Marketing Mix Magazine Sept Oct 07

MarketingMix

CONTENTS

I 0 2 I Book Review

I 3 1 I Expert Opinion: Lizelle Smit

Marketing Mix reviews Quirkology (authored by Richard Wiseman), and finds out about curious aspects of life: how much of a role does one’s horoscope actually play? Or how can I tell if someone is lying to me?

Lizelle offers some expert tips for advertising on radio ahead of the holiday season

20 I 0 4 I Ed’s note

Helen unpacks packaging and its role in the marketing mix

I 0 6 I DMA Find out about the Assegai awards criteria and categories, and the new founder members for the DMA

I 0 8 I News

I 3 3 I Indian media Marketing Mix gets a little closer to the local Indian market, and discovers a gem

11 29

All the latest gossip in the wonderful world of the marketing mix

I 3 8 I Business Media New entrants into the business media sector offer more niche target markets and have forced everyone to up their game

I 1 6 I 7 Day [B]itch Discovery Magazine editor, and freelance writer, Gus Silber tells us why he doesn’t like films about pirates

I 4 6 I Ethical marketing 12

49

I 1 7 I Expert Opinion: Richard Duncan

Richard tells you how to maximise your e-mail marketing returns

I 1 8 I Brand Anatomy Marketing Mix gets to know Hummer

50 16

I 54 I Sales Promotions Critique Marketing Mix looks at some of the best sales promos

I 2 8 I Footskating 101 54

Footskating 101 producer, Ronnie Apteker, chats about the trials and tribulations of marketing a local film

Michele explores the school car park dynamics, and the hullabaloo around marketing to kids

I 50 I Content Champions We pick this year’s best content providers

Marketing Mix investigates what’s hot and happening in the townships, and tells you how to get into the township markets

I 3 0 I Expert Opinion: Michele Venter-Davies

Alison Tucker ponders what it means to be an ethical marketer amidst the Green revolution

I 4 9 I Expert Opinion: Richard Mullins

Richard examines the nature and impact of change

I 2 0 I Township marketing

I 3 2 I Expert Opinion: Helen McIntee

I 5 5 I Expert Opinion: Nici Stathacopoulos Nici prompts direct marketers to Just Do It

18 I 56 I Law Mix Eugene Honey unpacks the risks and issues around licensing intellectual property

Vol 25 No. 11/12 I 2007 I MarketingMix

1

by michelle sturman BOOK REVIEW

Quirky Quirkology is about the quirky nature of humans. The author, Richard Wiseman, is a well-known psychologist whose studies and experiments have been featured on TV documentaries across the world. Quirkology not only details Wiseman’s foray into the weird and wonderful, but also some of the other quirky studies undertaken in the name of trying to figure out what makes us tick. According to Wiseman: ‘quirkology uses scientific methods to study the more curious aspects of everyday life… but has never been formally recognised within the social sciences.’ One of the first stories that Wiseman tells is of an experiment playing the stock market. Can astrology really predict what’s going to happen? Wiseman found a city analyst, a financial astrologer and a fouryear-old girl to invest in the stock market. After a year, the results were analysed. The four year old made the only profit! Wiseman was prompted to engage in this first experiment to find out why people believe in astrology – a few more examples of astrological experiments are detailed in the book. What’s important from reading the astrology experiments is the notion that many people who believe in astrology know what star sign characteristics are meant to be, and therefore tend to say they possess those characteristics. Finding out detailed characteristics of consumers could be a way to fine-tune campaigns. Do your consumers believe they are lucky or unlucky, for example? Results from various experiments reveal that people make their own luck: ‘the lucky people were optimistic, energetic, and open to new opportunities and experiences. In contrast, the unlucky people were more withdrawn, clumsy, anxious about life and unwilling to make the

most of the opportunities that came their way.’ A fascinating chapter, entitled Chronopsychology and the grim reaper, details an experiment by sociologist David Philips at the University of California. His specific interest is whether people are able to postpone their death until after the moment of important emotional significance. While controversial, one of his largest studies looked at whether people’s date of birth influences their date of death. It was found that women were more likely to die in the week following their birthday, while men were likely to die in the week before their birthday. Another study conducted on 2 000 Finnish men tried to establish a link between healthy thinking and longevity. The group was divided into pessimistic, optimistic and neutral groups and studied for six years. ‘It was found that the men in the “pessimistic”group were far more likely to die from cancer, cardiovascular disease and accidents than those in the “neutral” group. In contrast, the “optimistic” group exhibited a far lower mortality rate

The Chambers Dictionary 10th Edition For those looking for the most eccentric, lesser-used words in the English language, this is the dictionary to have. It’s probably the only way you’ll ever get to know what jobernowl, fizgig, snoozle and zoozoo mean – and they’re just some of the examples on the cover! A must-have for copywriters and anyone who loves words. The dictionary also contains sections on first names, foreign language quotes, books of the Bible, wine bottle sizes, international paper sizes and Internet suffixes, among others.

The Chambers Dictionary 10th Edition Chambers Harrap Publishers Ltd R495

2

MarketingMix I Vol 25 No. 9/10 I 2007

than the other two groups.’ Those engaged in research, will be interested in the section on lying. Research conducted by Professor Charles Bond, involved surveying thousands of people from over 60 countries. What’s intriguing is that the traditional indicators we associate with lying – averting a gaze, fidgeting etc – just don’t hold up, which could explain why people are so bad at detecting liars. Apparently, the way to tell a lie is to study the words used and the way in which they are used. A few indicators include fewer references to themselves and feelings within the story or lie they are telling. Following on from this section is one on the human smile – can you tell if a smile is real or fake? In the chapter, Trust everyone, but always cut the cards, an experiment to get people to part with their cash through the power of suggestion is demonstrated. In the experiment, two objects were bought from a hardware store. People in the first group of passersby were asked if they felt anything unusual – as expected, they didn’t. The second group was told that the objects were designed to feel unusual – some people reported different sensations and said they would pay far more than the items were actually worth. The third group had visual elements introduced such as Wiseman dressed in a lab coat. This group reported more extreme sensations and reported they would pay more than three times the amount for the objects than the second group. According to Wiseman: ‘It was a dramatic demonstration of how easily suggestion can be used to part the gullible from their cash.’ Other interesting experiments include: how people choose to save money for items on sale relates to the overall percentage of the amount of money they are spending; how subliminal advertising doesn’t really work; how first names affect personality, life and career choices; how news affects people’s outlook; how to write the perfect personal ad; how female van drivers are the most aggressive; and measuring the pace of life. 

Quirkology The Curious Science of Everyday Lives By Richard Wiseman Macmillan R143

by michelle sturman ED’S NOTE

T V talk I’m addicted to Ugly Betty, the smash hit US comedy (just won a couple of Emmys) but what has really piqued my interest is the Dulux sponsorship. Talk about a match made in heaven. It’s not as if we haven’t seen the ads before, but kudos to the genius that decided to match the two. This got me thinking about other sponsorships of my favourite programmes. Prison Break, for example, was sponsored by Peugeot. Not an altogether bad match and it did tie the ads into the theme of the programme – fast getaways, etc. Survivor is great local programming (and vastly superior this year without the D-list celebs on it) but I’m not 100 per cent convinced by Vodacom’s ads. They’re cute and designed to tie in with the whole ‘surviving without broadband’ idea but I think it’s slightly misplaced and the cartoon theme doesn’t work for me. The KFC ads that are slotted in are great. But, neither of them are a patch on Pick ’n Pay’s efforts last year – loved the fact that ads were tied directly into an event that happened on a particular night’s episode. That’s creative. Two sponsorships that really don’t work are Leaf Wireless for Grey’s Anatomy and Tata for Desperate Housewives. Let’s start with Grey’s Anatomy. It’s simply the wrong product for this environment and the ad is all wrong – aliens and hospitals, cellphones and hospitals! A little trite and completely obvious, but how about medical aid, gyms, energy drinks, beauty products – the female cast is always beautifully made up, no matter what the emergency, or tissues – who doesn’t sniffle during almost every episode? And now for Desperate Housewives… call me a snob (and the Marketing Mix team) but when the cast of the show drive very expensive cars (Gabrielle and the Aston Martin, for example), Tata doesn’t quite make the grade. That’s not to say I think Tata cars are rubbish or ugly, they just don’t go with the show – a better fit perhaps would have been Audi with the new TT or BMW showcasing the Mini Cooper S convertible. Coca-Cola’s sponsorship last year was ok, but so much more could have been done with it. Why didn’t Coca-Cola come up with a mini-series that offered a new episode with each airing of the show – it would have caused as much watercooler gossip as Desperate Housewives itself. If brands are going to spend so much boodle on sponsoring some of the best programmes around, then at least do them justice. The very least you can do is think about which products really fit with the show in question, then think long and hard about what type of ad would fit best, and then think out of the box – a lot more.

PROPRIETOR AND PUBLISHER: Systems Publishers (Pty) Ltd. Tel: (011) 234 7008 North Block, Bradenham Hall, Mellis Road, Rivonia PUBLISHER: Terry Murphy EDITOR: Michelle Sturman e-mail: [email protected] JOURNALIST: Fulvia Becatti e-mail: [email protected] SUB-EDITOR: Jenny Bastomsky e-mail: [email protected] ADVERTISING MANAGER: Robyn Andrews e-mail: [email protected] PRODUCTION: Spencer van Graan e-mail: [email protected] SUBSCRIPTION ENQUIRIES: Daisy Mulenga Email: [email protected]

Copyright of all material in this publication and supplements are reserved by the proprietors, except where expressly stated. The opinions in this publication do not necessarily represent the views of the publisher.

Database: List Perfect

3 944 Jan-June 2007

4

Marketing Mix Conference Programme •

Effective Marketing in the Township: 16 October 07

•

Word of Mouth Marketing Workshop: 6 November 07

•

The Marketing Law Workshop: 13 November 07

Sponsorship and delegate enquiries: Robyn: [email protected] (011) 234 7008

MarketingMix I Vol 25 No. 9/10 I 2007

DMA

DMA Assegai Awards 2007 The Direct Marketing Association of South Africa has taken back the direct marketing awards and this year sees the relaunch of the Assegai Awards. The purpose of the awards is to recognise and reward excellence in multi-channel direct response marketing. “We are aiming to attract over 200 entries this year and in negotiations to secure international judges from the UK and US. We are looking for campaigns that have pushed the envelope, have excelled and delivered real, measurable results,” says Brian Mdluli, CEO, DMASA. This year, the South Africa Post Office (SAPO) has stepped onboard as the main sponsor of the awards. “We are committed to raising the profile of direct marketing in our country and from a SAPO perspective, even influence the growth of direct mail as one of the effective advertising media,” says Janras Kotsi of SAPO. For more information contact Teresa Settas (011) 894 2767, e-mail [email protected] or visit www.dmasa.org. Closing date: 12 October 2007. The awards will take place on 5 Nov 2007

Assegai 2007 categories and criteria There are seven sections covering 21 categories. Campaigns may be entered into multiple categories and across different sections. Assegai statuettes will be awarded to those campaigns that meet the judge’s criteria in each category. The Inkosi Award will be given to the entry that exceeds all others in the area of creativity, strategy and results. Section 1: Media Categories  3D/Direct mail  Alternative media  Mass media (TV/infomercials/outdoor/radio/print).  Catalogue/mail order  Direct distribution/inserts  Multiple media/integrated campaigns  Telephone marketing Section 2: New Media Categories  Mobile marketing  E-marketing Section 3: Strategic and Integrated Marketing Categories  Customer relationship marketing/loyalty  Enterprise relationship management programmes Section 4: Technology Solutions Categories  Database  Electronic commerce innovation Section 5: Individual and Company Categories  DM marketer of the year  DMA Hall of Fame  Organisation of the year

6

MarketingMix I Vol 25 No. 9/10 I 2007

Section 6: Creativity Categories  Copy  Art direction  Creative solutions Section 7: Student Awards Categories  Young direct marketer of the year (under age 30)  Student marketing team/campaign of the year Judging Criteria In each area of assessment, the judges will have the following criteria top of mind:  Strategy: counts for 30 per cent of the judging criteria and will be evaluated on whether the campaign demonstrates a thorough understanding of the business environment and market, while displaying a focused strategic insight in response to the challenges posed by the brief.  Creative: counts for 30 per cent of the judging criteria. Only work displaying true originality, effectiveness and craftsmanship in execution will reach the finals. The use of typography, photography and design in relation to the copy and art direction will be judged. Simple low cost, once-off campaigns that demonstrate creative excellence stand as much chance of winning as any other.  Results/ROI: counts for 40 per cent of the judging criteria. Relevant measurements such as cost per response, conversion rates and sales turnover must be provided for an entry to be considered. The results must also be in line with the predetermined objectives, whether those were sales, lead generation, retail traffic etc. Figures can be represented in percentage or indexed terms. All judges are bound to secrecy and confidentiality. Campaigns that have received exposure from May 2006 to August 2007 are eligible to enter.  Creative Awards: counts 20 per cent strategy and 80 per cent creativity.

DMA

Founder Members are offered the following:  One year free DMA corporate membership  A free (full day) customised educational seminar about direct marketing, presented by industry specialists  Representation on the DMA website  Logo on all pro bono DMA ad placements  Six free tables over the course of 12 months at various DMA events  Showcasing at various relevant exhibitions and conferences  An official Founder Member certificate  An opportunity to join the planned mentoring programme Special consideration will also be given to Founder Members through Marketing Mix, with respect to:  Nominating topics and being invited to provide expert opinions, leading sponsorship rights and occupying premium advertising positions within Marketing Mix  Nominating topics for executive roundtables that are hosted by Marketing Mix  A customised communication programme that can be implemented with the DMA and Marketing Mix

More founder members for DMA There are only two founder member places left for the DMA Founder Member programme, according to Colin Hudson, founder member negotiator, DMASA. So far, FNB, SA Post Office, MTN, Absa, Computer Facilities, Avis and HomeChoice have provided financial support as founder member companies. “The need for a body representing the industry as a principal lobbyist on legislation affecting direct marketing has been graphically illustrated through the contributions made by the DMA to the National Credit Act and, in particular, to the Protection of Personal Information Bill and the Consumer Protection Bill, all at a high level. This positive contribution on behalf of the industry fully justifies the wisdom of the founders’ investments,” says Hudson. Says Jacques Hattingh, senior manager, Customer Satisfaction (CRM, Loyalty & Rewards), MTN Consumer Marketing: “MTN became a founder member to show its commitment to the direct marketing industry. We work with a broad base of customers and BTL communications is used extensively in our own marketing as it’s cost-effective and more personal. Being in the cellular industry our core product is a direct marketing tool for many and with mobile broadband on its way and the next big thing, being a founder member is the right thing to do.” Absa’s direct manager, Renny Letswalo, states that the bank’s involvement with the Founder Member programme will help direct marketing take its rightful place in the marketing mix. “Direct Marketing is a critical element of the marketing mix, it allows you one-on-one contact with your customers. It is a platform to communicate your products and services as well as build relationships with customers. Direct marketing in South Africa is not developed to the level that it should be and it seems marketers do not realise its the full strength. Given this, Absa Absa believes that supporting a direct marketing specific body will assist in developing the field, for it to take its rightful place in the marketing mix and realise the role it plays in effectively achieving business objectives.” Companies interested in joining the set of Founder Members should contact Colin (011) 706 1657/083 628 6406, or e-mail [email protected].

Join the DMA… To join, visit www.facilities.coza/dma DMA fees are paid annually on the anniversary date of joining the organisation and are based on the size of your company. Payment can be made via cheque or EFT. An invoice will be e-mailed as soon as you have completed the online membership. Before you go to the link above in order to register to become a member, you will need to have the following information available:  Your company details  Your company coordinator’s details ie the person who will be responsible for keeping your company details up to date on a quarterly basis  Your company decision maker’s details ie the person who will authorise your membership of the DMA and the essential payment of membership fees  The details of staff members who you believe should receive information updates from the DMA on an ongoing basis. If you do not have all the details with you, your company coordinator can go back into the system at any time to update these details Contact details: (011) 577 2780 [email protected] www.dmasa.org

Vol 25 No. 9/10 I 2007 I MarketingMix

7

NEWS

The introduction of four new Pay TV services – ICASA has awarded licences to Walking on Water, On Digital Media, e-sat, Telkom Media and renewed MultiChoice licence is going to shake up the sector considerably for both consumers and the advertising industry. The news is excellent for consumers as fierce competition is expected to lower pricing and increase the number of channels and programmes available. The news is also good for advertisers for the exact same reasons, although media planners are going to have to examine the prospects carefully as soon as pricing structures, ad rates, target markets and programming strategies

Partnering for growth The Efficient Consumer Response (ECR) South Africa conference is back again with a great line-up. The conference deals with the global and local shopper, retailing and supply chain trends, and case studies. The conference runs over two days and includes both local and international speakers. The keynote speaker is Grant Pattison, CEO of Massmart SA. Other speakers include Mark Davies from Glendinning Management Consultants, UK, Mark Barnard from Unilever, Bob Connolly from the US (ex WalMart) and Michael Poynor, chief retail adviser, PricewaterhouseCoopers UK. Topics include: Brand Building in the 21st Century Retail, Global Retail Trends and the Effect on the South African Retail Market, Supply Chain – the big picture and Turning Insights into In-store Shopper Experiences. What: ECR Conference 2007 Where: Sandton Convention Centre When: 30 and 31 October 2007 Website: www.ecr-sa.co.za

8

are announced. Marketing Mix will keep everyone informed as soon as information is available although don’t expect any announcements for at least another few months. Telkom Media is expected to give incumbent MultiChoice a run for its money, especially as it is looking at IPTV and video on demand. We’ll have to see what e-sat and ODM offer and Walk on Water is a niche channel aimed at SA’s large Christian community. Expect to see lots of TV sales people knocking on your door offering movies, sports, news and entertainment channels as well as much more local content.

Website of the month – The media section within the UK’s The Guardian newspaper has always been a great read and it recently updated the sector with the introduction of the Creative Lounge. Within this sector, you can view some of the latest ads in TV, radio, print, outdoor and cinema with the latest on show on any given day. A simple layout means easy access to the ads, with a link through to all of the ads by category on the site. There’s a brief description of the ad – once through to the ads, you can search by brand or company name or just have a look at the top ad of the day. Each ad provides the company, brand, name, product, ad type and first recorded date of the ad, but strangely no ad agency details. Having said that, if you’d like to know what the UK creatives and brands are up to, then this is a great resource plus you have the added advantage of being able to gain direct access to the entire media sectionwhich is always worth a look. To gain access you will have to visit The Guardian’s main website, click through to the media section and then to Creative Lounge.

MarketingMix I Vol 25 No. 9/10 I 2007

www.guardian.co.uk

NEWS

Cheque please Want to reach millions of upmarket consumers each month with your brand message? Then try the Billads folder, a plush folder used to give restaurant customers their bill. Developed by the Nine Mile Group, the Billads folders are proving popular with consumers as testing shows that 93 per cent of consumers prefer Billads to traditional bill folders. Inperspective Research Consultancy performed an independent study and determined that 64 per cent of consumers noticed the advertising in Billads, 78 per cent recalled the brand that advertised and 43 per cent said the advertising would encourage them to make a related purchase. For brands, the advantages include being delivered directly into the hands of a target audience in a medium that has high frequency of contact. “Billads is embraced by up

to four million targeted consumers every month,” says Craig Segal, managing director, Nine Mile Group. Cost is between R650 and R850 and contracts are usually for a minimum of three months (although Segal says that this can be adjusted to suit individual campaigns); branded pens are also available. Nine Mile has 500 national sites – increasing daily – including restaurants, coffee shops and hotels. These sites are researched and data is available, including the ambience, type and foot traffic of the environment making it possible to target a campaign to a specific region. All are LSM 7-10 focused sites (which receive an average of 30 folders each) and only one brand is advertised on a site during a campaign. The Nine Mile team visits sites regularly to ensure that all the units are in good condition; restaurants are also fully educated on how to use the Billads, care for and clean them. “The Billads are the only folders that they are permitted to use to hand bills to their clients within the site,” says Segal. This medium also holds great potential for product sampling, vouchers, etc. “The key is that we are able to target a specific audience without a gunshot approach and a lot of wastage,” says Segal. For more information, call 0861 64 63 64 or e-mail [email protected].

NEWS

The future of TV

On the rampage

The announcement of four new Pay TV services and the changing nature of technology and consumers mean that Oracle Airtime Sales (OATS), the advertising arm of MultiChoice, has its work cut out for it, especially when reaching out to advertisers. Not only does its portfolio include M-Net, SuperSport, DStv, and MultiChoice Africa and Global but also offers advertising packages such as classic airtime, customised shows, interactive TV (iTV), sponsored fillers, sponsorships and product placement for over 45 channels. Chris Hitchings, director of sales at OATS spoke to Marketing Mix about the ‘future of TV’, and says that the traditional tv businesses have “moved from broadcasters to content distributors.” The power of that statement cannot be underestimated as Hitchings knows only too well. The future of TV is a myriad of acronyms: PVR, VOD, IPTV, iTV, DALs and DVB-H. The second digital revolution is about TV in the PC and mobile arena with a more complicated value chain, shorter development cycles and infinite choice for consumers, and major challenges for advertisers and broadcasters.

Youth marketing has just been given a boost with the launch of Marvel Rampage, a lifestyle magazine aimed at boys aged between 7 and 12. According to Sean Press, managing director: Sales, Results Media Groups,

Personal video recorder (PVR) Locally, the PVR has been around for a couple of years and, according to OATS, over 160 000 PVRs have been sold. “There are conflicting views on PVRs but it has been found that the audience is engaged with the ads even on fast forward,” says Hitchings. According to OATS research, 51 per cent of respondents claim to watch more TV with a PVR than without – sports programmes recorded the most benefit and film viewership increased by around 20 per cent. So far, the PVR has penetrated less than two per cent of SA homes, ensuring future growth. A highdefinition PVR is currently being looked at in preparation for SA’s digital migration, supposedly starting next year.

which has secured the rights, the magazine will carry one or two of the original Marvel Comics range each month, including icons such as Spiderman, XMen, Hulk, Silver Surfer and the Fantastic Four, but it is not restricted to Marvel Comics. Other editorial content includes news, celeb news, amazing but true facts, fashion, poster, toys, gadgets & stuff as well as DVD, games and film reviews. And we bet dad will love it too!

Video on Demand (VOD) VOD is an interactive process whereby video content is delivered to a decoder and accessed by the subscriber. VOD systems either stream content allowing viewing while the video is being downloaded, or downloaded directly to the PVR before viewing starts. “DStv will be launching VOD by the end of this year and we are working on the commercial application for it,” says Hitchings. In its bid to offer consumers content on as many platforms as possible, DStv is currently testing Internet Protocol TV (IPTV) through its www.dstvbroadband.co.za service. The service offers subscribers free access to premium content after a programme is originally broadcast. All that is required for IPTV is an Internet connection and Internet-enabled device. The challenge locally is, of course, the low penetration of broadband currently.

Digital video broadcast-handheld (DVB-H) In the mobile space, MultiChoice is still waiting for the licensing process to take place regarding mobile tv, and notably its DVB-H product. Another area of interest to OATS is user-generated content and the social networking space, which could be just one more platform in its arsenal, which it will need in the battle against Telkom Media, e.sat and On Digital Media. All of this adds up to further fragmentation of future TV audiences, but also increased viewing as consumers will have access to programming wherever, whenever and however they wish. All of this choice means that advertisers need to ensure that their ads are entertaining, seductive, involving, and that they cover all bases and push services and benefits.

1 0 MarketingMix I Vol 25 No. 9/10 I 2007

The magazine is currently exclusive to 240 CNA stores nationwide with a large point-of-sale presence. According to Press, Marvel Rampage will run between 36 and 40 pages monthly with ad slots totalling 12 to 14, with a retail price of R14.95 and a 20 000 monthly print run. In the future, it is expected that Marvel Rampage will be released in a number of local languages.

NEWS

Just add music Which music is currently enjoying its 15 minutes of fame or would make a brilliant soundbed for an ad? The list below includes a wide range of local and international music styles and, most importantly, it highlights which songs are hip and happening within different target markets right now. The following list is courtesy of Roy Harman, who manages

South African artists and works on various music entertainment productions and events. For more information on how to match your brand with an appropriate song e-mail [email protected] or call 083 407 4928

Act and song

Why it’s hot

Genre and emotion evoked

Amy Winehouse Rehab

Lots of hype and gossip about her music and addictions

Pop– youthful, rebellious and independent

Pink Get the Party Started

Just completed a South African tour

Pop – party, fun and social

Pavarotti Ti Adoro

Mass awareness of Pavarotti’s death and his relevance in the music business

Classical – serious, proud, romantic and trusting

Elton John Your Song

About to create a media frenzy with his shows in January

Pop – celebration, joy and memories

K-OS Sunday Morning

Catchy and optimistic while being appropriate as he headlined the Arts Alive festival at the end of September

Hip-hop – vibey, positive and optimistic

Chemical Brothers Do It Again

Powerful electronic music from a classic band and one of the biggest hits on youth radio

Dance – uplifting, energetic, speed and drive

Jamali Ain’t No Mountain High Enough

Major radio smash hit. Also, it’s an instantly recognised cover of a classic so cheaper to licence than the original

Pop – cheerful, family, motherly, positive and uplifting

Miriam Makeba Pata Pata

Just headlined the Joy Of Jazz festival and advertised to mass media as a result so fresh in people’s minds

African – cheerful, fun, friendship, social and full of life

Obita Shaka Zulu

Another cover of an instantly recognised classic with powerful vocals

Hip-hop – force, pride, patriotic and powerful

Queen We are the Champions

Ending off the hype and patriotism evoked by the Rugby World Cup and Cricket 20/20 World Cup

Rock – a strong unifying and uniting classic

The English way Superbrands UK has released it CoolBrands results and while SA doesn’t always follow international trends – we have our own – it’s always worth taking notes of what’s cool elsewhere in the world. Five of the top 20 are websites, with three car brands and five lifestyle technology brands. What’s most interesting is that the top five CoolBrands rarely advertise or market themselves – the power of style, sex appeal, packaging and the mighty word-of-mouth rule. The top CoolBrands 2007 are:  Aston Martin – thank you Casino Royale  iPod – to be expected  YouTube – we really are all TV addicts  Bang and Olufsen – top of the range and super sexy  Google – only fifth place?  PlayStation – no doubt spurred on by the launch of PS3

 

    

      

Apple – Steve Jobs we love you Agent Provocateur – when are you going to land in SA? Nintendo – wiiiiiiiii Virgin Atlantic – fly British! Ferrari – the Italian stallion Ducati – super fast, super cool eBay – Fergie’s (Black Eyed Peas) Hummer anyone? Rolex – timeless Tate Modern – greed experiential campaign Prada – thanks to Ms Beckham perhaps? Lamborghini – burnt orange or baby blue? Green & Black’s – orgasmic organic choccies iTunes – SA is not a fan Amazon – SA is a fan

Vol 25 No. 9/10 I 2007 I MarketingMix 1 1

NEWS

The interview Marketing Mix spoke to Louise Sams, president of Turner Broadcasting System International and executive vice president and general counsel for Turner Broadcasting System, Inc, about the future of broadcasting and Africa. This is what she had to say: On Africa: For Africa, nothing is out of the question. Unfortunately, the scale of our African operations is inhibited by the lack of broadcasting technology such as cable and satellite. But, we already have programming such as Inside Africa on CNN and we’ll continue with that great work. We have to take countries as we find them but the potential with the cellphone for developing markets is enormous and is definitely an opportunity on the continent that we had not appreciated until recently. However, looking at the traffic to our mobile service across EMEA, we are getting viewers from Africa although it seems that the devices are primarily used for voice at this point. We are still experimenting with mobile devices and while there is a real opportunity here, we do hope that in Africa, broadband will become pervasive. Our goal is to be as agnostic as possible as it relates to distribution – we want to be everywhere. We’ll not only take advantage of additional platforms but also new platforms such as IPTV. On programming: There is always the possibility of licensing existing programmes from TBS and our plans are to move into new genres, in some cases leveraging the brands in the US and adapting them locally. On a digital future: We will have to work harder and use some of the new tools to appeal to the younger generation such as user-generated content, etc. People are looking for excellent content and credible brands to help them sift through all this information and to fulfil the brand proposition. The audience is still tied to TV but broadband and mobile are growing. Our core (TV) is still very strong but the engine is definitely digital. TV is not going to go away. I think in 10 years there will be different players launching linear channels in new markets. For TBS, the aim is to have as much broad content across as many different platforms as possible. The viewer needs to be connected to the brand no matter how they interact with it. Services will become more interactive and Louise Sams is president of Turner Broadcasting System ‘on-demand’ – on-demand will become more and more International and executive vice president and general counsel for important – how, where and when the viewer wants the Turner Broadcasting System, Inc. (TBS, Inc.). info is key. In the former capacity, she is responsible for production, distribution and ad sales relating On growth markets: The largest growth in five years – to Cartoon Network, Brazil, India and China, although China has regulatory Turner Classic Movies, issues which means foreign channels are allowed only in Boomerang and all other certain hotels. Russia is another rapidly growing market. A entertainment networks major growth area will be multichannel TV and advertising and media services offered spend in particular in the Middle East, Central and by Turner outside of North Eastern Europe. America; the distribution and commercial operations of CNN’s international services; all of Turner’s international joint ventures; and On branding: If you want to have a successful offering, licensing and merchandising activity of Cartoon network outside of you have to distinguish yourself from the pack with a North America. Sams is based in Atlanta and reports to Philip I Kent, recognisable brand, great content and a brand that chairman and CEO, TBS, Inc. delivers on the proposition promised to the customer. In her capacity as exec VP and general counsel for TBS Inc, she This is what appears to be working in this digital world, oversees the company’s legal matters worldwide, which include where everything is available. Sometimes companies focus acquisitions and joint ventures; production and clearance of content too much on what the competition is doing rather than for Turner Broadcasting’s news, entertainment and animation on their own business and brand – brands must be networks; protection of the company’s intellectual property; and proactive, not reactive and for any brand it’s important to litigation and employment matters. Sams directs a staff of 80 be on the ground. lawyers located in Atlanta, Los Angeles, London, Hong Kong and Sydney.

brief biography

1 2 MarketingMix I Vol 25 No. 9/10 I 2007

NEWS

Debating radio As iPods, online media and new technology change the way we consume music, radio is forced to adapt if it is to survive. But more importantly, radio still has to address a few long-standing issues. One major issue is that radio is frequently the ad campaign afterthought; as a result, the radio brief is often

sponsors to get involved in the ‘on-demand’ environment. However, contentions surround the use of podcast advertising and websites. It is clear that some clients still believe that this type of advertising should form the benefit feature of a contract and be free! Others argue that clients should be experimenting and investing in these new media types in preparation for mass markets (when broadband becomes affordable and available, who isn’t going to be online?). Guest speaker Anice Hassim of Immedia, argues that the customer is online, researching your brand,

so that’s where you should be too; he urges brands to develop an online presence that supports mass media advertising. On the other hand, there is the issue of the online and mobile elements of radio and its impact – will the audiences pull away from radio. After all, why bother tuning in if you can download the weather and traffic to your phone? Or will these simply add value for listeners and allow for time shifting of radio content in much the same way that the PVR has done for TV viewing? Watch this space for the only real answer.

inadequate. Award winning radio copywriter, Alison Hingel, chatted to Radmark Sound Safari delegates about the poor quality of radio advertising that too often is the result of clients not giving radio enough attention. Hingel championed the role of the copywriter (who has trained to write powerful copy for a medium that is unique, ie not visual). Marketers and clients need to realise that the advertising brief needs the same attention to radio that is devoted to TV and print ads. A related issue (and one that got tongues wagging at the workshop) is the role of the media agency, which is bypassed or disregarded by clients, who then complain when the advertising fails to hit the mark. Creatives, likewise, are accused of failing to understand the role of the agency. In terms of its future, radio needs to embrace new media and technology. Podcasting, for example, will extend radio’s offering (lets listeners download info and content that they want, which they can listen to in their own time). Podcasts are easy to produce and are easily loaded onto a radio station’s website. Podcasts can also create new opportunities for advertisers and

Vol 25 No. 9/10 I 2007 I MarketingMix 1 3

NEWS

One club education The One Club recently held its 4th Annual One Club Education Summit in New York City connecting decision-makers at universities, portfolio schools and advertising programmes with key players in the industry. Panel speakers were: Richard Ting, executive creative director, R/GA; Robert Wong, executive creative director, Arnold; Robert Rasmussen, creative director, JWT; Fernanda Romano, executive creative director, Lowe; and Matt Smith, creative director, TribalDDB. The summit also covered Brand and Innovation with Brian Collins, former chairman & chief creative officer, B.I.G; the New Creative Revolution with Kevin Swanepoel, president; The One Club and Clients – shepherding the Brand into the New Age with Moira Cullen, design director, Coca-Cola North America; and Brad Jakeman, executive vice president, Creative Strategy, Macy’s. The following are extracts from the summit detailing key issues: Reforming your students Q: How do you want educators to change or prepare students who come into your industry? RT: Technology is changing very quickly and we are looking for people who have a genuine interest, who are constantly learning and keeping up to date with industry changes. The iPhone came out and there is an amazing Safari browser on it that allows mobile browsing that is different from any other browser out there. If you work in interactive but did not know this, you are not keeping up with the instant changes of events, so how are you going to pitch new ideas to clients? Q: Is there anything you would change? FR: There are two things schools need to focus on for creative students. The first is media planning. It is a creative person’s responsibility to understand it. They don’t need to be able to sit down and do the planning, but be able to have a conversation about it. Second, students need to know the business aspect of advertising. They need to understand that they are selling a product. It has a cost and an economic impact. The agency model is shifting and products are created and becoming part of the campaign. Q: Are agencies too busy to teach? RR: It depends on the agency. If we want young people to be more connected to what’s out there then we need to teach them. FR: Students don’t come ready. If we don’t help the talent to develop then we won’t find the talent. What Happens Next? Brand and Innovation with Brian Collins When people talk about branding, particularly in advertising, they are talking about what we hear and what we see. However, there is a whole territory of the brand experience that has nothing to do with that. When we talk about branding and advertising, it is not just what we hear and see; it is really about what we feel. I think it is so important for us to think about what people touch and smell. It is a huge part of creating brands. The interesting thing is smell goes right into our memory. It is instant and we don’t analyse it. Every good brand story speaks internally and externally. The things that are powerful to us can be interesting. Now, what we have discovered is when creating business ideas, emotionally charged stories are powerful. It’s not just the object; it’s about the stories behind the object. So when people buy products, they are not only buying the item, they are participating in your story.

1 4 MarketingMix I Vol 25 No. 9/10 I 2007

The New Creative Revolution with Kevin Swanepoel This is not about the death of old media but rather about the birth of new media, an interactive media. It’s about reinventing and reenergising your students’ career paths. It’s about pop culture; it’s about the client’s need and the consumer’s desire. It’s about community and collaboration on a scale never seen before. It’s about the cosmic compendium of knowledge. The new web is a very different thing. It’s a tool for bringing together the small contributions of millions of people and making them matter. It’s really a revolution. Here are some questions you should ask yourself and your students. The answer to each should be ‘yes’. Do you own an Xbox, WII, PSP, PS2, etc? Do you have a MySpace or Facebook page, or your own website? Do you write or contribute to a blog? Do you subscribe to RSS Feeds? Do you know what Twitter is? Have you posted creative work online or have an online portfolio? Have you created a podcast or posted a video on YouTube? You need to be engaged and you need to immerse yourself in the very space clients and consumers live in. If you and your students do not understand the basics of how these technologies work or fit together, if you do not play in the same world as the new generation, how will your students come up with concepts and ideas to create compelling commercials, applications, games and websites? What I find interesting is that some of the better interactive agencies are looking to hire creatives from the traditional space. They are looking for better art direction, writing and creative thinking. They are looking for traditional creatives who understand the new media. Technology can be learned, creativity cannot. Clients – Shepherding the Brand into the New Age with Moira Cullen and Brad Jakeman Q: Over the past 12 months, there have been dramatic changes in the media landscape. As Head of Creative Strategy, do you see this as a trend? If so, are you changing your approach to retail advertising? BJ: We are in a rapid cycle of change. Society and consumers are taking more control over what they see, what they choose to see and what they like. We are seeing people posting their content on YouTube. We are seeing greater penetration of broadband. The sophistication of what we experience online in our own homes is getting deeper. This is leading people to talk about the death of the 30-second ad. I think it’s the death of the bad 30-second spot. All of these new technologies are presenting more messages to more people, but they are also allowing us to edit and filter. Most of the messages are not breaking through because they are either irrelevant or they are not delivered in a way that is causing people to take notice. It is not about trying to cover up the fact that it’s an ad and trying to present it as something it’s not. It’s about making it better. People will respond to advertising if it’s good. I don’t believe new media is going to replace old media. I think one of the biggest mistakes that marketers make all the time is they think of new media as either black or white. I think the implications are really simple – people who are in marketing positions like me need to drive bigger ideas and execute them in better ways.

NEWS

Q: In the past few years, design has become aggressive in a positive way. How do you work with advertising agencies and design companies to ensure the overall design keeps the brand true? MC: I think we are moving from a very networked world to a world of relationships. Moving from a very rational economy to a much more emotional economy. Design is difficult to value but on the operational and even marketing side, its value has certainly increased because we respond to it. Everyone responds to the ascetic aspect of life experience, but there is no rational or quantitative value. The only thing we can calculate is the executed product that can be quantified down the line in an experimental approach where you can look at consumers with empathy and observe their behaviours and understand the kind of need they show. This can then inspire, lead, help and build the creative ultimate experience. The value of this is huge. The challenge is the world has departmentalised design advertising and established its value to the advertising community. Design roles are complementary to the advertising role. It’s an ongoing process and I think designers need to consider their education in terms of their ability to communicate who they are and what they are. The importance is, we are truly trying to

create an integrated experience and this is the new way of working. I think students and young professionals really need to have a deep sense of what that means. Q: What makes a good client-agency relationship? BJ: How can most advertising agencies be good and most advertising be bad? Clients have a very adversarial relationship versus a complementary relationship with agencies. Clients don’t see their roles as pulling the agency back from doing something crazy. What I encourage is to make your work better and to get work through to the organisation. There are many things that make a great client-agency relationship. I think you have to understand and have a mutual trust in each other. You have to respect each other’s expertise. Q: What would better prepare students for a career in advertising? MC: I am a client. I am looking for a partner. We need to ensure that great work gets presented and done. I want to work with a designer that is excited about the business we are in. I think to really appreciate the complexities of the world that we live in is unbelievable. I think the ability to appreciate the creative is only as good as the emotion around it.

7 DAY [B]ITCH

Gus Silber, editor of Discovery Magazine and freelance writer

27/08/07 Curses. I have to be up at 4am to be ready at 5am to be at the airport at 6am to be on the plane at 7am. The workshop I’m attending is sometime this afternoon so, in theory, I could have taken a mid-morning flight. But I would still have had to be on the road before sunrise to beat the peak-hour traffic and get to OR Tambo in time to find parking. This is known as the Johannesburg-to-Cape Town Paradox. I’ve taken a bunch of mags and printouts to go through on the plane. Those two hours of cellular-free confinement can be among the most productive of the day. We take off at 7.09am. By 7.11am, I’m lolling against the headrest with my eyes shut tight and my jaw hanging open. It’s a nice sunny day in Cape Town, with just a wispy milk moustache of cloud on top of the rock. We have a good workshop, focusing on the challenges of producing custom titles for corporations in a fiercely competitive media environment. I like being part of the Special Projects Division of Touchline Media. 28/08/07 Coffee with Janna Joseph, managing editor of Discovery Magazine, at vida e caffè, to go through the line-up for the next mag. We could just as easily do this in the office on the 5th floor (or is the 4th? I work from home, so I am always disoriented in a vertical working environment) but there is something about Cape Town that induces in me a Pavlovian response for a short cappuccino. As soon as I break through the foam, I start feeling enthused, alert and inspired. Three sips later, and I’m hallucinating, which is the best way to deal with the growing realisation that we are presenting the mag in – gulp – two-and-a-half weeks. We’re never going to make it. We’re never going to make it. We’re never going to make it. Janna smiles brightly and tells me we’re going to make it, we’re going to make it, we’re going to make it. I flip open my new black MacBook to look at the production schedule or at least to let everyone in the vicinity see that I have a new black MacBook. Several cappuccinos and a sushi lunch later, I head for the airport, in good time to avoid the bottleneck on Hospital Bend. But thanks to all the Jo’burgers hurrying to avoid the bottleneck on Hospital Bend, there is a bottleneck on Hospital Bend. 29/08/07 Back at home, staring at my PC, in full, flat-out Triage Mode. People are leaving anxious messages on my landline, to let me know that they have left anxious messages on my cellphone. In situations like this, I am forced to maintain radio silence, so that I can channel all my energies into tackling the task. Just as soon as I’ve brewed myself a fresh cup of Twinings Green Tea and cleaned these keyboard marks off my forehead.

1 6 MarketingMix I Vol 25 No. 9/10 I 2007

30/08/07 Coffee with a freelance journalist at the mall, to go through the first draft of a story that is going to need a lot more drafting and a lot more coffee. The problem with the story is that there is not enough story in it, which is a growing syndrome of the age of journalism-by-Wikipedia. If you are going to use Wikipedia, I tell the journalist, at least use it for its intended purpose, which is to insert random mis-statements and inaccuracies into the articles, and see how long it takes for someone to notice. I spend the rest of the morning mooching around the mall and playing cellphone roulette, which consists of looking at a ‘Private Number’ on your caller ID and trying to decide whether it is someone nagging about work, or merely someone inviting you to a presentation about timeshare. 31/08/07 My wife, Mandy, rushes into my study from her scrapbooking class, warning me once again to keep the security gate closed because the little old lady across the road was almost hijacked by two guys pretending to be cops. They were driving a big black Mercedes, which was the first clue that they weren’t cops. Also, they were carrying AK-47s. 01/09/07 Saturday is the freelancer’s day of rest, in theory at least, because not too many people need copy on a Sunday. But a nice lady from a below-theline agency has come to see me about an urgent script for the launch of a feminine hygiene product. She has brought along a sample for me to look at. I’m not sure whether I should open it, or just run my fingers along the packaging. I ask whether the script needs to mention the product. Oh no, she says, and I sigh with relief. I set aside a few hours to fashion a light script about fashion through the ages. What the heck. I’ll rest tomorrow. 02/09/07 A friend comes around to discuss a project we’re supposed to be working on. It’s a seminar on creativity for the corporate market. To get me in the mood to spend my Sunday working, he’s brought along a plastic bag full of pirate DVDs. I take a look. No thanks. I’m not interested in movies about pirates. 

EXPERT OPINION by richard duncan

A time for change The rate of change is unrelenting and unforgiving, and for those brands that fail to keep pace with the ever-evolving demands and expectations of their customers, it can prove fatal. Change can be driven by societal pressures like consumers’ enhanced environmental – awareness and demands which directly impact on manufacturers. It can be driven by heightened service expectations as found in the retail sector, which challenge the conventional staff-to-customer ratio. Often, it can be as a direct result of technological advancement, as witnessed by the rapid evolution of the cellphone as a handheld television, Internet services and general all-round communication tools. Companies today face daily demands for change that force them to continually review and redress their product ranges, scope and offerings. The speed and frequency of this re-evaluation would make yesteryear’s chief executives’ heads spin. This has resulted in changes to the dynamics of many traditional markets and their ways of doing business. This is further supported by the trend of ‘masstige’, the demand for prestige products by the mass and often-price sensitive market. One example of this phenomenon is the relative accessibility of brands like Sony whose products are now much more widely affordable to all income levels. Coming from the opposite direction is the ALDI brand. While ALDI may be unfamiliar to most South Africans, it remains one of the biggest and most established grocery brands in the world with around 7 000 stores. Founded in Essen in 1948 after WWII, the ALDI brand was formed to offer disenfranchised Germans in post-War Germany a quality offering at an affordable price by focusing on a select range of quality merchandise. While it began its life as a traditional grocery retailer and has largely stayed true to its original formula, its unique format of pallet box displays and weekly specials, supported principally through its weekly catalogue, has propelled it to the forefront of the European retail landscape and threatens to spread across the southern hemisphere. In Australia, the brand has a modest network of 140 stores, which currently accounts for less than 10 per cent of the total market. From

humble beginnings in 2001 and while still a minor thorn in the side on the local market leaders Coles and Woolworths (same name but very different brand to its South African counterpart), the ALDI brand threatens exponential growth in the years ahead. With a public target of 200 stores by the end of 2008, its MD Michael Kloeters recently projected its potential growth on the eastern seaboard of the country as 500 outlets, which sent shockwaves through the Australian grocery landscape. Privately owned, the ALDI brand is under no real pressure to grow and so quietly goes about its business, largely under the radar of its local competitors. And yet, even this juggernaut brand is slowly evolving with the times and is arguably causing a change in shopping behaviour and attitudes. It offers savvy shoppers a clever way to save money on the basics and the opportunity to afford certain luxuries. At present the brand’s image is more commonly associated with discount retailing and low-cost bulk shopping, even this is set to change as the brand taps into the new trend of smart shopping. In Australia, Woolworths and Coles realise that their future threat is ALDI. Despite this realisation they are hard pressed to be able to compete with its well-established formula of high volumes at low prices. Consider this; Wal-Mart in the US sells 100 000 SKUs with a turnover of US$300 billion, which translates into $3 million per item. ALDI, on the other hand, only sells 700 SKUs with a turnover in the US of $44 billion. This surprisingly translates into a turnover of $63 million per item. With this sort of buying power it is no small wonder that it can undercut its competitors and offer its customers the same quality product for substantially less. The thought that comes to my mind is the potential threat a brand like ALDI and its sister IKEA could pose to the current retail status quo in South Africa. Just how disruptive could they be if they decided to turn their attention southwards? Their arrival would certainly change the dynamics of the South African retail landscape forever and force changes on the current market leaders. Perhaps this wouldn’t be such a bad thing. 

“

Companies today face daily demands for change that force them to continually review and redress their product ranges, scope and offerings.

”

Richard Duncan Sydney, Australia

+61 41 154 9791 [email protected]

Vol 25 No. 9/10 I 2007 I MarketingMix 1 7

by fulvia becatti BRAND ANATOMY

Hummer has arrived The star of action films, rap music videos and the Gulf War, the Hummer has become the ultimate SUV, sought after for its capabilities, its style and its status. In 2005, General Motors (GM) made the decision to take the Hummer H3 to an the international market, and would later invest a reported R650 million into the GM production plant in Port Elizabeth, with the aim of producing vehicles for launch to a global

market that would include South Africa. Big questions were raised around local brand awareness, and the mass market desirability of a vehicle that has become synonymous with millionaires. Brand manager Bob Smith decided to test the waters ahead of the launch of the H3 locally with strategic market research. He brought together

The History history of Hummer: 1979: the US Military needs a multi-purpose war vehicle, and awards American Motors General (AM General) a contract for the production of the High Mobility Multipurpose Wheeled Vehicle (or Humvee, as it was dubbed) 1990: Gulf War (and Operation Desert Storm in particular) generates positive media exposure for the Humvee. During this time, Arnold Schwarzenegger takes an interest in the Humvee and he requests a modified (ie civilian-friendly) Humvee to be used in the filming of Kindergarten Cop. 1992: the The Humvee goes on sale to the US public, under the name Hummer. 1998: AM General sells the brand name and technology to General Motors, retaining only the manufacturing rights. 2000: The Hummer is renamed the Hummer H1. 2002: Hummer H2 Sports sports Utility utility Vehicle vehicle (SUV) is launched. 2003: Hummer H2 Sports sport Utility utility Truck truck (SUT) is launched. 2005: Hummer H3 is launched. In April, GM announces its export contract programme. 2006: In February, Bob Lutz (GM Chairman, North America) visits South Africa. In August, GM expands its facilities and production lines at its Port Elizabeth plant (which produces and exports left left-hand drive Hummers to countries globally, including to Japan, Australia, the Middle East, and Europe). In October, the first left left-hand drive H3 is produced at this plant. The H1 model is discontinued, due to the fact that the vehicle does not comply with new diesel emission laws. 2007: The pricing for the Hummer is announced, and the H3 is launched in South Africa.

1 8 MarketingMix I Vol 25 No. 9/10 I 2007

motoring experts, car dealers, celebs and the media from across the country, for a mysterious weekend ‘car clinic’. The first step was to establish the price/volume relationship, the vehicle’s positioning, and the specifications and features that would be required by the various local markets locally (ie the 4X4 enthusiasts versus the soccer moms); this involved a static display with competitors. “When we asked them how much they would expect to pay for a Hummer, the response was ‘a million’. The mindset around this vehicle is that it is expensive,” says Smith. This was good news for Hummer: “This existing mindset would allow us to premium price the Hummer at a premium price,” says Smith. The next step was to gain insight into the brand itself; the recognition factor and brand associations. What became clear is that Hummer enjoys a high brand recall. “The Hummer shape and iconic design cues [the grille, for example] were the most recognisable factors with 85 per cent recognition on of the Hummer shape, from nine years of age upwards,” says Smith. Based on this initial market research, it was decided that the mystery about the car’s entry into the South African market would be

BRAND ANATOMY

Extending the brand Brand extensions in the form of Hummer clothing lines, sunglasses and accessories are in the pipelines. “The brand is bigger than the vehicle,” says Smith. maintained for as long as possible. To achieve this, Hummer held off on mass media campaigns for a while, and opted for clever and regular PR messages delivered to the right media, as well as exciting test drives on the dunes of Mozambique. Smith believes that the media coverage that this generated is worth in excess of R10 million when assessed relative to the cost of purchasing traditional ad- space. “Values are difficult to calculate but when one thinks that an A4 glossy ad can be cost as much as R60 000, then third third-party endorsement is priceless and is more credible than traditional ad spend,” he says. It worked – orders for the vehicles started rolling in, despite the fact that pricing would not be set until later that year. “People were putting down R20 000 deposits without even knowing how much the cars were actually selling for. In fact, we didn’t spend a cent on advertising, until two months before the launch,” explains Smith. GM simply kept the brand messages and PR going on a regular basis. The provocative billboard, print and television ad campaigns were launched in May 2007, following Smith’s media announcement in April that the entry-level H3 was to retail for a competitive R3754 000, (the orders doubled). “Our planning was perfect. As a result, we knew exactly which dealers to set up and where, because we already had an idea of where the footprint was,” says Smith. Dealerships opened in KZN, Menlyn and Fourways in Gauteng, the Western Cape, Bloemfontein, and in Nelspruit, Mpumalanga. New dealerships are due to open in Port Elizabeth, Bruma in Gauteng, and Klerksdorp before the end of the year. Since July 2007, when the H3 was launched to the market, sales have exceeded expectations, with 234 Hummers sold through five dealers within the first month. In its second month on the market, another 230 cars were sold, and a sixth dealer was opened.

Hummer in Hollywood imcdb.org has compiled a list of all the films and TV series in which the Hummer has featured. Check out www.http://www.imcdb.org/vehicles_ make-Hummer.html

Who is buying a Hummer? Interestingly, only 20 per cent of buyers are firm off-road enthusiasts. A hefty 40 per cent of the brand’s early adoptersbuyers are ‘black diamonds’ and the brand’s early adopters. And 40 per cent of buyers are females (many of whom see the Hummer as a safe vehicle to travel our roads in). The core market is defined as LSM 10+, in their mid mid-thirties and older, mostly married; they have a degree and/or are self-employed. This is a savvy shopper that enjoys more subtle forms of status, but is still brand conscious. They are looked up to their peers (trend setters), and have an adventurous spirit. The majority of Hummers sold to date are either black or yellow. “Everyone we sell to at this stage is a conquest sale,” says Smith, “the repeat purchases will be proof of our success.” Effectively, sales averaged at two cars per dealer per day – an average Hummer wants to maintain for now, through careful control of the supply and demand of the vehicles (ahead of the launch, GM ensured that dealers had sufficient stock, but they have carried forward the mystique of the car post-launch by focusing on a drip-feed of vehicles to the dealerships, and almost encouraging a one one-month waiting list on for the cars). They also invite new owners to pick up their Hummers on a Saturday (when buyers are more likely to bring their families and friends along to check out their new toy). “We place a great emphasis on the idea that it should be a joy to buy a car,” says Smith. To this end, effective motor finance plans and customer service departments were in place well ahead of the launch, ensuring that customers would enjoy ease of service. And indeed, a part of the joy of buying a Hummer is the fact that it is customisable. “This vehicle lends itself to being unique,” says Smith; and this is powerful in an age of mass customisation. The success of this brand will depend on its ability to maintain singular global presence. “What we do as brand Hummer internationally must be replicated in South Africa,” says Smith. Parent company GM (including global brand managers, etc) are is highly involved; country brand managers hold fortnightly conference calls to discuss the brand’s image, as well as the marketing activities. Co-promotions must be approved and discussed, and deemed to be beneficial for the brand as a whole before they will get the nod. “Every brand wants the Hummer association in order to uplift their brand. As assessment policy is in place to determine the ‘must must-haves’,”, says Smith. Unfortunately, this does not prevent other brands from using Hummer as leverage without its sanction (for example, by purchasing a Hummer and then covering it in branding, or offering it as a competition prize).

Luckily for the Hummer brand, its image and appeal has landed it in more than a few films, TV series and product placements (many of which have been unpaid). And there is the powerful celeb endorsement by actor turned Californian governor, Arnold Schwarzenegger (who became a spokesperson for the H1 and H2 models). All of which went a long way to building the Hummer brand (at no cost to Hummer). “GM has realised that these are big opportunities because it gets the message across positively for the brand,” says Smith. Look out for the Hummers in a new Ricoffee TV campaign (to be aired soon), and in the Peter Pan pantomime at the Civic Theatre. There is also a campaign planned with one of the cell phone companies. The big question on everyone’s lips is how will Hummer survive the Green green revolution? The car is a renowned gas guzzler, and, as a result, is often targeted by environmentalists. The Green Hummer Project in the US, for example, built a mock Hummer, powered by two bicycles that are incorporated into the frame of the vehicle, to protest against the vehicles. But Hummer seems to be addressing the issue. In 2006, the H1 model was discontinued, precisely because its fuel consumption did not comply with fuel emission laws (and also because it was being ousted by the smaller H2 and H3 models, which were more suited to suburban driving). “Hummer is no worse than any of its competitors,” says Smith, adding that Hummer has set itself “’green goals”’: by 2010, the Hummer range will include cars that have biofuel capabilities. SAAB (which is GM’s biofuel pioneer) is already taking biofuelenabled cars into the market place. “We’re on our way to producing these for all Hummer models,” says Smith. Plus, GM is making inroads into electric cars (such as the Chevrolet Volt). Product research and development efforts are underway, and we can expect to see new engines and special editions by 2010. And in the meantime, Hummer will be developing its CSI initiatives. 

Vol 25 No. 9/10 I 2007 I MarketingMix 1 9

by fulvia becatti TOWNSHIP MARKETING

Tapping in

2 0 MarketingMix I Vol 25 No. 9/10 I 2007

TOWNSHIP MARKETING

g into iKasi Historically, townships were the underdeveloped eyesores of SA’s landscape and cities; considered poor (possessing little, if any, disposable income), undiscerning and illiterate. Few brands ventured into these no-man’s lands as a result. But there is tremendous change afoot, and today, the townships are veritable goldmines. Yet still, too little is known about this market by too many, with assumptions that townships are all one and the same; or worse, assuming that townships hold no appeal for brands.

A changing consumer The township population is increasingly educated, employable (employed) and possesses ever greater disposable incomes and buying power. “People are beginning to live good lives,” says Marcus Banga, marketing director, PEP. As Pieter Groenewald, managing director, Comutanet, says, while many township residents do not have large disposable incomes, their combined purchasing power and loyalty to specific brands are huge drivers of the South African economy. This growing percentile of the township population works in the metropoles and major cities, commuting to and from work by bus, taxi and train. Jacques du Preez, managing director, Provantage Media estimates this number of commuters to be around 18.2 million. “It takes an average of 84 minutes

for someone living in Soweto to get to work in Rosebank. This means that they are a captive audience for that time,” he says. And yet, as he points out, less than one per cent of ATL advertising is allocated to taxi and transit advertising. “When the average township dweller starts their day, they are out of range of conventional advertising media,” says Groenewald. He insists that alternative media (transit media, taxi radio and TV etc) is the way to go, in order to reach these consumers. Du Preez adds that most info into and out of a township is through a taxi. Mass media is just as prevalent in the townships as anywhere else. “They own televisions, radios, consume popular newspapers (such as the Daily Sun and the Sowetan) and definitely aspire to premium brands when they are affordable,” says Groenewald. Word of mouth is also extremely important within this environment, says Melanie Walter, media director, Starcom Media, as they have more of a community information network, than someone say, living in Jo’burg’s northern suburbs.

Townships are the new cool Property is booming in the townships, businesses are moving in and malls are springing up. “When companies such as Pam Golding move in, it shows that these areas are no longer the ‘poor cousins’,” says Walter.

According to Casper Oelofsen (Shareholder and Principal of entity that owns Pam Golding Franchise rights of Khayelitsha, Mitchells Plain, Kuilsriver and other empowerment areas) the boom has been triggered by more land becoming available from the supply side and current land owners starting to see value in developments. Oelofsen continues to say that not all township residents want to or can afford to move to the suburbs, but they are gaining from economic growth and want to buy and own a house in the area they live. He points to areas such as Khayelitsha, where secure villages are in serious demand; prices in the formal market range from R130 000 to R750 000. Businesses and government departments are also purchasing land and property. As Caroline Rait, insight project director, Added Value says, many people are choosing to stay in the place where they grew up creating a market that is as rich and diverse as any other. “They are looking for everything that suburban dwellers are looking for and they have access to all media platforms,” says Walter. The burgeoning cafe culture is a prime example of the ‘suburban’ trend that has emerged in the townships. “Indeed, consumers in the rural and township areas are demanding it. They want to have a coffee shop locally rather than having to travel 50km to experience it,” says Dave McKenzie,

Vol 25 No. 9/10 I 2007 I MarketingMix 2 1

TOWNSHIP MARKETING

managing director, Boo! Media, pointing to the increase in the number of coffee franchises across the townships. Even those who move out of the townships return on weekends and holidays. “Much of this market is living in the suburbs, but spending money in the townships,” says Walter. Du Preez has found that township schoolchildren attending model C schools in the suburbs are being consulted on household purchasing decisions as they are deemed to be informed, brand savvy and are bringing this information home with them. Government is also pumping money into the townships, especially Soweto – ready for the 2010 FIFA World Cup – with greenification projects and the upgrading of taxi ranks, malls, parks and services; the townships are becoming fully functional and well equipped. “The government is spending money improving these environments, and this changes what you can do in terms of advertising,” says du Preez; outdoor ads, such as posters and billboards become a viable option in these environments, now that they are formalised and attractive. Marketers need to make the effort to explore the many possibilities that are becoming available to them. Refiloe Mataboge, CEO, Infusion (a local market research company, formerly Culture Cruizing) says that townships, such as Soweto, have proved to be attractive and unexplored markets for marketers seeking to increase their sales by reaching new audiences. Conversely, townships need to brand themselves to attract more investment. Infusion’s study found that Soweto has attracted the most investment – retail, commercial and community development – and tourism plays its part as Soweto is a brand known worldwide. Mamelodi, likewise, is garnering investment, having positioned itself as a ‘Jazz Capital’. Mataboge points to Tembisa as a township that offers a lucrative market (ie one with a disposable income and a brand awareness) but is overlooked.

No one-for-all approach Investigating each township is imperative as they are not alike – each one is unique and diverse, some being home to several subgroups (each with its own purchasing behaviour and brand preferences). “If one studies Soweto as a prime example of a township, one must realise that Soweto is a city in its

2 2 MarketingMix I Vol 25 No. 9/10 I 2007

Community service According to the ROOTS study, the Caxton newspapers reach penetration in the 60-85 per cent zone and are primarily focused in Soweto, with newspapers also in Tembisa, Alexandra, Mamelodi, and those townships of the Vaal Triangle (Sebokeng, Boipotong and Sharpeville). “We cover about 320 000 households in Soweto, with 10 local newspapers. All in all, the group’s township print orders are roughly 500 000,” says John Bowles, joint managing director, NAB. While the newspapers have had a great response from national advertisers, it appears that the small businesses in the townships lack an understanding of the role of advertising. “We don’t see the same support for local advertising as we do in the more established areas but we do anticipate that will change as the market becomes more formal,” says Bowles.

Primedia@Home recently launched the Store Carnival offering (a concept for store openings among the LSM 1-6 markets). According to Melvin Chagonda, managing director, Primedia@Home, there are three different Store Carnival products. The first involves bottom-end distributors giving out leaflets at the malls/centres. The Deluxe option involves more presentable distributors, dressed in branded gear, handing out branded freebies; a popular radio DJ and music are included. The Extravaganza option is a live event, with branded promoters, a well-known DJ, music and speakers, etc. This option includes the use of an in-house trailer (equipped with its own generator), which can be taken anywhere. The Store Carnival offerings are adaptable to events, stadium environments and more, making them flexible; plus, the concept can be adapted to the language profile of the target market. And the cost is relatively low (with marketers paying between R4 500 and R12 500 for a Store Carnival). Chagonda believes that, given what the store carnivals can do, the cost is negligible. “This is precision marketing, taking the right product to the right person, at the right time and in the right place,” says Chagonda, “we’re also able to speak the language of the people in that area. And the response is instantaneous.”

Soweto TV On 1 July 2007, Soweto TV switched on again, this time with a first of its kind in SA, a 12-month TV licence. This freeto-air channel generates revenues from advertising, sponsored programming and CSI funding. Target Group Index (TGI) is compiling research on viewership and audiences (due for release in early in 2008), but according to head of marketing and sponsored programming, Deon Botha, the longer 12-month contract has allowed the station to become more proactive in the activation of viewers through community initiatives. The station’s Switch On campaign includes ads in the Sowetan and community papers as well as distribution of pamphlets and promotions on taxi TVs. Shows include Dlala Ngeringas (youth programming), Mbokodo (for women), Soweto Today (current issues and events) and Ziyamporoma (the hip and happening in Soweto), among others. Advertisers can expect to pay between R2 330 and R4 660 for a 30-second ad spot; sponsorship opportunities are also available, especially with a focus on edutainment. “This is a target market that contributes in excess of R10 billion in retail sales per annum, and is highly motivated to improve its living standards,” says Botha. Soweto TV is expected to increase its footprint to extend outside of the township in the future as well as expand the number of platforms it can be viewed on.

The Marketing Law Workshop 13 November 2007 Sandton Sun, Johannesburg Consumer Protection Bill, Protection of Private Information Bill, National Credit Act, Electronic Communications and Transactions Act

Your questions answered These Acts and Bills are and will profoundly influence marketing practices. We are in constant dialogue with the Regulators and the government departments about interpretations and the purpose of the workshop is to brief you on the latest discussions and interpretations, as they will impact on marketing practices. Present at the workshop will be representatives from the appropriate government bodies, legal advisors and senior representatives from the marketing bodies who have been actively influencing government. Keynote Address Andy Quinan, chairman of the legislative sub-committee of the DMA, explains the consultative framework with government, advising on the current status of the various discussions and highlighting three key issues per Act/Bill which impact upon marketers. Consumer Protection Bill The Project Manager from the DTI will address key issues and our legal advisor will comment on the legal interpretations and respond to your questions. Protection of Private Information Bill Christiane Duval, a director of the DMA and a member of the South African Law Commission provides a briefing on the latest draft and the implications for marketers. The issues to be highlighted will be based on the current draft Bill, and Christiane will suggest how companies can adopt best practices to support the basic nine principles, including electronic marketing and purpose and consent marketing. National Credit Act The DMA have conducted a number of discussions recently with the Regulator concerning various interpretations and the resulting clarifications are helpful. Andy Quinan explains the key developments and a senior representative from the Regulator’s office will be present to answer questions. Electronic Communications and Transactions Act Critical issues include the extent to which SMS and email messages can only be issued with prior consent, opt-in versus opt-out and conflicts with the wording of the Protection of Private Information Bill. The policing of spamming and its effectiveness will be reviewed. A senior representative of ISPA (Internet Service Provider Association) will comment and answer questions. Legal Summary Adv. Randolph Samuel, a director of LUCID Legal Business Services, a consulting firm specialising in these areas, looks at the key issues from a legal and business impact perspective Delegate fee: R1 950 plus VAT. Three or more delegates: R1 750 plus VAT per delegate. Enquiries: Robyn Andrews (011) 234 7008 or e-mail [email protected]

TOWNSHIP MARKETING

own right and city dwellers are diverse in their beliefs, traditions, habits and behaviours. This is inadequately recognised by those seeking to penetrate ‘this market’,” says Groenewald. Mataboge agrees: “the various townships are at different stages of development. On average, Soweto is more advanced than the likes of Kwa Mashu and Khayelitsha,” she says. Marketers often complain that they are not recognised by this market, and one of the major reasons is that once-off marketing that assumes people are alike is futile and ineffective. “This market is not homogeneous,” insists Banga. Consider, for example, that PEP’s market (primarily LSM 2-6, township dwellers) is categorised into five groupings, depending on the driver of purchase decisions (value for money, lowest price, best quality, fashion and style at any cost, and a combination of best quality for best price). “Irrespective of where they live, shoppers, as individuals, make decisions based on these factors,” says Banga. Groenewald points out that contrary to the perceived stereotype, there are more than 10 languages and dialects spoken in the townships, people with university educations and others with no education at all.

Retail While language can be a barrier, the main obstacle, a lack of national retailers, is rapidly being removed. Informal trade and small independent retailers are the norm, but the introduction of shopping malls makes it easier for brands and retail marketing to begin the quest for brand loyalty and sales. “Marketers are not necessarily ignoring townships, but look at them from the point of view of a major player, such as Procter and Gamble. They distribute through retailers like Shoprite, and if these retailers are not in those environments, it makes it difficult for marketers to move into those areas,” says Walter. McKenzie points out that while traditional billboards are available and have been for some time, the innovative use of branding communication inside the mall or at entrances as examples was not available previously. “Traditionally, the marketplace was the town or village square, where one could eat, shop, meet friends and be entertained. The malls have become the modern marketplace,” says du Preez.

2 4 MarketingMix I Vol 25 No. 9/10 I 2007

Infusion Lifestyle Research 



The townships which have the highest incidence of residents who feel that they can get by on their salaries are Tembisa and Soweto. Those who cannot meet their basic needs are in Khayelitsha, KwaMashu and Soshanguve. Khayelitsha is described as being in a general state of despair (average household income is R2 500 or less). However, Soshanguve has the lowest household earning at R1 400 a month (yet they do not report feeling despair).

The taxi industry  



 





120 000 taxis in SA 11 per cent of taxi drivers own their own taxis 11 average number of trips that each taxi makes per day 1 050 number of local taxi associations 55 number of major taxi ranks or transit nodes in SA 14.5 million number of passengers transported by the taxi industry each day 87 million the number of passengers transported by taxi each week

Taxi commuters per province Eastern Cape: 2 100 000 Free State: 1 100 000 Gauteng: 3 200 000 KwaZulu-Natal: 3 300 000 Mpumalanga: 926 000 Northern Cape: 266 000 Limpopo: 1 500 000 North West: 1 200 000 Western Cape: 994 000 Total: 14 586 Source: Provantage Media

Property Boom Pam Golding Property Group’s empowerment division has launched a black-owned development franchise that will focus on the marketing and sales of new developments in Mitchells Plain, Khayelitsha and the Eersterivier areas of the Western Cape. “Rights have been approved and split to accommodate existing residential (secondary market) and developments (greenfield or primary opportunities),” says John Herbst, managing director, Pam Golding Properties: Empowerment. This hopes to address the demand for new housing to consumers (especially sectional title ownership, which is a new concept to these markets) and to educate and inform consumers about property ownership. Furthermore, the split in franchise rights will allow stakeholders to act as project advisers or facilitators to developers seeking to develop in new markets. Market intelligence and project viability can therefore be adjudicated with the assistance of a dedicated PGP developments office that has an intimate knowledge of the market. “New development franchises have been secured for Khayelitsha, Mitchells Plain and Eersterivier, with development capacity in Soweto, Johannesburg South, Roodepoort, Roodepoort North, Pretoria West Moot and Kuilsrivier. Strategic partners also include developers of affordable housing,” says Herbst. The Franchised offices have secured for than R400 million in sell out value in new projects in the Western Cape; R300 million in sell out value in KwaZulu-Natal and potential engagements on greenfield opportunities in Gauteng (all of which are at an advanced stage of negotiation in excess of R1 billion). “Townships will keep on attracting consumers based on affordability and socio-cultural dynamics. The spend is unquestionably present, with an objective to contain economic upliftment within these markets,” says Herbst. Meanwhile, Old Mutual Property Group Investments (OMIGPI) is also involved in developments in previously under-developed areas. One such development is the R350 million Thembokwezi Lifestyle Estate, which is under construction in Khayelitsha. Another is the R2 billion development and office-to-apartment conversions in the inner cities of Johannesburg and Pretoria. “OMIGPI is also exploring property development opportunities for Umgeni, Tsantabane, Mafikeng, JS Moroka, Buffalo City, Nelson Mandela Metro and Kokstad. These range from residential townships and mixed-use developments to parkades and taxi ranks,” says Ben Kodisang, managing director of Old Mutual Investment Group Property Investments.

TOWNSHIP MARKETING

These developments are impacting on consumer behaviour, shoppers’ decision-making and the response to advertising messages. McKenzie says that the township consumer is an emerging consumer; “they are demanding a greater choice of product in their shopping centres,” he says. Many of the landlords that Boo! Media have signed contracts with are developing additional malls in the untapped rural and township areas, so there is a great deal of development in the pipeline. “The sizes vary from 15 000m2 gross lettable area, which excludes the parking and taxi rank area, through to 85 000m2. Foot traffic also varies from 400 00 shoppers to two million shoppers per month,” he says. The good news for retailers is that the township malls are seeing greater demand for the retailers that are available in the upper LSM malls. Woolworths, for example, has moved into the townships with great success; according to McKenzie, the Jabulani mall store generated double the expected revenue in its first month of trading. “If one works on a formula of dividing the amount of monthly foot traffic by the square meterage of the centre, the township malls are receiving higher volumes of traffic per square metre than the upper LSM malls,” says McKenzie. The good news is that the mall owners and developers are backing mall advertising. Mall owners and developers are more educated now than ever about the marketing and advertising within their centres. “They understand the opportunity that we are creating, and are very much behind us. Property owners want to see that the shopper’s experience is enhanced,” says McKenzie. For this reason, the property owners will outsource professionals that will help them to realise their ambitions. But care must be taken to ensure that the ad campaigns fit with the marketing profile of the mall and its market positioning. Questions have been raised over the impact that these malls and centres will have on the smaller retailers and informal traders. “The rural and township markets are experiencing unprecedented income growth. The malls are purely satisfying the demand from this growing economically active market,” says McKenzie. Mataboge maintains that the impact of the malls on informal traders is largely dependent on which ‘industry’ they operate in. “Interestingly, there is a big market for township junk food, such as kota

Township slang 

 

        

Chisa nyama: a butchery with a car wash and a braai area, where suburban locals will hang out and show off their fancy cars (in particular, on Sundays) Ekasi: the township (derived from the word location/lokasie) B.E.E: any BMW driver in their forties (new money, flashy); likes to pick up young women; a ‘sugar daddy’ Ziyawa/ziyabhixha: it’s happening Maraud: to paint the town red; party hopping Mpintji: a buddy or friend Mpintji Gazi: very close friend (almost like a blood relative) Hectic: crazy (used as an adjective); describes a tragedy; describes how busy one is Hundreds: used in reference to the first person, indicates that he/she is OK Heita/holla/hoezit: hello, how are you? Bra: used as term ‘guy’, applies both to males and females Jeses bra: exclamation, when something is ‘hectic’ or shocking. Source: Added Value

s’phathlo (township bunny chow) and chisa nyama.” There has been a visible increase in the number of local car mechanics (relative to the increase in car purchases), and in the number of people who make security/ burglar bars. Professor Andre Ligthelm of the University of South Africa’s Bureau of Market Research compiled a study into the impact of shopping mall developments in township areas on small township retailers. In the study, it was found that in 2004 only 25 per cent Soweto households’ retail expenditure was at outlets in Soweto. This has changed today. It was also found that those small retailers that are based within 1km of mall lost the greatest revenues and saw the greatest declines in profit. Consider Southgate Mall; this mall is very much an entrenched part of Soweto, and while the new malls in the area are pulling some customers away, the mall is retaining its higher income shoppers. “The one risk for malls in rural and township areas is if they do not upgrade their malls; a competitor will come in with a bigger and better mall,” says McKenzie. Expect to see new malls in Tsakane township in Springs, Mamelodi, Everton, Mafikeng, Burgersfort, Mdantsane and East London, among others.

Marketing savvy? Studies, such as TNS Research Survey’s Black Diamond, have shed a lot of light on the township market, although it also has its critics, and perceptions of this market have progressed substantially. But there is still a great need for marketer education, and du Preez believes that some of the responsibility

Vol 25 No. 9/10 I 2007 I MarketingMix 2 5

TOWNSHIP MARKETING

lies with media owners and agencies. “A lot of people who are responsible for media planning don’t go into the townships,” he says. Mataboge says that some marketers believe that people in the townships will simply ‘catch on’; these marketers seem to lack the instinctive feel that they have with people residing in the suburbs. And the biggest mistakes are made post-product launch. “Prior to launch, most retailers conduct extensive research in order to understand the potential market, ascertain viability of the offering and so forth. Once the launch is done, there doesn’t seem to be the same enthusiasm to ascertain satisfaction with products and services on a continuous basis.”

What works? Integration is the key word here – traditional mass media with alternative media such as taxi advertising, mall advertising, etc). McKenzie advocates the use of campaigns integrated with experiential activations. “It’s how you integrate your campaigns that is important,” says du Preez. PEP, for example, uses a combination of media: knock-anddrop leaflets are popular, as is radio, and branded TV entertainment (the brand features in the SABC 1 soapie, Generations). In terms of newspaper advertising it’s the Daily Sun. Groenewald adds that the township market is not an easily trusting one, so tangible experience with a brand is important. A condescending or patronising attitude towards the township consumer is not tolerated. Past oppression has made them very aware of status. Research data on the language preferences of the township consumer is limited, but marketers and media owners know that communicating to this market in a home language is important. Dubbing over an English ad is not going to work; “it needs the cultural nuances that go with it,” says Walter. She adds that the younger, more educated market doesn’t mind being marketed to in English. Du Preez, meanwhile, has found that 88 per cent of taxi commuters read English, and prefer to get info and news in English. “It is an aspirational language – just look at the success of the Daily Sun.”

Deeper insights Groenewald says that serious analysis is needed to better understand the township environ-

2 6 MarketingMix I Vol 25 No. 9/10 I 2007

ROOTS 2007: Soweto LSM 7-10: Dobsonville, Protea, Diepkloof Average HH income: Dobsonville – R6 600 Diepkloof – R6 200 Protea – R8 400 Most dominant home language: Isizulu, Sesotho, Sepedi. The averages: the percentage of Soweto households that have: Fridge/Freezer: 91 Washing machine: 35 Microwave oven: 53 Have children under age of six: 19 Have school-going children: 38 Have children beyond school age living at home: 33 Without children: 20 90 per cent of Sowetans own their homes. Less then 10 per cent rent 17 per cent of Sowetans have one car in their household; Four per cent have two, and just 1 per cent have three 65 per cent of Sowetans have bought take away food once a month (or more often); 39 per cent eat in a restaurant once a month or more often 30 per cent entertain at home once a month or more often Durables purchased: Small electrical appliances; large electrical appliances; furniture; soft furnishings (curtains, cushions, etc); home accessories; and toys. Contribution to savings and insurance (medical aid, short-term insurance) on a monthly basis is below average in Soweto (though residents in Diepkloof and Protea ranked highest). Shopping, cellphone and techno gadgets This market does not buy nutritional supplements; it purchases over-the-counter medicines, and will try to improve its health by taking supplements. This market does not exercise at the gym. Only 12 per cent of Soweto and Alex households have four or more ‘techno’ items in the home; however, 47 per cent of these markets have looked for or bought audio visual products in the past 12 months. Forty eight per cent of Soweto and Alex cellphone users are MTN subscribers; 47 per cent are Vodacom; and six per cent Cell C. The majority are prepaid customers. In the past month, the majority of Sowetans have shopped at Shoprite and Pick ‘n Pay. Spar is also popular in Dobsonville and Meadowlands. These shoppers do bulk shopping once a month. A small percentage will shop twice a month. For clothes and toiletries, this market will shop at Edgars and Jet stores.

TOWNSHIP MARKETING

ment and insists that an intimate knowledge of the demographics of the target market is essential. But researching this market presents challenges. Infusion encountered the following challenges over the course of its township research. “The most significant problem behind research is the fragmentation due to research projects focusing on a couple of problems that are never seen in the context of larger society,” says Melani Prinsloo, founder, Infusion. Traditional fieldwork doesn’t work – arriving at 7am to interview people that leave for work at 5am, for example. Prinsloo also points to the distrust of respondents because of non-sustainable investments in the townships. “What works best for us is referred to as community-based participatory research, where information is gathered for us through community members, while this info is provided free of charge back to the communities for development purposes.“ Mataboge adds that we need to start asking different questions if we are to gain true knowledge about life in the townships. And respect for the community needs to be maintained; “we need to more humane when visiting places that people call home. The same sentiment applies to brands,” says Mataboge. Traditional research methods do not apply within the township environment; face-to-face interviews set in the townships are the way to go. Recruiting a local community member to smooth the research process is key, as is interviewing outside of working hours. “Taking clients with us into the townships can be really powerful, especially for those who’ve never ventured there,” says Rait.

Bite-sized branding There has been an increase in the number of brands exploring bite-sized servings. Clorets chewing gum recently launched a two-piece pack; Cadbury’s bite-sized chocolates campaign is doing well too. Kirstin Stapelberg, senior brand manager: chewing gum, Cadbury explains the launch of the Clorets two-piece pack. At the time of launch, SA was consuming less chewing gum than other developing markets (in spite of the huge growth in confectionary categories worldwide). “The so-called emerging market consumes more bubblegum and sweets than it does chewing gum, due to a lack of availability and an inability to afford chewing gum,” says Stapelberg. For Cadbury, this represented the ideal opportunity to grow the chewing gum market in a new direction. Clorets was identified as the ideal brand for this extension because it is a well-established within this market; consumers trust the brand. The smaller two-piece pack overcomes the issue of affordability (at just 50 cents per unit). A sampling campaign formed an integral part of the launch (especially since the majority of South Africans had not been exposed to big-brand chewing gum in the past); support in key wholesalers took the form of giveaways, win-and-spin competitions and point-of-sale material. Other campaign platforms include taxi branding, billboards, in-store activity and trade education. All communication carries the payoff line ‘nge5bob nigmnandi’ (for just 50 cents you can be cool/fresh). Cadbury had researched the market extensively and tested a variety of concepts at different price points. “Crucially, we confirmed that consumers in the lowincome market have the same needs and aspirations as those of their middle and upper income counterparts, and that they desire similar quality products. The difference lies in purchasing behaviour,” says Stapelberg. She also found that it is a question of affordability and availability. The Clorets two-piece offer has added growth to the brand (through awareness, which had grown to 54 per cent four weeks after the launch). “One-third of the consumers purchased two boxes at a time. Many consumers heard about the product through word of mouth, which indicates that people are talking about the product,” says Stapelberg.

The Imagination Lab in Soweto Expectations Craig Irving, founding director, Consumer Insight Agency (CIA), says that some suburbs of Soweto already resemble Sandton. The CIA’s NOW project reveals 12 archetypes that make sense of the South African landscape, and the ‘loxion’ dwellers. “Township is not an amorphous catch all for some notion of blackness…we believe that marketers need to spend time understanding this – drawing inspiration from the reality of the streets. McKenzie points to the growing aspiration of these markets. “For the first time, dishwashers are being sold in township malls beyond Soweto. The biggest mistake marketers can make is to under-estimate or ignore this market,” he says. 

The Imagination Lab takes matriculants from disadvantaged backgrounds and gives them the opportunity to explore the creative world (and consider careers in advertising, design and digital media, etc). After a year of study through the Imagination Lab, students are offered internships at ad agencies and marketing companies (such as TBWA Hunt Lascaris, Network BBDO, The Jupiter Drawing Room, Old Shanghai and FCB). These agencies play a role in guest lecturing at the Imagination Labs. The Imagination Lab course is a Vega School and Communications and Advertising Forum for Empowerment (CAFÉ ) initiative, and was launched in 2003. It was established with the purpose of fast-tracking transformation within the industry. Recently, the fifth Imagination Lab was launched in Soweto (with others in Alexandra, Kwa Mashu, Westville and Sandton). “We are very proud of this initiative as it is playing a big role in transforming the industry and in helping people develop their talents. Since inception, Imagination Lab has maintained a pass rate of 85 per cent, while many of the students went on to start their own small businesses after obtaining the certificate,” says Gordon Cook, founder and school navigator.

Vol 25 No. 9/10 I 2007 I MarketingMix 2 7

by ronnie apteker EAST MEETS WEST

Footskating 101 Two years ago South Africa’s imagination was captured by Crazy Monkey’s Straight Outta Benoni – a full-length local feature film that created a lot of hype and set a massive expectation. Well, the chips are down and the numbers are in. That youth comedy sold just over 200 000 cinema tickets. Not a bad first attempt but not nearly enough to cover the film’s budget. The result was a financial loss. Many hard lessons were learned, resulting in a lot of soul-searching. Winston Churchill once said that success is the ability to go from one failure to another with no loss of enthusiasm. So, we are back, with a different team of people, a radical new approach and a clearer vision coupled with an abundance of enthusiasm. The new colourful youth comedy is called Footskating 101 and we are very happy with the film. The budget came down, drastically, and the marketing campaign this time round will be more targeted with a clearer message. We made the new film on high-definition digital, a huge cost saving over Kodak film. Benoni had over 100 crew members. The new film, which was shot on the West Rand, was made with a handful of people and crew. I was one of the crew. We laid down a set of house rules. It was a simple, no nonsense approach. There was no catering, no portable toilets, no trailers, no frills and no attitude. What there was, was a stronger sense of purpose, an overwhelming humility, increased passion, and a bunch of artists that were very hungry. The film is complete and we have done some extensive audience testing. The sense I am getting is that we have moved up to a six or maybe even a seven out of 10. That makes me very happy. Finally, some growth. Yes, it is a crazy, silly movie. The name says it all, ‘Footskating’. But it has far greater heart than Benoni. It is a more honest piece of work and we hope that this time, the expectations we create with our marketing campaign will be more precise. The Benoni film’s marketing drive started at the beginning of 2005. It went on for nine months and the Monkey was everywhere. It

2 8 MarketingMix I Vol 25 No. 9/10 I 2007

certainly was a relentless and pervasive campaign and it had a lot of imagination behind it. The Footskating marketing blitz, on the other hand, is a lot more focused. It officially kicked off in August and runs for two months. The new campaign is simpler, but

being organised by the film’s distributor, UIP. During the roadshow, we will be handing out flyers, which will have an SMS line and an entry form for a competition. Handing out T-shirts is always cool. Everyone

bigger. By simpler I mean more direct, more straightforward and clearer. By bigger, I mean more creative and far more innovative. 5FM have come on board again as our main marketing partner. The movie is branded as a 5FM project. For all intents and purpose, it looks as if 5FM made the movie. In the new film we have a lot of 5FM product placement as well as some very clever cameos by some of the DJs. 5FM will get kudos for the film and we are hoping to forge an even stronger relationship with the station from our efforts. And the film gets a national broadcaster to help promote it. We learnt many valuable lessons on the Benoni marketing roadshow. Poster signing, for example, is highly cost-effective and we are printing 20 000 posters that will be used on campus tours, mall visits, cinema campaigns, music store displays, etc. The new poster is really brilliant, it hits all the right notes and we are confident that every youngster will want an autographed poster. Every teenager, for example, that puts up a poster in their bedroom or classroom becomes a billboard for the movie. Even more important is reaching our target audience through MXit, which is

loves getting a funky new hip T-shirt. But a good quality T-shirt costs around R50 to make. A poster costs less than R2. So, we are doing more with posters and less with T-shirts. There will be a range of stunning Footskating T-shirts from Puma, but it will be focused, and more strategic and tactical in its usage. This time around, we are using the T-shirts for competitions as opposed to just handing them out. We are trying to be more tactical by getting people to enter a Footskating competition by filling in a form whereby we capture their cell numbers and e-mail addresses to keep growing our database. We are creating a stack of big vinyl banners to hang up in the cinemas across the country. The cost of making a vinyl banner is around R600. To make, say, 40 banners is not that prohibitive from a rands and cents point of view. The exposure these banners provide to the key cinema-going population is focused and effective. There is no monthly real estate cost for putting up banners in a cinema. Yes, it is exciting to see a big billboard up on the side of the road advertising your labour of love, but it is expensive, and it is not that targeted. Having said that, we have a bunch of roadside bill-

EAST MEETS WEST

boards going live for the month of September. For the Benoni film we had billboards up for seven months. This time it is for one month; the month of release. It is a smaller footprint and more precise – there are about a dozen boards going up in Johannesburg... mainly in the north. Probably the most innovative aspect of the new campaign is the tie up with Fanta. Collaboration is in the form of branding on Fanta tins and the campaign will last about 10 weeks. This is an extraordinary win/win proposition. The thing I want to point out about this particular aspect is that it did not happen over night. Nothing about the making of this movie or its marketing happened quickly. A lot of time and effort has been invested in this journey and everything we have done on the marketing side has been proactive. We have not waited for the phone to ring. We have been building bridges since the first word was put on paper when we started writing the story over two years ago. The secret to our marketing campaign, and to life in general, is to be as proactive as humanly possible. We’ve been building our audience through a website – www.footskating.com – TV and radio spots, trailers, the Footskating Game competition as well as music videos. The music in the new movie is really solid this time round, it is all South African. We had a ball

working with EMI on the CD which hit the stores mid August. We are expecting it to sell well and create more heat for the film. A key consideration here is that we are not calling it a soundtrack, but rather, “The Footskater’s Rock Compilation”. Generally, compilations get far more exposure than soundtracks. Look & Listen and 5FM are punting the CD and at the time of writing, two of the songs are in the Top 40 charts and climbing. We are all hoping one of these tracks get to the number one position. Bands include: Fuzigish, Driverlane, Farryl Purkiss, Scarlet Box, Fokofpolisiekar and Taxi Violence, among others. Einstein once said that insanity is doing the same over and over and expecting a different result. I have been involved in eight film productions over the past seven years and this last one, the Footskating adventure, has been the best. We did things differently, radically differently, and the result is already a success

from my perspective. We came in on budget, on time, and with greater alignment in the small team. This, to me, is fundamental. Everything in life is about people. People are what make the difference. You only ever invest in people; not in business plans or movie scripts. From my perspective this was the best film investment I have made to date. 

Vol 25 No. 9/10 I 2007 I MarketingMix 2 9

by michele venter-davies EXPERT OPINION

Word of mom We’ve all recently read several articles in women’s publications and witnessed distraught parents on TV magazine programmes slating advertisers for the harm they are doing to their children. ‘The pressure’ has become a buzz phrase flaunted in the car parks and on the cricket fields of many prestigious schools. Moms complaining about the stresses caused by irresponsible advertisers who have brainwashed their (above average) offspring to believe that brands dictate social acceptance – which is directly proportional to the price tag. Dads bragging about the thousands paid for a cricket bat for six-year-olds who must ‘get off to a good start’. Sure, we all want to give our kids the best. Heaven forbid they should suffer psychological problems such as ‘material deprivation syndrome’ and humiliation at the next school function. The school car park must be one of the most powerful marketing arenas of our time. A captive audience of women determined to ensure that their children ‘make a success of life’ – founded on brands. Word of mouth is nowhere near as powerful as ‘Word of Mom’. Well done to the marketing profession. It has, it seems, successfully managed to remove the word ‘no’ from the vocabularies of thousands of well-heeled opinion leaders, seekers and followers, hell-bent on their kids outwearing, outperforming and out-marrying their nearest and dearest cohorts. An energy drink brand which, I guess, is aimed at teens and twenty-somethings that party all night, is poured down the throats of gagging primary school athletes intent on winning that gold (plastic medal) for mom. As long as Johnny has one medal more than Sipho we’ll risk the side effects of adult doses of caffeine. A lingerie shop designed to fulfil the dreams of any blushing bride-to-be is patronised by 13-year-olds wanting to ‘look sexy’. For whom we wonder? Maybe the 15-year-old who invited her to spend the holidays at ‘our place in Plett’ sipping Mexican beverages and smoking agricultural produce from KZN, while his parents are overseas making sure they keep ahead of the Jones’ and Gamedzes’. Good example of crosssegmentation and targeting. It was interesting to hear a mother reprimanding a young boy who was

3 0 MarketingMix I Vol 25 No. 9/10 I 2007

“

While South Africa has some truly innovative criminal tactics, forcing soccer moms to patronise trendy boutiques is not one of them.

”

tormenting the ‘dear little creatures’ at the Johannesburg Zoo… “Stop it Daniel! I will take away BOTH your bicycles!” Great marketing campaign that convinced mom that Daniel could ride two bicycles at same time. And what happened to good old sarmies for lunch? It is now essential to buy hamburgers and pizzas from highly successful franchises during break time. Again, ‘the pressure’. This time it’s the pressure of having to shop for shoes AND play tennis before noon. No time to make a sandwich. But the real reason, of course, is that the chubby teen will be ostracised by ‘the others’ if they bring homemade goodies. Not serious – chubby can be liposuctioned as a Sweet-Sixteen gift … they are all doing it. Plastic surgeons are being hounded by teens seeking boob jobs, nose jobs, lipo and even eye jobs. Gone is the matric holiday … we went to Disneyland by the time we were 10… Margate sucks. But lipo sucks better and

that’s what we are doing for the December holidays. (And, after all, we had the sex-toy party for our 16th so even that doesn’t titillate anymore.) And who is driving this consumption phenomenon? It is accepted that there are various role players in the consumer decisionmaking process. Kids are strong influencers. But, ultimately, the decider and buyer roles are acted out by those who control the spend. I assume that in most higher LSM families these are adult parents with a reasonable level of intelligence and education. And yet they claim to be the helpless victims of armed marketers who threaten horrid things if they don’t join the ‘get branded’ inner circle. Marketers lurk in car parks and on soccer fields exploiting spineless creatures who’ve lost their basic values. Those who merrily spend R800 on a T-shirt, but turn away from the child at the traffic lights for whom it represents school fees for five years or more. The same traffic lights where dad leans out of his luxury German sedan to buy a DVD from the informal sector. Very confusing as mom insists ‘We NEVER buy fakes’ during car park competitive dialogue sessions. Marketers play a role, of course. They put their brands out there for consumption. They position themselves according to consumer values. The consumer tells the marketer what their values are and the marketer designs a product offering to match. Maybe marketers are to blame for delivering on what the consumer wants? But, ultimately, the consumer has a choice. While South Africa has some truly innovative criminal tactics, forcing soccer moms to patronise trendy boutiques is not one of them. The most interesting thing for me, however, is how these consumers cannot seem to identify at all with other like-minded souls. They all lament the fact that they are ‘not like the others’. It is ‘the others’ who place pressure on them to conform to shopping behaviours beyond sensible practice. ‘We have no choice’ is their car park war cry. I wonder which marketing genius started the conspiracy? 

Michele Venter-Davies faculty head: Marketing and Advertising AAA School, (011) 781 2772 [email protected]

EXPERT OPINION by lizelle smit

Surviving the silly season – a radio guide Where are all the Christmas trees? It’s October and not a Christmas light in sight! Don’t worry; they’re being unpacked as we speak. In a month’s time you’ll be wondering what happened to the year and to your new year’s resolutions. Every year retail high season starts earlier. Retail mediums become more cluttered. Retailers become more competitive, and consumers become more discerning. While advertising mediums look more and more like gaudy, overdressed, cheap and nasty Christmas trees. The question on radio, as in any other medium, is how to STAND OUT. You might not have the benefit of CAPS on radio, but a few other pointers will help. Creatively: try staying away from Christmas tunes. I know it’s the only time of the year you can jingle your bells under the voice over, but it’s really not worth it. For the simple reason that everyone will be doing it. Slow down. The silly season brings out something funny in advertisers. Everyone wants to squash 45 seconds of price-product offers into 30 seconds. Understandably so, since there are so many fantastic offers and discounts around. But a second of sanity on radio often speaks louder than five words per second. On slowing down: allow enough time to develop the creative. Clients, even agencies, rarely allow their creatives enough time for crafting. Every word counts, especially considering you have 60 to 80 words to get your message across. Demand something fresh from your creatives; even if it means rebriefing them 10 times. Using a writer that actually likes writing radio commercials helps. Then an obvious one: avoid clichés and bad Christmas puns. Rather, avoid all puns, not just the bad Christmas ones. So no ‘miss it and you’ll miss out’. No ‘get into the festive spirit with…’ and definitely no ‘Tis the season to be (insert brand name here)’. Please. They make your brand sound contrived and unbelievable. Likewise, many brands will be claiming ‘professional’, ‘friendly service’, ‘knowledgeable staff’ etc as they do throughout the year. These phrases become more irritating in high season

“

Remember that nothing beats a fantastic offer. So make yours irresistible, and keep it to one message per ad.

”

because of how often you hear them being thrown around. But even before you start thinking creative, think strategy. Retailers often flood the market with frequency over the retail season. Remember that different radio stations attract vastly different listeners. Don’t un-sell your brand by talking to customers in a way they don’t appreciate or understand. Target the person you want to attract in a way he or she will notice. Related to this is understanding who really makes the buying decisions – not who pays for the item, but who nags for it. It might change the way you advertise completely. If at all possible, talk to people when they are performing a related activity. For example, if you sell a slimming product, talk to women on their way to the gym. Or on a Monday

morning when a whole week’s worth of starving was trumped by the Sunday braai. Radio makes an even bigger impact if the message is heard close to the moment of purchase. For example, radio reaches people on their way to the shops. Radio reaches them in their homes as they get ready, in their cars, in shopping centres (there’s a reason large clothing retailers now have their own in-store radio stations). So think about the lifestyle of the person you want to talk to and place your ad as close as possible to the time he or she would want to buy your product. And even if it can’t be at the time of purchase, make sure you’re top of mind when the purchase is made. Then the fuzzy-feeling factor. Over the peak retail season, say, from November to January, people are feeling different from the way they feel the rest of the year. They are looking forward to their annual holiday, family gatherings and spending time with loved ones. They are realising how lucky they are, and getting into caring and sharing mode. So join them, and get on board a radio station Christmas charity drive. It’s usually free, apart from your pledge. And it’s fantastic PR, even though ‘you’re not doing it for the airtime’. So give something to the people around you, and be sincere about it. More importantly, do it on radio – the most personal and believable medium. On being personal on radio: radio has this strange and wonderful way of making the big boys seem more personal and more caring over this period. It also allows the little guys to create a bigger ‘we’ve arrived’ vibe. Use this to your advantage. Then lastly, since the period is all about selling: Remember that nothing beats a fantastic offer. So make yours irresistible, and keep it to one message per ad. One price per ad. One beautiful shiny star for the top of the Christmas tree. Merry retailing. 

Lizelle Smit creative head, RadioHeads (011) 624 1319

[email protected]

Vol 25 No. 9/10 I 2007 I MarketingMix 3 1

by helen mcintee EXPERT OPINION

Packing – the other ‘P’ Fifteen years ago I conducted some research into packaging as the fifth ‘P’ of the marketing mix, limiting my study to the cosmetics industry. The results were interesting in that I successfully managed to prove that packaging is so closely linked to the cosmetic brand, that it could not be regarded as a separate ‘P’. Okay, I hear you sigh, so what’s your point? My point is that after 15 years, marketers have apparently still not hit on the fact that ‘packaging’ is a critical part of the product. It is well recognised (my research revealed) that many authors on the subject of marketing indicate that packaging is really the only piece of product information that every consumer sees. ACNielsen’s Shopper Trends 2005 reported that 60 per cent of shoppers are ‘extremely susceptible’ to impulse purchases and the average shopper makes 19 store visits in a month, with supermarkets visited twice a week, often two or three different supermarkets a month. And while containment obviously remains the most fundamental function of packaging, over the years it has come to perform many other functions. Consider the following functions:  Protection from physical or environmental damage  A source of information about manufacturer, dosage, contents, usage instructions etc.  Identification – the packaging enables quick and easy identification of the product at point of sale  Security – for example, tamper or childproof seals, authentication seals (to indicate that contents are not counterfeit), and anti-theft and pilferage devices  Facilitation – the very nature of packaging is to facilitate the usage of the product within, for example, aerosol cans, easy pour spouts etc  Storage of the product in warehouses, on shelves and so on  Convenience, such as the six-pack carry pack  Marketing – packaging should be carefully thought out as a very effective way of advertising to and communicating with the consumer.

3 2 MarketingMix I Vol 25 No. 9/10 I 2007

“

Marketing as a discipline is fairly new to the world, but I believe it is old enough to necessitate a review of past theory and practice. The world of the ‘50s and ‘60s is no longer our current reality – so let’s now add packaging to the marketing mix.

”

Unfortunately, it seems that little space is given by marketing textbooks or syllabi, either examining or discussing this crucial part of the mix and, in real life, by active marketing departments. I feel fairly sure that proportionally the amount of time spent on the packaging of a product is probably fairly small when compared to logo design, brand awareness and advertising. I decided to try and prove myself wrong and so opened up Philip Kotler’s latest textbook and yes, there it is in the index: ‘Packaging pages 393-394’ A page and a half does not, in my mind, constitute nearly enough focus on the topic. As marketers in one form or other, we are all aware that Product is arguably the most important ‘P’ as without it no marketing would be necessary. However, with the dramatic increase in products and services available to the consumer, the subsequent rise in intense competition between brands and, most importantly, the propensity for self-service shopping environments, then it is the appearance of the product that has now become a critical influencer in the purchase decision. In the marketing of services, we constantly emphasise the need to ‘tangibilise’ the intangible. This means trying to display physical evidence of the service so that consumers can more easily evaluate a product they are unable to touch or see – this is, in effect, the ‘packaging’ of that service and is equally important in the marketing mix. Marketing as a discipline is fairly new to the world, but I believe it is old enough to necessitate a review of past theory and practice. The world of the ‘50s and ‘60s is no longer our current reality – so let’s now add packaging to the marketing mix. 

Helen McIntee director, IMM graduate School of Marketing (011) 628 2038

[email protected]

INDIAN MEDIA by fulvia becatti

H o t a n d sp cy... The local Indian market makes up a relatively small percentage of the total population, with the 2001 census figures placing it at 1 120 494 adults (Labour Force 2006 survey places the Indian population at 1.16 million). The majority of this market is settled in KwaZulu Natal (where it accounts for 49 per cent of the total population). “KZN has the largest population of Indian people outside of India,” says Naveen Singh, programming manager, East Coast Radio. According to census figures, two thirds of South Africa’s Indians are Hindu. “Even though there is a small Indian population in SA, it is still representative of most of the different religions, castes, sects and languages,” says Shyam Pitamber, CEO, Indfinity.com (a local Indian website). The NAB ROOTS 2007 study found that Indian purchasing decision-makers (PDMs) are settled primarily around Durban (in Phoenix, Chatsworth, Merebank, Overport, Queensburgh and Umhlanga), with smaller concentrations across Johannesburg and Pretoria, and the country metros of Pietermaritzburg, Ladysmith, Newcastle, Empangeni and Brits. In Phoenix, more than 94 per cent of PDMs are Indian. In Chatsworth, the figure is

89.8 per cent and in Merebank 65.2 per cent. They are wealthy households. “It is true that Indians are of the upper LSM, however, I believe that there is a significant portion that is up and coming; people who aspire to becoming upper LSM individuals,” says Pitamber. In Chatsworth, for example, where there are 47 158 Indian households, their average monthly income stands at R8 620. This results in a total wealth of R407 million for the region. Overport’s 30 491 Indian households have an average monthly income of R11 785, which puts the total wealth of the region at R359 million. Phoenix’s total wealth stands at R306 million with 38 252 Indian households generating an average

Race Profile: KZN (ROOTS 2007) Region KZN TOTAL Durban total Phoenix Chatsworth Merebank Overport Queensburgh Lower South Coast Umhlanga Berea Highway Empangeni Bluff Upper South Coast

Percentage of total population Black Coloured Indian White 21 6 49 25 8 5 71 9 5 1 94 0 6 0 90 4 4 26 65 4 25 14 58 2 17 1 30 52 26 2 19 53 26 1 19 54 31 1 16 51 27 3 14 56 33 2 14 51 29 5 12 54 12 1 5 82

monthly income of R8 010. The total wealth of urban KZN households is approximately R4.8 billion; the Indian population in KZN accounts for around R2 billion of this total wealth (ROOTS 2007). “This is a rich capital market,” says Rajesh Devjee, CEO, SA India magazine. He warns advertisers that if they neglect to engage this market, they will alienate the country’s wealthiest group. “Indians won’t buy a brand-new Toyota. They would rather buy a second-hand BMW. It’s about the status,” he says. Of the Indians who have flown in the past 12 months, 60 per cent have flown SAA, 27 per cent Kulula and 12 per cent British Airways. This market shops for clothing and shoes at the following stores: Edgars (43 per cent), Woolworths (29 per cent), Jet stores (25 per cent), Mr Price (22 per cent) and Truworths (14 per cent). KFC and Nando’s are the most frequented takeaway/restaurant outlets, with 64 per cent and 58 per cent of Indian PDMs visiting them respectively over the past month. Spur, Debonairs, Something Fishy, Steers and Ocean Basket follow (ROOTS 2007). Mass media consumption among the Indian market consists of newspapers (national, regional and community papers), radio and TV (with DStv offering North Indian and South Indian bouquets), while SABC programmes such as Eastern Mosaic meet the need for locally produced content. AMPS 2006 figures found that of the 2.4 million DStv viewers, 137 000 were Indian. Approximately 33 000 of these are sub-

Vol 25 No. 9/10 I 2007 I MarketingMix 3 3

INDIAN MEDIA

scribed to the North Indian bouquet and approximately 16 000 to the South Indian bouquet. The North Indian bouquet includes B4U, ZEE TV, Sony Channel and NDTV. The South Indian bouquet includes KTV, NDTV and Sun TV. “Our subscriber market reflects a strong sense of cultural identity and the need for Indian cultural content which we provide. They are also looking for an alternative point of view, referring primarily to news and information,” says Cheryl Uys-Allie, specialist bouquet manager, DStv. She adds that the primary content drivers are Bollywood films, song-and-dance entertainment, celebrity news and entertainment formats. Family viewing rates high in comparison to sport or documentaries. In general, local community newspapers enjoy a high average issue readership, but publishers are starting to realise that this market is under-served. The Express stable of community papers (a new venture formed of the partnership between the Express titles and The Witness Printing and Publishing Company) includes the Eastern Express, which was launched because of changes that have taken place in the Indian community, which feels that it is not being reflected fairly (if it is reflected at all) in mainstream newspapers. The paper will avoid sensationalism, and will focus on professional, upwardly mobile LSM 6 – 10 Indians, between the ages of 24 and 55 years; they have an average monthly income of R7 500 plus. Half of this readership is female. The newspaper will cover a mix of national and international news, with a strong emphasis on lifestyle, food, fashion and decor, as well as Bollywood, sports, cars, travel, health, business and property. The paper is distributed on Wednesdays (97 000 copies), door-to-door, as well as via bulk drops at major shopping centres. The Express stable community papers will launch into the Durban metropole to address

Average household monthly income and regional wealth (ROOTS 2007) Region

Ave HH monthly income

Number of HH

Total wealth (in millions)

Berea Umhlanga Queensburgh Highway Bluff Chatsworth Phoenix Overport Merebank Amanzimtoti Port Shepstone Ladysmith Newscastle Pietermaritzburg Empangeni

17 231 18 919 13 863 14 291 17 198 8 620 8 010 11 785 10 028 18 114 13 000 10 522 13 986 11 688 15 125

3 560 2 997 4 801 5 106 1 944 47 158 38 252 30 491 12 294 515 3 019 1 931 3 620 25 813 951

61 57 67 73 33 407 306 359 123 9 39 20 51 302 14

Indians value culture and heritage Markinor’s World Value Study found that 99 per cent of Indian South Africans believe that their culture and heritage are very important to them. 94 per cent of Indians say that their heritage and history is important to them. The World Values Study was carried out by Markinor in conjunction with the Centre for International and Comparative Politics at the University of Stellenbosch. the gap in the market, says Piet Le Roux, CEO. The Sunday Tribune and the Daily News also rank high (ROOTS 2007). The Post reaches 327 000 readers, of which 90 per cent are Indian (AMPS 2006). “Adverts or news for that matter, on radio and television are just fleeting moments, not often remembered. In print there’s sustainability. The shelf life of this title, for example, is from a Wednesday to Sunday, and if readers or advertisers want

Spur advertising hits a nerve Spur Steak Ranches was forced to ditch its TV ad campaign (featuring a young Indian couple performing Bollywood dance sequences) after the Advertising Standards Authority of South Africa (ASASA) confirmed that it had received several complaints from members of the Hindu community. The complainants claimed that the advertising was offensive and made a mockery of Indian culture. This has brought to light issues around the manner in which advertisers target the Indian market (especially when this involves making light of Indian cultures and religions). As Pitamber says, one of the biggest misconceptions held about the Indian market is that it is a homogeneous group. He points to the failed Spur ad as an example of marketing that is not sensitive to the unique needs of the Indian population.

3 4 MarketingMix I Vol 25 No. 9/10 I 2007

to refer to past copies, it’s always readily available,” says Post’s editor, Brijlall Ramguthee. Indfinity.com will launch a new Indian lifestyle newspaper, the Indluminator, early next year. According to Pitamber, the paper will focus on the Indian lifestyle in the modern age, and will cover such topics as health and spirituality, recipes, religious events, fashion and technology, Bollywood, Tollywood (Tamil and Bengali language film industries), travel, community news, financial advice and classifieds. Games and competitions will make the paper reader interactive. “We have acquired the services of experts on these various topics to provide content. These experts are located in SA, and some in India,” says Pitamber. Meanwhile, research is being carried out to gain a better understanding of the Indian market; the results and data need to be processed as yet.

INDIAN MEDIA

In terms of magazines, community magazines and mass market consumer titles are viable media options. SA India magazine is one title that is specifically designed for and targeted at the Indian market. However, as CEO, Rajesh Devjee points out, media planners don’t know about the magazine, and don’t understand the Indian market. The mag was a member of the Audit Bureau of Circulations previously, but Devjee cancelled the membership: he believes that these circulation figures do not accurately represent readership. “We sell 10 000 copies every month. And we know that the average Indian family has six members, all of whom read the magazine,” he says. The magazine has a 65 per cent female readership, and focuses on Indian lifestyle (recipes, fashion etc) as well as all the latest gossip from India. According to Devjee, the magazine researched its readers’ preferences and found that there is great interest in Bollywood gossip. “No media that hopes to target the Indian market can survive without Bollywood. Every Indian perceives himself as a living reflection of a Bollywood actor,” says Devjee. On the radio front, community stations

Millward Brown explores India Millward Brown research has found that English and Hindi account for the majority of ad-space revenues. News is the most popular genre, followed by music, Hindi movies and kids. Soap operas are also hugely popular. It is expected that outdoor advertising will come to control a significant share of the market in the coming years, since this medium will continue to enjoy new innovations and advances. Seven per cent of advertising spend is allocated to outdoor media. Radio is growing, and is seeing an increase in competition; it is expected that this trend will be ongoing as content standards continue to improve. Plus, the Indian government is waiving licence fees and opening the second phase of licence bidding. Radio currently accounts for two per cent of total ad spend. India’s Internet user base is the fourth largest (49 per cent of this base comes from outside of the country’s big eight cities). Real estate, travel and jobs will extend the growth of the Internet. Currently, tourism is the primary e-commerce and online advertising driver. Internet adspend remains small at 0.5 per cent. Cinema is expected to grow, aided by the development of multiplex cinemas and digital distribution. Cinema adspend is at 0.5 per cent. Press adspend is the greatest, at 48 per cent, while that on TV is at 42 per cent. India is considered the least developed market in Asia, with low income and education levels. But this is a competitive and assertive market, and consumerism is on the increase. This is the world’s fourth largest economy (in terms of purchasing power parity), and it has a population of 1.12 billion. It is the largest English-speaking country in the world (although English is only one of 18 official languages). Nearly two thirds of all middleincome households are rural, but they represent half of the country’s buying potential. This is a market that is highly dependent on single serving packages (lower-income classes receive their wages daily). Non-traditional forms of communication (such as village theatre, etc) are viable means of reaching the vast rural areas.

INDIAN MEDIA

seem to have great reach among Indian markets, given that they can focus on issues around religion and culture. Hindvani radio (based in KZN) reached 36 000 listeners in the past seven days, compared with Radio Islam MW 1548, which reached 25 000. Eastwave Radio 90 92.2 FM had 8 000 listeners in the past seven days (RAMS August 2007). Of the commercial and regional stations, East Coast Radio and Lotus FM deliver audiences. East Coast Radio has a total past seven day listenership of 1.786 million (RAMS Aug 2007). AMPS 2007 figures show that the station captured six per cent of total radio audiences in the past seven days (a drop from 6.3 per cent in 2006). Four hundred and forty thousand of the station’s listeners are Indians between the ages of 25 and 49 years; they spend an average of 19 hours listening to the station each week. “It can be said that there is a lot of disposable income that is used to create a better lifestyle among this market,” says Singh. Lotus FM launched its new corporate identity recently. “The challenge was to create a brand that fuses the richness of Indian culture with the diverse lifestyles of modern South Africa,” says station manager, Shanil Singh. Lotus FM had 380 000 listeners (RAMS August 2007) in the past seven days. Meanwhile, AMPS 2007 finds that the station reached 1.3 per cent of the total adult audience in the past seven days (this figure has dropped from 1.4 per cent in 2006). The station’s core audience is between the ages of 24 and 49, in LSM 8-10. Bollywood films draw huge audiences locally. Ster-Kinekor recently formalised a broader strategy with regard to the acquisition, marketing and distribution of Indian film content, including Tamil- and Telegu-language films (previously, the acquisition of this content was not financially viable). “Our belief is that this content has strong potential to also cross over to non-core audiences, such as the Cinema Nouveau and the black

Fact a Day: did you know? (Eighty 20) 









Cricket is the most popular sport among the South African Indian population (40 per cent of Indian adults are interested in the sport, the highest proportion of all the population groups). (AMPS 2006 RA). Seven per cent of Indian males say they have been a victim of violent crime (the highest proportion of males from all the race groups). (AMPS 2006 RA). 0.5 per cent of single Indian women have babies under two years (the lowest proportion from all the race groups. For the country as a whole, the ratio is 12 per cent. (AMPS 2006). Six per cent of Indian adults understand at least one of their native languages (Hindi, Tamil, Telegu or Gujerati). Of those who do, four per cent are under the age of 25 (AMPS 2006 RA). The Indian population is at 1.16 million. Seventy per cent of Indians reside in KZN. (Labour Force Survey 2006).

Media Mix: Average Household Income (AMPS 2007) Lotus FM - R10 162 East Coast Radio – R8 252 SA India – R11 488

Media Mix: Average Age (AMPS 2007) SA India: 35 Lotus FM: 42 East Coast Radio: 32

emerging market,” says Isabel Rao, CEO, SterKinekor Distribution. Recently, Ster-Kinekor Distribution saw Tamil film Sivaji, which opened in the Box Office Top 10, become one of the biggest releases in the country. According to Rao, Hollywood studios are taking a more active role in Bollywood productions, co-producing Indian films. The Indian market is connected to the Internet, and as broadband becomes more popular and more affordable, one can expect to see more Indians online. As Pitamber puts it: “Indians are definitely not techno peasants – they use it every day and embrace the changes it brings to ordinary tasks.” Devjee believes that as much as 95 per cent of Indian households have a PC or laptop and

Internet access. Blogging, watching videos on YouTube, chat rooms and social networking are as popular among this market as any other. “The Indian market has taken to these sites to such a huge extent that we have received thousands of requests to offer similar features on Indfinity.com,” says Pitamber. Mobile media and technology is ubiquitous in this market. “While many Indians no longer limit their cellphones to making and receiving calls or text messages, many are using them to interact in chat rooms (and services like MXit), multimedia messages and mobile social networking,” says Pitamber. He believes that in the near future, Indians will be consuming their news and information through the most convenient means possible – mobile media. Research into the Indian market is somewhat limited, and Devjee speculates that this is because of the relatively small size of the population. However, as he points out, researchers and media planners must keep in mind that this is a proactive and entrepreneurial group. TNS Research Surveys’ Wildfire study found that 39 per cent of total igniters in 2005 were Indian/Asian, making this racial grouping the most ‘ignited’ group. Marketing and advertising that targets this market in the right way is guaranteed to hit the spot. “Big brands must remember this silent market,” says Devjee. 

Newspapers: Newspaper

ABC (Apr-Jun 2007)

Sunday Tribune The Post Daily News

119 495 46 721 57 830

AIR (%of adults, AMPS 2007) 2.1 1.1

3 6 MarketingMix I Vol 25 No. 9/10 I 2007

Readers per copy (AMPS 2007) 5.7 6.7 5.9

Ave Age (AMPS 2007)

Ave Household Income (AMPS 2007)

41 39 41

R13 115 R11 218 R12 886

by michelle sturman BUSINESS MEDIA

Best foot forward After stagnation in the business media sector, a number of new entries into the market has stirred the pot, upped everyone’s game and put it firmly back in the spotlight. The TV sector has been shaken with the introduction of CNBC Africa and SABC News International and, to some extent, Al Jazeera in English. In the print sector, Entrepreneur magazine launched and new newspaper supplements have made their presence felt. There are also a myriad of online business news and information websites and the introduction of lifestyle elements into previously staunch business-only editions. All this in the past 18 months or so. What this choice does mean is that it has become easier to handpick and precisely target niche audiences but spreads advertising budgets more thinly.

Print

Business-to-business magazines

Consumer magazines

The management category of the B2B section makes up one third of the overall sector total with 227 184 copies (out of 665 502). Leaders in the sector include Gauteng Business and Succeed Magazine – interestingly, both are aimed at the SME and entrepreneurial business sector. Two-year-old Gauteng Business takes the lead after impressive increases in circulation, a recent publicity campaign to raise awareness among consumers as well as a campaign aimed squarely at media planners. It is aimed at the SME market but specifically targeting the boss that makes all the decisions for the business – those businesses that do not necessarily have a formal and professional management structure. The publication has 3 500 agents with over 80 per cent of the distribution targeted in Gauteng, but it is also found in Mpumalanga, Limpopo, KZN and the

The battle between the Financial Mail and Finweek continues in the consumer business title race – there are less than 500 paid-for copies separating them, with Finweek taking a slight lead. In a year, both magazines have managed to increase circulation, with the FM keeping itself over the magical 30 000 barrier and Finweek increasing its circulation more than the FM overall. According to Marc Hasenfuss, editor-in-chief, Finweek and Fin24.co.za, the magazine is seeing its biggest editions (100-plus pages-) since 2002. “Adspend is robust. A strong, churning economy is evident in the number of financial service ads and strong consumer spending is driving cellphone, car, watch and luxury property ads – a relatively new phenomenon in Finweek,” he says. The FM added lifestyle components to its line-up last year under its revamp and is pulling in luxury brands. Finweek, however, is maintaining its non-lifestyle editorial policy although Hasenfuss says that it “might look at a wine column… at least a different kind of wine column and perhaps a movie review… but that quite possibly a wider focus on lifestyle would blunt Finweek’s thrust.” Still, it doesn’t seem to have done the FM any harm. In the same consumer category, Entrepreneur magazine is next in succession after Finweek and the FM. Andrew Honey, publisher of Entrepreneur, says that the entry of the publication into the market may have helped the sector to throw off its staid image. He also says that the magazine has created a new niche market within the print sector – the ‘how-to’ guide. “We are still connecting with the regular business media audience but we are the only ones in the consumer business media in this particular category.” Entrepreneur is the fastest growing title in the business media sector, and one of the fastest growing magazines overall – the magazine has also just increased its print order and number of retail outlets. There are four divisions of the brand: print, digital, events and business tools. “Entrepreneur is a resource, it’s a start and improvement magazine for business,” says Honey. Maverick is another of the big consumer business titles with sold copies coming in at under 9 000. Still, it does attract the luxury brands, is a great looking magazine and comes at business news from a completely different angle to any of the other publications.

3 8 MarketingMix I Vol 25 No. 9/10 I 2007

Consumer magazines ABC report All figures shown within the Consumer Magazines section are for subscriptions and single copy sales. The figure in brackets is the total circulation figure, including third-party bulk and controlled free distribution. Some magazines have recently been recategorised by the ABC so for the purpose of this article, category headers will be used. Category: Business and News April-June 2007 Entrepreneur (Mtly) 10 407 (16 604) Financial Mail (Wkly, Fri) 31 127 (33 308) Finweek (Wkly, Wed) 31 559 (35 028) Maverick (Mtly) 8 574 (24 716) AMPS 2007: Finweek HHI: R16 643; ave age 40; 1.7 readers per copy (RPC). Financial Mail HHI: R15 000; 5 RPC January-June 2007 Your Business Magazine (AltM) 12 978

BUSINESS MEDIA

Northern Cape. According to Ryk van Niekerk, editor, Gauteng Business there are plans in the pipeline to expand with new editions providing information pertinent to a particular area. There are three parts to the editorial content: daily news, legislation and by-laws in Gauteng. Secondly, how to expand the business, trends, etc, and thirdly, a management sector dealing with sales and marketing, labour issues, etc. “Through independent editorial, we tell readers which are the best products and services, says Van Niekerk. He states that the fact the magazine is regional is very important as the reader has news that directly affects them. Van Niekerk will also be looking closely at improving the existing website to include more editorial and interactive features. Succeed Magazine is also aimed at the SME business sector as well as corporate management and a huge subscription drive over the past year has seen its circulation skyrocket with almost 15 000 paid-for copies, according to the April-June 2007 ABC figures. Covering marketing, advertising, branding, hiring and firing, motivation, etc, the editorial focuses on the growth of formal SMEs. “We aim for the aspirational market and for those that want to start their own business; the objective is to stimulate thinking,” says Wessel Ebershohn, owner, Succeed Magazine. Despite the success of Succeed, Ebersohn does, however, feel that many independent publishers are largely ignored by those in charge of the media spend. “We would like the agencies to take us seriously; they tend to ignore the independents in favour of the large media houses.” Other magazines within the B2B sector worth taking note of are CEO Magazine, Leadership and Enterprise Magazine, all of which have distinct target audiences. Leadership offers high earners, mostly males, editorial that has a special focus on business leaders and the economy. CEO Magazine focuses on business management and Enterprise Magazine focuses on black business leaders and black business in particular, and is aimed at middle and senior management.

Newspapers Online is giving newspapers more problems than other mediums, but newspapers are fighting back as well as embracing online. The biggest bonus is that on the whole, there is increased interest from consumers regarding business news. “There is an interest in business and this is supporting business media. However, business media has also repositioned itself and now includes a lifestyle flavour that was never there,” says Paul Stober, editor, Business Times. The introduction of business-focused supplements is helping to diversify the sector and introduce new advertising revenues. The Its My Business supplement, for example, launched into the entrepreneurial space and is under the Business Times brand. “It is a clear indication of the growing business market and although SA scores low on the entrepreneurial monitor, there is a real sense of people

4 0 MarketingMix I Vol 25 No. 9/10 I 2007

Business-to-business magazines Category: Management Cape Business News (Mtly) 6 211 CEO Magazine (Mtly) 10 560 Enterprise Magazine (Mtly) 13 396 Gauteng Business (F) 23 244 Leadership (Mtly) 5 981 Succeed Magazine (11xA) 21 180 – AMPS 2007: HHI: R10 670; ave age 36 doing it for themselves,” says Stober. In the Afrikaans market, Media24’s business publication, Sake, was relaunched in March under the Sake24 brand, setting off a number of welcome changes. “The goal is to have a similar product whichever Afrikaans newspaper is read,” says Charles Naudé, editor, Sake24. Concentrating on business news and the economy, Sake24 is paving the way for future generations of business readers by enticing younger readers. “We are trying to make business news as user-friendly as possible without lowering the standard as well as focusing on ICT and new technologies for the youth market. A strong focus is on entrepreneurship, which is where it is expected that most young Afrikaans

Newspapers All figures shown within the Newspapers section are for subscriptions and single copy sales. Newspapers carrying business supplements/sections are included for the purpose of demonstrating potential circulation figures for business news. The figure in brackets is the total circulation figure, including third-party bulk and PMIE. Daily newspapers April-June 2007 Beeld 99 266 (105 184) – Sake24 Die Burger 83 967 (90 927) – Sake24 Business Day 40 778 (41 858) Cape Times 47 252 (51 428) – Business Report The Citizen 73 637 (74 037) – Moneyweb Biz The Mercury 36 342 (43 129) – Business Report Pretoria News 22 946 (28 140) – Business Report The Star 153 909 (168 977) – Business Report Volksblad 27 954 (28 987) – Sake24 Weekend newspapers The Weekender 10 081 (10 204) AMPS 2007 report: Beeld HHI: R14 308; ave age 44; RPC 4.7 Die Burger HHI: R11 331; ave age 42; RPC 4.9 Business Day HHI: R20 159; ave age 39; RPC3.1 Cape Times HHI: R11 090; ave age 43; RPC 5.4 Citizen HHI: R11 740; ave age 42; reader per copy RPC 7.4 The Mercury HHI: R14 581; ave age 43; RPC 5 Pretoria News HHI: R11 991; ave age 38; RPC 6.1 The Star HHI: R11 818; ave age 39; RPC 4.8 Sunday Times HHI: R10 469; ave age 37; RPC 7.1 Die Volksblad HHI: R12 070; RPC 4.7

BUSINESS MEDIA

readers will be,” says Naudé. The newspaper industry is still in a strong position in terms of circulation, readership, advertising and quality of reader. “Business Times readers are educated and moneyed, in top or senior management, with six in ten male readers and six in ten black readers. BT also has a phenomenal exclusive readership with 670 000 reading no other business publication,” says Lynn Allcock, trade marketing manager, Johncom Media Division (Newspapers). Sake24 has high LSM readers, wealthy readers. “We have an exclusive and lucrative readership with national representation,” says Naudé. Alec Hogg’s Moneyweb was rebranded as Moneyweb Biz in The Citizen a year ago, although it has supplied information for the past four years. “The Citizen is a marketing exercise and we have five daily pages. We also cover KZN through the Weekend Witness and in the southern Cape we supply editorial to the George Herald and Mosselbay Advertiser,” says Hogg. Business Day and Business Report remain stable, while The Weekender has doubled its circulation in the past year – we’ll see how it does in the next few ABC reports.

TV The TV sector has heated up in the past year. Firstly, we had the introduction of Al Jazeera offering a completely different insight into news. Next we had the launch of CNBC Africa to huge fanfare and then the

SABC decided to head into the same territory with the launch of SABC International. On top of this, there is business news offered on Sky News, SABC 3, eTV, BBC World, CNN, Bloomberg and Euro News, along with News24 Alert. Finally, there’s the dedicated local channel, Summit TV. Going forward with the announcement of four more pay TV licences, there’s bound to be even more business channels and programmes to choose from, or at the very least be able to wrangle deals across different stations for the same channels. Susie White, sales and marketing director, CNBC Africa, sees the new licences as an opportunity for its mostly live channel. “We are lucky in that we came into the market with an established brand, although we still have to prove our audience,” says White. CNBCA is looking at the SABRE research, and White says that CNBC Europe had 185 000 viewers weekly when it took over. CNBCA has kept some of the European content, has included information on the Lagos and Nairobi stock exchanges, and is due to go terrestrial in Kenya from the end of October with an available audience in the region of 15 to 20 million. Similarly, in Nigeria, terrestrial TV broadcasts several hour parts, offering regional buying. White says that wherever a stock exchange and transparent government become available across Africa, CNBCA will look at opening bureaus. With the only video wall on the continent, CNBCA has all the techno gadgets and gizmos to spruce up its programming. “We have our own dedicated sales team and half of our business comes from advertisers that have never been on TV. We can provide advertisers with an on-air strategy as we do all the production,’ says White. “The technology that CNBC Africa possesses is first-rate so the graphics are

4 2 MarketingMix I Vol 25 No. 9/10 I 2007

superb,” says Hogg – Moneyweb has a daily 30-minute slot, Power Lunch, on CNBC. Summit TV, on the other hand, is continuing to focus on providing South African business and financial news and has introduced new programming and interactive technology for further viewer engagement. “Our new flagship daily markets show with Bruce Whitfield and Stuart Theobald is a huge hit and our first Afrikaans programme, Op Die Keper, went down well so we’ve introduced a daily Afrikaans strand just after 6pm – Sake met Summit,” says Vernon Matzopoulos, channel head, Summit TV. Summit TV now offers live viewer call-ins, SMS comment and vote lines on the shows with content on additional platforms. “You can watch Summit on Vodacom’s 3G network and MultiChoice’s DVB-H platform. You can watch Summit from anywhere in the world via IPTV and M-Net’s kuduclub.com. We also supply news, finance and other info via SMS, WAP and MMS to cellphones through MTN Loaded,” says Matzopoulos. Radio Classic FM Show: The Classic Business Day Show (Mon-Fri 6pm-7pm) Presenter: Lindsay Williams RAMS Aug 07: 171 000 P7D AMPS 2007: HHI: R16 973; ave age: 49 Talk Radio 702 Show: World at 6 Presenter: Bruce Whitfield (Mon-Fri 6pm-7pm) RAMS Aug 07: 392 000 P7D AMPS 2007: HHI: R14 894; ave age: 49 SAfm Show: Market Update (Mon-Fri 6pm-6.30pm) Presenter: Siki Mgabadeli RAMS Aug 07: 544 000 P7D AMPS 2007: HHI: R12 336; ave age: 44 Radio 2000 Show: The Moneyweb Power Hour (Mon-Fri 6pm-7pm) Presenter: Alec Hogg RAMS Aug 07: 262 000 P7D AMPS 2007: HHI: R12 528; ave age: 44 RSG Show: RSG Geldsake met Moneyweb (Mon-Fri 5pm-6pm) RAMS Aug 07: 1.8 million P7D AMPS 2007: HHI: R9 658; ave age: 48 Kaya FM Show: part of the Mashashaba Show (Tues 8pm-8.30pm) Presenter: Andrew Honey RAMS Aug 07: 1.063 million P7D AMPS 2007: HHI: R7 753; ave age: 36 Community radio featuring The Moneyweb Power Hour: All RAMS Aug 07 P7D: Fine Music Radio: 29 000 1485 Radio Today: 10 000 Radio Rippel: 30 000 East Rand Stereo: 36 000

BUSINESS MEDIA

Summit TV is also trying to lure younger viewers through initiatives such as the Young Entrepreneurs series and ‘Learn to Trade Shares’ competition which has attracted 9 000 active online players.

Radio Radio has always been a hotly contested medium for the business media sector. Hogg’s Moneyweb has done the rounds and is now comfortably settled at Radio Today, Radio 2000 and RSG which, according to Hogg, has 500 000 Afrikaans listeners. Moneyweb has also expanded to include business news on Lotus FM, Ripple Highway, East Rand Stereo and Fine FM. “We wanted to move into African languages and as such started on Lesedi FM, but unfortunately it didn’t work out,” says Hogg. According to RAMS, Talk Radio 702’s listenership has been growing steadily over the past year increasing by more than 100 000. Radio 2000 and SAfm have also increased listenership in the past year although specific business programmes figures are unavailable. Radio is a great platform for integration, and interests other media sectors, including magazines. Hasenfuss hasn’t ruled out launching on the airwaves either, saying that Finweek has the resources to start-up its own radio show; “perhaps once the relaunched Fin24 is bedded down, we will revisit our radio options.” Finweek wouldn’t be the first magazine to move to radio, Entrepreneur is already on-air with Kaya FM. “On radio, we showcase success stories and information on franchises as news is now content on-demand, so the Internet, TV or daily radio business programmes serve this purpose,” says Honey. Talk Radio 702’s World at 6 show with Bruce Whitfield offers 80 000 listeners and 28 000 CapeTalk listeners for the show (March-June 07 RAMS). “The show is carefully constructed not only to provide the biggest, most important business stories of the day, but also eyewitness news bulletins, up-to-the minute traffic reports and top sport bulletins,” says Whitfield. Audience interaction is made quicker and more interactive with the introduction of SMS on top of the regular calls, which gives greater insight into stories that the programme may never have had, says Whitfield.

Online Online is where it’s at. The business person has changed and everyone wants news now, which is what makes online so exciting. Most magazines have a website, and while some excel, others need to up their game. Most newspapers have realised the importance of the Internet and are surpassing most magazines’ efforts and becoming more interactive by the day. Radio stations have websites, although the business programmes rarely get their own dedicated section, so there’s still work to be done. TV channels offering business news often have interactive content or at least good content. There are many local news sites offering business news, all of which compete with business media for eyeballs. Then there’s Moneyweb which has built its business model on business news online and expanded outwards from there. “The value of business information is in how fresh it is and all our brand extensions are designed to push people back online to the Moneyweb website,” says Hogg. Moneyweb is also currently expanding into other online arenas, namely education, politics, real estate and is also looking at sport and tax. As news is now wanted more immediately, print is at the biggest disadvantage, and as more South Africans move online, it’s only going

The following figures are from the Online Publishers Association and only take into account actual business websites (ie not those from news sites with business info). All results are Q2 2007 Sites with local traffic: Unique browsers (ave) Page impressions (ave) Fin24.co.za: 276 308 2 187 000 Business Report 125 031 519 377 Moneyweb 76 443 1 389 409 Business Day 70 442 785 206 Sites with local and international traffic: Unique browsers (ave) Fin24.co.za 394 987 Business Report 210 117 Business Day 150 000 Moneyweb 136 696

Page impressions (ave) 2 617 679 724 553 1 131 734 418 053

to get tougher. Having said that, some newspapers have caught up and are now putting more immediate news online with deeper analysis in the print editions. “We want to be a business news service so online we have breaking news with exclusive news held until the paper has been printed,” says Naudé. Sake24’s website has grown substantially in the past year, albeit from a relatively low base and, according to Naudé, a mobile service will be live by the end of the year, with podcasts eventually added. Business Times’ Stober is simply not going to compete with online but acknowledges that success lies in multimedia products, which are put together properly and can grow together. The launch of Johncom Media’s The Times, has led to a reworking of its online product, with the Sunday Times (including Business Times) incorporated into the daily’s website. Breaking business news is posted on the website along with multimedia products such as podcasts and blogs. “We have entirely separate newsrooms, however, we are constructing a 24-hour news service, so The Times can carry company results and live feeds on the same day. On Sunday, we can do the in-depth analysis,” says Stober. Summit TV has focused on a different tactic – to move its branded content through other media leaving its website for programmes and information. “We’re now of the view that the business audience is wired for video – so expect some changes,” says Matzopoulos. Plus, you can watch Summit TV through IPTV. On the magazine side, Finweek recently relaunched its website, fin24.co.za, and more initiatives in the pipeline include a trader’s forum, new investment tools and new look blogs. According to Hasenfuss, the podcasts are doing well “The success of the podcast hinges on the interviewee giving extra insight or dropping a hint or suggestion that readers may find useful and overall I am satisfied with the progress.” Mobile content for the website is in the pipeline. An extra bonus is the deal between Fin24 and McGregor BFA – Fin24 (Finweek, fin24.co.za) focuses on business and financial info on consumer-orientated platforms, while McGregor BFA focuses on the corporate market. Expect some interesting initiatives from this partnership. Entrepreneur magazine is rolling out its third-generation website early next year and there will be an increasing amount of unique webonly content available as well as editorial from the magazine. Advertising on the site has just been made available as well. 

Vol 25 No. 9/10 I 2007 I MarketingMix 4 3

by Alison Tucker EXPERT OPINION

Ethical consumers under the microscope If you’d asked a consumer a year ago what a carbon footprint is, they’d probably have thought it is something to do with not wiping your feet thoroughly before traipsing through the house. Not now. There’s been a massive change in their environmental perception over the past year and it is increasingly affecting consumers’ behaviour. Ethical consumers have arrived and ignoring them could be detrimental to your brand. In this article we explore what ethical consumerism is and how it manifests itself as four distinct territories that we can relate to. Eco-consciousness in the media is at an all-time high; global and ethical issues are quickly becoming mainstream; and in the UK, for example, Marks & Spencer’s carbon neutral five-year plan has stolen a march on its competitors, grabbing the first-to-market advantage. There has never been a more appropriate time or urgent need to debate how the marketing community should respond to emerging behavioural issues that concern not just the individual consumer, but broader cultural and environmental issues. Doing ethical marketing right and staying emotionally connected with your consumers will create a springboard for brand and business growth. The urgency-lies in the need to do it before consumers are so far ahead of the game that they leave your brand behind. To talk ethical, you need to be ethical – ‘greenwashing’ will eventually peel off to reveal something the consumer finds unpalatable. There is no overnight fix; this is a long-term journey. Already, more than two thirds (68 per cent)[1] of US and European consumers have boycotted a food, drink or personal care product on ethical grounds, and UK companies lost US$2.7bn of sales through consumer boycotts in 2003[2]. Now, 70 per cent of UK consumers say they’ll deliberately avoid buying goods and services from organisations and brands they think are unethical[3] and 85

4 6 MarketingMix I Vol 25 No. 9/10 I 2007

“

Marketing to the ethical consumer, ethical marketing, isn’t about charity, it is about revealing the unmet latent commercial potential for more responsible brands and designing marketing programmes to seize this potential.

”

per cent claim to be interested in ethical issues[4]. So what are ethical issues? They are both environmental and social concerns. Ethical is not a consumer word as such, it is a catch-all for many different everyday choices: from ‘green issues’ such as recycling and fuel

consumption, through to social issues such as giving to charity. But while it’s about the ‘we’ rather than the ‘me’, this doesn’t mean making an ethical choice is about sacrificing or ignoring your own needs as a consumer – you just won’t drink Fairtrade coffee if it tastes bad. Consumers are becoming more affluent, and making ethical choices can be seen as a natural progression up Maslow’s hierarchy of needs toward the pinnacle through selfesteem to morality. Some people talk of this as the age of mature capitalism. Importantly, from a corporate point of view, whereas many believe that consumers won’t pay more for ethical products, almost 50 per cent claim that they would pay at least five per cent more and almost a quarter would pay 10 per cent more[5]. People are increasingly turning to what they can control. One important area is in their personal consumption choices. But all consumers do not respond in the same way – ethical consumers are not homogeneous. So, as with any brand initiative, it is essential to have insight into the potential audiences – the differences and similarities that could open up several different directions for the brand. Ethical consumerism varies by sector, but with our new research the key finding is that, regardless of what the ethical issue is, certain people have a tendency to respond in a certain way. This is more about people’s natural responses and reactions. It is based on their values and it helps us to understand and predict their potential response to things like climate change, which is now passing a tipping point. Using our semiotics expertise and practical experience, together with proprietary/bespoke quantitative research into certain categories, we have found ethical consumers fall into four basic typologies – two internalising their reaction, putting themselves first, and two externalising it. These four typologies then

EXPERT OPINION

Fig 1

split across another axis (see Fig 1), as to which part of the ethical umbrella most concerns them, environment or social factors. The four categories themselves are: Healthy Awakening – often new mothers seeking healthy alternatives for their family (the Me/Social quadrant); Empathising – people making small gestures to show they accept their social responsibilities (the Others/Social quadrant); Ethical Badging – often inspired by celebrity and high profile ethical brands, which they use to display their awareness of global issues as visibly as possible (the Me/Environmental quadrant); and finally, EWOL – those choosing an ‘Ethical Way of Living’, where ethical concerns inform all their choices (the Environmental/Others quadrant). As we’ve said, the personal values of the ethical consumer affects their brand decision. So, it’s important to understand the characteristics of each typology in more detail.

shopping with their Save the Children credit card. Local community efforts are also part of this. Members’ small, but constructive steps reinforce their sense of personal integrity.

Healthy awakening

Ethical badging

Healthy Awakening is the behaviour of a new generation of mums and others who may not have previously had health issues on their radar – but who, with the plethora of health and obesity scares, and the strong media focus, be it Jamie Oliver’s School Dinners or the largescale condemnation of marketing to children, have woken up to the issues. They feel responsible for the health of their whole family and are now scrutinising labels, increasingly buying organic (Tesco experienced 30 per cent growth in organic sales last year[6]) and choosing super foods to maximise mind and body potential. Importantly, this new curiosity has bred a greater awareness of the food chain and the interrelationship between what we eat and the state of our planet. They opt for the likes of Innocent Smoothies or, locally, Woolies’ organic range, which have environmental impact at the heart of their brand promise.

Ethical Badging is about buying ethical because it makes you feel chic, trendy and noble. The brands and products ethical badgers choose are typically of excellent quality; they are often more expensive, but these consumers believe they are worth it. Brands that appeal to them are the likes of Green and Black’s, organic Fairtrade Maya Gold chocolate bars, and the Ethletic: a Converse-inspired shoe made with environmentally certified materials. They shop with their Red Amex card, promoted by Bono, which gives a percentage of each purchase to the Global Fund to fight Aids. These consumers want to make a statement and be seen to be making it.

Empathising Empathising, formerly polarised between the behaviour of militants or local community dogooders, has become a broader church. Many consumers have moved beyond a sense of guilt to identification and solidarity with others less fortunate than themselves. These consumers feel empowered by taking positive action to help people by giving to Oxfam, or buying Fairtrade or Duchy Originals, or

EWOL The Ethical Way of Life behaviour is perhaps the most complex touching on many aspects of consumers’ everyday lifestyles. It begins with an increased sensitivity to the environmental impact of personal actions and then transforms into behavioural changes. They begin by turning off the lights, recycling, minimising water usage and then take it further, integrating their carbon footprint into their mindset, seeking out alternative energies etc. They like brands such as Worn Again, which makes footwear from recycled materials and responsibletravel.com, which offers environmental tourism. They’ll get their fruit and

veg from Organic Connections and power from the likes of Ecotricity or Green Energy UK – a green reusable energy supplier with a unique share scheme where consumers become partners in green investments. Having identified these groups, the next key factor is finding out how brands can communicate and interact with them. As an example, let’s look at what strategies a utility company could use to address the four typologies and their specific value responses. In reality, brands will need to concentrate their efforts on a particular sector, the one that best fits their brand profile. But assuming that decision hasn’t been made:

Utility marketing strategies based on these four typologies; Healthy awakening This is perhaps the toughest typology for a utility company. The brand would have to go down the route of long-term health benefits for the consumer and their family. Being more conscious of how they use energy is a benefit to the environment, this in turn impacts on such elements as water quality and, ultimately, the food supply chain, bringing it back round to their family. Improving the environment also means a better future for their family. A positive health message would be key.

Empathising The brand would need to talk about social injustice, such as how affluent people have access to many resources while less fortunate

Vol 25 No. 9/10 I 2007 I MarketingMix 4 7

EXPERT OPINION

people have none. The message could be about rebalancing a community’s resources, talking about reducing usage so that the haves are able to help the have-nots. Eskom is currently employing this kind of tactic in its communications.

Ethical Badging One easy option is to get endorsement from a well-known or outspoken ethical celebrity. Strong branding would also be very important for this sector as well as a heavily

marketable message. Ethical Badgers care about the environment, but it’s secondary to hijacking the kudos they can gain surrounding ethical issues.

EWOL This is perhaps the typology most catered for at the moment, though mostly inadvertently. The strategy here would be about turning things off, half filling a kettle, making sure they’ve got electricity efficient light bulbs and buying from a renewable supplier as a way of life. It’s about doing their bit to help the environment. As mentioned, from a brand point of view, a company needs to focus on one of these typologies and develop its strategies accordingly. The choice of which typology needs to be informed by what the consumers in your particular category are likely to view as the

4 8 MarketingMix I Vol 25 No. 9/10 I 2007

most logical path for the brand that is the path that is likely to elicit the best response and stamp the brand’s ethical authority on the market. Your message will need to come across clearly. So, if your company has 50 ethical initiatives, we believe it makes sense to concentrate on communicating just one or two that have the best fit with the brand, and will be the most motivating to consumers. It’s almost a back-to-basics approach with factors such as first-to-market and

differentiation being extremely important. Generally, we’ve found that most companies are looking at EWOL consumer actions, but very few are putting across a holistic positive message or tapping into empathy issues. So, given the wide range of brand sectors and the four typologies proposed here, there is plenty of scope for differentiation. We also believe that brands need to strike the right balance between what the company is doing and what it is asking the consumer to do. It has to be a partnership. The company has to be seen to be doing something as well. There is a clear acknowledgement on the part of consumers that big business has an important role to play in the ethical arena. In our study[7], 30 per cent of consumers rate businesses ahead of the government as having the most responsibility for change. This underlines a simple truth that

consumers understand intuitively; if business is running the world, then it needs to be held accountable. What this means is that any change has to be real, a company must be aligned with its brand values, from top to toe, from product to people. This is not about radical overnight change, however: it is important to be realistic about the degree of change that is achievable in the short, medium and longer term. In our opinion, a good way forward would be to develop a clear ethical strategy and make sure you communicate your progress that is be transparent and honest about weaknesses that still need to be addressed and objectives that are yet to be achieved. We believe it will be a rewarding option to talk openly to consumers about the challenges you are facing and how you are trying to address them. (Though this doesn’t necessarily have to be in your primary communications – websites can be a good forum for this.) Many larger companies are now engaging with their critics and creating stakeholder panels to help them as they move along this path. And remember, while we are talking about fundamental changes here, we are also fundamentally talking about growing your business, the key marketing goal. Marketing to the ethical consumer, ethical marketing, isn’t about charity, it is about revealing the unmet latent commercial potential for more responsible brands and designing marketing programmes to seize this potential. Can you make money by being ethical? Companies which have focused on ethical marketing, such as American Apparel, Toyota, Marks & Spencer and many others, have delivered better, not worse financial returns as a consequence. So the response to that question must be a resounding ‘Yes’. 1 Datamonitor 2006 2 The Co-op index 3 Datamonitor 2006 4 Added Value Branding for Good Research 5 Added Value Branding for Good Research 6 Added Value Branding for Good Research

7 Added Value Branding for Good Research 

Alison Tucker director, Added Value (031) 207 1781

[email protected]

EXPERT OPINION by richard mullins

Build your own e-mail list Companies that want to maximise their returns from e-mail marketing should in most cases build up their own e-mail databases rather than buying lists of addresses from third-party vendors. Companies that invest the time and effort in creating an e-mail database of users that want to hear from them will generally experience better results than those that buy a list from a third party. The obvious risk involved in buying an e-mail database from a third party is that most of the users on the list will not be expecting to receive marketing e-mails from your company. Many will dismiss your e-mails as spam, which could damage your brand. In addition, some recipients might report unsolicited marketing e-mails to their ISPs as spam. ISPs could, in turn, block the domain that the e-mails originated from, with the result that the company will struggle to send even legitimate e-mails to its customers. Many companies think that buying an email database from a third party is a shortcut, but this isn’t always the case. If you buy a list, you may still face the arduous task of having to sort through it to find the users that you want to reach and ensuring that the e-mail addresses are all still valid and up to date. By contrast, a company that builds its own e-mail database can target the people that it wants to communicate with and, perhaps even more importantly, build up a list of recipients who are interested in its marketing messages. This translates directly into higher return on investment from the e-mail marketing programme. Companies often think that they can leverage an existing database that contains current e-mail addresses from clients, events and sales leads. However, they should realise that their clients have not explicitly given them permission to use this information for marketing purposes. These lists will also need to be checked against the DMA’s Do Not Contact Me list. Following a double opt-in process is therefore recommended – first encouraging customers and prospects to sign up to receive marketing e-mails through the corporate website, online advertising or offline channels, and then sending them an e-mail requesting them to confirm that they are interested in receiving marketing e-mails. It is common to see a 30 per cent drop-off in registrations after the confirmation

“

E-mail marketing should no longer be about reaching as many people as possible with a bulk message, but rather about establishing and growing a relationship with each customer or prospect.

”

e-mail, but those that do confirm are genuinely interested in what your company has to say and establishing a relationship with you. Companies that invest in creating their own databases are also laying the foundation to use e-mail as a sophisticated customer relationship management mechanism. With a database of customers and prospects it regularly interacts with, a company can start to communicate with its audience in a more personalised manner. Companies that create and maintain their

own e-mail lists need to be willing to invest the time and effort to ensure that their database remains up to date as most users will not inform you of a change in personal details or e-mail address. A good e-mail system will be able to track whether a person’s e-mail address is still live and whether they are opening and interacting with the e-mail. If used in conjunction with a preference centre, then the maintenance of customers’ details is automated. In terms of frequency, this will depend on the company’s e-mail strategy and the dependency on the data in terms of the core business and frequency of interaction. For example, an online casino has a very different timeline to a vehicle manufacturer. By using preference centres to capture information about its customers, a company is able to deliver relevant, customised and segmented content that caters to individual needs. This customisation allows the company to deliver targeted communications in a streamlined and automated manner without needing to personalise e-mails for each customer manually. It is recommended that companies outsource the technical aspects of maintaining and managing the database to a specialist so that they can concentrate on strategy rather than technology. They should also automate as many of their e-mail marketing processes as they can to reduce the possibility of human error and free up the marketing team’s time. A good online marketing services firm should be able to help a company to manage all technical aspects of e-mail marketing from database management through to data transformation, systems integration, report automation and e-mail distribution. E-mail marketing should no longer be about reaching as many people as possible with a bulk message, but rather about establishing and growing a relationship with each customer or prospect. It gives you the opportunity to increase interactions with customers and prospects, allowing you to consolidate relationships. 

Richard Mullins director, Acceleration (011) 706 9836

[email protected]

Vol 25 No. 9/10 I 2007 I MarketingMix 4 9

by fulvia becatti CONTENT CHAMPIONS

And the winners are... Marketing Mix has chosen the Content Champions across various media categories. The champs are those media which have got their content mix right for their relevant target audience. Where the competition was tight, secondary factors, such as audience ratings or circulation figures were looked at. For circulation figures only, subscriptions and sold copy sales were used. TV

Best reality content: Survivor SA It’s almost a case of who doesn’t watch Survivor SA? With huge audiences tuning into the programme (Survivor SA 2006 drew in an average of 1.254 million viewers, according to Transmit 3 September-26 November 2006 figures; the first episode of the show was the most watched in the history of M-Net, with more than 1.3 million viewers). This is reality TV’s toughest game, with a lucrative prize that demands a lot from contestants. “The physical toughness plays a part in revealing the complexity of human behaviour and mental reasoning that is unpredictable and sometimes shocking. The production is also one of the most demanding as crew and cameras must be ready to roll at any moment of the day. All these factors make it one of the most intense reality shows ever to be produced,” says Pierre Cloete, brand manager, Survivor SA.

Best sports content: SuperSport SuperSport covers everything from football, rugby and cricket, to extreme sports (competitive skateboarding and surfing), to horse riding and boxing. Many of the sports offered are exclusive and now include the major coup of the PSL. An Update channel, including highlights, extra interactive content and more at the push of a button, supports programming. Major games and matches are broadcast live, drawing

A website offers fans a game of Fantasy Survivor, downloadable content, the latest news and info, competitions and interactive offerings. Plus, the innovative product placements and sponsorships have changed the way that local brands engage with reality content. “The sponsorship opportunities were purposefully limited to food, hygiene and drinks other than water. These elements become important issues for Survivor contestants as they are deprived of these necessities. This created a great opportunity for the 2007 sponsors,” says Henry Meyer, project manager, Oracle Airtime Sales. in huge audiences with interviews and expert commentary. The advertising and programming sponsorships allow advertisers to really target specific consumers according to the sports that capture their passion (and in some cases, boost their brand share in the process). The website lends SuperSport all the benefits of an online platform (interactivity with sports fans, advertising opportunities, the means to disseminate information, schedules, interviews and commentary with ease).

Magazines

Best sports magazine: KickOff KickOff, now in its 13th year of publishing, offers the best of football (interviews, highlights, fan feedback and more), presented in a glossy magazine aimed at the male football fan. It was voted the sixth best consumer magazine in the Sunday Times Top Brands survey, and has 1.8 million readers every two weeks. The mag has seen a dip in circulation, but associate publisher, George Dearnaley believes this is attributable to the increase in competitive media in their environment. He maintains that readership has remained high. “With the 2010 FIFA World Cup around the corner, everyone is trying to find a football angle. With the rise of new media, and free soccer supplements in some of the newspapers, we have lost out on around five per cent of our total print circulation, although a decline in print circulation is true

Best women/family interest magazine: Move! The magazine’s content is obviously meeting the needs and interests of the emerging middle-class black woman. Since its launch in February 2005, Move! has grown its circulation fig-

5 0 MarketingMix I Vol 25 No. 9/10 I 2007

across a range of black market magazines,” says Dearnaley. “But the KickOff ‘footprint’ in the black male market continues to increase. Our latest website stats show that we had over 90 000 unique users on site for the month of August!” According to figures published by the Online Publisher’s Association, kickoff.com is the fourth most popular website among South African men, with 79 per cent of the total online male audience. In August 2007, the website generated 1 953 823 page impressions from 93 104 unique users. ures rapidly, and now finds itself at 107 719 (ABC April-June 2007) as one of the biggest consumer titles in the country. Content includes fashion and health advice, recipes and home decor articles, success stories, reader advice and more.

CONTENT CHAMPIONS

Best men’s magazine:

from new cars, jokes, gadgets, women, oddities etc. “Because ZOO’s readers are active, technologically switched-on members of the information generation, their level of interaction with zoo.co.za is extensive. ZOO’s readers love to interact, submitting pictures of themselves to the hugely popular ‘Inbox’ and ‘Eish!’ pages of the magazine, and registering on zoo.co.za and leaving comments or submitting stories,” says Margot Bertelsmann, ZOO Weekly/Weekliks editor.

ZOO Weekly ZOO Weekly delivers the right content mix, in the right way, to its teen and 20-something male readers. Growing circulation testifies to the winning formula sitting third in the category (not including Popular Mechanics) with 15 655 domestic unique browsers and 230 949 domestic page impressions to the website. The content covers everything

Best general interest magazine:

resulted when the mag switched from monthly to fortnightly, and it reflects the industry norm. “As previously, we will rebuild the circulation. Our readers are in the habit of buying the magazine every two weeks, so it will take time to change this. Plus, the economic situation at the moment means that people think twice before buying a magazine every week,” says Pretorius. He adds that the magazine continues to cater to TV fanatics, who watch about 25 hours of TV every week. “In one sense, it’s a mass market magazine. But in another, it’s a niche magazine,” says Pretorius.

TV Plus TV Plus is so much more than just TV, this mag delivers everything from crosswords, gossip and interviews with local soap stars to the ultimate TV guide. It is available in both Afrikaans and English, and even though circulation figures have taken a dip, this magazine remains a force to be reckoned with. The circulation losses are due to the mag’s switch from a fortnightly to a weekly publishing schedule; according to editor, Wicus Pretorius, the decline mirrors that which

Best Afrikaans magazine:

around SA for campers, hikers, caravanners and walkers, as well as 4X4 lovers. Photographic portfolios paint the best of SA’s outdoors, while product reviews inform. Interesting supplements and special issues add reader (and advertiser) value, with growing circulation figures to prove it.

Weg Weg is the travel and outdoor magazine for the informed and travel loving. It highlights the outdoors, while also giving readers information about creative (and affordable) travel destinations in and

Best youth magazine:

it appeals to just about every kid. NGC educates while it

National Geographic Kids

entertains, and encourages reader interaction. An Afrikaans edition extends readership even further. Reader events add value, and the Loerie Award for its illustrated advertising lends credibility. Since its launch in June 2004, the magazine has grown its circulation in a very tough category that is not only competing against each other but against the Internet.

National Geographic Kids has taken a broad spectrum of topics and made them engaging for the youth (with competitions, special features, short snippets packed with fun facts, etc). It covers science, animals and nature, current events, cultures from around the world and technology, among others, so

Newspapers

Best weekly newspaper: Soccer Laduma Soccer Laduma takes the country’s biggest sport to heart, delivering local, regional and international soccer news on a weekly basis to a growing number of readers. It includes the latest news from all the local and international clubs, player and team interviews, schedules and match information. The paper is currently relaunching its website with a promise of more editorial and interactive content. Its uncompromising editorial stance sees this paper just keep on growing.

Best daily newspaper: Shared between the Daily Sun and Isolezwe. The Daily Sun reaches the blue-collar worker with perfect aim and is the highest selling daily as a result (the latest ABC figures place it at 488 841 copies). The paper is written in a style that speaks directly to this market, while the content includes community news, gossip and scandal, sport and entertainment. There is no other paper that reaches this market with such authority and understanding.

Meanwhile, Zulu daily Isolezwe is reaching an ever-widening readership as it enjoys high brand affinity, and is giving back to the community that reads it (newspaper salespersons are employed by the paper as area distribution managers, for example).

Vol 25 No. 9/10 I 2007 I MarketingMix 5 1

CONTENT CHAMPIONS

Newspapers

Best newspaper supplement:

Best weekend newspaper:

Business Day Wanted

Shared between the Sunday Sun and City Press.

Business Day Wanted is a lifestyle magazine supplement that meets the needs and interests of the paper’s core readership. Travel, entertainment, dining, cooking and films, decor and weekend activities are covered in a neat, stylish package aimed at the high-end luxury buyer.

Both these newspapers round up weekend news (including community news, gossip, entertainment and weekend events, sports and business) effectively, meeting the needs and interests of the middle-class black newspaper reader. Content includes communityrelevant news and information, sports roundups, entertainment news and TV guides, as well as general lifestyle-related material.

Radio

Best national station: 5FM

Best regional station:

5FM boasts a hugely popular DJ line-up, and has targeted its programming to its core, urban listenership. The music mix is hip and fresh, with a focus on new releases (especially in the rock, hip-hop, R&B, rap and pop genres). Competitions and events add value and buzz for both advertisers and listeners, and allow brands to really make waves with listeners. The online platform (complete with downloadable content, blogs etc) is top class, with DJ blogs and podcasts, chart lists, competitions and interactive content as well as community media features.

94.7 Highveld Stereo 94.7 Highveld Stereo is one of Gauteng’s favourite stations. The music mix is spot on (although song repetition is a sore point for many), the station’s interactive and innovative competitions, such as The Fugitive, and promos pull in massive audiences. Content is available via its website, also offering podcasts, streaming and mobile applications. Highveld also offers a VIP loyalty programme. “We bring listeners the hottest music line-up, we showcase and support local talent and we invest in presenters who are enthusiastic and passionate about music,” says Ravi Naidoo, 94.7 Highveld Stereo station manager. “94.7 prides itself on developing and maintaining a close relationship with its listeners. We strive to bring in the ‘human factor’ in everything that we do,” he says.

Online

Best website: Sarugby.com Sarugby.com is the official website for the Springboks and offers the ultimate in rugby content. This includes local, regional and international rugby news and interviews. Downloadable content includes the national anthem, Youth Weeks Annual and wallpapers. There is online shopping available as well as useful links for fans.

Best Newcomer

Best newcomer: The Times This new tabloid is delivered free to Sunday Times subscribers and judging from the content it should help to attract the younger newspaper readers with interactive, multimedia content across various integrated media platforms. News includes celeb gossip, recipes and horoscopes as well as comics, sports and business commentary, and columns penned by local experts and comedians. The Times now includes the New York Times insert (formerly housed in the Lifestyle section of the Sunday Times). 

5 2 MarketingMix I Vol 25 No. 9/10 I 2007

Word of Mouth Marketing Workshop 6 N ovember 2 007 Sandton S un, J ohannesburg Motivating customers and prospects to say good things about you – that’s the trick and that’s how to gain real competitive advantage. The keynote speaker and Master Class leader is Steve Barton, a founding member of the Word of Mouth Institute in the UK. Programme Word of Mouth Marketing Steve Barton from the WOM UK explains why WOM is more important than ever, highlighting the latest trends from the UK and the US and focusing on the key issues affecting WOM marketing. How to Get Youth Talking about Your Brands Jason Stewart of Instant Grass discusses Seeding – Harnessing the Power of Consumer Advocacy to generate word-of-mouth marketing for your brand. Blogs and Brands The do’s and don’ts of corporate blogging and how they should be treated as a dynamic evolutionary extension of the Internet and a platform for really powerful dialogue with clients. Mike Stopforth, CEO, Cerebra (www.cerebra.co.za) Appraising WOM Models Neil Higgs, director of TNS Research Surveys looks at: Traditional models of word of mouth New thinking about how people interact and what this means for marketing models The Wildfire model (including Black Diamonds) WOM Showcase The best of the WOM campaigns from the US WOMMA and recent SA campaigns. WOM Analytics Ensuring a measurable and accountable campaign from the start; focusing on the real metrics and identifying the keys to repeatable success. Hendrik van Vuuren, director, Millward Brown WOM Master Class Led by Steve Barton, with the objective of communicating specific techniques and methodologies to facilitate your WOM planning. Briefing: If you are expecting a very different outcome (e.g. conversations rather than response) then you need to account for this when you establish the brief Targeting: There is no rate card for ‘influencer’. How you target the right influencers to spread the word Planning creative & media: Designing ideas to get your brand talked about Measurement: Creating the systems that can capture amplification rates rather than response rates or brand ratings... and ultimately proving ROI. A full day workshop: registration: 7.30am, conference starts: 8am and ends at 4pm. Delegate fee: R2 500 plus VAT, 3 or more R2 250 plus VAT per delegate. Enquiries: Daisy Mulenga (011) 234 7008, e-mail [email protected]

SALES PROMOTIONS

Sales promotions critique The campaigns Title: Thank You Client: Bokomo Weet-Bix Promotional tools: On-package details, PoS, limited edition tins, print and TV ads. Description: Bokomo replaced the Weet-Bix name on its cereal packaging with the words ‘Thank You’ in the same font and style as the Weet-Bix logo. For every pack of Bokomo Weet-Bix sold from April to September 2007, Bokomo donated 7,5 cents to Childline, up to a guaranteed R1 million. The Childline logo and telephone number is available on every Weet-Bix pack. The ‘Thank You’ campaign also had a competition element, with consumers standing a chance of winning one of three Citroën C4s, Sony PSP Value Packs, thousands of rands in cash and Bokomo hampers.

Comments:  Great ‘out-of-the-box’ thinking  If going the empathetic route with Thank You, donations to charity etc, on one hand, and appealing to the consumers’ soft emotional side, DO NOT get greedy with a commercial incentive to sell more products – the ‘Win a Citroen’ competition, under the same banner. The consumer gets mixed messages and the brand-building opportunity is missed. Leave it a while and charge for a separate concept.

Marketing Mix’s definition of a sales promotion: A sales promotion is designed to motivate a short-term call to action which adds value and promotes a transaction between a consumer and a brand.

Title: PS Love is in the Air Competition Client: Cadbury’s Promotional tools: An envelope in magazines and SMS. Description: A promotional envelope was inserted in print publications from Cadbury’s PS chocolate in time for Valentine’s Day. The envelope had the words ‘PS From Your Secret Admirer’ on the front. In the background, in gold, was a love message. Turn it over and there were details of a competition: ‘A message for your valentine on a sky banner’. Recipients were also encouraged to use the limited edition envelope to put a PS chocolate bar inside it. Details of the competition were on the back with the entry details. To win the prize, you had to buy the chocolate bar and SMS the last three bar code digits to a cellphone number. Comments:  Nice idea  It could have been better geared to increase sales to males prior to Valentine’s Day  The Valentine’s message in the sky was good. Hope they got good PR out of it  Great creative with the striking envelope and clear details on the back for what to do and how to enter.

Criteria All sales promotions are based on eliciting a response of ‘I wish I’d done that…’ The promotions are viewed from a consumer point of view that is without information on the brief, agency objective or results. Marketing Mix is also looking for innovative work that has broken new ground.

5 4 MarketingMix I Vol 25 No. 9/10 I 2007

Title: Prevage Eye Client: Vida e caffé and Elizabeth Arden Promotional tools: cup tag and SMS Details: Vida e caffé together with Elizabeth Arden promoted the new anti-ageing moisturising treatment ‘Prevage Eye’ on coffee cup ‘ear tags’. Customers received their cappuccinos with this tag attached to the ear of their coffee cup. The front of the tag promoted the treatment using the same creative as its print ads. On the back of the tag were SMS competition details to win one of four product hampers. Comments:  Nice graphics but call to action ‘WIN’ is lost in body copy.  I trust consumers would read the tag if they were bored with their date.  Choosing the right venues increases the hit rate to the target market making it very cost-effective.

Title: Koo Donation Can Client: Koo Promotional tools: creative stuck on Koo tins on-shelf Details: A sticker mimicking the top of a donation tin was stuck on top of tins of Koo fruit. As a shopper took the can from the shelf, it caught their eye and they would read the accompanying text, which explained that Koo was donating a percentage of sales of tinned food to Unite Against Hunger. Comments:  Simple, brilliant communication explaining to existing buyers what Koo is doing to help  Great PoS would have furthered the message to ‘would-be’ buyers  Certainly eye-catching for those doing their grocery shopping.

If you think your latest sales promotion campaign warrants a look by Marketing Mix, please send your campaign details to: Michelle Sturman 1st Floor, North Block, Bradenham Hall Mellis Road, Rivonia Or e-mail: [email protected]

EXPERT OPINION by nici stathacopoulos

Just do it! Every month poses interesting CRM scenarios and in my daily experiences with clients, family, travel and staff, I collect anecdotal information that helps the business to grow and enables us to ‘disperse’ relevant and significant strategic thoughts to everyone. Let me start with government policy. As we all know the National Credit Act has had a direct impact on our ability to spam South African citizens and, with the Data Privacy Bill being the topic of the day, we all need to be very cognisant of buying lists or even using our own lists to communicate. We sit with clients and pore over application forms – are they asking the right questions; what if a consumer ticks the NO box for communications, and yet we have a major operational issue they need to be made aware of? What if we know nothing about our consumer but we believe our message will enhance their lifestyle etc? What if they always open our newsletters, click to relevant articles, and yet they have never ticked a YES box? All these questions certainly make us think about and devise clever strategies for the future. But the bottom line is quite simple, if I don’t give you permission to communicate to me, then don’t! And even more importantly, if you really need to tell me something, send me a letter, that way I don’t feel you have invaded my privacy. After all, post boxes are usually far removed from my personal space. Yet the government disregards its own Bill. Our company recently parted ways with a contractor who went to the CCMA. At 8am one Saturday, I received an SMS from the CCMA notifying me of the case’s hearing date. How dare they? I never gave them my cellphone number. This is a company issue, so surely they have no right to text me personally – and on a Saturday? Surely, these issues should be communicated in a letter to my company? So, will someone please tell the government institutions it should follow its own policies before intervening with the way businesses communicate with their clients. My next anecdote spins around loyalty programmes, or rather, the thought process that a points programme will fix our woes and gather data that will unlock the mysterious consumer. Yes, it will, but over time, with continuous

“

Service is a hygiene factor if you are dealing with consumers, and to this end, if you get it right you will get the customers.

”

effort and if you are starting from scratch, with some serious money. With new clients you need to begin with a ‘start small, start somewhere’ test and trial, and then roll out to the masses. You need to start with data – understand your consumers’ needs and wants so that you can implement a programme that will enhance your offering in a relevant manner. Remember that only consumers who are truly invested in your business and brand will take

up the programme and activate it – usually your most valuable first – and in that consideration, our office in Singapore recently sent out an article on moving from monologue to dialogue – probably one of the best I have read in years. You need to engage your consumers in a manner that is relevant and rewarding to them on a regular basis, that way they will continue to purchase your brand, and don’t look towards you for discounts. This will engender dialogue, where consumers discuss your offering, not your price. Now we’re onto pitches. Remember when you put your business out to pitch, you need to be realistic in what you are asking the agencies to do. Two recent pitches asked us to present a strategy. But, how can we when we don’t know the client’s business and this is where we also make our money – so asking a CRM agency to give you a strategy in the hope it will appoint you without having spent a few weeks immersed in your business is actually quite unfair business practice. Finally, I turn to my most recent trip to Paris. Having visited the city in 2003, I was really surprised by the turnaround in service attitude wherever we went. Shop assistants, waiters, hoteliers etc all smiled, helped, spoke the best English they could and, generally speaking, you felt that you were truly in a world-class city. But so are our beautiful South African cities – so how hard can it be for our airlines, shop assistants etc to smile when they meet you and give you the service you deserve – after all, you are spending your money with them, even if they are offering you a ‘low-cost’ solution. Service is a hygiene factor if you are dealing with consumers, and to this end, if you get it right you will get the customers. (By the way – how difficult is it for a customer to use the sales assistant’s or steward’s name, if they have a name badge – that also goes a long way in launching dialogue). And only then can a loyalty (points) programme kick in and enhance your business offering so that your consumer buys your brand on a regular basis. 

Nici Stathacopoulos CEO, proximity#ttp (011) 447 7093 [email protected]

Vol 25 No. 9/10 I 2007 I MarketingMix 5 5

by eugene honey LAW MIX

Taxation o f royalties Royalties are an integral component of SA’s business sector. As a result, the recent Supreme Court of Appeal’s decision confirming that royalties are taxable has brought welcome relief. Many businesses, which license intellectual property, were at a substantial risk, including international entities with local independent operations and the entire franchising sector. A South African entity entered into a licence agreement with its foreign principal in terms of which it was authorised to use certain licensed trademarks. In terms of the agreement, the South African entity paid substantial royalties to its foreign principal, the proprietor of the brand and trademarks, for the use of those trademarks. Prior to the Appeal Court’s ruling, the lower courts found that the royalty payments were of a capital nature and therefore taxable. The Supreme Court of Appeal subsequently found differently and decided that royalty payments are of a revenue rather than a capital nature. The decision reiterated the following previously established principles: 

‘Expenditure incurred for purposes of acquiring a capital asset of the business is capital expenditure whereas expenditure which is part of the cost incidental to the performance of the income producing operations… is revenue in nature.’



‘A distinction is thus drawn between expenditure made to acquire an income-producing concern (in respect of which the outlay is usually non-recurrent) and money spent… in working the concern for the present production of profit.’



‘The conclusion to be drawn from all the cases seems to be that the true nature of each transaction must be examined in order to determine whether the expenditure in question is capital or revenue expenditure’ and that, ‘in deciding that question each case must be decided on its own facts and circumstances.’

5 6 MarketingMix I Vol 25 No. 9/10 I 2007







“

Many businesses, which license intellectual property, were at a substantial risk, including international entities with local independent operations and the entire franchising sector.

”

The royalty payment was made… for the use of the trademarks. Its purpose was to procure for the licensee, ‘…the use – not ownership – of the intellectual property of another from its sole and rightful owner for the duration of the agreement.’ The ownership of the intellectual property remained with the proprietor throughout the term of the agreement and that on termination thereof the local licensee ‘would automatically cease to have the right to use the intellectual property in question.’ The anticipated and recurrent nature of the royalties was a strong indicating factor that they are related to revenue rather than capital. ‘The recurrent cost of procuring the use of something which belongs to another is usually recognised as being of a revenue nature. The most obvious example is the recurrent rent paid… for the use of premises…’, which is certainly ‘expenditure incurred in the production of income and of a non-capital nature and therefore deductible… for the purpose of determining taxable income.’

The Court found that the royalty fees paid were to all intents and purposes indistinguishable from ongoing rental payments for the use of another’s property and that the royalties neither created nor preserved any capital asset in the hands of the taxpayer. The confirmation of many previously existing principles is comforting. Even so, it is critical to bear in mind that each case will be decided on its own facts. Thus, although the general principles have been confirmed, there are certain scenarios where the Court could arrive at a different decision –for example, in the case of an indefinite exclusive licence agreement where a single payment is made. 

Eugene Honey director, Bowman Gilfillan Inc (011) 669 9000 [email protected]