Companies willing to survive the current macroeconomic challenges have been urged to create and sustain a competitive advantage, rather than spending on marketing tactics that do not work.
Speaking as a guest speaker during a virtual Chief Marketing/ Communications Officers Forum, of the Advertisers Association of Nigeria (ADVAN), the Group Marketing Director at Jotna Nigeria Limited, The LaCasera Company, Emmanuel Agu, admitted that a Volatile, Uncertain, Complex and Ambiguous (VUCA) environment can be challenging, especially in Nigeria, where businesses are struggling to survive amidst many domestic crisis and global pandemic.
Speaking on the various challenges facing Nigerian businesses, Agu made reference to persistent high foreign exchange rate due to the depreciation of Naira for raw material/finished goods import, insurgencies, herdsmen/farmers’ clashes, banditry, kidnappings and multiplicity of taxes, among others.
“We have seen many businesses fold up as a result of foreign exchange volatility leading to job losses of which marketers are not immune to. These are businesses with genuine intentions and great marketing plans. The media was recently awash with news about a major South African retail giant communicating its intention to leave Nigeria.
“What can we say about policy somersaults by government of the day – we sure cannot forget in a hurry that GOKADA, Max.ng, Opay and their likes have marketeers that probably have consolidated their three- five years marketing plan. Unclear economic policy direction took them by storm and flung them into the already saturated labour market.
“Multiplicity of taxes, licenses, charges of all sorts, import and trade restrictions, trade and labour union pressures, energy and power issues has caused companies’ operational costs to go high and marketing budget in most cases gets cut as a result.
What happens to all the amazing plans that have been built? Hence, marketers begin to cut or scale down on their planned activities earlier budgeted to accommodate the new reality,” he stated.
The marketing expert, who stated that the term VUCA originated in the US Army War College in the late 1990s, but spread to the business world because of the striking similarities in terms of rapid change and uncertainty, pointed out that re-jiging business model remains the best recipe for dealing with VUCA environment.
“You can win a fight with a single bullet but you can’t win a war with that. Build for yourself multiple business models if you want to survive and excel in a VUCA environment. A reputable research firm Brand Z shows that brands with five or more areas of business are on an average 4x bigger and growing 10x faster than others.
“Marketing in a VUCA environment requires the pursuit of multiple business models.
Examples abound about companies that have adopted multiple business models. SUBC (Seven Up Bottling Company) recently moved into the production of sanitiser and surface cleaner as covid -19 pandemic continued unabated in Nigeria. Africa’s pay TV giant DSTV evolved their business model from subscription to on-demand (Showmax) and local content development (Africa Magic Original Movies).
“What about Uber moving into the home delivery with UBER EATS & Scuber for under water ride hailing? Dangote’s multiple business models and that of GOKADA (Logistics) comes into mind,”
On the need for companies to spend wisely, he called on marketers to always consider prioritising and scaling up new digital capabilities to enable digital touch points with consumers.
“Marketers must, as necessity leverage on the abundance of fallow inventories that abound during crisis period and negotiate hard nose discounts for their brands. Cash is king.
“Marketing/marketers should not go on isolation during crisis period because of budget cut. Be creative with what you have and let the voice of your brand(s) be heard. Marketing still remains the holy grail that holds strategy and sales together and has the potential to rescue any business from crisis,” he added.
While calling on marketers to always make attempt to predict consumer behaviour, Agu pointed out that brands must evolve along consumer choice, taste and medium of communication. To this end, he said understanding the consumer in the midst of information explosion, plethora of media & channels coupled with intense competition must be based on data and analytics.
“Data and analytics have become more critical than ever to accurately forecast demand across product segments. Consumer responses to VUCA environment have made demand more difficult to gauge accurately.
“The past is no longer a predictor of future demand that means essentially starting from scratch on strategies and plans because marketers are facing such a divergent market dynamic that previous assumptions and accepted truths may no longer apply. Through the use of analytics, marketers should develop a robust comprehension of cyclical patterns and its impact on consumer behaviour,” he said.
Speaking further, he emphasised the need for brand owners not to hesitate in delisting non performing brands, with a philosophical allusion that one cannot fight and win a battle with multiple local guns.
He said: “One good sophisticated gun or bomb is more effective than multiple local ones. And so it is with brands. Brands with low prospect for growth and profitability will generate negative returns and as such are less likely to achieve their original aim.”