says, pointing out that soccer titles are those affordable luxuries. He is expecting the volume of ad bookings to increase ahead of the World Cup, but is also concerned that these advertisers will only come in for five or six weeks. “What I’m hoping may happen is that it will open the eyes of marketers and media strategists to the nature of South Africans’ passion for football. They will see how the Brazilian fans respond, for example,” says Du Toit.



Moroka Swallows (the beautiful birds)



Bloemfontein Celtic (nickname ‘siwelele’)



Amazulu is potentially a massive force, but the team has been a bit up and down.

Players: 

Teko Modise – Bucs



Itumeleng Khune – Chiefs



Bernard Parker – Thunda Zulu Royals



Dikgang ‘Terminator’ Mabalane – Bucs

Coaches: 

Muhsin Ertugral – Chiefs



Ruud Krol – Bucs



Henri Michel – Sundowns



Joel Santana – Bafana Bafana



Gavin Hunt – SuperSport United



Caesar Leal – Swallows



Manqoba Mngqithi – Golden Arrows



Clive Barker – Amazulu

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Soccer marketing guide

FIFA rules and regulations:

F

IFA’s commercial affiliates (sponsors, licensees and official broadcasters), the host country and the nine host cities, as well as the Local Organising Committees all make significant contributions to the 20101 FIFA World Cup, ranging from financial, value-in-kind and human resource support through to the provision of infrastructure, transportation and security. In return for this substantial commitment, they are guaranteed an exclusive marketing association with the event. Hence, FIFA operates a global rights protection programme to ensure that these rights are not infringed by free-loades seeking to claim a commercial association with the event for themselves. FIFA partners: adidas, Coca-Cola, Emirates, Hyundai, Sony and Visa. FIFA World Cup sponsors: Anheuser-Busch, Castrol, Continental, McDonalds, MTN and Satyam. FIFA national supporters: First National Bank and Telkom South Africa. FIFA has prohibitions against unauthorised commercial use and association. Commercial Association involves the use of official event marks (which include official emblem, the mascot, the poster, the fifa.com logo, and also certain terms). Not only are the actual terms protected, but so are similar variations and modifications.

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“As a general guideline, promotional material/advertising, company names, store decorations, websites, domain names and merchandise should not bear or make use of any of the official marks.”

In a nutshell As a general guideline, promotional material/advertising, company names, store decorations, websites, domain names and merchandise should not bear or make use of any of the official marks (most especially for commercial purposes, ie to drive sales). Editorial use of the official marks, and the official match schedules is permitted, but only if this is done to inform the public. Any ticket promotions or competitions that make reference to the event are prohibited. More information on that matters is available in the public information sheet which is published on the official website www.fifa.com. According to FIFA, co-promotions with 2010 FIFA World Cup Sponsors are possible, as long as the third party is not a competitor of any of the sponsor. However, the third party may not be directly associated with the Official FIFA Marks. Product licences (which permit the holder to produce Official Merchandise) can be acquired from the Global Brands Group.

Commercial public viewing events: FIFA defines a public viewing event as one at which broadcast coverage of the event is made available for exhibition, and viewing by, an audience

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in any place other than a private dwelling (ie bars, cinemas, educational establishments, etc). A commercial public viewing event is one at which a direct or indirect admission fee is charged, and/or one at which sponsorships and commercial rights are exploited relating to the event. In the case of the latter, only live broadcasts (without repeats, or altered broadcast) are permitted. Likewise, the exhibitor shall not create the impression that he is in any way officially associated with the event. There are no conditions on the type of food and drinks on sale at any public viewing event; each vendor is free to offer and sell what he wants. Conditions only apply to sponsorship and promotions by competitors. Similarly, the exhibitor may grant local sponsorship rights of a commercial public viewing event to local third parties, as long as they are not a competitor to any of the competition’s marketing affiliates. (For more details please see the Public Viewing Guidelines available on www.fifa.com). 

Sponsorship of local soccer Sponsoring local soccer teams or leagues is another option for brands that wish to get involved with the game; consider Volkswagen’s sponsorship of team Moroka Swallows, and also their investment in Premier League club, Bay United (formerly Maritzburg United). “Many companies think they have to own the property for the sponsorship to be effective. But in reality, they don’t need to. The other thing is that too often, the sponsorship is misused. It’s not simply about spending a lot of money, it’s about doing it right,” says Grant Hillary, managing director, ThirtyFour Sport. And the good news, as Neil Jankelowitz, MD, MSC Sports points out, is that local soccer administration has improved significantly. He urges sponsors to ensure that their properties and investments have a track record and a professional management team is in place. Their financials should be audited and they should have suitable board representation. “In addition, we advise our clients to ensure there is a suitable ‘escape clause’ in the relevant agreements should the rights holder fail to deliver,” says Jankelowitz.

Expert opinion

Time to take a fresh look... T

he last time I looked we were just about to start 2008 and here we are at the beginning of 2009. Actually, that is a complete and utter lie because I had to write this article before the end of 2008 to make sure I met the publisher’s deadline. Anyway, what really matters is that you lot, the readers, will all be sitting on the edge of your 2009 seats as you read this. So moving on...

The current crisis is causing many marketers to re-evaluate much of what they have done in the past and to take a fresh look at direct, which might just be an option.

The world is in trouble. The reasons for this are known to most of us... the backwash from the sub-prime lending fiasco... the collapse of international financial institutions... high interest rates, to name just a few. Many countries, including SA, are in a state of near, if not actual, recession. Both consumers and businesses are cutting back on spending resulting in job losses in many major business sectors like the motor car industry.

Amid all the global doom and gloom this may be a very good time to re-evaluate how we are going about marketing. The financial guys may not be the only ones who have been getting it wrong. The global spend on advertising last year was estimated to be around US$471 billion. That’s US$78 for every individual on the planet which includes the four billion who are surviving on less that $2 per day. That’s a lot of noise! Added to this the consumer is changing. In a recent survey conducted by the Unilever USA Consumer and Market Insight Department 86 per cent of people over 50 stated that advertising is irrelevant to them. Another survey revealed that 33 per cent of patients in the US go online before visiting their doctor. If that is not disturbing enough, even more (44 per cent) go online after they have visited the doctor. The consumer is showing all the signs of wanting to be in charge. The consumer is also going digital. By the year 2011, 22 per cent of the world’s population will have regular access to the Internet. Another estimate believes that 50 per cent of the world’s population will have access to a cellphone by the year 2015. This year the spend on Internet advertising will exceed 10 per cent of the total ad spend in countries like the US, UK, Norway, Israel, South Korea, Canada and Japan. It’s not just developing countries that are making these changes. The cellphone market in India is growing at around three to four million per month. That’s equivalent to the entire population of New Zealand. In Singapore cellphone penetration is 105 per cent (ie more phones than people). SA may not be far behind. In China, Internet access increased from 22 million in 2000 to 137 million at the end of 2006. In the UK, the spend on digital direct marketing has already surpassed direct mail. Add these two together and you are looking at in excess of 25 per cent of the total UK ad spend. Spend on direct marketing in the US in 2007 accounted for 53.7 per cent of total ad spend. Little wonder that FCB couldn’t wait to merge with Draft to form Draftfcb. This lemming-like rush to digital is not just about the cost of delivery. It’s about targeting, measurability and return on investment. Underpinning all of this is the more effective use of data. All of these are core strengths of direct marketing. 

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Keith Wiser managing director 5th Dimension (011) 781 6396 [email protected]

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marketingmix.co.za

Outdoor media

Outdoor ad spend R1.3 billion a year, out of a total of R20 billion

Outdoor offers Outdoor advertising offers the opportunity to not only remind and brand build, but also communicate a message effectively as part of a multi-media solution

Expect more from outdoor O

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utdoor ad spend has enjoyed comfortable growth of between 10 and 15 per cent annually, say experts. Richard Bode, sales and marketing executive, Primedia Outdoor, refers to ADEX data, which finds that between October 2007 and September 2008, ad spend reached around R1.89 billion. “According to Nielsen data, the industry is worth around R1.3 billion a year, out of a total of R20 billion,” says Brad Fisher, joint CEO, ADreach. In recent months, the market share growth has also been attributed to the proliferation of new media channels that fall into the outdoor area such as digital screens etc. Certainly, outdoor media has some sort of glam appeal. However, the economic climate has had a negative impact on the outdoor media industry, and we are starting to see the growth rates slowing. “The trend over the past four years has shown steady increases in outdoor advertising spend. But over the last 12 months, the increase has not been as positive due to the economic climate,” says Bode. Says Lebona Moleli, CEO, The Marketing Kraal, given the AIS/Nielsen figures, which show that outdoor ad spend has declined by 3.6 per cent for the period August 07- July 08, outdoor will continue to grow, but at a slower pace in the long term. “Especially in key township and suburban areas which are main attractions for advertisers. The increased traffic congestion will also increase exposure time and the effectiveness of this medium,” says Moleli. Dave McKenzie, MD, BOO! Alternative Media, finds that billboards still get the lion’s share of ad spend, followed by airports and retail street furniture. But he points to Addynamix figures (July 2003- June 2008), which find that spend on billboards has decreased quite significantly over the past five years – dropping by 24 per cent. “At the same time, both the airport advertising and retail street furniture categories have shown significant growth,” he says. Fisher, has found that bookings for street pole ads have increased, while those for large billboards have declined; advertisers are looking for a more cost-effective solution, with less risk and greater returns. In spite of the negative impact that the economic crunch is having on sales, the industry players remain optimistic that the industry will grow, particularly in SA. “The country has not been as heavily impacted by the current global economic and financial crisis as the US, for example,” says Fisher. The 2009 FIFA Confederations Cup as well as the 2010 FIFA World Cup will continue to create marketing opportunities for advertisers (and for global and local sponsors and partners, in particular) and will bolster the industry somewhat. Whether this industry is relying to heavily on this false economy (as some refer to it) remains to be seen.

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For the industry supporters, the nature of outdoor media will drive its continued growth. With traditional mass media becoming too fragmented or too expensive to really deliver audiences and ROI, outdoor offers advertisers a means to build their brands. Yet there are concerns that the outdoor industry has not been embraced by the ad industry; Bode believes new measurement and testing will inspire greater confidence in the medium. It may be that the continued presence of rogue operators is driving advertisers away. Likewise, the inflated prices of certain formats and positions (without proven returns) forces advertisers away from outdoor media. And yes, as long as the rand continues to plummet, the cost of certain digital screens and outdoor technology will be out of reach for local advertisers. Smaller and more flexible formats will probably see greater adoption. Street pole ads fit this description, and Fisher says they are possibly the best form of outdoor media as a

Outdoor media

result. “They have a relatively low production cost and are very repetitive. Billboards are great, but they are very expensive,” he says. Clutter was a problem in the street pole space, but companies are taking steps to minimise this. ADreach, for example, is creating fixed black frames, which will be the standard structure for its street pole advertising. It is also limiting the number of frames per street pole. “We have a visibility rating, which takes into account proximity to a road, clutter around the pole, whether the ad is obscured, its size and so on, to get a score out of 100. This score determines pricing too,” explains Fisher.

Measurement

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No doubt, measurement of outdoor media needs to be taken to the next level, to ensure greater transparency and accountability. Locally, the NPod research, carried out in a joint venture between Nielsen and the South African Advertising Research Foundation (SAARF), should provide the industry with reliable stats and figures. The Nielsen Npod study samples 300 adults, and is able to merge the demographics of a sample with its GPS tracking data, to measure the traffic for each billboard on the database, and to determine how many people come within the specific range of each outdoor format, to have the opportunity to view it and potentially engage with it. According to Michelle Boehme, technical manager, SAARF, the Npod results for KZN and Gauteng are available, with results for the Eastern and Western Cape due by mid-2009; the remaining provinces’ results will follow. The results for the Eastern and Western Cape will be modelled down to smaller geographical areas, and to district level, to provide richer feedback for advertisers and media owners. The KZN and Gauteng data will be modelled to this level thereafter. The initial results show the extent of mobility of the sample group and demonstrate the opportunity to reach a target audience not only in areas where they reside, but based on travel patterns, explains Bode. “The AMPS sample is being used and when the whole country has been surveyed we should have a far more credible measurement system. What will hopefully happen in the fullness of time is that this initial data will be supplemented with other richer data and better audience measurement will be the outcome. It should always be remembered that we would want to compare the performance of outdoor on a GRP (reach X frequency) basis against all other media,” says Bazil Lauryssen, MD, INM Outdoor. The Npod3 device – the latest version of the Npod handset – is more compact, at almost half the size and weight of the Npod2. Plus, it tracks 16 satellites, instead of 12, which means that it is far more accurate. Improved downloads also mean faster turnaround of data. In the UK’s Polstar study, billboards are being fitted with intelligent cameras that read which eyeballs interact with the creative on the board, and also register their gender, and age, as well as the length of time they spend looking at the creative. “It is also subjective and has its limitations, and is very expensive,” says Lauryssen. Others are concerned that this sort of measure is not relevant to the general outdoor market, and will require a substantial financial investment (which may further increase

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media rental rates). For the media owner, this is a very sophisticated measurement tool, but consumers are not happy about the invasion of their privacy. Marketers and advertisers are looking for greater accountability, and we can expect that there will be greater investment in measures and technology that will deliver this. “Is this specific technology a possibility for SA? I would say that within the next five to 10 years, yes, for sure,” says Ken Varejes CEO, Primedia Unlimeted. Dr Paul Haupt, CEO, SAARF, says that locally, this sort of system would not work. While in urban areas, it might be viable to fit billboards with cameras, trying to do so in almost inaccessible rural areas would be very difficult. And where do you draw the line with these smart cameras – how do you decide whether someone’s eyesight is good enough to read the copy on a billboard, for example. “For any currency research, the methodology and the data must be consistent, stable and reliable,” he says. The complexity of engagement makes this system difficult to implement. “We all know that great creative sells. The problem media owners have is that they dare not say the creative is poor. This turns creative people off outdoor advertising as they loathe being criticised and would rather design a print ad or TV commercial. I have no doubt that in the electronic and digital age that we live in where GPS devices know exactly where we are combined with a form of eye-contact device we will be able to provide audience measurement of a different kind in the future. It’s all a function of cost benefit and what the returns are,” says Lauryssen. Out of Home Media SA(OHMSA) is currently looking at a new research tool for outdoor which will see a transponder device inserted into vehicles, according to Varejes. “It’s not perfect but we’re certainly taking a step in the right direction. Outdoor is a really difficult medium to research; what I would suggest is that marketers look more closely at pre- and post-campaign research to isolate its effectiveness,” he says. And while engagement is becoming more important, exposure remains a major priority for all brands who want to be seen by the right target market, and remembered.

Integration For launches and special events, radio and targeted print should be used in equal part, along with outdoor advertising, in order to raise awareness. Branding campaigns would do better, to split the budget between street pole ads, and print/radio. For the communication of specific new product features, for example, the emphasis should be on targeted print media with outdoor simply serving as a reminder of the print campaign (or as a tool to direct shoppers to a website for more info). Mobile phones can be used effectively to generate feedback, and monitor who is viewing and interacting with billboards. Fisher says ADreach is using SMS competition campaigns for some of its clients, as this allows it to track responses to the campaign. Through the use of individual unique codes, it is possible to see where the response is coming from (regionally), so the advertiser can concentrate its efforts on that region. These campaigns also drive the individual to a website for competition registration, so demographics are easily obtained. “The integration with outdoor and online is happening already – the problem is that you shouldn’t be paying too much attention to your cellphone

Outdoor media

while you’re driving. I’d recommend using more online and mobile campaigns integrated into the shopping mall and indoor media space,” says Varejes.

Alternative media options Alternative forms of ambient and outdoor media, hold a lot of potential. “Wall murals and containers are very cost-effective and also very impactful, especially in the township markets,” says Moleli. However, marketers must take care to work with local municipalities closely, in order to be in line with regional regulations. We can expect a lot more innovation coming into the outdoor advertising space, thanks the more innovative use of technology. “Projection format advertising is proving to be hugely popular – a brand image can be literally projected onto the side of a building without production costs and any permanent structure attached to any building,” says Varejes.

Digital Digital screens and billboards in SA have not been adopted as widely as they have been in other countries. The secret to a successful digital campaign is to have pristine screen quality, and he doesn’t think SA is not there yet in terms of mass digital due to pricing. “Five per cent of total advertising spend is allocated to outdoor. The digital proportion is very small due to the medium being in its initial phase,” says Bode. Alive Advertising launched its first digital billboard 12 years ago, and since then, has grown this number to around 22 screens. “Five years ago, the market started to take off,” says Itz Arenstein, MD, Alive Advertising. Today, these screens are almost picture quality. “But at four times the price of a regular static billboard they are too expensive for the local market,” says Arenstein. The billboards and the LEDs they require are imported, and the dollar exchange rate makes the cost of these units relatively high. Primedia Outdoor launched the first large format Digital Network in May 2008 and it has been very successful thus far, says Bode. “To implement a project of this magnitude and quality requires substantial capital investment. Digital signage is definitely the future of outdoor and already in the US it accounts for one per cent of outdoor sites,” he says. With the current economic pressures forcing marketers to seek out risk-free, cost effective media solutions, digital might not top the list for some time. The upside of the digital screens is that they allow for the creative to be changed almost instantly, making this medium more flexible than static media. For retailers, for example, this sort of system would be ideal, as they could load daily specials immediately, and target them to specific areas. Experts agree that in the long term, digital will be the way to go. “In some cases, digital is a forced investment, as the media owner must go digital to justify the high rentals, as in an airport,” says Fisher. Other benefits of digital media are:  Tactical messaging  Day-part message management  Real-time updates  Inexpensive creative changes (very low production costs).

to take their messaging to the next level. But there are concerns around this. Fisher believes that on roads, these billboards should not be animated, as they are dangerous, and drivers are passing too fast to actually engage with the creative. He also argues that at night, the illumination of these billboards should be turned down to prevent road accidents. “Unless you have ads that are static and simply change over every 30 seconds,” he says, “but this requires the media owner to be online so that the ad material can be changed and updated more easily.”

Looking ahead We can expect a greater emphasis on feedback and more immediate advertising models, particularly digital, to dominate the outdoor agenda over the next year or two. “TV, radio, magazines, etc are too fragmented to offer the returns that advertisers are after. But with outdoor, you know that there is one main road that everyone travels. It is very costly to try and cover all the magazines out there; it’s much cheaper to advertise via out of home media and get the same exposure,” says Fisher. Outdoor advertising is increasingly being incorporated into 360 degree campaigns, and its tactical strengths being exploited. “Based on the socio-economic environment and the mobility of the adult population, more time is being spent out of home. This offers advertisers the opportunity to reach larger audiences through outdoor advertising,” says Bode. But on the flip side, outdoor media will have to deal with a changing regulatory environment, economic downturns and the effect of the global economy, as well as changing perceptions of outdoor. Furthermore, environmental concerns, council inconsistencies and the evolution of audience measurement will play in role in determining the future of outdoor media. But these challenges are not going to have a long-term impact. Varejes says: “As soon as we get over our current decline, I definitely expect this sector to continue growing year on year at a faster pace than traditional media.” Pricing issues will also need to be resolved as the industry has come under fire for over-inflated billboard fees. In particular, the larger formats (temporary building wraps) are seeing steep rentals. Perhaps the advertisers themselves are to blame for the steep pricing that media owners are establishing. “Advertisers are demanding bigger and better sites; there is limited supply and over demand so we as media owners are actually only the facilitator,” he says. Short-term business deals are also extremely costly once approval fees, physical structure costs, and erection costs are tallied up. Advertisers and media owners will need to work closely to begin planning their 2010 exposure. Leading up to 2010, there will be a dramatic short-term increase in spend, especially in the few months and weeks before the main event. “One thing is for sure, if you believe you are going to do better after 2010, think again, as everyone has clamoured onto the bandwagon and believes there are pots of gold in the outdoor industry. After 2010 the established players will continue doing normal, sane business and landlords will come back to earth with realistic pricing on which we can all survive,” Varejes says. 

The animated billboards are attractive to advertisers that want

vol 27 / issue 1/2 / 2009

marketingmix.co.za

35

Community media

Community magazines “We would expect our target market, all things being equal, to read our publication in addition to their special interest magazines, although initial indications are that MyWeek’s target market does not necessarily read community newspapers as the information is focused on school, municipal and crime news.” – Reinard du Plessis, GM, MyWeek

Settling down C

ommunity media in South Africa has seen several years of successful growth, and is now seeing a flattening out in ad revenues, as advertisers feel the economic pinch. However, compared with its commercial/regional counterparts, it would appear to have a very strong position in the marketplace, thanks to its local reporting and advertising relevance as well as its relative affordability.

Magazines

36

Community press trends According to Gordon Patterson, vice president, Audit Bureau of Circulations (ABC) , in Q3 of 2008, community newspapers were showing growth as a result of the launch of new titles and the gains of individual titles. He reports that there appears to be no cannabilisation of titles, since the titles were growing to cover new areas. Comparing Q3 circulations for community papers from 2006 to 2008, circulations went from 4 020 000 to 4 060 000 in 2007 to 4 600 000 in 2008. Referring to magazines, Patterson finds that while there has been an increase in

Community magazines report growth, as reader and circulations from Q2 2008 to Q3 2008, the circulation of the free magazines is advertiser uptake of these titles increases, and it’s expected down year on year. In Q3 2006, circulation stood at 1 500 000; in 2007, this that this growth will continue. “General content magazines figure stood at 2 150 000, while in Q3 2008 the figures were slightly lower, are likely to suffer as a result of the growth of community resulting in a decline of around three per cent. titles, and the environment is an exciting one for advertisers who were usually limited to only newspapers in the past,” says John Bowles, joint MD, the Newspaper Advertising Bureau (NAB). The community magazines are not cannabalising the readership of other print media. “We would expect our target market, all things being equal, to read our publication in addition to their special interest magazines, although initial indications are that MyWeek’s target market does not necessarily read community newspapers as the information is focused on school, municipal and crime news. This is due to the differing mindset between the two groups, and I say mindset because age isn’t the dividing factor, only a contributor,” explains Reinard du Plessis, GM, MyWeek. However, in spite of the positive adoption of the community magazine by the reader, media owners and planners do not fully understand the medium. The complexity of the reader mindset is a novel challenge. “Because of its youthful mindset and lifestyle, this market is more inclined to be prosumers (producer-consumers) which means they are socially active, participate in online social networks, and interested in technological developments and environmental affairs,” says Du Plessis. Robust digital strategies are therefore required to carry the printed product into the age of broadband to ensure sustainability, and so the community magazine category might be seen as a set of integrated platforms that can deliver relevant, lifestyle-entertainment info to the community. “We should probably stop looking at market segments or niche markets and focus more on where communities form, why they form, around what they form and how you can integrate yourself in that existing community or build a new community around your brand a la YouTube, Facebook, MySpace etc,” says Du Plessis. In terms of the number of magazine launches, there has been a slow down and a merging of geographical zones into larger areas, to cut costs and increase potential revenues (publishing a glossy, high quality community

marketingmix.co.za / vol 27 / issue 1/2 / 2009

Community media

Community newspaper circulation (ABC, Apr – Jun 2008): 10 largest circulations

38

Newspaper

Net distribution

Corresponding previous period

1

City Vision (JHB)

272 557

272 557

2

PE Express

89 799

89 861

3

Plainsman

83 504

83 504

4

People’s Post Mitchells Plain

83 340

83 340

5

Vukani

81 160

75 560

6

Algoa Sun

76 154

76 154

7

Maritzburg Sun

68 361

54 857

8

The Mirror

65 000

65 000

9

Vaal Vision

64 908

64 944

10

Rekord East/Oos

61 997

59 120

magazine in only one community is costly, and challenging). “The current economic climate has had an obvious affect and will continue to do so due to the fact that businesses return to those mediums that have proven track records in terms of ROI on every marketing buck spent,” says Du Plessis. The reason readership and circulation have been maintained is that these titles are of strategic value, being available free of charge to readers, while also serving as a tool through which publishers can engage with a hyper-local community. The integration of media and social networks may drive further interaction with these media. “We are planning a number of initiatives in these categories at a local level. We have set up a social network in two markets and its success has been remarkable at this early stage. The group is well set up to develop this environment which is very much part of our future strategy,” says Bowles.

Newspapers People are time starved, and so have less time to read newspapers, and yet are also overloaded with info and news from a multitude of sources. Community newspapers deliver news from the immediate surroundings, as well as advertising that is much closer to the reader. “This in itself is a competitive advantage with which dailies and weekly national newspapers find it difficult to compete,” explains Alda Roux, GM, Community Newspapers (Central), Media24. While national or international news is available online, community news is not, and so the demand for

free community publications intensifies (paid for titles, on the other hand, show a downward curve – their news is available on the Internet, usually for free). Community newspapers remain a dominant force, particularly as a retail communications medium. “Retailers have little choice if they want to saturate the catchment areas of their businesses or operations,” explains Bowles. Reader profiles have remained much the same, and it is expected that this will continue (at least until the economy and the property market have picked up and people start to move around again). Since area profiles match the reader profiles of a community newspaper, we can assume that the readers’ profiles will not have changed either, says Bowles. The economic pinch sees newspapers dealing with shrinking revenues. We can also expect that consumers will increasingly turn to community media that help them find the best deals and the best prices. At Central Community Newspapers (Free State and Northern Cape) the decline in advertising income has been very small, says Roux, but it’s clear that there has been a shift in terms of who advertises. “Advertisers who initially only advertised in dailies have moved to community newspapers due to the lower tariffs they charge. The profile of the advertiser has definitely changed due to the economic crunch. Advertisers who took full pages, will now only take half pages or smaller,” she says. The economic slowdown is impacting on the operations and launches of these newspapers as well, resulting in serious consolidation. However, consumers still need to make purchases, albeit more conservatively; and they will shop around somewhat, to find the right prices. “Community newspapers continue to be that reference point where buying decisions are made. Now more than ever, advertisers cannot afford

Community newspapers “National and regional media schedules are gunshot tools that lack the cover and penetration required to support key retail nodes. As marketers realise this, there will be massive pressure on them to justify fair support for where their products and services are available.” – John Bowles, Newspaper Advertising Bureau (NAB)

marketingmix.co.za / vol 27 / issue 1/2 / 2009

Community media Community radio (RAMS Nov 2008): 10 largest audiences

42

Station

Province

Past 7 days listeners

Percentage of total adults

1

Jozi FM

Gauteng

560 000

59 %

2

Unitra Community Radio

Eastern Cape

375 000

49 %

3

Radio Tygerberg 104 FM

Western Cape

312 000

45 %

4

Sekgosese Community Radio

Limpopo

264 000

41 %

5

Nkqubela Community Radio

Eastern Cape

260 000

41 %

6

Thetha FM 100.6

Gauteng

227 000

38 %

7

Qwaqwa Radio

Free State

211 000

37 %

8

Zibonele Community Radio

Western Cape

208 000

36 %

9

Radio 786/ Voice of the Cape

Western Cape

205 000

36 %

10

Radio Mafisa 93.4 FM

North West

188 000

35 %

not to be part of that reference,” says Bowles. Community media also offer retailers a more targeted media option (national and regional media lack the cover and the penetration to match). “As marketers realise this, there will be massive pressure on them to justify fair support for where their products and services are available,” says Bowles. That said, the rise of the ‘black diamond’ in SA sees young black professionals wanting to be well informed and, as Roux says, this is where the great opportunity lies for community newspapers. “The black diamonds are naturally also the investors, which is the reason advertisers want to reach this market. Black community and other newspapers are probably the market to invest in at the moment,” she says. The Express newspaper, for example, is becoming more popular with state departments and estate agents that want to reach this market. Looking ahead, the community newspapers could see income benefits during the elections, though in general, economic pressure will force just about everyone to tighten their belts.

TV Community TV is growing slowly; last year saw the launch of Cape Town TV. Soweto TV, meanwhile is refining its operations. According to Marco Veloso, group sales and marketing manager for Soweto TV at Urban Brew Studios, SAARF AMPS has placed the station’s audience at around 347 000, excluding DStv viewers (AMPS 2008A). “The SAARF People Meter has us at 581 000. My gut tells me that the true figure lies somewhere between the two,” says Veloso. He adds that the station is about giving Soweto people the space to express themselves.

“Our model prioritises creating easy-to-access platforms for residents to become the content creators,” says Veloso. This requires that the station maintains a flexible real-time broadcast model with low costs. Soweto is used as the studio for filming, and this ensures that all the content is contextually real and recognisable. The station also accesses and encourages independent producers to create programming for its viewers. Research by Freshly Ground has shown that the two most popular programmes for the stations are Dlal Ngeringas (youth to early 30s) and Ezomoya (a Sunday gospel show).

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The station has felt the impact of declining advertiser spend, but Veloso believes that the declines in revenues are not as dramatic as they might be for the larger players, because Soweto TV is coming off such a low base. “There’s no doubt that the credit crunch has affected our audience. Very few people will escape this one. However, ours is a market that, historically, hasn’t had significant access to credit”. This market will be more deeply affected by staff retrenchments, for example. Soweto TV’s audiences are attractive to advertisers and marketers, says Veloso, because Soweto is home to a growing young, trend-setting middle class. He goes on to say that marketing to this community (if done in such a way that it is relevant to them) delivers ROI. Community TV fits in well with both ATL and BTL marketing, and can be easily integrated into campaigns and strategies. “In ATL, it can deliver audiences that traditional media may not reach, with minimal wastage – provided the message is tailor-made for that community. In BTL, it can be integrated into tactical campaigns, supported by activations in the community,” says Veloso. “From my personal experience, the planning fraternity still has a lot to learn about community media although efforts from organisations like NAB have made significant inroads in educating the industry,” he says. But the onus is on planners to venture beyond their tried and tested favourites.

Radio Community radio might not offer wide reach, but as part of a strategic campaign that reaches into niche communities, it can be very effective. PEP has just launched a new radio programme across 15 community radio stations across SA. Monate Feela (which means ‘feeling good’) reaches around 3.5 million community radio listeners, with local music and messages from SA sports and entertainment celebs; the focus is on messaging that makes them feel good about SA. “Community radio has great influence and is at the hub of the community,” says Marcus Banga, marketing director, PEP. “We have 1 400 stores and wherever there are communities in South Africa, there is a PEP store. This is why partnering with community radio is such a perfect fit – for the listeners, for the stations and for PEP Some of the stations, by the way, do have good listenership figures – hundreds of thousands,” says Banga. The particular stations were chosen based on the size of the audiences, geographic spread and so on. The programme carries only a PEP branded jingle (no other advertising). “The show has editorial integrity and is not cluttered by ‘sponsor’ messages – this is what makes Monate Feela so successful. PEP has produced all the jingles and promotional trailers for the show – so that each radio station has its own personally produced jingles for Monate Feela,” says Banga. And while it is still early days, the feedback from the stations has been positive. 

Species

The man: a user’s guide T

44

‘Modern & In Control’ men might also be married, but either way, cope well with modern ideas of marriage and life; they do the cooking or work part-time in order to help ferry the kids to school, for example.

marketingmix.co.za / vol 27 / issue 1/2 / 2009

he question of what women want and what it is that makes them tick has been debated and deliberated for decades. Men, on the other hand, remained largely ignored by the research and marketing fraternities, or were stereotyped; until David Beckham made it acceptable for men to use fancy hair products, and big brands had to sit up and start thinking more intelligently about how men behave. The Discovery Channel has delved deeper into the attitudes, habits and mindset of the modern man in a study that is set to get big brands and companies thinking. The Discovery Species study challenges existing stereotypes of young men (the core target market for the channel) and delivers a bigger picture of ‘the man’. The study will lead to new thinking in the brand-development process and impacts execution, since it challenges traditional views of why men buy what they buy, why they do what they do, and what kind of emotional response informs all of this. Starting in 2007, the Discovery Channel researchers identified and explored the 18 most significant life issues that young men share in the most important areas of their lives, including family life, work, life stage, health and wellness, relationships and so on. They then created 40 attitudinal statements to reflect these trends and set out to collect the responses of 12 000 men across Europe between the ages of 25 and 39, and were able to segment them into four Uber-Segments (which are then further segmented into sub-segments). They have subsequently tested 600 South African men, and will compare the results to those from the European study, to offer South African clients a more localised and contextualised report on local men. The study explains certain trends, and can make certain predictions about the market: for example, based on the local findings, the researchers can explain why it is that the male cosmetics industry is set to grow further in SA. Young men’s lives have become more complex than ever before. Social, economic and cultural changes are making the world of the man so much more evolved. For example, men are delaying becoming ‘grown ups’ (buying the car, buying the house, settling down, etc) because financial freedom is valued above the very complicated and serious trappings of adult life. Emotional support and a strong network of friends is becoming

key, especially in a world in which traditional family structures have unravelled. These men more frequently look for a wife who is intelligent and independent, and will answer his need for equality in the relationship; the Stepford Wife days are over. Meanwhile, the media is throwing new role models their way, and it is having a major impact on men’s concept of their personal image, and what it is that constitutes masculinity; wellness has also taken on a whole new meaning. The study puts paid to the image of the man under pressure and in crisis at the hands of all these new and evolving demands. Instead, say the researchers, men are thriving – and some are juggling the demands of modern life even better than the superwoman who came roaring out of the Eighties, vowing she would manage the kids, house, husband, friends, book club, aerobics class and a high-powered job without breaking a sweat.

The Uber-Segments 







Pressured Providers are more likely to be family men who have traditional and conservative views of their role in the family and society (26% overall, 17% in SA). Modern & In Control men might also be married, but either way, cope well with modern ideas of marriage and life; they do the cooking or work part-time in order to help ferry the kids to school, for example (34% overall, 45% in SA). All About Me men are, as the segment title implies, self-focused; they will drive their career interests, hobbies, desire for wealth and independence as well as leisure pursuits (26% overall, 14% in SA). Non Committals are men who live for the day and shy away from serious commitment or responsibility (14% overall, 24% in SA).

The Discovery Species study will be launched to Discovery Channel clients and the media in SA in February 2009. Enquiries may be directed to Sarah-Jane Harling, account manager: General Entertainment & Specialist Channels, Oracle Airtime Sales, call (011) 329 5017. The results of the study will be available on the Marketing Mix website (www.marketingmix.co.za) along with exclusive commentary from the Discovery Networks Europe (DNE) research team. 

www.marketingmix.co.za

Eastern Cape intelligence

The Eastern Cape: ripe with growth opportunities T

46

he Eastern Cape’s future looks rosy. Eastern Cape Tourism has plans to position the province as a premier travel destination, while the developments along the coast are attracting investment and boosting consumer confidence. “The Eastern Cape (EC) was South Africa’s best kept secret until a few years ago when we were ‘discovered’,” says Mauneen Charter, chief sales officer, Avusa Community Newspapers and Agri, Avusa Media. Tourism flourished, she says, and many farmers have transformed their farms into game lodges, attracting visitors from abroad. Consider that this province offers the Big 5, but not malaria, as well as having beautiful beaches, and very reasonable property prices; the province has attracted an influx of property developers in recent years. “More people equals more business, which means more advertising,” says Charter. The EC is a tough market, says Neil Hart, managing director, Boomtown Advertising, but it is certainly not to be ignored. Even though there has been a downturn in the economy, the EC region is seeing high growth, as in the case of the Coega IDZ, and the five-star Radisson Hotel. “There is a general sense of waiting for the recession to kick in, but strangely is seems that it is very much business as usual. We have noticed very small changes with certain clients, but overall things are good, we are projecting our best year ever this year and are well on track to achieve that,” says Hart. Port Alfred, Port Elizabeth and Jeffreys Bay have probably grown the most and now sport large malls and lots of development is taking place in these areas. Property prices have seen a slight drop and, as a result, are not as inflated as they were a year ago. “What agents are experiencing is that they have many more properties on their books, so buyers have a better choice. A year or so ago agents had very little property to sell as demand was greater than supply,” says Charter.

marketingmix.co.za / vol 27 / issue 1/2 / 2009

The opening of chain store businesses in the region means that national advertising is becoming available to the media in this region. However, there are doubts about the extent to which media planners across SA are familiar with this market. “Areas like the EC have vast regions of several thousands of people who are not easily reached but who, by numbers, can make very good target audiences. One just needs to consider it from the politicians’ point of view – can they afford not to lobby these masses for their votes?” says Hart. Media planners and buyers are warming up to the region, however; as a result, Media24 community media are seeing very good national ad revenues, for example. “But because there aren’t as many big businesses in the area, agencies do not get to see the area as often as they would Cape Town or Johannesburg,” says Reinard du Plessis, GM, MyWeek. “If you think that Nestlé, Willard Batteries, GM, VW and Daimler Chrysler are but some of the businesses that call the EC home, it’s strange that an agency hasn’t decided to open up a satellite office in the area. Many smaller agencies are reaping great rewards by servicing these businesses (and local government) very efficiently from within the EC.” And indeed, the low level of competition is allowing the smaller agencies to really focus on more holistic, through-the-line solutions for their clients, while also being forced to develop in-house the skills that are an anomaly in Jozi’s agencies. “Due to the tighter budgets in the EC we have developed very lean business practices. Gone are the days of big budgets being spent with little care for ROI, every cent is looked at carefully,” says Hart. The EC is harder to reach through traditional media, and Hart supposes that this is because it is often left out of the editorial of national magazines, radio etc. “EC-specific media therefore does well as it creates a sense of ownership that we would not get through several

Eastern Cape intelligence

national media realms. It’s time that national media start including EC (especially Port Elizabeth) stories in their content,” he says.

Newspapers

48

“Press is stagnant, but perhaps more due to management complacency than reader disinterest,” says Hart. However, this cannot be said of community media. According to Andre Olivier, manager of OP Newspapers, Media24, the ad revenues for the company’s community papers in the EC region has grown by around 14 per cent in 2008, compared with the previous year, thanks to the growth of new shopping centres and malls, and the escalated national spending that goes with that. He points to market research, which shows a healthy readership, mainly due to the fact that the editorial content published in these papers has a direct impact on the readers of the publications in their respective communities. The strongest areas of growth are the Port Elizabeth metropole area and the Jeffreys Bay area. “These areas are expanding rapidly and the demand for our papers is increasing month by month,” says Olivier. The community papers in this region have not seen a decline in ad revenues in total. However, Olivier notes a decline in the property and motoring markets. “Advertisers are looking around for the best deals and have become more aware of the ‘fly by nights’ and prefer to advertise in reputable, established papers,” says Charter. According to Charter, the number of newspaper launches has not declined thus far, but whether the new titles will be successful remains to be seen. She believes that newspaper ad spend might drop slightly more if the economic pinch deepens, but that the EC developments will drive demand for advertising media. The PE Express Indaba launched in the latter half of 2008. This publication serves the black townships around Port Elizabeth and is published on the last Wednesday of every month. A total of 30 000 copies are distributed to these areas. Feedback from local businesses and the community is that the product is spot on as far as the target market is concerned and the local residents are ecstatic about a paper that informs them about key issues in their areas. The community newspapers in the EC are ramping up their new media platforms, too. OP Newspapers, for example, is in the process of refining its websites, with the aim of increasing user interactivity with the platform. The websites will be up and running in early 2009. “OP Newspapers has also joined forces with local community radio station, Bay FM, to serve our communities even better,” says Olivier. Looking ahead, it seems the EC newspapers will be consolidating somewhat. “I don’t think anyone can forecast the next year in the EC – we will just have to ride out the storm and hope for the best. I don’t think there will be many new newspapers launched as people are nervous about the economic situation in the country as a whole, not just the EC,” says Charter.

Radio Radio is strong in the EC, and the local stations have enjoyed good growth over the past five years. “In terms of local advertisers, we have not lost ground on advertising revenue year on year,” says Toinette Koumpan, promotions manager, Algoa FM. From a national perspective, the unstable economic climate has contributed to clients cutting back on advertising budgets and adopting a wait-and-see attitude.

marketingmix.co.za / vol 27 / issue 1/2 / 2009

“Reports from AC Nielson ADEX indicate year-on-year drops of between seven and 14 per cent among other major radio players, whereas revenues on Algoa FM have not dropped by these levels,” she says. The station makes education of clients a priority to ensure that they understand the audience Algoa FM speaks to. The station targets a market aged 25-49 in LSM 7-10. Ongoing increases in audience with past seven days at 919 000 (RAMS, Q4 2008). And while the station is not actively targeting young listeners, it is seeing consistent growth in the number of young listeners. “Algoa FM has embarked on an aggressive strategy to grow the brand across a variety of media platforms specifically online and mobile marketing through the launch of a mobisite,” she says. In December, a new look interactive site was launched, with a content-driven strategy. “The site is updated on a daily basis ensuring content is fresh and exciting at all times with the power of the strong listenership to encourage hits to the site,” explains Koumpan.

Magazines The community magazines in the EC have seen a slow down in revenues, but this follows national trends, according to du Plessis. “We are, however, seeing strong support for our titles in PE,” he says. New launches are also slowing. “Due to market saturation on a micro level (meaning those magazines that do not distribute nationally), launches have certainly slowed there, and it is clear that both MyWeek and GetIt are consolidating their titles during a harsher economic climate,” explains Du Plessis. The growth in infrastructure resulted in a growth in publications to service those developments or their tenants. “Unfortunately, that spurt was short lived in the EC (the EC normally experiences shifts in the economy three to six months after the rest of the country) and the current climate has impacted on that growth,” explains Du Plessis. There are no concrete readership figures as yet for MyWeek, though it has a distribution of 20 000 copies in PE. Looking ahead, these publications will be strengthening their positions through expansive projects based on the core titles, for example. “There are a few opportunities for micro titles, whether anyone has the stomach to invest in those opportunities remains to be seen,” says Du Plessis. 

Expert opinion

What’s the flutter about Twitter Y

ou would be forgiven if you don’t get Twitter. Most people don’t, at first. Who would want to know the answer to the question, “What are you doing?” With more than three million people already ‘twittering’ it has taken the world by storm and is currently the fastest growing social network in the world. Twitter recently revealed that Facebook offered to buy it for US$500 million in stock*. Clones are popping up all over and developers are developing API applications for Twitter at an alarming rate. If you’re not sure what I am talking about let me start at the beginning. Twitter is an Internetbased application which is described in its own blurb as: “Twitter is a service for friends, family and co–workers to communicate and stay connected through the exchange of quick, frequent answers to one simple question: What are you doing?” (www.twitter.com) The answer is given in a maximum of 140 characters and can be constructed using the Web, IM or SMS. Although the ‘Updates to SMS’ feature was disabled in SA because of network costs, tweets can still be made by SMS, although there are many very useful applications available for Smartphones and iPhones etc. Your update is read by your followers, people who have elected to be your ‘friend’ and in turn you follow people whom you chose. You also have the option to protect your updates or to restrict them to your approved followers only. Twitter is, in short, a mind-bogglingly efficient way to stay in touch with many people at one time. My tweets are linked to my Facebook profile and other sites, and it automatically updates my status on these sites too. It has very low barriers to entry; it’s far easier to write a message of 140 characters than it is to write an entire blog, for example. It allows people to interact in the time between more formal e-mails and blog posts, and by doing so allows a far more intimate relationship to develop between friends and co-workers. Am I reading your mind? You are probably wondering ‘why on earth would I want to know that Walter is having a cup of coffee or that Jane is stuck in traffic’? Like many technologies the application has far more interesting possibilities than were initially thought of when it was designed. I will give you some examples:  Many tweeters will sit in a conference, summarise the speaker’s presentations and tweet it to their followers, they will use a

simple search indexing technique called a hash tag and by broadcasting it the proceedings at the conference can be searched and followed by many. At a recent conference I was able to bring questions in from around the world which greatly enhanced the experience of the delegates.  It’s very easy to get opinions by asking a question. As a demonstration, in a recent presentation I asked my followers for restaurant recommendations. In two minutes I received more than 30. Barrack Obama has more than 100 000 followers, think how quickly he could gauge the opinions of the people.  Consider co-ordination in a sales team using a private twitter network, or in a service operation, or motivating employees or getting instant feedback.  Consider its use in a disaster situation co-ordinating rescue attempts. Twitter was reportedly used during the hurricane disaster in New Orleans. The Los Angeles fire department is on Twitter.  Within 20 seconds of the recent earthquake in Los Angeles starting, I received a tweet: OMG it’s an earthquake.  Consider using Twitter to keep in touch with your customers, informing them and judging their response to your marketing and branding efforts. Dell uses Twitter as does Zappos and Southwestern in the US.  I use Twitter extensively for gathering information, as many of the people I follow are international thought leaders in their fields. I also use Twitter to broadcast my writing, public speaking, consulting services, and to announce and promote my blog posts.  I also use Twitter to follow what people are saying about my clients.  I use Twitter to build a community. For example, on a social level I recently attended a meeting in Cape Town. I tweeted that I would be staying on after the meeting, and a ‘tweetup’ (a Twitter meet-up) was arranged I met 30 to 40 people. Twitter is still very new and like any social media tool, it can be used in a frivolous and destructive manner and can eat up productivity; however, as a tool to engage your customers and empower your employees it has enormous strategic and marketing potential. As a marketer you can’t ignore it. Your customers are using Twitter or its clones to talk about your business, your products and your service… and you had better be listening. How will you use it? 

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Walter Pike head of the faculty of marketing and advertising AAA School of Advertising [email protected] (011) 781 2772 (You can follow Walter on twitter at www.twitter.com/walterpike). *Reference: http://www.bizjournals.com/sacramento/stories/ 2008/11/24/daily17.html

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*

Expert opinion

Technology: destination (not entirely) unknown This is the third in a series of articles written by the Hello Computer team outlining the core competencies which are the essence of website creation.

T

he first and most important thing that I can say about technology, on any platform, is very simple. A fundamental mind shift in the manner in which technology is applied is far more important and necessary than any new developments, innovations or technology itself. More often then not, the latter is a result of the former. I pride myself on being technologically agnostic, and I justify my belief by first assessing what the desired outcomes and targets of any online project are, before settling on a means of delivery. A rural analogy that really helps in understanding this attitude towards technology is a little bit simple, but very effective (as rural things often are). You don’t pick up a pitchfork to go do some farm work and then realise that you actually need to dig a hole, which leads you to waste time going back to the shed to fetch the spade you would have taken, had you known what was going to be required of you. I cannot emphasise this enough – decide on what, before you decide on how. So simple, yet so easily overlooked.

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The typewriter used to be cutting edge

Benon Czornij technical director HelloComputer (011) 477 3304 [email protected] www.hellocomputer.net

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There is no golden technology checklist that you can reference to make sure your brand is tech savvy or one of the cool kids. There is Flash, JavaScript + Ajax, HTML, Flash and XHTML hybrids, PHP… the list goes on and for as many different technologies as you can discover, there are places for them to exist. Where and how should always be dependant on your needs and not guided by what’s easier to build. A handy tech test for a brand is to ask someone completely removed from the process to test the online experience. If they can go through the entire journey the brand has created intuitively without being confused or having to consider where they should be navigating to, then the brand has succeeded. The successful choice and use of technology should result in the delivery of the most simple user interface available, that accommodates the richest experience while meeting your targeted objectives within your chosen channels of communication. A myth that must be debunked is the belief that Flash sites are too cumbersome to load

competitively in comparison with HTML sites. This, besides being untrue, is the result of sub-standard development by individual developers whom are able to design and build in Flash, but who are unable to optimise file sizes appropriately. Another issue I come across on a daily basis is the belief that only HTML sites can get listed on search engines. This also, is simply not true. If at any stage you get told of an online constraint, realise that it could be subjective and get a second opinion before diving in.

David 1 – Goliath 0 A lot of people bemoan the infrastructure we have in South Africa, but the simple truth is that this isn’t a major factor when talking to the majority of users who access the Internet with more then adequate connections from their places of work or for the higher LSMs whose access is via powerful home connections. We have one of the highest cellphone penetration rates in the world; couple that with new and innovative means of communicating that are emerging everyday and you realise that a little bit of creative thinking about the application and relevance of technology can easily counter any infrastructure nay-saying.

Technology of the world The term global village was popular a while ago, but people seem to have forgotten what it actually means. I communicate with people all over the world, sharing knowledge and ideas, as many people do. The result is that although someone is thousands of kilometres away, their ideas are right here with us and ours with them. There are no limits or challenges that are location specific that cannot be creatively demolished in the name of progress. A final thought I’d like to leave you with is a little bit frightening and yet exciting at the same time. The digital camera almost killed the use of film entirely in less than five years. Today, sitting in a basement somewhere in the world, there is a completely unknown person, developing something that will revolutionise our industry. We don’t even know who this person is yet, let alone what or how they’re going to revolutionise our world. 

Expert opinion

Service please, South Africa, this is your customer calling I t is generally regarded that customer service in SA is very poor; some would say it is almost non-existent. In fact, according to a recent global survey SA was rated 111th out of 124 countries in service excellence. According to John Tschohl, president of USbased Service Quality Institute and dubbed by Time magazine as the world’s top customer service guru, “South Africa could reach a growth rate of 10 per cent a year or possibly more if greater attention was given to customer service.” Certainly, we have a considerable way to go to compare with other emerging economies, but SA is not alone in its need to address its customer service challenges. According to a global study conducted by Accenture earlier this year, companies across the world are not keeping pace with consumers’ rising service expectations, especially in emerging economies. The survey findings indicate that increases in customer service expectations continue to outpace efforts made by companies to improve service. Globally, nearly one-half (47 per cent) of survey respondents said their expectations were met only ‘sometimes,’ ‘rarely’ or ‘never’. To capitalise on our positive attributes of cultural diversity, friendliness and welcoming hospitality, especially with the upcoming 2010 FIFA World Cup, we must be able to deliver a globally acceptable standard. Yet, in my opinion, this will only be achievable if a service ethos is adopted across all sectors and through every level of society, and moreover can be maintained in every interaction visitors have in their experience of SA. We cannot hope to improve our service record without commitment to making a difference across all sectors. While fulfilling service commitments, meeting expectations and achieving customer satisfaction are service basics, delivering a level of customer service that creates a positive experience and makes people feel their interaction with a company – or a country – adds value, sets it apart. Service must become a real priority for SA to ‘get right’ over the next two years. More customer service support facilities and enablement channels will be needed with contact centres being critical to providing visitors and South Africans alike with access to information, travel and ticket information, fulfilment of bookings and a host of others 2010-related services. Yet, many call centres in SA do not provide

consumers with a satisfactory service experience. Based on customer satisfaction market research, the major gripe that consumers have with call centres is their failure to appreciate that the caller is their customer, not merely a member of the public or another number in the queue! While call centres’ primary function is to render support, customers are demanding people who expect their individual requirements to be met. Even as call centres cannot be everything to everyone, agents should nonetheless be adequately equipped to manage customers’ expectations. While agents are trained to handle all types of customers, my observation is that call centre agents fall short on the basics. Most notably, they do not readily take the time to listen and properly understand a customer’s query; and then seldom respond with solutions. This leaves customers feeling disregarded and frustrated, and having wasted precious time. Companies know only too well that it takes just one poor service experience for a customer to go elsewhere. Therefore, more emphasis should be placed on sensitising call centre agents to be more empathetic and responsive to their customers. Furthermore, customer service and call centre agents need to better understand how to communicate the brand that they are actually representing. In my experience, agents do not see themselves as an extension of the brand and therefore do not understand that they represent a component of the value a company offers the customer. Yet, consumers expect value, and expect a value-added service or experience from their chosen brand. Marketers understand this, but call centre or customer service agents typically do not. Marketing departments in companies could do much to remedy this situation through educating call centre agents on the value proposition of a brand, the key benefits, what marketing messages have been communicated, what the market perception of a brand is, and therefore what customers’ expectations of a product or service are likely to be. Such training should not apply to contact centre personnel only, but to every single person in a business. If everyone across a company understood what their customers valued about the company’s brands, and were effective in harnessing its efforts to increase that value through delivering exceptional customer service, the odds are that they would outshine the competition. 

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Nicci Columbine managing director Columbine Communications (011) 880 8137 [email protected]

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Services SETA

CM (SA) update Welcome to 2009 and to an exciting year, packed with value, engagement, growth and self-actualisation for Chartered Marketers. The past few months have seen the Temporary Advisory Committee hard at work, putting in place a number of CM (SA) building blocks. There is still work to be done, but progress is steady and the future is bright. More detail on some of our activities will be shared shortly – but to keep you as motivated as the team is, we are pleased to share with you our achievements to date and list the areas we are working on for delivery by July this year.

So what’s in progress?  The Communication Strategy and Plan is complete and the regular communication to CM (SA)’s and to prospects will commence shortly.

The purpose of the programme was and is, as we go forward to facilitate the maintenance of the currency of the competencies of Chartered Marketers in order to ongoingly award the designation of qualified Chartered Marketer SA.

 The 2009 CPD Workshop schedule is close to finalisation – thanks to Dr Michele Serfontein, CPD Project Manager.  The CM (SA) Constitution is in development and will be completed within the next three months, following consultation and engagement.

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 We are currently formulating processes around the establishment of the permanent ‘Advisory Committee’, which we are anticipating will be in place by July 2009.

The Marketing Practitioner (MP) (SA)’s systems, processes, procedures and rollout plan is also being competed. MP (SA) applies to marketers with three years working experience as apposed to CM (SA) which requires 10 years in the workplace, at a senior level.

 The process for CM (SA) and Marketing Practitioner, or MP (SA), from initial interest through engagement workshops, PoE submission, CPD maintenance and more, has been fully documented.  The CPD Activity Providers process and protocols are currently being finalised.  The re-registration of current CM (SA)’s is now complete and a re-accreditation ceremony is planned for the first months of 2009. Congratulations to those who were successful – communication in this regard will reach you shortly.  New CM (SA)’s are currently undergoing the CM process and we expect to have two Board Exams written this year – those dates being 27 March and 30 October 2009.  The Marketing Practitioner (MP) (SA)’s systems, processes, procedures and rollout plan is also being competed. MP (SA) applies to marketers with three years working experience as apposed to CM (SA) which requires 10 years in the workplace, at a senior level.  Overall, great progress has been made and more positive outcomes are expected soon, so watch this space and look out for the first CM (SA) Newsletter coming to you soon.

Continuous Professional Development: 2007/8 in retrospect, and going forward.

 The Committees responsible for CM (SA) quality, for benchmarking, standards, CPD development and more will be in place shortly. Various academics and industry marketing leaders will assist in finalising this aspect.  The process is underway to employ, under the auspices of our custodian, the Services SETA, within their body – Communication Management Services Chamber – a full-time, dedicated marketing co-ordinator and project manager.

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About the CPD Programme The Continuing Professional Development (CPD) programme for Chartered Marketers that was initially introduced by the Services SETA in 2007 has received much positive feedback from delegates. More than 125 Chartered Marketers participated during the course of 2008, in each of the three regions, where workshops were presented. All the costs associated with these workshops were covered by the Services SETA. This made it possible for every Chartered Marketer to

Services SETA

attend without having to consider additional expense. Marketers who are members of the Services SETA and who are working for themselves or small business owners were especially appreciative of the opportunity to participate. The purpose of the programme was and is, as we go forward to facilitate the maintenance of the currency of the competencies of Chartered Marketers in order to ongoingly award the designation of qualified Chartered Marketer SA. In 2009 the programme will be made up of three components:  A compulsory CPD calendar made up of four sessions presented as three-hour workshops in Johannesburg, Durban and Cape Town – two workshops will be run by renowned international marketers and two by leading South African marketers. Chartered Marketers are required to attend all four sessions in order to comply with the CPD requirements.  Participation in registered CPD activities offered through registered CPD activity providers, such as PRISA, SAMRA, the DMA SA, GIBS, Wits Business School, UCT Graduate School of Business and others.  Various activities promoting the continuing professional development of Chartered Marketers including the reading and publishing of articles and papers; giving of speeches and lecturers; supervising, mentoring or coaching of other practitioners and professionals; attending courses and seminars; membership of marketing professional bodies and industry organisations; and participation in community or social development projects. Look out for details of the 2009 CPD Programme which will be available online from mid-February on www.serviceseta.org.za

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Measuring the effectiveness of sports sponsorships as part of an organisation’s marketing investment is key to understanding its value to the organisation. The 2007/8 programme ran most successfully and was concluded with the submitting of completed CPD record cards on 31 October 2008. Close too 100 Chartered Marketers completed and submitted their record cards and have now been re-accredited. All submissions were evaluated by the CPD and Exemption Committee, under the guidance of Dr Michele Serfontein, CPD Project Manager contracted by the Services SETA. Verification of participation in continuing professional development is a new component that has been introduced to the programme during 2008. In line with this, twenty-five percent of the CPD submissions will be required to submit additional supporting documentation, providing evidence of participation in the CPD.

Compulsory CPD Calendar – a View on 2008 A diverse group of marketing experts participated in the CPD calendar of workshops. Although some of the topics were not applicable to all Chartered Marketers, who work in diverse industries in specialised areas, the CPD workshops established an opportunity for Chartered Marketers to interact with each other, the subject matter experts and the programme managers.

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“Being forced to participate in a workshop that you don’t find particularly relevant to your work has taught me that I can learn new things from other areas of marketing,” commented one of the participants. The topics led to great discussion and introduced new and challenging ideas that could be used by participants in refining and improving their marketing strategies:

The Pivotal Role of Direct Marketing – Traditional and New Media, Trends, Quick Wins and Techniques (presented by Michelle Perrow) This workshop showed marketers how direct marketing has moved from a ‘silo’d’ discipline to an integral part of the marketing mix. Marketers need to maximise direct marketing by introducing new media to traditional channel usage and by appreciating the critical role of the marketing database. Best practice was discussed through the presentation of various successful customer- and enterprise-relationship management programmes and loyalty programmes. Metrics pertaining to direct marketing was considered, as well as trends propelling direct marketing into the future.

Sports Marketing and Sponsorship (presented by Michael Goldman) Sport sponsorship has been shown to be extremely successful in creating emotional brand connections and building consumer loyalty. Tapping into the fans’ passion and sustaining the connection requires strategic thinking, brand positioning and an approach to partnership that moves beyond traditional views of sponsorship. Measuring the effectiveness of sports sponsorships as part of an organisation’s marketing investment is key to understanding its value to the organisation. The objective of this workshop, therefore, was to expose delegates to current local and international best practices and leave them with an actionable approach that could improve the performance of their organisations. It assisted the delegates to integrate their sports marketing and sponsorship activities into their organisations’ broader brand and marketing strategies.

Consumer Loyalty Beyond Delivering Quality and Bringing Satisfaction: The Creation of Perceived Customer Value (presented by Francis Petel) The workshop covered a perceived quality, the different approaches to customer satisfaction measurement and the focus on churn analysis – what triggers churn events and their analysis in terms of risk management. It also looked at the role of incidents in loyalty, as well as brand loyalty and consumer resistance, especially the effect on marketing strategies and how to address these issues. Finally, it considered a ‘value’ approach to loyalty with a discussion covering a comprehensive range of loyalty related issues, as they occur in European and mainly French consumer behaviour.

Building a Customer-centric Organisation (presented by Nicola Kleyn) Organisations are increasingly focusing on becoming more customer-centric as part of their attempts to grow revenues. This module provided marketers with insights on how to mobilise their organisations and value delivery systems to put customers back at the centre of the organisation’s activities. Delegates were shown how to conceptualise the construct of customer-centricity, before focusing on the core components of a customer strategy, which if not in place, renders an organisation’s customer-related activities unfocused and less effective. The workshop was concluded by identifying the core organisational behaviours that need to exist in order to promote customer satisfaction, retention and equity, and by looking at the role that marketers can play in enabling these.

Services SETA

stages of research and marketing analytics to identify routes to superior performance outcomes.

Managing corporate reputation, communicating about corporate brands and building corporate identity, are vital issues facing companies and other corporations today.

Building and Protecting Corporate Reputation (presented by Prof. Russell Abratt) Managing corporate reputation, communicating about corporate brands and building corporate identity, are vital issues facing companies and other corporations today. New environmental pressures have led to increasing importance being accorded to these topics. Possible effects of eroded reputation include a drop in share price, decline in market share, difficulty in recruiting talent and discontent in the communities in which the company operates. Senior Marketers have to become aware of the fact that corporate level marketing needs to play a very important role in developing and maintaining an organisation’s reputation among all its stakeholders. This workshop explored the role of corporate identity, organisational identity, corporate image, corporate communication and the corporate brand in reputation building and management.

Marketing Renaissance (presented by Dr Steve Burgess) With marketing enjoying a renaissance worldwide, this upbeat seminar explored two important trends that are helping the discipline regain the boardroom influence it once held. The first trend concerned the ability to leverage our new insights into the institutional context of emergent markets. The second trend concerned the advent of the new ‘marketing engineering’ era. This seminar showed how marketers could leverage these marketing renaissance trends to establish and stoke emergent market learning laboratories and propel their companies and personal careers to new heights. Opportunities and challenges in this new marketing engineering era, which draws on soft and hard market knowledge to hone market orientation within the firm, were discussed. Delegates also discovered how marketing learning laboratories use four

Innovation, Marketing and Branding in South Africa (presented by Gordon Cook) This provocative and energising workshop discussed areas requiring innovation in marketing and branding in South Africa. It also looked at current innovative thinking taking place in the fields of branding and marketing. The following question was raised: is business the brand or is brand the business? Delegates were challenged to think beyond the paradigm of a brand being developed as a result of a business being established. Rather, business is established because someone has ‘had a dream’. The dream is converted into a product or service and a brand is established. Integrating the responsibility of building the brand into the business is the paradox faced by marketers wanting to stand out as professionals fighting for recognition at boardroom level.

Trading currencies for the buying and selling of media space and time (presented by Dr Paul Haupt) This presentation focussed on providing a broad perspective on media audience research; SAARF and its critical role in the advertising, marketing and media industry; and how it can be used to support and inform best practice in marketing in South Africa. The workshop covered the history of and rationale for media audience research and the development of the South African Advertising Research Foundation (SAARF) since 1974. It also looked at trading currencies for the buying and selling of media space and time, the segmentation of audiences focusing mainly on the SAARF Universal Living Standards Measure (SU-LSM), and explored future challenges. Chartered Marketers can look forward to a similar scope of CPD topics in 2009. This will ensure that each CM (SA) is up to speed with both traditional and new media trends.

Michelle Perrow

CM (SA) Project Co-ordinator (011) 808 1600 [email protected]

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Law mix

Tobacco products control act – where do we stand?

I

f you thought the current Tobacco Products Control Act placed a burden on smokers, the current Amendment Bill has set the bar much higher. The Bill was recently passed by the National Assembly and is now awaiting signature by the President before coming into force. The purpose of the Tobacco Products Control Amendment Bill is defined in its preamble. It includes, inter alia, the provision of new control over the smoking of tobacco products, the provision of standards in respect of the manufacturing and export of tobacco products, and an increase in penalties for those who contravene the Act, once it comes into force. Each of these individual “sub-purposes” is discussed below.

New control

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Rachel Sikwane associate Bowman Gilfillan Inc (011) 669 9624 [email protected]

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Previously, the smoking of tobacco products in any public place was prohibited. The Tobacco Products Control Amendment Bill now indicates that, inter alia, “no person may smoke any tobacco product in a public place, any area within a prescribed distance from a window or entrance to a public place or any motor vehicle where a child under the age of 12 years is present.” Furthermore, where public place was previously defined as “any indoor or enclosed area which is open to the public or any part of the public and includes a workplace and public conveyance”, the definition of public place will be amended to read “any indoor, enclosed or partially enclosed area which is open to the public and includes the workplace and a public conveyance.” Another amendment in the control over the smoking of tobacco products is that an employer must ensure that employees may, without any retaliation, object to smoking in the workplace, which is in contravention of the new Act. Furthermore, an employer must ensure that employees who do not want to be exposed to tobacco smoke in the workplace are not so exposed, that it is not a condition of employment that an employee is required to work in any portion of the workplace where smoking is permitted and that they are not required to sign any indemnity for working in any portion of the workplace where smoking is permitted. At a first glance, one wonders how, among others, restaurant owners, their customers and their employees will adjust to this new law.

Manufacture and export Another purpose of the Tobacco Products Control Amendment Bill is to make provision for standards in respect of the manufacturing and export of tobacco products. The Act itself will not expressly state these standards; rather, the Minister will later promulgate regulations in this regard. However, no person will be allowed to manufacture a tobacco product unless it complies with such standards. Furthermore, the standards will require every manufacturer of a tobacco product to provide information about the product and its emissions to the Minister and the public as may be prescribed, in a prescribed manner and within a prescribed time. Finally, no person will be allowed to export a tobacco product from South Africa unless it meets the product and testing standards of the country of final destination. If no such standards exist in the country of final destination, the standards as prescribed in South Africa will apply. Therefore, where an exporter previously need not have stated warnings on their tobacco products meant solely for export because the destination country had no prescribed standards, the new law seeks to set such standards based on those applicable to South Africa.

Penalties The provisions relating to penalties have certainly been the more drastic changes to the current Act. Previously, the fines persons would be liable for, if they contravened certain sections of the Act, ranged from R200 to R200 000. The Amendment Bill penalties now range between R500 and R1 million. Any person who is caught smoking in public is liable to a fine of up to R500. Owners of restaurants and other public places are now liable to pay a fine of up to R50 000 if they contravene the new laws. Furthermore, employers who force employees to work in smoking areas against their will, will be liable to a fine of up to R100 000. Advertising houses and their clients as well as tobacco manufacturers and exporters are liable to a fine of up to R1 million for contravening the provision of the Act relating to the advertisement, manufacture and exportation of tobacco products respectively. One can only conclude that these increased fines are meant to give the current Act a bite that will match its new bark.