Marketing Mix Jan Feb 2009

MarketingMixM E A S U R A B L E M A R K E T I N G I N S I G H T S I Vol 27 Issue No. 1/2 I 2009 I R25.00 incl. vat

MarketingMix

2 0 2 2 2 4 4 6PROPRIETOR AND PUBLISHER: Systems Publishers (Pty) Ltd. Tel: (011) 234 7008 North Block, BradenhamHall, Mellis Road, Rivonia, Johannesburg PUBLISHER: Terry Murphy MANAGING EDITOR: Michelle [email protected] EDITOR: Fulvia Becatti [email protected] ADVERTISING MANAGER: Lethabo [email protected] PRODUCTION: Spencer van Graan [email protected] EVENT ENQUIRIES: DaisyMulenga [email protected] SUBSCRIPTION ENQUIRIES: Bernice Tloue [email protected]

www.marketingmix.co.za

Database:List Perfect

3 461 Jan-June 2008

ContentsI 0 2 I Ed’s note

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

I 0 5 I Shopper marketingPedro De Gouveia explores shopper marketing, and the need forgreater collaboration.

I 0 6 I Retail marketing: why it’s hotFind out why brands should be investing in the retail marketingspace.

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

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

I 1 2 I In-store mediaMarketing Mix discusses the various in-store media available tomarketers, and how they should select and integrate these.

I 1 4 I Shopper intelligenceShopper research is key to clever retail marketing. Find out howto go about doing research, and what the specialists have learnedthus far.

I 1 6 I Expert opinion: Richard DuncanRichard talks survival marketing.

I 1 8 I Luxury Marketing Summit: reportbackMarketing Mix reports back from the first ever Luxury MarketingSummit, with a better understanding of how to get the top end(and the aspirational upper middle class) to spend luxuriously.

I 1 9 I Expert opinion: Nici StathacopoulosNici has a new perspective on customer service, thanks to themountain.

I 2 0 I 7 Day [B]itchOlivia Leitch, executive producer at Ola Films, tries out newmethods of connecting with her clients.

I 2 1 I Expert opinion: Bryan PearsonBryan explains why marketers need to look beyond the plastic,when it comes to customer loyalty.

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

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

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

I 3 2 I Outdoor mediaFind out which are the biggest challenges facing outdoor mediaright now.

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

I 4 4 I Discovery SpeciesMarketing Mix gets the low down on the Discovery Channel’slatest study into the brawnier member of our species.

I 4 6 I Eastern Cape intelligenceGetting to grips with the Eastern Cape marketing and medialandscape.

I 4 9 I Expert opinion: Walter PikeWalter explores the power of a little micro-blogging platformcalled Twitter.

I 5 0 I Expert opinion: Benon CzornijHello Computer’s third article explores the technologicalconsiderations that should be top of mind during websiteplanning and creation.

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

I 5 2 I Marketing 2009: understanding the challengesand the way forwardThe Services SETA team get together to discuss the issues critically.

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

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

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

It could be simple…

2

Ed’s note

The beach holidays are long gone, and we are back into the swing of things here

at Marketing Mix. The magazine boasts a fresh new look to take it into 2009

with style.

Our website, www.marketingmix.co.za, is almost a year old, and we’re enjoying

aggregating content across our print and online platforms. In fact, in our print articles

you will notice the following graphic:

This graphic directs you to the website to find more information and extra content.

I had the pleasure of researching the retail marketing sector over the past few weeks,

and the fruit of this research is the very informative Retail Marketing Guide. After

investigating the challenges and trends in the retail space, I have decided that it has got

to be one of the toughest marketing disciplines. It could be simple: store +

shopper/money + brand = sold. But it’s not. The shopper is complicated and

unpredictable, and the store environment has evolved to become a dynamic and very

competitive place. Plus, researchers have not decided whether they believe what we say

about the manner in which we shop, which makes things a little fuzzy.

I will be watching closely to see how both brands and retailers cope with recessionary

pressures. I suspect that the top-end stores and brands will find it a very difficult

time, especially as the upper-middle-class shopper downgrades to stretch rands further.

The stores that have succeeded in creating tiered ranges, aimed at different market

segments will probably catch the largest shopper market – as long as the store brand

itself can meet the expectations of a range of shopper profiles. We can expect interesting

times ahead.

Also on the radar, is the 2010 FIFA World Cup and all things related. The SoccerMarketing Guide answers questions around how to leverage this prestigious event. At

the time of going to press, I had tried to get a response from FIFA to some very

tough questions – such as, where can marketers find out which service providers FIFA

still needs to sign on locally? Or how can small and medium brands get involved as

third-party partners to official partners, exhibitors and service providers? And how will

FIFA enforce the rules that it has put in place to protect its rights holders, for example,

how will it educate local supporters about the fact that if they arrive en masse at the

stadia, wearing the branding of official sponsor competitors, they could be turned away?

Sadly, FIFA and the Local Organising Commitee (LOC) have yet to get back to me,

despite repeated requests for a response. Perhaps it’s time that local marketers joined

forces to rally the LOC for some real answers.

And so the first issue of Marketing Mix for 2009 gets off to a robust and exciting

start. Be sure to pen the Marketing Mix events into your diary with a stellar line-up of

conferences and workshops planned to help you navigate marketing challenges and

make the right decisions.

And with that, I wish you all the best for this year; happy reading. �



3

Delegates who attended the Marketing Mix retail conferences,

which included brand marketers, retailers, POP service

providers and ad agencies, were asked late last year to

complete the Retail Spend and Trends questionnaire in which they rated

the importance of media categories (both in and outside the store),

POP promotional tools and advertising displays in 2008. They then had

to rate the importance these media categories and tools would have

in 2009. Respondents also had to indicate what percentage of total

marketing budget went to each of these in 2008; then what the percentage

would be in 2009.

The resultsMarketers were asked to rank which media were a priority in 2008, and

which will be big in 2009.

AnalysisThe Retail Spend and Trends survey found that in-store media advertising

was a major priority in 2008, and remains so in 2009. This is in keeping

with the trend towards retail marketing, which is highly measurable, and

provides the ‘moment of truth’ where the brand comes into contact

with the consumer. See page 6 for a more detailed explanation.

At a glance, the results indicate that marketers are going to move

their focus away from the mass giants (TV and radio, specifically),

towards malls, mobile and digital media, which strengthen the cause of

marketing at-retail.

The rise in the ranks of mall media reflects the realisation that malls

have become destinations in their own right – going to the mall is part

of the urban leisure experience. Plus, the malls are investing in strategies

that make their environment more attractive to consumers, and encourage

them to linger and window-shop; and also to make the visit a regular

fixture. Brands have wised up and are using the mall environment to

interact directly with consumers through sampling, demos and branded

entertainment. This experiential marketing tends to be well received in

the mall environment, precisely because shoppers are in the right frame

of mind and these activations create the brand desire that gets the

consumer into the store to buy.

Despite the success of experiential methods, they have dropped

down the ranks; perhaps these methods are not seen as a must-do within

the current economic climate.

Based on the assumption that a climb in rank indicates a correlating

increase in intended spend, then mobile media could see quite a boom in

revenues. This reflects the reality that mobile marketing is picking up

ever more momentum in SA. Not only is this medium cost-effective,

but it has great reach and can be very powerful as either a branding tool

or a call-to-action sales driver. The potential for couponing, discounts,

and also greater measurability and campaign feedback are all attractive in

the retail environment.

Online media climbs the ranks. Brands are clearly taking

cognisance of the fact that consumers, especially those with higher

incomes, are online. Retailers are expected to uplift their home/

online shopping services, and start making this service more attractive

to the busy housewife (and not just businesses that buy in bulk

once a month).

Community media has fallen a few spots; these media are reaching

particularly small niche markets and perhaps don’t have the reach that

brand marketers are looking for in the current economic situation.

The fall in rank of direct-to-home media may indicate that

respondents find this media option too remote from the store space and

mindset. However, the challenge for stores and retail brands is to think

more creatively about the potential that this media has got for taking

coupons or special offers directly to the housewife’s door and enticing

her into the store.

2009 retail spend and trends

Media preference

Rank 2008 2009

1 In-store In-store

2 TV Mall media

3 Mall media TV

4 Radio Outdoor

5 Experiential Magazine

6 Outdoor Mobile

7 Magazine Radio

8 Community newspapers Experiential

9 Community radio Press

10 Commuter media Community radio

11 Direct to home Social marketing

12 Community TV Commuter media

13 Press Community paper

14 Mobile Online

15 Social marketing Direct to home

16 Online Community TV

Retail marketing guide

Brands will need to work closely with

retailers and shopper insight

specialists, to first, understand their

shoppers better and, second, develop

the campaigns and activations that

actually work. The proof will be in

the sales data.



4

The resultsMarketers were asked to rank the importance of in-store promotional

tools in 2008 and then in 2009.

AnalysisOverall, the results indicate that within the store environment, brands

are moving towards media that break through the clutter and offer high

visibility – in-store screens, digital signage, gondolas and permanent

displays. Interactive media is also high on the agenda. For this reason,

kiosks should see greater rollout: they allow the shopper to find out

much more about a product/product range than they could ever find

out from an advertisement or a store salesperson, while also allowing a

brand to dominate the aisle space. Research shows that demos and

kiosks have the greatest interruption impact in the store and are

responsible for many a brand switch at the shelf.

Price promotions fell hard: consistent price cuts and price-based

promotions destroy brand equity in the long term and train a shopper

to buy only when pricing is lower. In-store sampling too, sees declined

interest in 2009; this might be because a trial does not guarantee future

purchases and is not an easily measured activation, making it a risky

proposition.

It is clear from the results that more flexible, short-term solutions are

required in 2009; consider that screens (which claimed the number one

spot) allow offers and content that is easily tailored to store, region and

even time of day. Digital signage too, ranks high on the list for 2009, for

the same reasons. However, the cost of this technology may be prohibitive

for smaller brands with limited budgets.

Gondolas climb the ranks for 2009, and this may be due to their

effectiveness in creating brand visibility in the aisles (essential in

driving conversion).

Coupons will see much greater use in 2009 as part of in-store

marketing campaigns. The shopper’s budget is tighter than ever

and coupons not only make the product more affordable (value for

money), but also makes it viable for the shopper to continue to

purchase that particular product above all others on the shelf. And

since couponing is not a direct price cut, there is a less danger of

eroding brand equity.

Ceiling hanging boards ranked low in the results; research shows

that shoppers do not look above eye level or shelf height while

shopping, which means that anything that’s above their heads is simply

not noticed.

Movable displays and branded counter tops are also ranked lower

for 2009.

In-store advertising displaysRespondents were asked to indicate which categories of in-store

advertising displays are regarded as most effective. In descending order,

these are:� Gondola ends� Counter displays� Hot spot shelf displays� Mobiles� Floor-standing units� Floor displays� Pre-pack displays and trolley marketing� Shelf talkers� Wall-mounted POS� Dump bins� Clip strips � Case stackers.

What does it all mean?Expect a tactical shift away from mass media advertising to niche

media advertising and integrated campaigns that deliver on short- and

long-term brand building and sales. Look out for greater innovation

in the store environment, with mobile, digital and in-store screens

promising to make the retail space a much more flexible and impactful

medium. This also requires media owners to develop packages

and pricing that is more adaptable and affordable. Brands are

going to be measuring and evaluating media spend and ROI;

accountability is the name of the game, and every cent must

be justified.

This, of course, means that the retail environment is going to

become more competitive. Brands will need to work closely with

retailers and shopper insight specialists, to first, understand their

shoppers better and, second, develop the campaigns and activations

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

For a more in-depth analysis of the results and the current

market trends, visit www.marketingmix.co.za. �

POP promotional tools

Rank 2008 2009

1 Permanent displays In-store screens

2 Sampling Digital signage

3 Pricing Permanent displays

4 Temporary displays Gondolas

5 In-store screens Temporary displays

6 Digital signage/branded counters Coupons

7 Movable displays Kiosks

8 Gondolas Sampling

9 Shelf-edge systems Movable displays

10 Kiosks Shelf-edge systems

11 Refunds/rebates Pricing

12 On-pack communications Refunds/rebates

13 Ceiling hanging boards Branded counters/on pack

14 Coupons Ceiling hanging boards

15 Coupon holders Stack cards/coupon holders

16 Stack cards Games/sweepstakes

17 Games/sweepstakes -

Other survey findingsThe concept of destination shopping is becoming ever more relevant, especially

as brand marketers and retailers look for effective means to keep shoppers in

store for longer periods, while also driving loyalty to the store or destination.

The study has noted that there has been a marked increase in consumer

awareness of green issues, yet it is not clear whether this will have a major

impact on local retail marketing strategy. Whether consumers will worry about

the environment when they have the much more immediate need to stretch

their rands is questionable.


Shopper marketing: the super gluethat strengthens relationships between retailersand manufacturers


5


For years retailers and

manufacturers have

enjoyed a love-hate

relationship with regard to

prioritising their sales, marketing

and business objectives and,

more importantly, defining

their ownership of the

relationship with the consumer.

The eureka moment?In the past three years a new

buzzword has entered the

already wordy marketing

lexicon – shopper marketing. As with many groundbreaking marketing

and retail developments, it was encouraged and endorsed by respective

global marketing and retail leaders – Procter & Gamble (P&G) and

Wal-Mart.

On 21 September 2005, a front-page article in the Wall Street Journalspoke about ‘P&G’s most recent concept for further conquering the

world of fast-moving consumer goods.’ It was called the First Moment

of Truth and dealt with the first three to seven seconds after a shopper

first encounters a product on a store shelf. P&G contended that in

these first vital seconds, marketers had the best chance of converting a

browser into a buyer by appealing to their senses, emotions and values.

Soon, websites and blogs from across the world were commenting on

this ‘novel’ marketing tool that focused entirely on the shop floor.

So what’s the fuss?The USA’s Grocery Manufacturers Association (GMA) defines shopper

marketing as: ‘All marketing stimuli developed and based on a deep

understanding of shopper behaviour, designed to build brand equity,

engage the shopper whilst “in shopping mode, and lead” him/her to

make a purchase’.

Seventy per cent of purchase decisions

are made in the store. In the US, shopper marketing is growing at 21 per

cent with manufacturers and 26 per cent with retailers, versus overall

marketing budget growth of two per cent.

It is estimated that between 2004 and 2010 shopper marketing will

have increased its share of manufacturer marketing investment from

two per cent to 12 per cent; that’s faster than digital marketing’s two

per cent to eight per cent over the same period. If I could offer you one

tip for shopper marketing, collaboration would be it.

1) Share your valuable information and insightsSouth African manufacturers and retailers should share the heaps of

valuable sales and consumer data they collect. One true consumer

insight is worth more than 999 pages of sales figures.

Take a page out of the 20-year-old information-sharing relationship

between P&G and Wal-Mart. Both share real-time information across

their common supply chain to ensure just-in-time delivery of stock by

shortening the order cycle time and increasing stock turns. On average,

P&G products spend less than eight hours in Wal-Mart’s warehouses,

and are usually sold within 24 hours of arriving at a store.

2) Work together when developing new products/ product innovationsUS research shows that up to 80 per cent

of new products fail in their first year. The failure rate in SA can’t be too

far off. Manufacturers and retailers are now seeing product and systems

innovation as key to differentiating their brands and consumer offerings.

Manufacturers should consult retailers to find out what their

customers are looking for. Then jointly establish what type of packaging,

visual graphics, pack sizes and shapes will work in terms of display

space, customer appeal and convenience.

If you supply Shoprite Usave, the billion rand limited assortment

format, provide them with cutaway shipper packaging. This packaging

innovation allows its small store staff complement to wheel out, cut out

and display products easily.

3) Deliver availabilityNothing irritates a retailer (and customer) more than a manufacturer’s

inability to supply it with stock at the right time so shelves remain full.

Out of stock is an anathema to retailers. They often lead to a lesser sale,

a lost sale or a lost customer.

On-shelf availability shouldn’t just involve the buying department

of the retailer and the sales department of the manufacturer. It

should constantly be addressed at both board levels to ensure that all

stakeholders share

the common goal of correctly producing, supplying, warehousing, delivering,

displaying and ordering product across both organisations.

Out-of stock situations need to be identified quickly. Their root causes

need to be jointly analysed and corrected so they aren’t repeated.

These three steps will help to deliver growth in a planned and sustained

manner through the support of ongoing shopper-led insight. �

Pedro De Gouveiageneral manager Salient Strategic Advertising(021) 506 [email protected]

“Out-of stock situations need to be

identified quickly. Their root causes

need to be jointly analysed and

corrected so they aren’t repeated.”



6

The store is that magical place where the shopper/ consumer,

armed with money, comes into direct contact with brands.

Ultimately, it is the shopper who makes it possible for brands to

be consumed and experienced. And it is this experience that (hopefully)

leads to a repeat purchase and consumption pattern. It’s not surprising

then that marketers are investing more heavily in the

retail space.

Among the factors that are driving the growth in

retail marketing spend, is the increase in consumer

spending (where there is consumer spend, there will

be increased marketing spend). However, this

consumer spending is set to slow, thanks to the recession.

“The consolidation of a large range of products,

even financial services, into super or larger stores has

consolidated marketing spend,” says Riaan

Labuschagne, MD, Zapop. Plus. He adds, there is a

direct correlation between media spend and sales,

which has justified an ever-increasing demand from

retailers.

Media measurement has become more scientific, thanks to research

methods that measure impact to bottom line (and not just how many

brand impressions the consumer can recall), and budgets are more easily

justified. Since retail marketing is very results oriented – it either sold

more, or it didn’t – it is undoubtedly going to grow. “The store space is

all about conversion,” says Kristina Couzyn, director: Shopper

Marketing, Ogilvy. Shopper marketing delivers the bottom line.

Consider too, that globally, retailer strength has shown steady

growth. A case in point is the successes of US giant, Wal-Mart, which is

the world’s largest public corporation by revenue, according to the 2008

Fortune Global 500, with stores and chains across the world. For store

giants, consolidations and global expansions are the name of the game.

Elton Scheepers, commercial accounts director, Todwil, notes that a

consumer/customer-centric marketing approach has been adopted by

brands and retailers as opposed to the conventional brand-centric

marketing approach. “Organisations and brands have realised that to

deliver on the requirements and value needs of customers/consumers

they need to have these consumers adopt, as opposed to accept, their

proposition,” he says.

Retailers have realised that they are onto something, and that their

stores are the brand. “Global retailers never used to have marketing

teams. Now, they are poaching some of the finest brand marketers and

are embracing the power of marketing hype. They are using branding to

elevate their stores and ensure that the shopper experiences the brand,”

says Couzyn.

Given all of this, it’s not surprising then, that service providers like

Zapop are reporting a fast-growing emphasis on the promotion of

products at the shelf. It’s all about interrupting the shopper in the right

space, at the right time; and when they are in the store and in a frame of

mind that finds them receptive to clever marketing.

However, retail marketing has become very complex and requires a

very strong campaign strategy as well as realistic measures and evaluation.

“Retail marketing is affordable and yields the required returns, but

significantly most brands fail to complete a qualitative or quantitative

analysis after a campaign and therefore most often are not able to justify

the total delivery of the executions,” says Scheepers.

Looking ahead, brands, manufacturers and retailers to intensifying

their focus on the retail space. But it won’t be easy. �

“Global retailers never used to have

marketing teams. Now, they are

poaching some of the finest brand

marketers and are embracing the

power of marketing hype. They are

using branding to elevate their stores

and ensure that the shopper

experiences the brand”

Retail marketing: why it’s hot

How do we compare?Compared to the US or the UK, says Riaan Labuschagne, MD, Zapop, we have a

varying supplier buy-in proportional to sales turnover. “Some suppliers allocate a high

percentage of their marketing budget to in-store, whereas a large majority of the

multinationals are growing their budgets in-store at an ever-increasing pace,” he says.

Both the US and European markets have a greater appreciation and progressive

approach in terms of investment within the retail environment, says Elton Scheepers,

commercial accounts director, Todwil. “SA is relatively new to marketing and dialogue

within the retail environment and its spend reflects this.”



8

Current trends and challenges

The current economic recession is changing the

retail marketing environment in terms of an

increase in retail marketing spend even as

consumers tighten their purse strings and overall

marketing budgets shrink. This dichotomy has come

about as the realisation of the ‘moment of truth’

drives more focus into the retail environment.

However, in light of the current economic climate,

there will need to be much more retail marketing

and shopper insight research carried out to push

brand sales.

“If we review what is happening in the US and

use this as the base case, spend within the retail

marketing environment will continue to increase year

on year,” says Elton Scheepers, commercial business

director, Todwil.

With marketing budgets shrinking, the trend is

moving towards more tactical below-the-line

campaigns, though not necessarily at the expense of

above-the-line branding. “With over 60 per cent of

shopper decisions being made in the outlet, this

trend is here to stay. As always, when volume and

profitability come under threat from weak economic

conditions, more knee-jerk-type activities find their

way into the marketplace,” says Scheepers.

Manufacturers too, are trying to cut their costs.

Marne Dirks, MD, Executrac, finds that to keep mar-

gins intact, manufacturers are focusing on making

business processes more efficient and cutting costs, although it seems

to have only a limited impact. The only bright light on the horizon is

the drop in fuel prices.

Retailers are also under severe pressure to cut costs while

meeting profit targets and retaining shopper loyalty. Reports

(www.tradeintelligence.co.za) indicate that retailers had better than

expected December trade, but that January is off to a slow start. The

bottom line is that this year will be tough. To maintain profits, stores are

going to have to work hard at creating the right shopping environment;

service delivery is key, and a simpler, more pleasant shopping experience

must be created.

Brands and retailers are going to have to work more closely together

as a key component in maintaining profits for both parties is to keep the

shelves stocked with the right brands, at the right price. All too often,

shoppers are faced with empty shelves and products missing for

inordinate amounts of time, eroding loyalty and confidence in product,

brand and retailer.

Stephen Mawby, managing director of Glendinning Management

Consultants, compares SA’s retail market to those of more developed

countries, where the average store product range is very complex, and all

aspects of the service and supply chain have been refined. Locally, he

says, there are still issues around supply, store range, store layout and so

on; retailers need to drive the research that exposes the weak spots and

highlight new opportunities.

As stores try to achieve this, we may see continued focus on ready to

eat, prepared meals, and also on healthy or organic foods; however,

pricing needs to be carefully considered (even premium shoppers will be

cutting back and looking for value).

Another result of the tightening of purse strings will see the loyalty

of high-end retail shoppers being eroded as they switch to mid-range

Premium store brands and private brands:A study carried out by Ipsos MORI in the US in 2007, found that 41 per cent of

shoppers identify themselves as frequent buyers of private labels, with 70 per cent of

respondents believing that these private label items are as good as, if not better than,

national brands.

Today, private labels often mimic the category leaders, but are still available at a lower

price. In recent years, the emergence of premium store brands changed the face of retail

yet again, allowing retailers to generate higher profits and position themselves differently.

According to stats quoted by Millward Brown (What’s in Store for Store Brands, July

2008), private label penetration is estimated to be growing by five per cent per annum,

while for manufacturers, the figure is closer to two per cent. Plus, retailers have been

very clever with customer insights and have developed product ranges that meet the

needs of their shoppers; as a result, shoppers have grown to trust the store and its own

brands far more.

So what can marketers do to protect their brands?Millward Brown’s report suggests that marketers increase consumers’ perceived risk of

switching (ie focusing on quality and not price). This is not something that will be

achieved easily across all categories during the current recession; it is only in a few

categories and industries that quality will outweigh price as a purchase driver (for

example, in the fashion and clothing sector; parents will pay a premium for school

uniforms that are going to last longer and wear better). They could also break through

the clutter with deals that the private labels cannot match, or they could offer a unique

brand experience that private labels are unable to.



10

stores. In fact, shoppers are going to be planning

shopping trips more carefully to avoid the unplanned

top-up shop that is rife with impulse purchasing.

They will also be more careful about what they buy,

and where. This may result in shoppers visiting a

greater variety of stores to take advantage of better

pricing, but buying fewer items in each. Certain

luxuries will simply be left off the shopping list (or

replaced by ‘the next best thing’), and bargain hunting

is going to take on a new meaning.

“I have found that people are shopping less

frequently, and are doing larger, more planned and

controlled shopping trips,” says Siemon Scamell-Katz,

founder, TNS Magasin (international shopper strategy

consultancy), and global director of TNS Retail and

Shopper. “The typical list has around nine items on it, so there is still

room for marketing to influence what people do and what they buy.”

Innovative loyalty mechanisms may prove invaluable, and we’ll be

closely watching Pick n Pay as it joins forces with Discovery healthcare,

to offer bigger discounts to the health insurer’s clients and gives these

shoppers value, where it counts – in their pockets.

Private labels and store brands will find themselves perfectly

positioned to take greater share of store spending – especially those

store brands that offer comparative value at a lower price – which

strangely doesn’t always happen. And national brands will increasingly

be defending their spot on the shelf. “The tussle between the retailer’s

private labels and the national brands is very good for the consumer,

who gets greater choice and more honest pricing,” says Kristina

Couzyn, director of Shopper Marketing, Ogilvy.

When it comes to the clothing and fashion retailers, we can expect

shopping to slow somewhat, as consumers steer away from unnecessary

impulse buys. Stores that sell good quality fashion staples at affordable

prices will fare well – if the store brand is positioned well, that is. The

high-end luxury brands will be unlikely to suffer too much (their

consumers have more cash to spend), but may well feel the loss of a

chunk of aspirant consumers who simply cannot afford luxuries anymore.

The shopper is under tremendous pressure from all sides, and loyalty

to any store, and any brand is now at its most fragile. Shopping habits

are changing to meet needs, and the factors that drive the purchasing

decisions have also changed. “High food inflation definitely impacted

on the spending power of consumers. Customers have shied away from

luxury and expensive items and are more anxious about creating debt,”

says George Steyn, managing director, PEP.

According to research, a significant number of higher LSM customers

are beginning to ‘shop down’. “Luxury, high fashion and extensive

entertainment are being replaced by basic consumables and semi-durable

essentials by many of these customers. The introduction of the National

Credit Act also means that less credit is available and so people cannot

spend money they do not have,” says Steyn. This is, of course, good

news for the cash-based discount retailers that will see a boost in

business. Indeed, Labuschagne reports significant growth in the

non-credit food sector, while the higher LSM sector is taking a hit.

In the townships, the spazas and informal traders will be battling

personal financial pressures, but are likely to enjoy increased sales as

township shoppers seek out more affordable pricing and flexible

shopping. Brands and distributors can make the most of this channel by

working closely with the informal traders to match their needs, and

develop packaging and pricing that works.

Shopping centres based in and around townships will also need to

create positive experiences for these shoppers as budgets shrink.

Shopping mall retailers will need to provide serious value for money and

responsible cost saving.

A proliferated marketplaceA further marketplace challenge is the intense proliferation of brands

on the shelves. Consider the finding of the TNS Retail and Shopper

division: the average global total FMCG offer is between 200 000

and 400 000 SKU, but the average household FMCG usage over one

year is between 250 and 350 SKU. This range complexity has led to

range blindness, says Peter Wilson, business manager, TNS Research

Surveys: Client Services. Shopping is no longer a simple task and

shoppers don’t have the time to linger in the aisles checking out

the store’s range. Wilson finds that while people are shopping

more frequently at more stores; they are spending less time shopping.

In 1995, he reports, the average shopping trip lasted 45 minutes;

in 2005, it lasted just 30 minutes. It’s no wonder then that shoppers

are quickly learning store layouts to save time when they shop.

Unfortunately, there is little data available for the South African retail

environment.

“The proliferation of new SKUs across all major categories in an

attempt to meet consumer needs has led to massive complications for

the entire value chain,” says Dirks. Shorter production runs, which are

increasingly unprofitable, are giving warehouses and distributors bigger

challenges. The impact on marketers is a portfolio that doubles every

few years, and greater difficulty in allocating marketing budgets.” Plus,

direct marketing expenditure in absolute numbers is increasing less than

CPI,” says Dirks.

Brand and marketing clutter are huge challenges; so too is the

proliferation of private labels. Stock returns increase daily, says Dirks,

while receiving bays become more complex. The administrative burden

of these developments has increased the cost of these activities. �

Retail in 2009 The 2009 Consumer Shopping Intentions Study carried out by Cavallino LLC in the US,

determines where and how much consumers plan to spend in 2009. The results reveal

that about 69 per cent of US adults plan to spend less at retailers than they did in

2008. The younger shoppers (18-24) plan to spend the same or more, especially at

mass merchants. These stores offer consistent value and low prices.

If this trend is true in SA, it means that stores like Shoprite (which offers a wide range of

products and categories, consistently, at low prices) is well positioned.

Influencing purchase decisionsAccording to a Millward Brown Knowledge Point report (What are

the main influences on purchase decisions), researchers find that it

is the out-of-store experience that generates desire for a brand, but

that this is strongly affected by in-store activity. The report also states

that the balance between out-of-store desire and in-store activation

differs by country, and across categories and brands.

Price promotions are found to have the biggest influence in-store.

Launches and challengers will want to disrupt the category, while

brand leaders will want to emphasise their familiarity and aid quick

recognition and brand-buying routine.

The report finds that in-store experience can evoke associations from

advertising, generating stronger interest in the brand.



11

The township market is seen as a high

growth area for the retail sector because of

the growth of the middle class and its

respective spending power.

Getting the retail marketing right in townships is

about understanding the township shopper, and the

unique and complex market dynamics of the envi-

ronment. “Understand the market: the language

they speak; their culture; travelling habits; source

and type of income (weekly or monthly); gender;

access to water and refrigeration; and so on,” says

Riaan Labuschagne, MD, Zapop. Obtaining and

maintaining an effective distribution chain is also

essential

A few trends and tips from the experts:� Zapop has noted a few major differences

between retail marketing in lower LSMs and that

in urbanised higher LSM environments. “The

more rural the retail environment, the

less influence children have on buying patterns,”

says Labuschagne. It will be interesting to see

how the rise of child-headed families (a social

phenomenon that has emerged thanks to the

Aids pandemic)

affects retail trends. � Another major difference is that these customers

shop because of an immediate family need. After

all, they have low income levels, and an almost

nonexistent disposable income. and cannot shop

as freely as upper LSM markets do. “Every cent

that our customers have counts, therefore shopping

decisions are based on best value (low price + acceptable quality),”

says Marcus Banga, marketing director, PEP. Priority is given to kids

and home essentials (stylish products, at a good price, are a winner). � Word-of-mouth communications is huge in the townships, and these

consumers have large social networks. � Radio and TV are the most accessible and effective media for raising

awareness in this market, and certainly there is access to the mass

media in the townships. However, seeing as the demographics of

consumers and their access to media varies from one township to the

next, it is important to do homework before assuming this is true

across the board.

� Knock-and-drop leaflets are used to communicate more directly

with customers. “This is particularly effective in communicating

our range as well as special offers. It works well with our

customers who have limited education as pictures say a million

words,” says Banga.� The township community is hungry for marketing and media innovation,

so brands need to be more adventurous. Integration with new media

is a good idea, and so is experiential activation.� Malls and shopping centres in the township can see foot-traffic in the

millions each month, so brands need to be there.� Newspapers should be used as a call-to-action tool, while magazines

promote fashion merchandise, for example. � Outdoor media should be used to create long-term brand awareness. � Giving back to the community in a meaningful and sustainable way is

good for business and branding.� Promotions in-store help customers to identify best value items

or weekly deals and promotions. “POS material also assists our

customers to navigate our stores easily, which simplifies matters for

them and adds to the service levels within our stores. Lower LSM

customers are just as particular about service as their wealthier

counterparts,” says Banga.� In the township markets, product packaging can be used

to deliver POS solutions. “Don’t just give them a bulk-pack brown

box, give them a branded pack in which the store owner can display

your product in the store. Understand that these different channels

require different pack sizes,” says Kristina Couzyn, director: Shopper

Marketing, Ogilvy. �

The township market

Top tips for ensuring retail marketing works1. Ensure you have sufficient stock. Most campaigns fail because

they kick off with a bang and then have lacklustre results

because of a lack of stock.

2. Differentiate in the store. In most categories today the consumer

has a few options, if the promotion does not differentiate the

product from those competing lines next to it, the campaign will

have mediocre results.

3. Offer the customer value. This does not relate to price at all, but

rather to the perceived value for the customer.



12

In-store media T

here is a growing repertoire of media options available in the

store space and while no particular media stands out as the

number one in-store medium, understanding each available

media and careful selection must be undertaken to ensure a successful

campaign.

There is no blueprint for success, though in-store campaigns need to

be supported in the mass or niche media. “If you are targeting the broad

public with a nationally available brand, TV and radio still remain good

options to get your message across efficiently,” says Geoff Whyte,

commercial director, Cadbury, Africa and Middle East.

Interestingly, dominance outside the store does not guarantee sales

in-store. High-profile TV campaigns, for example, can drive sales for

rival brands by sending consumers to the corresponding aisle in the

store. “This gap between awareness and sales conversion is one of the

biggest challenges facing marketers today,” says Kristina Couzyn,

director: Shopper Marketing, Ogilvy.

As a general rule, it is high visual impact that sets brands apart in the

store, but also depends on the brand and its status within the market. “If

you are talking about a well-known brand with well-known advertising,

a shelf talker may be a great solution. If you are the new kid on the

block you probably need to invest more to make a statement and get

consumers’ attention,” says Whyte.

Media optionsDigital/LCD screensDigital screens offer flexibility as content can be easily tailored to the

individual store, its location, the time of day, special events, etc. They

also have the power to catch the attention of the shopper with content

that is more compelling than a simple static display.

Consider that in the US, researchers and retailers have teamed up to

test a new wireless screen (the ShelfAds system), that automatically

broadcasts a 10-second ad when a shopper walks by. The battery-

operated devices cost around US$300, and are easily attached to the

shelf edge. They are able to dispense scents, which means brands or

categories can engineer brand experiences more easily.

Locally, TV screens and production costs are an expensive investment.

“Digital screens definitely have a justified share of the in-store media

space but the large capex required limits rollout,” says Riaan

Labuschagne, managing director, Zapop.

MobileThe integration of mobile marketing into a retail strategy has not really

taken off as yet. “I believe the concept is exciting and will have a role to

When shoppers buy impulsively, what drives the purchase?Ogilvy Activation’s global research has found that the following

media and marketing tools drive impulse purchases in the store:� 24 per cent: off-location display� 18 per cent: demonstration� 17 per cent: price promotion� 12 per cent: retailer recommendation� 11 per cent: consumer promotion

Visibility and engagement are major drivers of impulse buying (price

is a driver, but its importance can be overestimated). “Price promos

simply encourage your existing shoppers to pantry-load; it doesn’t

always get you new consumers or shoppers,” says Kristina Couzyn,

director, Shopper Marketing, Ogilvy SA.

What influences shoppers’ brand decision? Ogilvy Activation’s global research has found that the following POP

promotional tools influence the shopper’s brand decisions in the

store:� 31 per cent: demonstration� 28 per cent: price promotion� 27 per cent: consumer promotion� 26 per cent: retailer recommendation� 25 per cent: off-location display

“We claim that it’s price that has the biggest influence on our

purchases and we like to think we are logical in our decision-

making, but the truth is, we’re not,” says Couzyn. Brands that

engage the shopper, win.

POS design tipsWayne Elsom, CEO of Todwil, gives marketers a few tips for the

design of point-of-sale (POS) marketing material:� Find out what your competitors are busy with, and make sure that

you familiarise yourself with their respective positioning andattributes.

� Research trends in foreign markets to get a fresh perspective.� Be different: your display should have its own visual equity and a

strong personality.� Keep your POS display simple. Make it easy for the customer to

find what they are looking for or to understand your promotion.� Protect your display unit in terms of trademark law and copyright,

and ensure that you are not infringing on your competitors’ rights.� Pre-test your display in-store, alongside your competition’s displays.� In designing your display, consider future design trends to prevent

your display from dating too soon.� Your product should be placed close to eye-level and as close to

your competitors as possible (preferably to the right as consumersscan for products from left to right). If people are instinctivelydrawn to the leading brand, there will be a greater chance ofswitching to yours if it is competitively priced.


play within our market,” says Elton Scheepers, commercial business

director, Todwil.

However, mobile couponing is seeing growth, and should be used

more extensively once the POS systems on the retailer side have been

upgraded and redemption is easier to manage.

For mobile to be successfully integrated into store campaigns, there

should be a very strong call to action, while mechanics of the campaign

must be clear. “This is normally done by means of a cartoon-type

explanation and is particularly valuable in the illiterate market,”

says Labuschagne.

A US-based research firm, ForeSee Results, found in its December

study into mobile applications and shopping (www.mobilemarketer.com),

that one in four people used their mobile phone to look at price

comparisons; 15 per cent used their phones to go online and check

product reviews. The study also found that people who use their

mobile phones to shop are more likely to buy products offline not via

online shopping.

PackagingPackaging plays a very important role in the retail space in terms of

allowing the shopper to recognise the product as well as converting the

shopper. “Packaging is the first moment of truth,” explains Couzyn.

“So brands need to know what the cues are in the category, and then

design the right packaging,” she says.

DisplaysDisplay advertising can be very effective in the store space, especially

larger displays and free-standing units, although they do cost considerably

more. Since 2006 in-store media turnover in Shoprite and Checkers

stores has grown seven-fold, thanks to the growth of the display

advertising sector in-store. “This growth rate is attributed to the fact

that we sign contracts four to eight months in advance, and it is not

showing any signs of slowing,” says Labuschagne.

Trolley advertisingTrolley branding and advertising is old hat. Or is it? DStv has just

partnered with Icon Media to create branded trolleys in an attempt to

communicate with shoppers. The tagline, Come play with DStv, inspired

the design of the trolleys, which are branded with their favourite TV

characters, and styled like racing cars. They are also great for advertising

to kids. So let’s rephrase: boring trolley branding is old hat.

CouponsCoupons have the potential to drive sales; they would be useful in driving

a trial of a new product, for example. They also allow a brand to sell its

products at a discounted rate without resorting to price cuts and price

promotions. “Coupons are a great reciprocity tool in the store. If they

are distributed by a promoter or a dispenser in the store it tends to work

well,” says Labuschagne. �

� We supply fast, cost-effective, high quality retail surveysso you get the full picture

� For under R60 a survey, you can afford to read yourentire customer database and not just a small sample



14

Shopper intelligence

Specialist shopper research must be carried out to make

sense of the retail environment, and to gain an under-

standing of what motivates the shopper’s behaviours

and decisions in the store. “Global research spend allocated to

retail, including the shopper, is between 15 and 20 per cent. In

South Africa only five per cent of spend goes to retail, but it’s

what everybody is talking about,” says Siemon Scamell-Katz,

founder, TNS Magasin, and global director of TNS Retail and

Shopper. The shopper retail/marketing industry is said to be

worth R130 bn (and that’s just the FMCG categories),

according to Michael Broughton, acting CEO of the

Consumer Goods Council of SA (CGCSA).

The good news is that there is a lot of research innovation

taking place. “There are a greater number of store pilots and

targeted shopper research going on. Retailers are waking up

to it and they want category insights. They are thinking about

their competitors,” says Andrea Ellens, associate brand

director, Added Value.

Shopper research can be a costly investment, so brand

owners are encouraged to start small and be very particular

about the type of research methodology used. “When

companies don’t know what research to buy, we actually

recommend that they begin by studying existing in-store data and use it

to get their basics right, including supply chain and merchandising.

Once this has been achieved, they can start asking the more complex

questions around shopper insights,” says Stephen Mawby, managing

director of Glendinning Management Consultants. He points to tech-

nology and software available in the UK, which allows the marketer to

input sales data obtained from the retailer, and then slice it up and

analyse it in many different ways to

get a holistic understanding of the performance of its brands. Locally,

sales data is available, but there is a shortage of standardised software

or tech systems.

Very important is that the research itself be integrated into marketing

strategy to address the business goals and problems of a brand or store,

and should be accompanied by both pre- and post-testing to determine

its effectiveness. Yet fewer than five per cent of brands globally are

confident that shopper research has been integrated into their strategies,

according to Peter Wilson, business manager: TNS Research Surveys

Client Services.

“I have seen very little evidence of shopper research finding its way

into retail trade by way of a coherent shopper strategy,” says Marne

Dirks, MD, Executrac. A lot of rich shopper and activation insights

never make it into the store, due to a lack of execution capabilities.

“Research firms tend to complicate research feedback in this area and I

have seen as many as 18 shopper demographic profiles for one FMCG

company in the same channel, making it near impossible for a sales rep

to execute a strategy,” says Dirks. Classifications should be kept to a

simple two to three shopper types per channel, based on in-store

observation.

It should also be kept in mind that a store owner is the best source

of free information about the shopper, category routes and pricing

levers, so working more closely with them will provide simpler, more

cost-effective insights.

Shopper research: step by stepShopper research begins by understanding what happens before the

shopper enters the store. At this stage, the researcher is investigating

the brand equity pre-disposition (whether the shopper has a positive

perception of the brand, as created by previous consumption and

advertising), as well the different shopping missions that the shopper

plans and their impact on in-store behaviour.

The next stage of shopper research investigates how the shopping

mission has motivated the choice of store, the behaviour in the store and

the impact of different marketing media and messages. As says Kristina

Couzyn, director: Shopper Marketing, Ogilvy, it’s overly simplistic to

say that 70 per cent of decisions are made at the point of sale without

understanding what kinds of decisions are made.

The experience of the shopper both before and during the shopping

process as well as during consumption post-shopping will feed back into

the pre-shop motivations, and will inform future shopping missions and

decisions.

New technologyThe use of technologies like infrared and radio frequency identification

(RFID) have not seen extensive rollout locally. “SA is essentially a

follower in terms of international technology developments. We do not

“The experience of the shopper both

before and during the shopping process

as well as during consumption post-

shopping will feed back into the pre-shop

motivations, and will inform future

shopping missions and decisions.”


anticipate much before 2011,” says Broughton.

Coca-Cola SA, however, is reportedly using GPS trackers in trolleys

to get maximum exposure in-store by tailoring its execution standards

by channel, geography and shopper type. This allows Coca-Cola to

ensure that the correct brand and pack mix is available at the correct

price and is communicated effectively in every outlet. “This means

moving away from a one-size fits all approach into a segmented

approach where the picture of success is altered for every outlet based

on the variables. The caveat, as always, is the capability of the sales and

trade marketing folk to execute against multiple pictures of success in

various outlets,” says Dirks. The ultimate goal will be for South African

companies to manage day part marketing on this level.

New research methodologies and technologies:

Radio Frequency Identification RFID tracking sees the trolley being fitted with a device which tracks

its path through the store, as well as registering where the shopper

lingers and for how long. This is helpful in identifying the store hot

spots from the shopper’s perspective.

Infrared-assisted researchInfrared technology was used by Nielsen’s US offices in the PRISM

project to provide traffic counts for different parts of a store; this

allows the store to be rated a medium for marketing. However, the

project has been shelved due to lack of funding (Wal-Mart pulled out of

the project in late 2008, according to reports on www.adadge.com).

Video miningIn the US, technology that was developed by homeland security is

being used to ‘watch’ video recordings of the shopper in action and

anonymously record their demographics, while also analysing which

store elements the shopper engages with (www.videomining.com).

However, shopper privacy is an issue.

Eye-trackingEye-tracking could be useful for understanding what the shopper sees in

the store. But researchers say that there is a disconnect between what

the shopper looks at and what that actually does for decision-making

in the store.

This form of observation must be layered with other methodologies

for better insights.

Marketing at Retail Initiative (MARI ) researchMARI research is endorsed by the Point of Purchase Association

(POPAI), which has been established locally (www.popai.co.za).

The MARI research aims to measure engagement with in-store

media and marketing messages. A sample of shoppers is fitted

with a clipcam (surgical camera, attached to their glasses, or

a dummy pair of glasses). This camera records what the shopper

sees, and which brands and marketing messages they interact with,

to determine what sort of marketing works and where it is best situated

in the store.

There are concerns, however, that the cameras will impact shopper

behaviour and will compromise the research. �


Desperate times, desperate

16

Expert opinion

For many people Christmas came early

last year, literally. The windfall of retail

promotions that spread like wildfire in

December in places like the UK, France and

Australia were a clear sign of the desperation

being felt in boardrooms across the world

following the sharp economic downturn

experienced across the globe in the second

half of last year.

I spent December last year travelling in

Europe. Much of my time was dedicated to

walking the high streets, window-shopping

and bargain hunting. My timing couldn’t

have been better as the pound weakened by

20 per cent against the euro and high street

retailers and shopping centres alike went into

promotional overdrive. This selling frenzy

was further fuelled by Woolworths UK’s

closing-down sale that flooded the market

with ludicrously discounted toys, CDs,

DVDs and Christmas bounty.

Everywhere I looked, the signs of desperation

stared back at me in the form of red ‘Sale’ and

‘Clearance’ signs, large discount banners and

multi-buy deals of one form or another. The

traditional ‘bogof ’ (buy-one get one free)

promotional offer was replaced by its eager

successor ‘buy one and get two free’ as

retailers resorted to generous incentives to

lure shoppers out of the cold, and prise open

wallets and purses that threatened to remain

resolutely shut.

No sector was immune from the

clamouring for consumer spend.

Broadspeed.com, an online car broker,

stunned the UK motor industry by offering

a bogof offer on a car. The offer for two

Dodge Avenger SXT 2.4i models for

£20 000 generated a consumer response that

crashed its website and delivered 22 000

customers. Another example of clever

marketing or was it more a case of crisis

marketing? The company’s management

seemed happy enough but will it really be

happy with the longer-term effect of its

cut-price marketing? For now, the managing

director seems happy to be clearing his stock

and making a modest profit when his

competitors are unable to move stock at a

cost of £500 per car each month.

With new car sales in the UK down by

23 per cent in October last year, the biggest

fall in 17 years, the car industry is facing its

worst crisis since 1966, with unsold stock

burning a deep hole in the pockets of car

traders. In November 2008, four major car

dealerships called in the administrators with a

loss of 400 jobs. So perhaps its initiative

should be regarded as necessary and the term

we should use is ‘survival marketing’.

The car industry is but one of the multitude

of sectors struggling to stay in business. I

got talking to one London mini-cab driver

and learnt that I was one of his first

customers and that he was actually a mortgage

broker; with the dramatic downturn in house

sales was forced to get behind the wheel of a

car to earn a crust. This prompted me to turn

my attention to the estate agent business.

When I paid a visit to one of the UK’s greatest

estate agent success stories, Foxton’s, the

picture was no less bleak: one cash-strapped

business executive even threw in his nearly

new Bentley to try clinch a deal. There were

no takers.

Taking to the air on more than one

occasion I observed how the retail squeeze

was being felt in the various duty-free shops

and numerous airlines. Not everyone was

suffering as much as the others though.

Europe’s original and largest low-fares airline,

Ryanair (carried 58 million passengers last

year on 800+ low-fare routes across 26

European countries), seems to have bucked

the recessionary trend with an 11 per cent

increase in its December traffic. Flying with

the airline last month I noted with mild

amusement that in addition to the usual

in-flight refreshment sales, it was sweating its

asset in all sorts of promotional ways, from

selling instant-win tickets, discounting

duty-free sales and heavily promoting sales of

its 2009 Stewardess Bikini Calendar. Who says

sex doesn’t sell!

Even the UK Chancellor of the Exchequer,

Alistair Darling, was drawn into the retail fray

Whatever you believe

about the sense

and sensibility of

promotional discounting,

one thing is for sure,

it doesn’t always work.

www.marketingmix.co.za24 February 2009Digital and Mobile at-Retail


measures

17

when he boldly dropped the country’s VAT

rate for 13 months by 2.5 per cent to 15 per

cent to help stimulate the economy. While

the intention was clear, the wisdom and full

impact of his decision is still to be seen. The

short-term implications included widespread

retailer and consumer confusion at the till,

substantial operational expenses for UK

retailers who were forced at short notice

to re-program their internal accounting

systems, tills and price lists. The cost to

retailers has been estimated at £300 million and

the change is expected to cost the Treasury

£12.5 billion. The actual saving to the average

UK shopper has been calculated to be a modest

£170. Was it really worth it and will it really

stimulate the economy? Many fear not.

The financial pundits are predicting that

the full impact of the global recession will not

be felt for the next six to 12 months. Britain’s

Chancellor of the Exchequer agrees:

“The economic times we are facing... are

arguably the worst they’ve been in 60 years.

And I think it’s going to be more profound

and long lasting.” This bleak outlook is one

shared by the US market where consumers

are in full-scale retreat and major retailers

Macy’s, Abercrombie & Fitch and GAP

reported sales declines of more than 10 per

cent in November.

While total sales volumes in the UK

climbed 0.3 per cent in November from the

previous month, the net profit levels have

been hit hard, absorbed and indeed surpassed

by the deep discounts. In fact, the UK’s retail

sales values fell 2.6 per cent on a like-for-like

basis. This was the first time since 1995 that

retail sales declined for two consecutive

months. Furthermore, the long-term effect in

the high street of the high profile price-cutting

strategy has still to be seen. I suspect that the

way we shop has changed irrevocably forever.

While I understand the natural predilection

to rely on fire sales, dramatic deals and banded

offers, I question the sense in discounting

brand value. I believe that any short-term gain

will be paid for dearly in the long term. Good

old-fashioned loyalty marketing and customer

service seem to have been largely ignored as

retailers chase new blood rather than protect,

retain and reward their existing customers.

This can only end in tears as loyal customers

are trained to only buy on deal. The simple

truth is that shoppers don’t pay full price that

often anymore, unless they absolutely have to.

It’s not that long ago that this discount

principle was proven in SA by the trials and

tribulations faced by the management of the

juggernaut Edgars on the back of its discount

track record. I may be wrong and hope that I

am. Abercrombie & Fitch, however, will be

hoping that I’m right and that its brand will

help it through the bad times as its brave

decision to refuse to join competitors in

aggressive discounting in November cost it a

28 per cent drop in sales in the US.

Whatever you believe about the sense and

sensibility of promotional discounting, one

thing is for sure; it doesn’t always work. If

consumers aren’t desperate for something, or

the financial motivation isn’t strong enough,

there is no guarantee that even the best pro-

motional offers will get them to open their

purses. And if retailers go too far, all they will

end up doing is surrendering margins and

chasing bad money for little return. This has

been proven in the UK where the heavy

promotional activity last month in the high

street failed to arrest the decline in retail sales.

According to the BRC-KPMG Retail SalesMonitor, the UK’s December trade was the

worst in the history of the survey. The first

half of the month was extremely difficult for

most retailers: Christmas buying came later

than usual, with consumers waiting for

discounts and early clearance sales.

Have we seen the end of the retail

discount insanity? The experts fear not.

Helen Dickinson, head of Retail at KPMG

stated in a press release recently that:

“December’s performance has historically set

the scene for the year ahead, so the outlook is

indeed bleak.”

Judging by the January sales we are

witnessing across the globe, it’s clear that only

the strong will survive. �

Richard DuncanThe PartnershipSydney, [email protected]

Expert opinion

www.marketingmix.co.za4-5 March 20093rd Interactive Marketing Summit


18

Capturing a larger share of thebig spender’s wallet

Luxury marketing

On 12 and 13 November 2008, Marketing Mix held the first ever SA Luxury Marketing Summit

“What one person looks for in a

luxury brand, another often

doesn’t see. This means it is

subjective, which means that understanding

your target market is crucial,” says Gaby de

Abreu, creative director, The Switch Group.

The difficulty in defining this market, says

Rudo Maponga, black diamond manager, TNS

Research Surveys, is the fact that it is notorious

for refusing to disclose income data.

Greg Furman, chairman, Luxury Marketing

Council USA, defines the luxury consumer as

an individual with a liquid portfolio of financial

or other assets worth US$1 million or more.

Some models will differentiate between the

actually rich and the big earners who have a

large credit spend.

BrandEQ’s founder, Kim Aardweg, segments

the market into one of five categories:� X Fluents: extremely affluent.� Butterflies: looking for new experiences

rather than material things.� Luxury Cocooners: spend their riches on

health and home.� Aspirers: they haven’t achieved the level of

luxury to which they aspire. Believe luxury

is expressed by what they own.� Temperate Pragmatist: newly emerged luxury

consumers, not that involved in luxury

spending; in fact, they are careful spenders.

How big is the luxury market and howmuch is it worth?Maponga believes that globally, there are

between 75 and 100 million people that fall

into the super-rich category. Despite the

economic downturn this segment is still

growing. “In 2005, we found that there were

only 41 000 super-wealthy consumers and in

2008 there were 104 000,” she says.

Locally, she says, we can expect that figure

to be around the half million mark. This may

not sound substantial, but as Anina Malherbe,

founder, Vivid Luxury Marketing says, the

market is definitely big enough. “It’s not only

about the numbers and volumes. It’s about

the handful of customers who spend a lot

regularly,” she says.

According to Millward Brown marketing

science director, Hendrik van Vuuren, the

global luxury market is worth around

US$400 billion, but is growing at a rate of

approximately 24 per cent; it’s estimated that

the value of the market will reach around

US$2 trillion by 2010.

The emerging countries are driving growth of

the luxury market, and so is the new middle class.

What do they want and how shouldbrands speak to them?Malherbe says that it is paramount for these

brands to have a very strong, global strategy

in place to guide every activity. When launching

in a new country or market, local partners

advise them of any cultural differences which

might have an impact. Clever PR, marketing

and advertising ensures that their brand is top

of mind. “Your brand must be a necessity and

part of their lifestyle, not just a luxury buy,”

says Malherbe. “Smaller boutique or niche

agencies are often more suited to the job.

Find someone who relates personally to your

brand or who is the customer,” she says.

Furman suggests that brands observe the

trends towards concierge and in-home services,

which bring the store or the goods to the

home of the elite shopper. Also, there is a

trend toward brand partnerships: two luxury

brands with similar customer profiles will

share their best customer databases and partner

to create unique events to get the customer

talking and expose them to the brands.

Highly sophisticated loyalty programmes are

also evolving, with rewards described as ‘once

in a lifetime experiences’.

Mark Angus, CEO, Innoviate, illustrated

the power of one to-one marketing, which

allows for multiple touchpoints to be created

across media platforms to really add value.

Personalised magazines, e-mails and even

websites can be created with this new,

personalising technology; these reduce print

costs and make communications more targeted.

A Web-to-print interface allows the customer

to choose which marketing collateral they

wish to receive, and in what format (which

also means that marketers learn the preferences

of each customer). Look out for personalised

video, says Angus.

General marketing tips� Outstanding service and customer loyalty

are greater than brand awareness.� Offer membership of a very select group to

create exclusivity and status.� High personalisation and individualisation;

bespoke customisation is a great tool.� Emotional triggers are key.� They like to have stories to tell and they

like to be the first in their group of peers to

tell them.� Educate them about the brand (and about

luxury) so they can make their own decisions.� They are highly networked – use this to

leverage word-of-mouth marketing and

brand advocacy.� Give something back, for nothing (a gift or

a handwritten note).� Time and wellness are luxuries. Help them

to get more of either (or both).� Beware of your pricing: they shop around

the world and are aware of the pricing and

value of each item. � Quality is crucial – it’s what they pay for.� Mass media creates awareness, but niche

publications really have an impact. Go

for niche markets too (such asthe gay

market). �

Visit

for an exclusive interview with Greg Furman.

www.marketingmix.co.za18-19March 2009Retail Marketing Mix

www.marketingmix.co.za/pebble.asp?relid=4387


The one to one myth

19

Ihave the rare privilege of working at

Woolworths for the next seven months.

My role encompasses anything that

touches the customer – insights, data,

research, rewards, loyalty, financial services

etc. It is early days but I can see how the

information at hand is used to improve the

offering to the customer, new and existing,

and I am seriously impressed with how the

business treats what our department does on a

daily basis.

This got me thinking about the reality of

business in the customer relationship

management space. What is possible, what is

hygiene and what is blue-skies thinking?

Hygiene factors are the bare essential

offering. Service, great service, cleanliness,

product availability and acknowledgement –

these are essential to the basis of any relation-

ship (think of Maslow’s Hierarchy of Needs).

Possibilities through great technology deployment

and employment of smart strategic thinkers

are then endless. Creating new product lines;

cross selling and up selling then become

nursery school work – very easy.

If it were possible and if blue skies could be

nudged a little, every customer in SA would

have a store designed just for them. I want my

food displayed in a certain way, I want certain

grocery products always available, I want to

buy boutique merchandise and I want

Guerlain cosmetics to be available. Oh yes,

and can you sell me a toy boy while you’re at

it? The reality is, no one can customise to the

extent that we as individuals would like, so

organisations adopt a one to few or more

likely a one to some and most likely a one

to many approach in store. We can, however,

get closer to one to one through our

communications especially as we get more

digitally in tune we can be very conditional

and very clever.

But while we are doing this segmentation

and honing our messages to give the customer

exactly what they want, we face the reality

that we could send them 15 marketing

messages a day – come in and buy your baked

beans on special (they buy this product

weekly), we’ve just launched a new fragrance

range, come in for your sample, back to

school, back to work, Easter, Valentine’s Day,

the list is endless. Marketers need to step up

to the plate and be realistic; what message is

going to drive the customer into the store to

purchase and deliver a profit to the business?

It’s not the information in hand that is

questionable but the insights we apply to

this information.

While marketers need to be revenue and

profit minded I believe the customer (all over

the world) also needs to be realistic. For a

brand experience to be sustainable, a relationship

needs to be established – both parties have to

give and take. More and more I find cus-

tomers unreasonably demanding of a brand,

and fickle to the extent that marketers are

also unable to perform in their

communication tasks. If I want to be treated

as a high-volume, most-valuable customer,

I need to behave consistently with the brand.

I should update my data (oops guilty, I have

yet to change my e-mail address with any brands

I engage with); I should provide information

and I should guide the brand. And in tough

times, as a customer I should display loyalty.

My message right now to the marketers

facing serious budget cuts and financially

strapped consumers: The one-to-one myth is

not a myth – it’s the most powerful tool in

your quiver of arrows. Pour your efforts and

resources into building your digital base –

quickly and robustly – and then use this data

effectively. Innovatively and uniquely

communicate with customers, prospect and

existing; engage them, create a relationship

with them, and work towards a strong loyalty

coefficient. In return they will reward you with

less fickle, more sustainable behaviour. �

Nici Stathacopoulos The Tipping [email protected]

My message right now

to the marketers facing

serious budget cuts

and financially

strapped consumers:

The one-to-one myth is

not a myth – it’s the

most powerful tool in

your quiver of arrows.

Expert opinion


20

7 Day [B]itch

Olivia Leitchexecutive producer Ola Films

All good, back to

office… confirm cast,

wardrobe fitting… sign

off on art department

budget… and think

about the next pitch.

5/01/2009

The first day of the week is always

about planning for the week ahead.

We plan everything during the day in a

series of meetings. Seems to be the longest day

of the week. After that we are A-for-away. (I

interviewed someone today – so hold thumbs

for her.) I have a team building constructive

feedback session with one account team to try

and help it to achieve what it needs to with

the least amount of hassle. To end off my day

I go with a colleague (who I admire greatly)

to debrief a digital company that I admire on

our website. It’s going to be awesome that

everyone will be using it – everyday! Here’s to

creativity – and to my best TV night ever. TwoAnd A Half Men, followed by Will and Grace,

ending with CSI Las Vegas. (My client, SABC

3, has great Monday nights).

6/01/2009I start my day beautifully with a Vida coffee

to go. Yum. Have a day full of internal meetings,

to get the best creative out for our clients. I

love working with creative minds. We get to

develop breakthrough work for a lot of our

clients (challenging brands within their

respective categories), which is very rewarding.

Also interviewed another two people – so hold

thumbs again. (Yesterday’s chick has been

accepted). My day ends with dinner at the

Codfather with two of my close friends.

07/01/2009Woke up to beautiful weather that has now

turned quite sh#@&y. Today I hope to sell a

really innovative idea to one of our clients;

something that is not traditional above the

line. We are always trying new ways (they

don’t always need to be ads) to connect with

our consumers. We meet to discuss our

potential new client. Lots to do – will keep

me busy and challenged. It’s very motivating

to discover what it is that new industries do

and how they do it – good marketing lessons.

I’m off to a friend’s house-warming tonight…

love to see new spaces and the positive energy

they create.

08/01/2009I wake up tired, as I realise that I am feeling

that ‘one too many’ glasses of vino at the

house-warming… For a moment, I contemplate

a quick trot round the block to clear my

head… think better of it. Up, put the kettle

on, quickly put the hand sprinkler on as the

irrigation timer is still not fixed (oh, when is

it going to rain!) Oh no… today is Trash

Day. Drag the bins outside, looking frightfully

attractive to the neighbours, in my holey

nightie! Shower, and oh no – no more cat

food! Oh well, cat biscuits and the rapidly

multiplying moths will have to suffice till

I can hit the Spar. Check in with my

partner, (director) Amy. She is stealing a

quiet moment to go to the dermatologist.

Thursday is not looking up. Ok, what have

we got: Preprod at 1pm, casting cut down

done? Shotlist? Storyboard? Props boards

ready? Quick, grab porti bag, and run!

They are across town… please, oh please, let

there not be any roadworks or lights out.

Amy and I pile into the car (have a quick

moan at her that I always have to drive,

when we both need to put on make-up).

Amy puts her director’s cap on, wows them

with her colourful treatment and great visuals.

Exhale – they are comfortable and confident

about us. All good, back to office… confirm

cast, wardrobe fitting… sign off on art

department budget… and think about the

next pitch.

09/01/2009Friday is possibly the best day of the week.

You know it’s almost the weekend… Perhaps

it’s because you feel that it will be a slightly

more chilled day when compared to the mayhem

of the past four. As is the Friday routine, I

begin with a client breakfast at 7.30am. I have

to ‘bribe’ my team members to attend as

7.30am is a tad early for my crew. My day is

slightly uneventful which means that all

should be happy. Tonight I am off to watch

the Lions play the Waratahs at Ellis Park –

good South African fun!

10/01/2009Ahhhhhh, Saturdays are generally spent

shopping; personal grooming; shopping;

chores; more shopping; and seeing my fabulous

friends. Today is no different – hairdresser;

shopping; getting quotes to do maintenance

on my deck at home and lunch at Bellini’s

with my mates. It’s an absolutely stunning

day, ending with a friend’s birthday party.

11/01/2009Sundays are family days; special, soulful,

rejuvenating days. Love them stacks. �


21

We’ve seen a burgeoning trend in

which marketers have outsourced

loyalty value proposition design to

their customers. In 2006, Turkey’s Garanti

Bank launched the Flexi credit card, which

allowed card applicants to craft a custom-made

reward card by choosing from a menu of

rewards, repayment schemes and interest rate

options, and even designing the look of their

card. By bringing customers in on the value

proposition design, these card issuers are

front-loading their rewards programmes

with personalised and relevant offers that

differentiate them in a crowded market.

Open-source marketing also extends to

reward redemption. In the United Arab

Emirates, Ehitad Airways’ Etihad Guest

programme features a website slider that

allows members to create personalised

cash-plus-miles awards. The cost of entry?

Just a single mile.

Partnership marketingCoalition loyalty programmes, in which a

group of sponsor companies works with a

third-party operator to issue a common loyalty

currency to members, thrive around the

globe. Programmes like Canada’s AIR MILES

Reward Programme, The UK’s Nectar and

Brazil’s Dotz have all enjoyed sustained success.

In the US, a national coalition programme

has yet to launch, but partnership marketing

is taking root. Citi’s ThankYou Network

recently partnered with Expedia to create a

new layer of travel earning and reward options

for ThankYou members. Such loyalty

partnerships will help more companies to

achieve critical mass and create additional

value for members, partners and stakeholders.

The colour greenIn Europe and North America, green marketing

is red-hot. Since April 2007, when Wells Fargo

made renewable energy certificates available

for redemption in its Enhanced Rewards

programme, green rewards options have

proliferated. No fewer than 20 loyalty

programmes added environmental rewards

and benefits to their mix in 2007.

Other forms of altruism, such as the college-

savings themed coalition programme Upromise

in the US, paved the way for new-generation

programme offers. Taking altruism a step

farther, the uTango coalition in the US allows

young married couples to apply a percentage of

their purchases to a savings fund that promises

a payout of up to US$1 million – if the couple

can stay married for 30 years.

While altruistic and community-minded

benefits certainly carry consumer appeal, the

broader trend is the use of database segmentation

to target green and altruistic rewards to those

customers most likely to respond.

The data differenceIn the retail sector, UK companies such as

Tesco and Boots lead the effort to analyse and

segment the purchase patterns of loyalty

programme members and to deliver relevant

offers. North American companies, mean-

while, are also entering the data game more

aggressively. The US grocer Kroger Co. and

health-and-beauty retailer CVS/pharmacy are

attempting to replicate Tesco’s success across

the Atlantic. In Canada, two AIR MILES

Reward Programme sponsors, health-and-

beauty retailer Rexall/Pharma Plus and DIY

retailer RONA, are mining collector data

across multiple dimensions to predict and

respond to attrition, proactively influence

segment migration and create relevant offers.

Relationship bankingIn 2003, Puerto Rico-based financial services

company Banco Popular pioneered the concept

recognising and rewarding its customers

across their entire relationship with the retail

bank. Designed to build loyalty to the brand,

its Premia programme has allowed the bank

to gather actionable customer data that

delivers bottom-line benefit.

This concept was replicated in the US with

such launches as Citi’s ThankYou Network

and National City’s Points programme. In

Canada, Bank of Montreal likewise rewards

AIR MILES across banking lines. The future

of financial services loyalty lies in the entire

banking relationship as customers look for

financial partners rather than mere credit

providers.

Moving beyond plasticThe days of having customers carry a plastic

slice of your brand in their wallets may be

numbered. Contactless payment systems such

as MasterCard’s Paypass, Visa’s Wave and

ExxonMobil’s Speedpass continue to

proliferate – and you don’t necessarily need

a plastic card to use these systems.

But the true card-killer might be mobile

payment systems that turn cellphones into

credit or debit payment systems through

RFID or SMS. Garanti Bank has already

implemented this technology. Such systems

are entrenched in Japan, and will soon

proliferate in other emerging markets – in SA,

more than half a million people use their

cellphones to conduct their banking

transactions. This new generation of tools will

require marketers to create value propositions

rich enough to create a desire to opt in –

because without explicit customer opt in,

you’re only creating more spam.

Of course, loyalty marketers can ill-afford

to throw these ingredients together at random.

The culinary term for such ill-considered

conglomeration is confusion cuisine. By

paying attention to global practitioners

honing the art and science of loyalty and

relationship marketing, you can help move

loyalty marketing forward. Listen to your

customers, analyse their behaviour through

effective segmentation, choose strategically

aligned partners and leverage the latest in

payment and communications technology –

but do these things strategically, with your

business objectives and brand strategy guiding

your choices. �

Expert opinion

The global loyalty infusion

Bryan Pearsonpresident, LoyaltyOnecontributing editor, [email protected]

Proudly South African retailer Pick

n Pay launched Fresh Livingmagazine in November 2007 to

complement its offering to customers.

According to the magazine’s account

director, Lisa Visser, “Fresh Living is the

result of extensive and ongoing customer

research, where shoppers identified the

need for their own magazine. Given the

international trend towards custom

magazines and the size of the Pick n Pay

retail chain, Fresh Living was a natural

progression.” Through the magazine, the

chain hopes to grow brand equity, entrench

customer loyalty and increase size of basket,

while also creating a platform from which to

communicate with the customer in an

ongoing dialogue. “Its core function is to

promote the brand and highlight the diverse

product offerings available at Pick n Pay,”

says Visser.

The magazine complements the brand’s media

mix. Pick n Pay Media Services recognises that 67

per cent of purchase decisions are made at retail,

and thus has a bouquet of in-store media

channels to augment any through-the-line

campaign, and provide statistical evidence of

basket penetration and the success of in-store

campaigns, says Visser.

Custom titleThere has been a growing trend towards custom

publications the world over. “Custom publications

are exploding in SA, and previous resistance to

these magazines has disappeared and is being

replaced by a belief that they deliver to their intended

audience,” says Visser. However, magazines like

Fresh Living will increasingly need to promote price

promotions in the current economic climate. “Some

sold custom magazines will be tempted, along with

consumer magazines, to reduce their cover price in

order not to lose market share,” says Visser.

Fresh Living creates a dialogue with the chain’s shoppers, and

immerses them in its branding. The magazine is food and lifestyle

focused, and so covers mealtime solutions and recipes, travel,

decor, entertainment and celebrity profiles as well as commentary

on environmental and financial concerns. Feedback on the

magazine is that the recipes are the biggest driver and the most

popular content within the magazine – educating consumers about

food choices and providing them with inexpensive and accessible

mealtime solutions is the perfect stimulus for product sales, says

Visser. “From the magazine, consumers can generate a menu and

shopping list, all of which directs them to Pick n Pay’s stores and

products.” Other sections of the magazine that are proving

popular include the My Favourite and Slice of Life sections.

TargetWomen constitute the majority of the magazine’s readers,

although the magazine does not specifically target them. Instead,

the content reflects the interests of both men and women. “The

content is based on a formula that ensures that there are food

solutions for all occasions and needs,” says Visser. In fact, the

magazine is intentionally positioned to appeal across the board.

“Pick n Pay customers range from emerging market to high

LSMs, depending on where the stores are located. Likewise, FreshLiving’s editorial is not intimidating; it’s inspirational and relevant

to all age groups and both genders,” says Visser.

AdvertisingThe bulk of advertising revenue comes from the food sector

followed by the health and beauty sector. The fact that the

magazine is also a lifestyle read means lifestyle brands (cars,

finance and telecommunications) also have a place in the title.

“Fresh Living is a conscious purchase made by consumers and

this ensures that our readers are receptive to and engaged with

content,” says Visser.

This is in contrast to the unsolicited product advertising seen on

TV, for example, which Visser insists does not drive brand loyalty.

Advertising revenues have increased with each issue published and,

according to Visser, the magazine’s first ABC figures placed its

circulation at 48 012 (Jul-Sept 2008). “With our current position as

SA’s top selling monthly food magazine, we anticipate even higher

revenues and support from suppliers as well as lifestyle brands

wanting to participate with the magazine,” she says.

Pick n Pay gets fresh


Brand anatomy

The Pick n Pay target market

is mainly women in LSM 5 –

10, aged 30 -55 years; living

nationally, in urban or

suburban environments.

Who is the Pickn Pay targetshopper?

22

The involvement of brands via editorial endorsement is signifi-

cant: whereas the traditional ATL format advertising is seen as a hard

sell, editorial endorsement is seen as more valuable. “Fresh Livingdoes not push Pick n Pay and its products at every corner, but

rather nurtures the love of food and lifestyle solutions. In so doing,

opportunities are, of course, available for products to be promoted,”

adds Visser.

Affordability and valueDiscount vouchers (which give readers R100 worth of discounts in

each issue) distributed in the magazine have made it more appealing

to customers, especially in the current economic climate. “The

Coupons Clearing Bureau administers the tracking of these vouchers,

and both anecdotal references and focus group research support our

contention that having a return on a reader’s investment of 10 times

the cover price is a significant contributory factor to making the entire

Fresh Living offering a more compelling proposition,” says Visser.

The affordability of the magazine – with its R9.95 cover price – has

certainly helped to drive its adoption by the target market. This has

placed the title well within the reach of the mass markets, so Visser is

positive that while other magazine sectors will feel the impact of

decreased luxury spending, Fresh Living will remain relatively

unaffected. “We are, however, still actively investing in advertising the

magazine to the media industry and to consumers through ATL

advertising and in-store promotional tools. We will also continue to

offer vouchers in each issue, which ensures that consumers get more

than their money back by purchasing the magazine,” says Visser.

Getting a healthy dosePick n Pay is actively involved in promoting healthy eating, from its

5-a-Day programme to the increasing range of organic products

available in store, says Visser. The magazine, meanwhile, deals with

such issues as sustainable fishing and the world food crisis. “We

have a regular health column written in conjunction with Pick n

Pay’s resident dietician, which looks at issues such as the red meat

debate. medicinal food products and how to keep your body in shape

during winter,” she says. The energy, protein, fat and carbohydrate

content of each recipe is also indicated, to give readers greater

control. A joint venture with Discovery Healthcare offers the

medical aid group’s customers discounted prices on healthy foods

at Pick n Pay stores, which further demonstrates the chain’s

commitment to wellness and affordable shopping. �


1967 – Raymond Ackerman returns to Cape Town after losing his job at Checkers in Johannesburg. He starts negotiations

to buy four small stores in Cape Town, called Pick n Pay.

1969 – Pick n Pay is listed as one of the Sunday Times Top 100’ companies.

1975 – The first Pick n Pay Hypermarket is opened in Boksburg.

1983 – Turnover exceeds R1 billion for the first time.

1985 – Pick n Pay acquires a 50 per cent interest in Boardmans, a home décor store chain.

1986 – Turnover exceeds the R2 billion mark.

1988 – Pick n Pay celebrates its 21st anniversary and the launch of the ‘Part of Your Life’ campaign.

1996 – Pick n Pay management board splits into two separate divisions. Vuselela (Nguni word, for rebirth or renewal)

programme is launched, with a commitment to staff satisfaction and service excellence.

2001 – Pick n Pay Home Shopping is launched.

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

Pick n Pay: the milestones

Brand anatomy

23


24

Soccer marketing guide

Taking a closer look at the soccer media’s consumer, it

becomes clear that the South African soccer fan is a

middle-class man in his 20s 0r 30s (ie, a large percentage of

our population). Fahmeeda Cassim-Surtee, general manager of

SuperSport at Oracle Airtime Sales, points out that 80 per cent of

SA’s population is made up of black Africans, with 43 per cent in

the LSM 5-7 category and 6.6 per cent in the LSM 8-10. “The core

population in SA is soccer mad. Any brand can benefit from the

adoration and emotion of this fan,” says Grant Hillary, managing

director, ThirtyFour Sport.

The team at Soccer-Laduma (which has 2.5 million readers,

according to AMPS 2008) has found that compared with the

general SA population, the newspaper’s readers are greater

consumers of a wide range of products and are into technology in

a big way.

“For example, AMPS tells us that there has been an increase in

ownership of digital cameras of nearly 300 per cent since 2006,

compared with an increase in the general population of 93 per

cent,” says Soccer-Laduma founder and editor, Peter du Toit. He

goes on to say that 18 per cent of readers – almost half a million

people – have a household income of over R10 000. This is a very desir-

able group, he says, as it is aspiring to move up into higher lifestyle lev-

els and is also likely to be there in the next two years.

“South African marketers should not confuse a predominantly black

local soccer market with a downmarket, ‘hooligan’ and unemployed

demographic/psychographic. The local soccer fan has a lot to offer brands

that want to reach an economically active, aspirant and brand-conscious

market en masse,” says Shaun Smith, marketing manager, SoccerLife.

And this fan has evolved. Du Toit, finds that his readers’ psychographics

have changed. “When DStv got the rights to the PSL, many more

readers got DStv and were subsequently more exposed to European

football, and to more sophisticated coverage and production values than

the SABC had provided, so our readers’ expectations of quality all

round were raised. Our writers have become more skilled and, in

response to the greater sophistication of readers, they are providing

many more layers of enjoyment,” he says.

The good news for brands is that, according to the experts, the fan is

in a positive, engaged state of mind when interacting with soccer or

soccer media. “This upbeat positivity will rub off on the brands

advertised in the soccer media,” says Clint Roper, deputy editor,

Soccer-Laduma. However, there remains a lack of knowledge about and

understanding of the local soccer fan, particularly among

media planners and advertisers.

“Media agencies are not often exposed to the culture

of the South African soccer fan – whether it be how he

lives, the products he consumes or his passionate

following of the game,” says Smith. Roper, however,

believes that white people in general don’t understand

the nature of the passion South African soccer lovers

have for the game. Soccer is the best way to reach every

level of black society, he says. “If business is not sure

about the value of investing in soccer, is it because it

doesn’t understand the game, or because it doesn’t

SA: 2010 ready?According to market researchers, African Response, 63 per cent of South Africans

believe that the global economic crisis may lead to fewer visitors to SA. The good news

is that a growing percentage of South Africans believe we will be ready to take on the

2010 FIFA World Cup. According to the African Response 2010 Barometer 2008, in

December 76 per cent of South Africans believed we will be ready for 2010. This figure

is up from March 2008, when only 67 per cent of South Africans believed as much.

The local soccer fan:

a desirable market

Cou

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y: S

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Soc

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26


An obvious factor to consider when selecting media is

access; the lower LSM market has less access to the

Internet, while print publications and radio are

easily accessible.

TV remains an expensive investment. Fahmeeda Cassim-Surtee,

general manager of SuperSport at Oracle Airtime Sales, anticipates

that the majority of ad bookings ahead of and during the 2010

FIFA World Cup will come from the partners and sponsors. “We

price events based on audience delivery; demand, timing, team pop-

ularity and exclusivity. From previous experience of world cups, the

most viewed matches are toward the end of the tournament, there-

fore these would be more expensive. Also, there are certain teams

that have bigger fan bases, hence viewership will be higher, thus we

would price accordingly,” she says. Pricing will be available from

mid-February 2009.

FIFA has set restrictions controlling who can buy airtime during

the match broadcasts. “We have to first approach sponsors/partners

of the event to take up airtime before going out to the rest of the

market. Brands that are in direct conflict to sponsors/partners of

the event cannot buy airtime within the event,” says Cassim-Surtee.

There are, however, opportunities for clients to buy into the build up,

highlights, player profiles and other world cup programming. The

SuperSport website also offers clients new media options.

According to Daniel Munslow, executive strategist, Newsclip Media

Monitoring, print media appears to be the preferred medium when

communicating sports news and results. He agrees that accessibility and

availability of media impacts on consumption trends, but that there are

also disparities between the number of mentions that different teams or

leagues receive. According to Munslow, Bafana Bafana received 64 per

cent of its exposure in print media and only 12 per cent from online

media, compared to the PSL as a whole, which received 49 per cent of

its exposure in print media and 42 per cent online. SuperSoccer

(SuperSport’s soccer website) was the only obvious commonality

between the two topics in the online category. The balance of media

mentions were from broadcast media, with a bias towards radio content.

“This is congruent with the accessibility and availability of media

across the different LSM groups; where even in broadcast, radio is more

accessible than television. In principle, there should not be such

disparities in the media that cover the PSL versus Bafana Bafana’s

coverage. It suggests a trend that sees the blurring of the lines between

digital, broadcast and traditional media,” says Munslow.

And while, generally speaking, it’s the upper LSMs that have greater

access to online media, it cannot be assumed that the lower LSMs are

not using online media; after all, he says, 42 per cent of the PSL’s media

exposure was online. Plus, the number of publications – including those

aimed at the lower LSMs – that are adding digital publishing to their

offering speaks for itself.

Diogo Peral, soccerladuma.com webmaster, finds that apart from an

LSM skew relative to website usage, there is little difference between the

users of Soccer-Laduma’s three platforms (the newspaper, website and

mobisite). “What is different is the time at which they access them. The

website gets the majority of traffic during business hours, which would

lend it to certain categories of ads perhaps. After 5pm, the mobisite

takes over,” he says. The mobisite is proving a valuable tool through

which fans can access match logs and schedules as well as additional

information (snippets from player interviews, for example). In fact, says

Peral, mobile Internet is the real treasure for marketers and media.

“Almost every South African has a cellphone. Soon all these cellphones

will have WAP technology. We just need to get it across to our readers

that all this is available on their phones,” says Peral.

Challenges include the diversity of cellphone models on the market

and consumer literacy; Soccer-Laduma has overcome these by offering an

SMS service with step-by-step instructions for the downloading and setting

up of the mobisite. Readers pay R2 for the download and installation.

Shaun Smith, marketing manager, SoccerLife, says that soccer-

dedicated print titles are an obvious choice for planners wanting a

print/electronic synergy. “Soccercheck Research conducted by Research

Surveys shows the local soccer fan looks to TV and print for their

soccer news,” he says.

Meanwhile, SuperSport segments viewers into four groups: Experts,

Enthusiasts, Fans and Selective Viewers. “It is our Enthusiasts and

Experts that are always seeking more information; it is these segments

that would be more involved viewers, hence consuming other media

types to learn more,” says Cassim-Surtee.

Peral urges advertisers to incorporate digital into any campaign from

the beginning, so that the digital tools amplify the message more

effectively. “The strength of each medium should be exploited: print’s

strength is its longevity and physical presence; the Web’s is its interactive

facility, and mobi is both interactive and has terrific reach in the

emerging market,” he says.

According to Cassim-Surtee, viewership of soccer varies depending

on the event being broadcast as well as the teams playing. Current

sample sizes on SuperSport 3 and SuperSport 4 are too small on the

AMPS Peoplemeter panel for robust viewership data to be collated, but

she is optimistic that with the launch of the DStv-i panel (the return

path measurement system, which will measure a panel of around 4 000

households in SA), the lack of reliable data will be addressed.

“According to AMPS 2007, there were 932 000 viewers who watched

SuperSport 3 in the past seven days. Viewership has increased by 29 per

cent – driven by the increased soccer content and the growth of

compact subscribers,” says Cassim-Surtee.

While it is the white, coloured, Indian (WCI) market that is the

predominant audience for European soccer, SuperSport finds that

viewership of European league soccer among black fans is growing. “Last

season, UEFA Champions League viewership increased by 22 per cent,

largely driven by the increase in black viewers,” says Cassim-Surtee. �

Media selection

Sponsorship: Top tipsNeil Jankelowitz, MD, MSC Sports, says that a sponsor must have a specific

set of objectives prior to the sponsorship investment, and should seek out

an agency with experience in that territory. “The recourse or the agency

would then identify the relevant rights to achieve the objectives, and then

secure these rights and implement strategically in order to gain maximum

exposure from the investment. We have found that leverage spend,

particularly in this area, is of utmost importance,” he says.

Grant Hillary, ThirtyFour Sport, believes that sponsors should not have

more than two objectives that the sponsorship should be linked to, and

that these should be measurable. For example, if the objective is to drive

sales, then the sponsorship must be activated in the relevant manner,

and sales figures must be tracked (before, during and after the sponsorship

activation).



27

For local marketers and brands, finding a suitable opportunity to

leverage the 2010 FIFA World Cup is key. “Creation, creation,

creation, is the name of the game in this regard,” says Neil

Jankelowitz, MD, MSC Sport. He believes that there is a lot that a

brand can achieve in spite of FIFA’s tight controls. “Due to the fact that

the exposure and values are so high very few of our local brands see it

fit to participate at this level,” he says. “Hospitality is the area where

most local corporates are positioning themselves, and with over US$60

million worth of hospitality already sold we can see that this is where

corporate SA will participate,” says Jankelowitz.

Outside of this, the opportunities for brands to make the most of

soccer fever are ripe. Those companies that have given up on the world

cup as having no marketing leverage opportunity, have given up the

ghost too early, says Grant Hillary, managing director, ThirtyFour Sport.

There are interesting possibilities, such as a branded township tour.

“You could brand the bus or the destination in the township where you

could watch the game. It wouldn’t use any of the official logos, but

would be associated with the World Cup and would have an African

experience attached to it,” suggests Peter Du Toit, founder and editor,

Soccer-Laduma.

The official fan park concept is another possibility; however, brands

need to keep in mind that the world cup will be taking place in winter.

Plus, says Hillary, South African soccer lovers are primarily based in the

townships and rural regions of the country, where there is no

transportation system for them to get to and from the stadiums.

Shebeens and township taverns will become the fan parks.

Making life easier for the soccer fan is a potentially fruitful line of

thinking. According to Du Toit, local soccer fans (and particularly those

living in the townships) have no transport networks that would allow

them to get to and from matches easily; ticket prices are also an issue.

Brands could get involved in a positive way by sponsoring taxis or buses

that would serve in an organised network, making the stadiums more

accessible to these fans. “The more ardent a soccer fan is the more

they will want to associate with brands that support soccer. But you

have to be in it for the long run if you want to capture that passion,”

says Clint Roper, deputy editor, Soccer Laduma.

For a brand to jump in without breaking the rules it simply needs to

consider the changes in social behaviours around the event, says Hillary;

it doesn’t need to become a sponsor to achieve the similar successes. He

refers to beer brand, Castle Lager, which cleverly leveraged the

excitement around the 2007 Rugby World Cup, by speaking about

specific games and players in its advertising, thereby tapping into the

fan’s braai-side conversations. He also points to retailers who will

promote special braai packs (buy the beer, the boerie, the chips and get

a free vuvuzela, for example).

Yet Hillary believes that brands are not doing enough to find the little

marketing gems that would set them apart during the world cup. “For

example, if I was an electronic goods supplier, knowing that an opposition

brand was a FIFA partner, I would have spent the last six months

getting people ready to watch the soccer on my screens.” On-pack

communications need to be used more cleverly – consider Coca-Cola’s

use of its own packaging as a canvas for soccer messaging.

Hillary believes that the 2010 FIFA World Cup is not only about the

thousands of visitors that will flock to SA; instead, he says, marketing

managers should be looking at the 48 million local supporters, and

should aim for sustainable marketing. Retail brands are able to track

their promotions and activities, and so can measure and evaluate their

progress. Of course, we must expect the retail environment to be

cluttered with all things soccer, so for brands to stand out they need to

do something unusual. “The rest of the world is spending

70 per cent of its marketing budget below the line, while in SA it seems

that 70 per cent of the marketing budget is still being spent above the

line. Brands need to adopt a 360-degree approach and should be moving

their spend to BTL,” says Hillary.

Look out for greater use of mobile channels to spread soccer fever.

They could be used to drive sales, as long as there is no infringement

on the rights of MTN (which is an official World Cup sponsor). �

Clever ideas and opportunities:

Soccer mentionsAccording to Daniel Munslow, executive strategist, Newsclip

Media Monitoring, soccer (and Bafana Bafana) was the most

mentioned sport over 2008. Almost 16 000 print articles,

6 000 broadcast inserts and 3 000 online articles men-

tioned the beautiful game to an advertising value equivalent

(AVE) of R547 million. “There is no doubt that media men-

tions of soccer are on the rise. Interestingly, we find that

news items about soccer, such as infrastructural develop-

ments ahead of these two major events, are also driving

more interest in the sport,” says Munslow. Mentions of

Bafana Bafana topped the scale at 24 500 media clips

(excluding matches), to a value of R547-million.

Measuring online mentions is somewhat of a challenge: “The

first step is to establish the average advertising rate on a site

and then work out the amount of space that is occupied by

the average ad. We then calculate the number of words that

would fit into that space and, coupled with the number of

page impressions and weighting of the site, calculate a rand

value for the space,” says Munslow.

“The rest of the world is spending

70 per cent of its marketing budget

below the line, while in SA it seems

that 70 per cent of the marketing

budget is still being spent above

the line.”


28


Newspapers:Soccer-LadumaThe numbers (AMPS 2008A)Ave HH income: R6 499 Ave age: 32 years RPC: 8.5AIR Readership: 8 per cent (versus 6.7 per cent, corresponding previousperiod)Circulation (ABC July – Sept 08) 332 987 (corresponding previous period: 355 601)

Soccer-Laduma has seen its circulation grow from an initial 27 000

copies in 1997 to 332 987 (ABC July-Sept 08). “In the early years espe-

cially we paid a lot of attention to distribution, and we mapped routes

into previously inaccessible areas for our distribution partner, Allied,”

says Peter du Toit, founder and editor, Soccer-Laduma.

The newspaper’s readers are technologically empowered, and the news-

paper has responded with the digital tools and platforms that entice this

market. “Soccer-Laduma digital has been around for about six months, at

the time of going to print, and we’ve only done what time has allowed

us,” explains Diogo Peral, webmaster, Soccer-Laduma website

(www.soccerladuma.co.za). Its policy is to push the technology that adds

value and packages for mobile are being developed for specific groups of

readers (for example, Kaizer Chiefs ringtones and downloads for team fans).

“We’re also interested in mobile vouchers, which would allow our readers

to get a free beer, if they had the right bar code or tavern code,” he says.

The number of Soccer-Laduma readers who have a cellphone has

increased by 63 per cent since 2006, compared with the total population

increase of 37 per cent. The number of readers with a computer at home

has increased by 86 per cent compared with a 59 per cent increase in the

total population, reports Clint Roper, deputy editor, Soccer-Laduma.

“We’re convinced things will get even better. It will become easier to get

on the Internet. The lines will get faster, cheaper and cyber cafes will

pop up on every street corner in the townships. It’s happening already,”

he adds, reporting that Thunda.com (an online platform which sends

photographers to social venues and special events) is increasingly

getting calls from people in the township cyber cafes, wanting to find

out how to access their photos.

“Soccer-Laduma has a partnership with Thunda.com, whereby people

photographed at soccer matches will be able to find their pictures and

upload them to both the website and our social media site, Ayoba,”

explains Roper.

At the time of going to press, the Soccer-Laduma website had

52 000 unique browsers per month after five months (Nielsen). Peral

reports that Google Analytics is showing that 85 per cent of visitors to

the site return during a given month.

“Soccer-Laduma is at an advantage compared with the general

population in terms of Internet access. Our online members are very

interactive,” he says. And as long as the print product covers the unique

content and information that the website and mobisite don’t carry, readers

will keep paying for their copy of Soccer-Laduma each week. “Our

busiest traffic online is on Wednesdays, when Soccer-Laduma comes

out. Readers buy the paper and then go online to comment, so the two

media work hand in hand. Plus, we drive traffic to the website via polls

and questions in the newspaper,” explains Peral.

The Soccer-Laduma mobisite is Nielsen registered and, at the

time of going to print, after just five months, it had 60 000 unique

visits and 1.3 million page impressions a month. “It is in the

top five mobisites in SA. Mobile is where we will see the biggest

growth. We do not see a difference in profile between print and

mobi users: they are young and technologically adventurous,”

says Peral.

Members use the mobisite to access live scores, for example. And

since 92 per cent of the print readers fall into the 16-49 age bracket, the

mobile offering is well targeted to their needs. “The marketing implica-

tions of this are huge,” adds Peral.

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

Launched in 2002, SoccerLife magazine is described by marketing

manager, Shaun Smith as an upmarket, glossy read for the fan who wants

not only local news, but also international soccer news and opinion, as

well as lifestyle reporting (cars, fashion, gadgets, appliances, health and

so on). “Sixty-eight per cent of the SoccerLife readership falls into the

LSM 7-10 category, known for its savvy, brand conscious and aspirational

consumer character,” explains Smith. He goes on to say that 60 per cent

of the magazine’s sales are made up of loyal subscribers. “Circulation has

stabilised but does experience great peaks around topical editions likeEuro 2008 and December’s Top 100 Players in the World,” he says.

Smith explains that the demographic of the magazine’s readers

mirrors that of the average soccer fan –he is a 36-year-old black male

soccer fan falling into the LSM bracket and moving quickly up the LSM

ladder. “Research has proven that he is engaged when in ‘soccer mode’ –

hence agencies need to understand how portals like SoccerLife provide a

captive and engaged consumer with hard-hitting spending power.” He

adds that as a middle-class South African consumer, this reader is feeling

the pinch of the downturn, but that the magazine is not reporting any

declines in circulation. Supplements, posters and sample products

distributed via the magazine add reader value. “SoccerLife launched a

mobile site in January 2009 that aims to service its audience with a

unique and personalised approach to soccer data. The SoccerLife.mobi

user will interface with news that is tailor-made to his needs and team

preferences, and SoccerLife will ensure that the site is cost-effective and

gives real value add to its user in the form of high-value giveaways and

downloads,” says Smith.

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

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

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

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

The soccer media: who’s who on the pitch

>p29



29

If today’s soccer stars, with their high prices, are just out of reach,

perhaps tomorrow’s stars are a better investment. Corporate social

investment (CSI) is the most underrated marketing pillar and needs to

be considered as part of the 360 degree marketing mix, says Grant

Hillary, MD, ThirtyFour Sport and will be the next wave of marketing

activity. “It’s really good for consumer branding,” he says. But when it

comes to soccer development, maximising on it now means a brand has

to have started investing in the project a few years back. “For real

impact, it should be linked to retail activity with proceeds going to the

project,” says Hillary. Brands need to remember that a sustainable long-

term approach is about ensuring that the right facilities are in place as

well as the right coaches and mentoring.

CSI and soccer development

The current economic downturn is having an impact on the business of

soccer, globally. “Internationally, the economic impact has been more

significant with concerns of team/jersey sponsorships being cancelled,

as in the example of AIG and Man United. To date, no major local

sponsorship has been terminated,” says Neil Jankelowitz, MD, MSC

Sports. “Locally, we have found the market is exceptionally buoyant and

the impact in this regard has been negligible.” The Confederations Cup

and the 2010 FIFA World Cup are driving the industry forward.

Luyanda Peter, senior marketing manager: SuperSport, says that since

ticket prices for local soccer matches have not increased over the past

three years (R20), consumer spending has not been negatively impacted

by the current economic scenario.

Meanwhile, Peter du Toit, founder and editor, Soccer-Laduma believes

that everyone is feeling the pinch, but finds that his readers are

somewhat more resilient, since they are not servicing debt. “There’s an

argument to be made that in a downturn, the affordable ‘luxuries’

become even more important in people’s lives,” he says, pointing out

that soccer titles are those affordable luxuries.

He is expecting the volume of ad bookings to increase ahead of the

World Cup, but is also concerned that these advertisers will only come

in for five or six weeks. “What I’m hoping may happen is that it will

open the eyes of marketers and media strategists to the nature of South

Africans’ passion for football. They will see how the Brazilian fans

respond, for example,” says Du Toit.

The business of soccer

Soccer-Laduma tells us who SA’s biggest soccer teamsand personalities are:� Kaizer Chiefs (nickname Amakhosi, ‘the kings’)� Orlando Pirates (nickname the Bucs, from buccaneers)� Mamelodi Sundowns (nickname the Brazilians because their blue

and gold colours are similar to the national kit and the type of

football they play is said to be similar to Brazil’s)� Moroka Swallows (the beautiful birds)� Bloemfontein Celtic (nickname ‘siwelele’)� Amazulu is potentially a massive force, but the team has been a

bit up and down.

Players:� Teko Modise – Bucs� Itumeleng Khune – Chiefs� Bernard Parker – Thunda Zulu Royals� Dikgang ‘Terminator’ Mabalane – Bucs

Coaches:� Muhsin Ertugral – Chiefs� Ruud Krol – Bucs� Henri Michel – Sundowns� Joel Santana – Bafana Bafana� Gavin Hunt – SuperSport United� Caesar Leal – Swallows� Manqoba Mngqithi – Golden Arrows� Clive Barker – Amazulu

The Confederations Cup: a wasted opportunity?“The Confederations Cup is a test run, and tends to be overshadowed

by the 2010 FIFA World Cup. I’m sure that now that the 2010 FIFA

World Cup Organising Committee South Africa has launched the

marketing and promotional campaign for the Confederations Cup

things will start picking up. The job of media is to talk up the game

and the players so that there are more eyes and ears on the game

and hence more marketing opportunities,” says Peter du Toit, founder

and editor, Soccer-Laduma. ‘I don’t think we realise how big the

Confederations Cup will be,” says Grant Hillary, managing director,

ThirtyFour Sport. “SA got the best possible draw, and yet no brands

are tapping into it yet.”

OnlineThis list is by no means exhaustive; these are just a few soccer-related websites.� www.soccerladuma.co.za (the official website of Soccer-Laduma)� www.psl.co.za (the official website of the Premier Soccer League)� www.supersport.co.za/football � www.thesoccerpages.com (a South African online soccer

community; results and news as well as discussions and blogs).� www.soccerlife.co.za (the official website of SoccerLife magazine)

>p28


30

in any place other than a private dwelling (ie bars, cinemas, educational

establishments, etc).

A commercial public viewing event is one at which a direct or indirect

admission fee is charged, and/or one at which sponsorships and

commercial rights are exploited relating to the event.

In the case of the latter, only live broadcasts (without repeats, or altered

broadcast) are permitted. Likewise, the exhibitor shall not create the

impression that he is in any way officially associated with the event. There

are no conditions on the type of food and drinks on sale at any public

viewing event; each vendor is free to offer and sell what he wants.

Conditions only apply to sponsorship and promotions by competitors.

Similarly, the exhibitor may grant local sponsorship rights of a commercial

public viewing event to local third parties, as long as they are not a

competitor to any of the competition’s marketing affiliates. (For more details

please see the Public Viewing Guidelines available on www.fifa.com). �

Sponsoring local soccer teams or leagues is another option for brands

that wish to get involved with the game; consider Volkswagen’s

sponsorship of team Moroka Swallows, and also their investment in

Premier League club, Bay United (formerly Maritzburg United). “Many

companies think they have to own the property for the sponsorship to

be effective. But in reality, they don’t need to. The other thing is that too

often, the sponsorship is misused. It’s not simply about spending a lot of

money, it’s about doing it right,” says Grant Hillary, managing director,

ThirtyFour Sport.

And the good news, as Neil Jankelowitz, MD, MSC Sports points

out, is that local soccer administration has improved significantly. He

urges sponsors to ensure that their properties and investments have a

track record and a professional management team is in place. Their

financials should be audited and they should have suitable board

representation. “In addition, we advise our clients to ensure there is a

suitable ‘escape clause’ in the relevant agreements should the rights

holder fail to deliver,” says Jankelowitz.


Sponsorship oflocal soccer

FIFA’s commercial affiliates (sponsors, licensees and official

broadcasters), the host country and the nine host cities, as well

as the Local Organising Committees all make significant

contributions to the 20101 FIFA World Cup, ranging from financial,

value-in-kind and human resource support through to the provision of

infrastructure, transportation and security. In return for this substantial

commitment, they are guaranteed an exclusive marketing association

with the event. Hence, FIFA operates a global rights protection

programme to ensure that these rights are not infringed by free-loades

seeking to claim a commercial association with the event for themselves.

FIFA partners: adidas, Coca-Cola, Emirates, Hyundai, Sony and Visa.

FIFA World Cup sponsors: Anheuser-Busch, Castrol, Continental,

McDonalds, MTN and Satyam.

FIFA national supporters: First National Bank and Telkom South

Africa.

FIFA has prohibitions against unauthorised commercial use and

association. Commercial Association involves the use of official event

marks (which include official emblem, the mascot, the poster, the

fifa.com logo, and also certain terms). Not only are the actual terms

protected, but so are similar variations and modifications.

In a nutshellAs a general guideline, promotional material/advertising, company

names, store decorations, websites, domain names and merchandise

should not bear or make use of any of the official marks (most especially

for commercial purposes, ie to drive sales). Editorial use of the official

marks, and the official match schedules is permitted, but only if this is

done to inform the public. Any ticket promotions or competitions that

make reference to the event are prohibited. More information on that

matters is available in the public information sheet which is published

on the official website www.fifa.com.

According to FIFA, co-promotions with 2010 FIFA World Cup

Sponsors are possible, as long as the third party is not a competitor of

any of the sponsor. However, the third party may not be directly

associated with the Official FIFA Marks.

Product licences (which permit the holder to produce Official

Merchandise) can be acquired from the Global Brands Group.

Commercial public viewing events:FIFA defines a public viewing event as one at which broadcast coverage

of the event is made available for exhibition, and viewing by, an audience

FIFA rules and regulations:

“As a general guideline, promotional

material/advertising, company names,

store decorations, websites, domain

names and merchandise should not bear

or make use of any of the official marks.”


31

Keith Wisermanaging director 5th Dimension(011) 781 [email protected]

Time to take a fresh look...

The last time I looked we were just about

to start 2008 and here we are at the

beginning of 2009. Actually, that is a

complete and utter lie because I had to write this

article before the end of 2008 to make sure I met

the publisher’s deadline. Anyway, what really

matters is that you lot, the readers, will all be

sitting on the edge of your 2009 seats as you read

this. So moving on...

The world is in trouble. The reasons for this

are known to most of us... the backwash from

the sub-prime lending fiasco... the collapse of

international financial institutions... high interest

rates, to name just a few. Many countries,

including SA, are in a state of near, if not actual,

recession. Both consumers and businesses are

cutting back on spending resulting in job losses

in many major business sectors like the motor

car industry.

Amid all the global doom and gloom this may

be a very good time to re-evaluate how we are

going about marketing. The financial guys may

not be the only ones who have been getting it

wrong. The global spend on advertising last year

was estimated to be around US$471 billion.

That’s US$78 for every individual on the planet

which includes the four billion who are surviving

on less that $2 per day. That’s a lot of noise!

Added to this the consumer is changing. In a

recent survey conducted by the Unilever USA

Consumer and Market Insight Department 86

per cent of people over 50 stated that advertising

is irrelevant to them. Another survey revealed

that 33 per cent of patients in the US go online

before visiting their doctor. If that is not disturbing

enough, even more (44 per cent) go online after

they have visited the doctor. The consumer is

showing all the signs of wanting to be in charge.

The consumer is also going digital. By the year

2011, 22 per cent of the world’s population will

have regular access to the Internet. Another

estimate believes that 50 per cent of the world’s

population will have access to a cellphone by the

year 2015. This year the spend on Internet

advertising will exceed 10 per cent of the total ad

spend in countries like the US, UK, Norway,

Israel, South Korea, Canada and Japan.

It’s not just developing countries that are

making these changes. The cellphone market in

India is growing at around three to four million

per month. That’s equivalent to the entire

population of New Zealand. In Singapore

cellphone penetration is 105 per cent (ie more

phones than people). SA may not be far behind.

In China, Internet access increased from 22 million

in 2000 to 137 million at the end of 2006.

In the UK, the spend on digital direct market-

ing has already surpassed direct mail. Add these

two together and you are looking at in excess of

25 per cent of the total UK ad spend. Spend on

direct marketing in the US in 2007 accounted for

53.7 per cent of total ad spend. Little wonder

that FCB couldn’t wait to merge with Draft to

form Draftfcb.

This lemming-like rush to digital is not just

about the cost of delivery. It’s about targeting,

measurability and return on investment.

Underpinning all of this is the more effective use

of data. All of these are core strengths of direct

marketing. �

The current crisis is

causing many

marketers to re-evaluate

much of what they

have done in the past

and to take a fresh look

at direct, which might

just be an option.

Expert opinion


Outdoor media

32

Expect more from outdoor

Outdoor adspend

R1.3 billion a year,out of a total ofR20 billion

Outdoor offersOutdoor advertising offers the opportunityto not only remind and brand build, butalso communicate a message effectivelyas part of a multi-media solution

Outdoor ad spend has enjoyed comfortable growth of

between 10 and 15 per cent annually, say experts. Richard

Bode, sales and marketing executive, Primedia Outdoor,

refers to ADEX data, which finds that between October 2007 and

September 2008, ad spend reached around R1.89 billion. “According to

Nielsen data, the industry is worth around R1.3 billion a year, out of a

total of R20 billion,” says Brad Fisher, joint CEO, ADreach. In recent

months, the market share growth has also been attributed to the

proliferation of new media channels that fall into the outdoor area

such as digital screens etc. Certainly, outdoor media has some sort

of glam appeal.

However, the economic climate has had a negative impact on the

outdoor media industry, and we are starting to see the growth rates

slowing. “The trend over the past four years has shown steady increases

in outdoor advertising spend. But over the last 12 months, the increase

has not been as positive due to the economic climate,” says Bode.

Says Lebona Moleli, CEO, The Marketing Kraal, given the

AIS/Nielsen figures, which show that outdoor ad spend has

declined by 3.6 per cent for the period August 07- July 08, outdoor

will continue to grow, but at a slower pace in the long term.

“Especially in key township and suburban areas which are main

attractions for advertisers. The increased traffic congestion will

also increase exposure time and the effectiveness of this medium,”

says Moleli.

Dave McKenzie, MD, BOO! Alternative Media, finds that

billboards still get the lion’s share of ad spend, followed by

airports and retail street furniture. But he points to

Addynamix figures (July 2003- June 2008), which find

that spend on billboards has decreased quite significantly

over the past five years – dropping by 24 per cent. “At

the same time, both the airport advertising and retail

street furniture categories have shown significant growth,”

he says. Fisher, has found that bookings for street pole

ads have increased, while those for large billboards have

declined; advertisers are looking for a more cost-effective

solution, with less risk and greater returns.

In spite of the negative impact that the economic

crunch is having on sales, the industry players remain

optimistic that the industry will grow, particularly in SA.

“The country has not been as heavily impacted by the

current global economic and financial crisis as the US,

for example,” says Fisher. The 2009 FIFA Confederations Cup as well

as the 2010 FIFA World Cup will continue to create marketing

opportunities for advertisers (and for global and local sponsors and

partners, in particular) and will bolster the industry somewhat.

Whether this industry is relying to heavily on this false economy (as

some refer to it) remains to be seen.

For the industry supporters, the nature of outdoor media will drive

its continued growth. With traditional mass media becoming too

fragmented or too expensive to really deliver audiences and ROI,

outdoor offers advertisers a means to build their brands. Yet there are

concerns that the outdoor industry has not been embraced by the ad

industry; Bode believes new measurement and testing will inspire

greater confidence in the medium.

It may be that the continued presence of rogue operators is driving

advertisers away. Likewise, the inflated prices of certain formats and

positions (without proven returns) forces advertisers away from

outdoor media. And yes, as long as the rand continues to plummet, the

cost of certain digital screens and outdoor technology will be out of

reach for local advertisers. Smaller and more flexible formats will

probably see greater adoption. Street pole ads fit this description, and

Fisher says they are possibly the best form of outdoor media as a


Outdoor media

34

result. “They have a relatively low production cost and are very

repetitive. Billboards are great, but they are very expensive,” he says.

Clutter was a problem in the street pole space, but companies

are taking steps to minimise this. ADreach, for example, is creating

fixed black frames, which will be the standard structure for its street

pole advertising. It is also limiting the number of frames per street

pole. “We have a visibility rating, which takes into account proximity to

a road, clutter around the pole, whether the ad is obscured, its size and

so on, to get a score out of 100. This score determines pricing too,”

explains Fisher.

MeasurementNo doubt, measurement of outdoor media needs to be taken to the

next level, to ensure greater transparency and accountability. Locally, the

NPod research, carried out in a joint venture between Nielsen and the

South African Advertising Research Foundation (SAARF), should

provide the industry with reliable stats and figures. The Nielsen Npod

study samples 300 adults, and is able to merge the demographics of a

sample with its GPS tracking data, to measure the traffic for each bill-

board on the database, and to determine how many people come within

the specific range of each outdoor format, to have the opportunity to

view it and potentially engage with it. According to Michelle Boehme,

technical manager, SAARF, the Npod results for KZN and Gauteng

are available, with results for the Eastern and Western Cape due by

mid-2009; the remaining provinces’ results will follow.

The results for the Eastern and Western Cape will be modelled down

to smaller geographical areas, and to district level, to provide richer

feedback for advertisers and media owners. The KZN and Gauteng data

will be modelled to this level

thereafter. The initial results

show the extent of mobility

of the sample group and

demonstrate the opportunity

to reach a target audience

not only in areas where they

reside, but based on travel

patterns, explains Bode.

“The AMPS sample is

being used and when the

whole country has been

surveyed we should have a far

more credible measurement

system. What will hopefully

happen in the fullness of

time is that this initial data

will be supplemented with

other richer data and better

audience measurement will

be the outcome. It should always be remembered that we would want

to compare the performance of outdoor on a GRP (reach X frequency)

basis against all other media,” says Bazil Lauryssen, MD, INM

Outdoor.

The Npod3 device – the latest version of the Npod handset – is more

compact, at almost half the size and weight of the Npod2. Plus, it tracks

16 satellites, instead of 12, which means that it is far more accurate.

Improved downloads also mean faster turnaround of data.

In the UK’s Polstar study, billboards are being fitted with intelligent

cameras that read which eyeballs interact with the creative on the board,

and also register their gender, and age, as well as the length of time they

spend looking at the creative. “It is also subjective and has its limitations,

and is very expensive,” says Lauryssen. Others are concerned that this

sort of measure is not relevant to the general outdoor market, and will

require a substantial financial investment (which may further increase

media rental rates). For the media owner, this is a very sophisticated

measurement tool, but consumers are not happy about the invasion of

their privacy.

Marketers and advertisers are looking for greater accountability, and

we can expect that there will be greater investment in measures and

technology that will deliver this. “Is this specific technology a possibility

for SA? I would say that within the next five to 10 years, yes, for sure,”

says Ken Varejes CEO, Primedia Unlimeted.

Dr Paul Haupt, CEO, SAARF, says that locally, this sort of system

would not work. While in urban areas, it might be viable to fit

billboards with cameras, trying to do so in almost inaccessible rural

areas would be very difficult. And where do you draw the line with these

smart cameras – how do you decide whether someone’s eyesight is good

enough to read the copy on a billboard, for example. “For any currency

research, the methodology and the data must be consistent, stable and

reliable,” he says. The complexity of engagement makes this system

difficult to implement. “We all know that great creative sells. The

problem media owners have is that they dare not say the creative is poor.

This turns creative people off outdoor advertising as they loathe being

criticised and would rather design a print ad or TV commercial. I have

no doubt that in the electronic and digital age that we live in where GPS

devices know exactly where we are combined with a form of eye-contact

device we will be able to provide audience measurement of a different

kind in the future. It’s all a function of cost benefit and what the returns

are,” says Lauryssen.

Out of Home Media SA(OHMSA) is currently looking at a new

research tool for outdoor which will see a transponder device inserted

into vehicles, according to Varejes. “It’s not perfect but we’re certainly

taking a step in the right direc-

tion. Outdoor is a really difficult

medium to research;

what I would suggest is that

marketers look more closely at

pre- and post-campaign research

to isolate its effectiveness,” he

says. And while engagement is

becoming more important,

exposure remains a major priority

for all brands who want to be

seen by the right target market,

and remembered.

IntegrationFor launches and special events,

radio and targeted print should

be used in equal part, along with

outdoor advertising, in order

to raise awareness. Branding

campaigns would do better, to split the budget between street pole ads,

and print/radio. For the communication of specific new product features,

for example, the emphasis should be on targeted print media with

outdoor simply serving as a reminder of the print campaign (or as a tool

to direct shoppers to a website for more info).

Mobile phones can be used effectively to generate feedback, and

monitor who is viewing and interacting with billboards. Fisher says

ADreach is using SMS competition campaigns for some of its clients, as

this allows it to track responses to the campaign. Through the use of

individual unique codes, it is possible to see where the response is

coming from (regionally), so the advertiser can concentrate its efforts

on that region. These campaigns also drive the individual to a website

for competition registration, so demographics are easily obtained. “The

integration with outdoor and online is happening already – the problem

is that you shouldn’t be paying too much attention to your cellphone


Outdoor media

35

while you’re driving. I’d recommend using more online and mobile

campaigns integrated into the shopping mall and indoor media space,”

says Varejes.

Alternative media optionsAlternative forms of ambient and outdoor media, hold a lot of potential.

“Wall murals and containers are very cost-effective and also very

impactful, especially in the township markets,” says Moleli. However,

marketers must take care to work with local municipalities closely, in

order to be in line with regional regulations.

We can expect a lot more innovation coming into the outdoor

advertising space, thanks the more innovative use of technology.

“Projection format advertising is proving to be hugely popular – a brand

image can be literally projected onto the side of a building without

production costs and any permanent structure attached to any

building,” says Varejes.

DigitalDigital screens and billboards in SA have not been adopted as widely as

they have been in other countries. The secret to a successful digital

campaign is to have pristine screen quality, and he doesn’t think SA is

not there yet in terms of mass digital due to pricing.

“Five per cent of total advertising spend is allocated to outdoor.

The digital proportion is very small due to the medium being in its initial

phase,” says Bode. Alive Advertising launched its first digital billboard 12

years ago, and since then, has grown this number to around 22 screens.

“Five years ago, the market started to take off,” says Itz Arenstein, MD,

Alive Advertising. Today, these screens are almost picture quality. “But at

four times the price of a regular static billboard they are too expensive for

the local market,” says Arenstein. The billboards and the LEDs they

require are imported, and the dollar exchange rate makes the cost of these

units relatively high.

Primedia Outdoor launched the first large format Digital Network in

May 2008 and it has been very successful thus far, says Bode. “To

implement a project of this magnitude and quality requires substantial

capital investment. Digital signage is definitely the future of outdoor

and already in the US it accounts for one per cent of outdoor sites,” he

says. With the current economic pressures forcing marketers to seek

out risk-free, cost effective media solutions, digital might not top the

list for some time.

The upside of the digital screens is that they allow for the creative to

be changed almost instantly, making this medium more flexible than

static media. For retailers, for example, this sort of system would be

ideal, as they could load daily specials immediately, and target them to

specific areas. Experts agree that in the long term, digital will be the way

to go. “In some cases, digital is a forced investment, as the media owner

must go digital to justify the high rentals, as in an airport,” says Fisher.

Other benefits of digital media are:� Tactical messaging� Day-part message management� Real-time updates� Inexpensive creative changes (very low production costs).

The animated billboards are attractive to advertisers that want

to take their messaging to the next level. But there are concerns

around this. Fisher believes that on roads, these billboards should

not be animated, as they are dangerous, and drivers are passing too

fast to actually engage with the creative. He also argues that at night,

the illumination of these billboards should be turned down to

prevent road accidents. “Unless you have ads that are static and

simply change over every 30 seconds,” he says, “but this requires the

media owner to be online so that the ad material can be changed and

updated more easily.”

Looking aheadWe can expect a greater emphasis on feedback and more immediate

advertising models, particularly digital, to dominate the outdoor agenda

over the next year or two. “TV, radio, magazines, etc are too fragmented

to offer the returns that advertisers are after. But with outdoor, you

know that there is one main road that everyone travels. It is very costly

to try and cover all the magazines out there; it’s much cheaper to advertise

via out of home media and get the same exposure,” says Fisher. Outdoor

advertising is increasingly being incorporated into 360 degree campaigns,

and its tactical strengths being exploited. “Based on the socio-economic

environment and the mobility of the adult population, more time is being

spent out of home. This offers advertisers the opportunity to reach larger

audiences through outdoor advertising,” says Bode.

But on the flip side, outdoor media will have to deal with a

changing regulatory environment, economic downturns and the

effect of the global economy, as well as changing perceptions of

outdoor. Furthermore, environmental concerns, council

inconsistencies and the evolution of audience measurement will

play in role in determining the future of outdoor media. But these

challenges are not going to have a long-term impact. Varejes says:

“As soon as we get over our current decline, I definitely expect

this sector to continue growing year on year at a faster pace than

traditional media.”

Pricing issues will also need to be resolved as the industry has come

under fire for over-inflated billboard fees. In particular, the larger

formats (temporary building wraps) are seeing steep rentals. Perhaps the

advertisers themselves are to blame for the steep pricing that media

owners are establishing. “Advertisers are demanding bigger and better

sites; there is limited supply and over demand so we as media owners

are actually only the facilitator,” he says. Short-term business deals are

also extremely costly once approval fees, physical structure costs, and

erection costs are tallied up.

Advertisers and media owners will need to work closely to begin

planning their 2010 exposure. Leading up to 2010, there will be

a dramatic short-term increase in spend, especially in the few

months and weeks before the main event. “One thing is for sure,

if you believe you are going to do better after 2010, think again,

as everyone has clamoured onto the bandwagon and believes

there are pots of gold in the outdoor industry. After 2010 the

established players will continue doing normal, sane business and

landlords will come back to earth with realistic pricing on which we

can all survive,” Varejes says. �


36

Settling down

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

Community media

Community media in South Africa has seen several

years of successful growth, and is now seeing a

flattening out in ad revenues, as advertisers feel the

economic pinch. However, compared with its

commercial/regional counterparts, it would appear to have

a very strong position in the marketplace, thanks to its

local reporting and advertising relevance as well as its

relative affordability.

MagazinesCommunity magazines report growth, as reader and

advertiser uptake of these titles increases, and it’s expected

that this growth will continue. “General content magazines

are likely to suffer as a result of the growth of community

titles, and the environment is an exciting one for advertisers

who were usually limited to only newspapers in the past,”

says John Bowles, joint MD, the Newspaper Advertising

Bureau (NAB).

The community magazines are not cannabalising the readership of

other print media. “We would expect our target market, all things being

equal, to read our publication in addition to their special interest

magazines, although initial indications are that MyWeek’s target market

does not necessarily read community newspapers as the information is

focused on school, municipal and crime news. This is due to the

differing mindset between the two groups, and I say mindset because

age isn’t the dividing factor, only a contributor,” explains Reinard du

Plessis, GM, MyWeek.However, in spite of the positive adoption of the community

magazine by the reader, media owners and planners do not fully

understand the medium. The complexity of the reader mindset is a

novel challenge. “Because of its youthful mindset and lifestyle, this

market is more inclined to be prosumers (producer-consumers) which

means they are socially active, participate in online social networks, and

interested in technological developments and environmental affairs,”

says Du Plessis. Robust digital strategies are therefore required to carry

the printed product into the age of broadband to ensure sustainability,

and so the community magazine category might be seen as a set of

integrated platforms that can deliver relevant, lifestyle-entertainment

info to the community. “We should probably stop looking at market

segments or niche markets and focus more on where communities

form, why they form, around what they form and how you can

integrate yourself in that existing community or build a new

community around your brand a la YouTube, Facebook, MySpace

etc,” says Du Plessis.

In terms of the number of magazine launches, there has been a slow

down and a merging of geographical zones into larger areas, to cut costs

and increase potential revenues (publishing a glossy, high quality community

Community press trendsAccording to Gordon Patterson, vice president, Audit Bureau of Circulations (ABC) ,

in Q3 of 2008, community newspapers were showing growth as a result of the

launch of new titles and the gains of individual titles. He reports that there appears

to be no cannabilisation of titles, since the titles were growing to cover new areas.

Comparing Q3 circulations for community papers from 2006 to 2008, circulations

went from 4 020 000 to 4 060 000 in 2007 to 4 600 000 in 2008.

Referring to magazines, Patterson finds that while there has been an increase in

circulations from Q2 2008 to Q3 2008, the circulation of the free magazines is

down year on year. In Q3 2006, circulation stood at 1 500 000; in 2007, this

figure stood at 2 150 000, while in Q3 2008 the figures were slightly lower,

resulting in a decline of around three per cent.


38

magazine in only one community is costly, and

challenging).

“The current economic climate has had an

obvious affect and will continue to do so due to

the fact that businesses return to those mediums

that have proven track records in terms of ROI on

every marketing buck spent,” says Du Plessis. The

reason readership and circulation have been

maintained is that these titles are of strategic value,

being available free of charge to readers, while also

serving as a tool through which publishers can

engage with a hyper-local community.

The integration of media and social networks

may drive further interaction with these media.

“We are planning a number of initiatives in

these categories at a local level. We have set

up a social network in two markets and its

success has been remarkable at this early stage. The

group is well set up to develop this environment

which is very much part of our future strategy,”

says Bowles.

NewspapersPeople are time starved, and so have less time to

read newspapers, and yet are also overloaded with

info and news from a multitude of sources.

Community newspapers deliver news from the

immediate surroundings, as well as advertising that

is much closer to the reader. “This in itself is a

competitive advantage with which dailies and

weekly national newspapers find it difficult to

compete,” explains Alda Roux, GM, Community

Newspapers (Central), Media24.

While national or international news is available

online, community news is not, and so the demand for

free community publications intensifies (paid for titles, on

the other hand, show a downward curve – their news is avail-

able on the Internet, usually for free).

Community newspapers remain a dominant force,

particularly as a retail communications medium.

“Retailers have little choice if they want to saturate the

catchment areas of their businesses or operations,”

explains Bowles. Reader profiles have remained much the

same, and it is expected that this will continue (at least

until the economy and the property market have picked

up and people start to move around again). Since area

profiles match the reader profiles of a community

newspaper, we can assume that the readers’ profiles will

not have changed either, says Bowles.

The economic pinch sees newspapers dealing with

shrinking revenues. We can also expect that consumers

will increasingly turn to community media that help

them find the best deals and the best prices.

At Central Community Newspapers (Free State and

Northern Cape) the decline in advertising income has

been very small, says Roux, but it’s clear that there has

been a shift in terms of who advertises. “Advertisers who

initially only advertised in dailies have moved to community

newspapers due to the lower tariffs they charge. The

profile of the advertiser has definitely changed due to the

economic crunch. Advertisers who took full pages, will

now only take half pages or smaller,” she says.

The economic slowdown is impacting on the

operations and launches of these newspapers as

well, resulting in serious consolidation. However,

consumers still need to make purchases, albeit more

conservatively; and they will shop around somewhat, to

find the right prices. “Community newspapers continue

to be that reference point where buying decisions are

made. Now more than ever, advertisers cannot afford

Community media

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

Newspaper Net distribution Corresponding previous period

1 City Vision (JHB) 272 557 272 557

2 PE Express 89 799 89 861

3 Plainsman 83 504 83 504

4 People’s Post Mitchells Plain 83 340 83 340

5 Vukani 81 160 75 560

6 Algoa Sun 76 154 76 154

7 Maritzburg Sun 68 361 54 857

8 The Mirror 65 000 65 000

9 Vaal Vision 64 908 64 944

10 Rekord East/Oos 61 997 59 120

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


42

not to be part of that reference,” says Bowles. Community media also

offer retailers a more targeted media option (national and regional media

lack the cover and the penetration to match). “As marketers realise this,

there will be massive pressure on them to justify fair support for where

their products and services are available,” says Bowles.

That said, the rise of the ‘black diamond’ in SA sees young black

professionals wanting to be well informed and, as Roux says, this

is where the great opportunity lies for community newspapers.

“The black diamonds are naturally also the investors, which is the

reason advertisers want to reach this market. Black community and

other newspapers are probably the market to invest in at the moment,”

she says. The Express newspaper, for example, is becoming more

popular with state departments and estate agents that want to reach

this market.

Looking ahead, the community newspapers could see income

benefits during the elections, though in general, economic pressure will

force just about everyone to tighten their belts.

TVCommunity TV is growing slowly; last year saw the launch of

Cape Town TV. Soweto TV, meanwhile is refining its operations.

According to Marco Veloso, group sales and marketing manager for

Soweto TV at Urban Brew Studios, SAARF AMPS has placed the

station’s audience at around 347 000, excluding DStv viewers (AMPS

2008A). “The SAARF People Meter has us at 581 000. My gut tells

me that the true figure lies somewhere between the two,” says Veloso.

He adds that the station is about giving Soweto people the space to

express themselves.

“Our model prioritises creating easy-to-access platforms for residents

to become the content creators,” says Veloso. This requires that the

station maintains a flexible real-time broadcast model with low costs.

Soweto is used as the studio for filming, and this ensures that all the

content is contextually real and recognisable. The station also accesses

and encourages independent producers to create programming for its

viewers. Research by Freshly Ground has shown that the two most

popular programmes for the stations are Dlal Ngeringas (youth to early

30s) and Ezomoya (a Sunday gospel show).

The station has felt the impact of declining advertiser spend, but

Veloso believes that the declines in revenues are not as dramatic as they

might be for the larger players, because Soweto TV is coming off such a

low base. “There’s no doubt that the credit crunch has affected our

audience. Very few people will escape this one. However, ours is a

market that, historically, hasn’t had significant access to credit”. This

market will be more deeply affected by staff retrenchments, for example.

Soweto TV’s audiences are attractive to advertisers and marketers,

says Veloso, because Soweto is home to a growing young, trend-setting

middle class. He goes on to say that marketing to this community (if

done in such a way that it is relevant to them) delivers ROI.

Community TV fits in well with both ATL and BTL marketing, and can

be easily integrated into campaigns and strategies. “In ATL, it can

deliver audiences that traditional media may not reach, with minimal

wastage – provided the message is tailor-made for that community.

In BTL, it can be integrated into tactical campaigns, supported by

activations in the community,” says Veloso.

“From my personal experience, the planning fraternity still has a lot

to learn about community media although efforts from organisations

like NAB have made significant inroads in educating the industry,” he

says. But the onus is on planners to venture beyond their tried and

tested favourites.

RadioCommunity radio might not offer wide reach, but as part of a strategic

campaign that reaches into niche communities, it can be very effective.

PEP has just launched a new radio programme across 15 community

radio stations across SA. Monate Feela (which means ‘feeling good’)

reaches around 3.5 million community radio listeners, with local music

and messages from SA sports and entertainment celebs; the focus is on

messaging that makes them feel good about SA. “Community radio has

great influence and is at the hub of the community,” says Marcus Banga,

marketing director, PEP. “We have 1 400 stores and wherever there are

communities in South Africa, there is a PEP store. This is why partnering

with community radio is such a perfect fit – for the listeners, for the

stations and for PEP Some of the stations, by the way, do have good lis-

tenership figures – hundreds of thousands,” says Banga. The particular

stations were chosen based on the size of the audiences, geographic

spread and so on. The programme carries only a PEP branded jingle (no

other advertising). “The show has editorial integrity and is not cluttered

by ‘sponsor’ messages – this is what makes Monate Feela so successful.

PEP has produced all the jingles and promotional trailers for the show –

so that each radio station has its own personally produced jingles for

Monate Feela,” says Banga. And while it is still early days, the feedback

from the stations has been positive. �

Community media

Station Province Past 7 days listeners Percentage of total adults

1 Jozi FM Gauteng 560 000 59 %

2 Unitra Community Radio Eastern Cape 375 000 49 %

3 Radio Tygerberg 104 FM Western Cape 312 000 45 %

4 Sekgosese Community Radio Limpopo 264 000 41 %

5 Nkqubela Community Radio Eastern Cape 260 000 41 %

6 Thetha FM 100.6 Gauteng 227 000 38 %

7 Qwaqwa Radio Free State 211 000 37 %

8 Zibonele Community Radio Western Cape 208 000 36 %

9 Radio 786/ Voice of the Cape Western Cape 205 000 36 %

10 Radio Mafisa 93.4 FM North West 188 000 35 %

Community radio (RAMS Nov 2008): 10 largest audiences


The man: a user’s guide

44

Species

The question of what women want and

what it is that makes them tick has

been debated and deliberated for

decades. Men, on the other hand, remained

largely ignored by the research and marketing

fraternities, or were stereotyped; until David

Beckham made it acceptable for men to use

fancy hair products, and big brands had to sit

up and start thinking more intelligently about

how men behave.

The Discovery Channel has delved deeper

into the attitudes, habits and mindset of the

modern man in a study that is set to get big

brands and companies thinking. The

Discovery Species study challenges existing

stereotypes of young men (the core target

market for the channel) and delivers a bigger

picture of ‘the man’.

The study will lead to new thinking in the

brand-development process and impacts

execution, since it challenges traditional views

of why men buy what they buy, why they do

what they do, and what kind of emotional

response informs all of this.

Starting in 2007, the Discovery Channel

researchers identified and explored

the 18 most significant life issues that

young men share in the most important

areas of their lives, including family life,

work, life stage, health and wellness,

relationships and so on. They then created

40 attitudinal statements to reflect these

trends and set out to collect the responses

of 12 000 men across Europe between

the ages of 25 and 39, and were able to

segment them into four Uber-Segments

(which are then further segmented into

sub-segments).

They have subsequently tested 600

South African men, and will compare the

results to those from the European study, to

offer South African clients a more localised and

contextualised report on local men.

The study explains certain trends,

and can make certain predictions about

the market: for example, based on the local

findings, the researchers can explain why

it is that the male cosmetics industry is

set to grow further in SA. Young men’s

lives have become more complex than

ever before. Social, economic and cultural

changes are making the world of the man

so much more evolved. For example,

men are delaying becoming ‘grown ups’

(buying the car, buying the house, settling

down, etc) because financial freedom is

valued above the very complicated and serious

trappings of adult life. Emotional support

and a strong network of friends is becoming

key, especially in a world in which

traditional family structures have unravelled.

These men more frequently look for

a wife who is intelligent and independent,

and will answer his need for equality in

the relationship; the Stepford Wife days

are over.

Meanwhile, the media is throwing new role

models their way, and it is having a major

impact on men’s concept of their personal

image, and what it is that constitutes

masculinity; wellness has also taken on a

whole new meaning.

The study puts paid to the image of the

man under pressure and in crisis at the hands

of all these new and evolving demands.

Instead, say the researchers, men are thriving

– and some are juggling the demands of

modern life even better than the superwoman

who came roaring out of the Eighties, vowing

she would manage the kids, house, husband,

friends, book club, aerobics class and a

high-powered job without breaking a sweat.

The Uber-Segments� Pressured Providers are more likely to be

family men who have traditional and

conservative views of their role in the family

and society (26% overall, 17% in SA).� Modern & In Control men might also be

married, but either way, cope well with

modern ideas of marriage and life; they do

the cooking or work part-time in order to

help ferry the kids to school, for example

(34% overall, 45% in SA).� All About Me men are, as the segment title

implies, self-focused; they will drive their

career interests, hobbies, desire for wealth

and independence as well as leisure pursuits

(26% overall, 14% in SA).� Non Committals are men who live for

the day and shy away from serious

commitment or responsibility (14%

overall, 24% in SA).

The Discovery Species study will be

launched to Discovery Channel clients and

the media in SA in February 2009. Enquiries

may be directed to Sarah-Jane Harling,

account manager: General Entertainment &

Specialist Channels, Oracle Airtime Sales, call

(011) 329 5017.

The results of the study will be available

on the Marketing Mix website

(www.marketingmix.co.za) along with

exclusive commentary from the Discovery

Networks Europe (DNE) research team. �

‘Modern & In Control’

men might also be

married, but either way,

cope well with modern

ideas of marriage and

life; they do the

cooking or work

part-time in order to

help ferry the kids to

school, for example.


The Eastern Cape’s future looks rosy. Eastern Cape Tourism has

plans to position the province as a premier travel destination,

while the developments along the coast are attracting investment

and boosting consumer confidence. “The Eastern Cape (EC) was South

Africa’s best kept secret until a few years ago when we were ‘discovered’,”

says Mauneen Charter, chief sales officer, Avusa Community

Newspapers and Agri, Avusa Media.

Tourism flourished, she says, and many farmers have transformed

their farms into game lodges, attracting visitors from abroad. Consider

that this province offers the Big 5, but not malaria, as well as having

beautiful beaches, and very reasonable property prices; the province has

attracted an influx of property developers in recent years. “More people

equals more business, which means more advertising,” says Charter.

The EC is a tough market, says Neil Hart, managing director,

Boomtown Advertising, but it is certainly not to be ignored. Even

though there has been a downturn in the economy, the EC region is

seeing high growth, as in the case of the Coega IDZ, and the five-star

Radisson Hotel. “There is a general sense of waiting for the recession

to kick in, but strangely is seems that it is very much business as usual.

We have noticed very small changes with certain clients, but overall

things are good, we are projecting our best year ever this year and are

well on track to achieve that,” says Hart.

Port Alfred, Port Elizabeth and Jeffreys Bay have probably grown

the most and now sport large malls and lots of development is taking

place in these areas. Property prices have seen a slight drop and, as a

result, are not as inflated as they were a year ago. “What agents are

experiencing is that they have many more properties on their books, so

buyers have a better choice. A year or so ago agents had very little

property to sell as demand was greater than supply,” says Charter.


Eastern Cape intelligence

46

The Eastern Cape: ripe withgrowth opportunities

The opening of chain store businesses in the region means that

national advertising is becoming available to the media in this region.

However, there are doubts about the extent to which media planners

across SA are familiar with this market. “Areas like the EC have vast

regions of several thousands of people who are not easily reached but

who, by numbers, can make very good target audiences. One just needs

to consider it from the politicians’ point of view – can they afford not to

lobby these masses for their votes?” says Hart.

Media planners and buyers are warming up to the region, however; as

a result, Media24 community media are seeing very good national ad

revenues, for example. “But because there aren’t as many big businesses

in the area, agencies do not get to see the area as often as they would

Cape Town or Johannesburg,” says Reinard du Plessis, GM, MyWeek.

“If you think that Nestlé, Willard Batteries, GM, VW and Daimler

Chrysler are but some of the businesses that call the EC home, it’s

strange that an agency hasn’t decided to open up a satellite office in the

area. Many smaller agencies are reaping great rewards by servicing these

businesses (and local government) very efficiently from within the EC.”

And indeed, the low level of competition is allowing the smaller

agencies to really focus on more holistic, through-the-line solutions for

their clients, while also being forced to develop in-house the skills that

are an anomaly in Jozi’s agencies. “Due to the tighter budgets in the EC

we have developed very lean business practices. Gone are the days of big

budgets being spent with little care for ROI, every cent is looked at

carefully,” says Hart.

The EC is harder to reach through traditional media, and Hart

supposes that this is because it is often left out of the editorial of

national magazines, radio etc. “EC-specific media therefore does well as

it creates a sense of ownership that we would not get through several


Eastern Cape intelligence

48

national media realms. It’s time that national

media start including EC (especially Port

Elizabeth) stories in their content,” he says.

Newspapers“Press is stagnant, but perhaps more due to

management complacency than reader disinterest,”

says Hart. However, this cannot be said of

community media.

According to Andre Olivier, manager of OP

Newspapers, Media24, the ad revenues for the

company’s community papers in the EC region

has grown by around 14 per cent in 2008,

compared with the previous year, thanks to the

growth of new shopping centres and malls, and

the escalated national spending that goes with

that. He points to market research, which shows

a healthy readership, mainly due to the fact that

the editorial content published in these papers

has a direct impact on the readers of the

publications in their respective communities.

The strongest areas of growth are the Port

Elizabeth metropole area and the Jeffreys Bay

area. “These areas are expanding rapidly and the

demand for our papers is increasing month by

month,” says Olivier. The community papers in

this region have not seen a decline in ad revenues in total. However,

Olivier notes a decline in the property and motoring markets.

“Advertisers are looking around for the best deals and have become

more aware of the ‘fly by nights’ and prefer to advertise in reputable,

established papers,” says Charter.

According to Charter, the number of newspaper launches has not

declined thus far, but whether the new titles will be successful remains

to be seen. She believes that newspaper ad spend might drop slightly

more if the economic pinch deepens, but that the EC developments will

drive demand for advertising media. The PE Express Indaba launched in

the latter half of 2008. This publication serves the black townships

around Port Elizabeth and is published on the last Wednesday of every

month. A total of 30 000 copies are distributed to these areas.

Feedback from local businesses and the community is that the product

is spot on as far as the target market is concerned and the local

residents are ecstatic about a paper that informs them about key issues

in their areas.

The community newspapers in the EC are ramping up their new

media platforms, too. OP Newspapers, for example, is in the process of

refining its websites, with the aim of increasing user interactivity with

the platform. The websites will be up and running in early 2009. “OP

Newspapers has also joined forces with local community radio station,

Bay FM, to serve our communities even better,” says Olivier.

Looking ahead, it seems the EC newspapers will be consolidating

somewhat. “I don’t think anyone can forecast the next year in the EC –

we will just have to ride out the storm and hope for the best. I don’t

think there will be many new newspapers launched as people are

nervous about the economic situation in the country as a whole, not

just the EC,” says Charter.

RadioRadio is strong in the EC, and the local stations have enjoyed good

growth over the past five years. “In terms of local advertisers, we have

not lost ground on advertising revenue year on year,” says Toinette

Koumpan, promotions manager, Algoa FM. From a national perspective,

the unstable economic climate has contributed to clients cutting back

on advertising budgets and adopting a wait-and-see attitude.

“Reports from AC Nielson ADEX indicate year-on-year drops of

between seven and 14 per cent among other major radio players, whereas

revenues on Algoa FM have not dropped by these levels,” she says.

The station makes education of clients a priority to ensure that they

understand the audience Algoa FM speaks to.

The station targets a market aged 25-49 in LSM 7-10. Ongoing

increases in audience with past seven days at 919 000 (RAMS, Q4 2008).

And while the station is not actively targeting young listeners, it is

seeing consistent growth in the number of young listeners. “Algoa FM

has embarked on an aggressive strategy to grow the brand across a

variety of media platforms specifically online and mobile marketing

through the launch of a mobisite,” she says.

In December, a new look interactive site was launched, with a

content-driven strategy. “The site is updated on a daily basis ensuring

content is fresh and exciting at all times with the power of the strong

listenership to encourage hits to the site,” explains Koumpan.

MagazinesThe community magazines in the EC have seen a slow down in

revenues, but this follows national trends, according to du Plessis.

“We are, however, seeing strong support for our titles in PE,” he says.

New launches are also slowing. “Due to market saturation on a micro

level (meaning those magazines that do not distribute nationally),

launches have certainly slowed there, and it is clear that both MyWeekand GetIt are consolidating their titles during a harsher economic

climate,” explains Du Plessis. The growth in infrastructure resulted in a

growth in publications to service those developments or their tenants.

“Unfortunately, that spurt was short lived in the EC (the EC normally

experiences shifts in the economy three to six months after the rest of

the country) and the current climate has impacted on that growth,”

explains Du Plessis.

There are no concrete readership figures as yet for MyWeek, though it

has a distribution of 20 000 copies in PE. Looking ahead, these

publications will be strengthening their positions through expansive

projects based on the core titles, for example. “There are a few

opportunities for micro titles, whether anyone has the stomach to invest

in those opportunities remains to be seen,” says Du Plessis. �


49

You would be forgiven if you don’t get

Twitter. Most people don’t, at first. Who

would want to know the answer to the

question, “What are you doing?” With more than

three million people already ‘twittering’ it has

taken the world by storm and is currently the

fastest growing social network in the world.

Twitter recently revealed that Facebook offered

to buy it for US$500 million in stock*. Clones

are popping up all over and developers are

developing API applications for Twitter at an

alarming rate.

If you’re not sure what I am talking about let

me start at the beginning. Twitter is an Internet-

based application which is described in its own

blurb as: “Twitter is a service for friends, family

and co–workers to communicate and stay

connected through the exchange of quick,

frequent answers to one simple question: What

are you doing?” (www.twitter.com)

The answer is given in a maximum of 140

characters and can be constructed using the Web,

IM or SMS. Although the ‘Updates to SMS’

feature was disabled in SA because of network

costs, tweets can still be made by SMS, although

there are many very useful applications available

for Smartphones and iPhones etc.

Your update is read by your followers, people

who have elected to be your ‘friend’ and in turn

you follow people whom you chose. You also

have the option to protect your updates or to

restrict them to your approved followers only.

Twitter is, in short, a mind-bogglingly efficient

way to stay in touch with many people at one

time. My tweets are linked to my Facebook

profile and other sites, and it automatically

updates my status on these sites too. It has very

low barriers to entry; it’s far easier to write a

message of 140 characters than it is to write an

entire blog, for example. It allows people to

interact in the time between more formal e-mails

and blog posts, and by doing so allows a far more

intimate relationship to develop between friends

and co-workers.

Am I reading your mind? You are probably

wondering ‘why on earth would I want to know

that Walter is having a cup of coffee or that Jane

is stuck in traffic’? Like many technologies the

application has far more interesting possibilities

than were initially thought of when it was

designed. I will give you some examples:� Many tweeters will sit in a conference,

summarise the speaker’s presentations and

tweet it to their followers, they will use a

simple search indexing technique called a hash

tag and by broadcasting it the proceedings at

the conference can be searched and followed

by many. At a recent conference I was able to

bring questions in from around the world

which greatly enhanced the experience of the

delegates.� It’s very easy to get opinions by asking a

question. As a demonstration, in a recent

presentation I asked my followers for restaurant

recommendations. In two minutes I received

more than 30. Barrack Obama has more than

100 000 followers, think how quickly he could

gauge the opinions of the people.� Consider co-ordination in a sales team using

a private twitter network, or in a service

operation, or motivating employees or getting

instant feedback.� Consider its use in a disaster situation

co-ordinating rescue attempts. Twitter was

reportedly used during the hurricane disaster

in New Orleans. The Los Angeles fire

department is on Twitter.� Within 20 seconds of the recent earthquake in

Los Angeles starting, I received a tweet:

OMG it’s an earthquake.� Consider using Twitter to keep in touch with

your customers, informing them and judging

their response to your marketing and branding

efforts. Dell uses Twitter as does Zappos and

Southwestern in the US.� I use Twitter extensively for gathering

information, as many of the people I follow

are international thought leaders in their fields.

I also use Twitter to broadcast my writing,

public speaking, consulting services, and to

announce and promote my blog posts.� I also use Twitter to follow what people are

saying about my clients.� I use Twitter to build a community. For

example, on a social level I recently attended a

meeting in Cape Town. I tweeted that I would

be staying on after the meeting, and a

‘tweetup’ (a Twitter meet-up) was arranged

I met 30 to 40 people.

Twitter is still very new and like any social

media tool, it can be used in a frivolous and

destructive manner and can eat up productivity;

however, as a tool to engage your customers and

empower your employees it has enormous

strategic and marketing potential.

As a marketer you can’t ignore it. Your

customers are using Twitter or its clones to talk

about your business, your products and your

service… and you had better be listening.

How will you use it? �

Expert opinion

What’s the flutter about Twitter

Walter Pikehead of the faculty of marketing andadvertisingAAA School of [email protected](011) 781 2772(You can follow Walter on twitter atwww.twitter.com/walterpike).

*Reference:http://www.bizjournals.com/sacramento/stories/2008/11/24/daily17.html

*


Technology: destination(not entirely) unknown

50

Expert opinion

The first and most important thing that

I can say about technology, on any

platform, is very simple. A fundamental

mind shift in the manner in which technology is

applied is far more important and necessary than

any new developments, innovations or technology

itself. More often then not, the latter is a result

of the former.

I pride myself on being technologically

agnostic, and I justify my belief by first assessing

what the desired outcomes and targets of any

online project are, before settling on a means of

delivery. A rural analogy that really helps in

understanding this attitude towards technology

is a little bit simple, but very effective (as rural

things often are).

You don’t pick up a pitchfork to go do some

farm work and then realise that you actually need

to dig a hole, which leads you to waste time

going back to the shed to fetch the spade you

would have taken, had you known what was

going to be required of you.

I cannot emphasise this enough – decide on

what, before you decide on how.

So simple, yet so easily overlooked.

The typewriter used to be cutting edgeThere is no golden technology checklist that you

can reference to make sure your brand is tech

savvy or one of the cool kids. There is Flash,

JavaScript + Ajax, HTML, Flash and XHTML

hybrids, PHP… the list goes on and for as many

different technologies as you can discover, there

are places for them to exist. Where and how

should always be dependant on your needs and

not guided by what’s easier to build. A handy tech

test for a brand is to ask someone completely

removed from the process to test the online

experience. If they can go through the entire journey

the brand has created intuitively without being

confused or having to consider where they should

be navigating to, then the brand has succeeded.

The successful choice and use of technology

should result in the delivery of the most simple

user interface available, that accommodates the

richest experience while meeting your targeted

objectives within your chosen channels of

communication.

A myth that must be debunked is the belief

that Flash sites are too cumbersome to load

competitively in comparison with HTML sites.

This, besides being untrue, is the result of

sub-standard development by individual

developers whom are able to design and build in

Flash, but who are unable to optimise file sizes

appropriately.

Another issue I come across on a daily basis is

the belief that only HTML sites can get listed on

search engines. This also, is simply not true.

If at any stage you get told of an online

constraint, realise that it could be subjective and

get a second opinion before diving in.

David 1 – Goliath 0A lot of people bemoan the infrastructure we

have in South Africa, but the simple truth is that

this isn’t a major factor when talking to the

majority of users who access the Internet with

more then adequate connections from their

places of work or for the higher LSMs whose

access is via powerful home connections.

We have one of the highest cellphone

penetration rates in the world; couple that with

new and innovative means of communicating

that are emerging everyday and you realise that

a little bit of creative thinking about the

application and relevance of technology can

easily counter any infrastructure nay-saying.

Technology of the worldThe term global village was popular a while ago,

but people seem to have forgotten what it actually

means. I communicate with people all over the

world, sharing knowledge and ideas, as many

people do. The result is that although someone is

thousands of kilometres away, their ideas are

right here with us and ours with them. There are

no limits or challenges that are location specific

that cannot be creatively demolished in the name

of progress.

A final thought I’d like to leave you with is a

little bit frightening and yet exciting at the same

time. The digital camera almost killed the use of

film entirely in less than five years. Today, sitting

in a basement somewhere in the world, there is

a completely unknown person, developing

something that will revolutionise our industry.

We don’t even know who this person is yet, let

alone what or how they’re going to revolutionise

our world. �

Benon Czornij technical directorHelloComputer (011) 477 [email protected]

This is the third in a series of articles written by the Hello Computer team outlining the corecompetencies which are the essence of website creation.


Service please, SouthAfrica, this is yourcustomer calling

51

Expert opinion

Nicci Columbinemanaging directorColumbine Communications(011) 880 [email protected]

It is generally regarded that customer service

in SA is very poor; some would say it is

almost non-existent. In fact, according to a

recent global survey SA was rated 111th out of

124 countries in service excellence.

According to John Tschohl, president of US-

based Service Quality Institute and dubbed by

Time magazine as the world’s top customer

service guru, “South Africa could reach a growth

rate of 10 per cent a year or possibly more if

greater attention was given to customer service.”

Certainly, we have a considerable way to go to

compare with other emerging economies, but SA

is not alone in its need to address its customer

service challenges. According to a global study

conducted by Accenture earlier this year, companies

across the world are not keeping pace with

consumers’ rising service expectations, especially

in emerging economies. The survey findings

indicate that increases in customer service

expectations continue to outpace efforts made by

companies to improve service. Globally, nearly

one-half (47 per cent) of survey respondents said

their expectations were met only ‘sometimes,’

‘rarely’ or ‘never’.

To capitalise on our positive attributes of

cultural diversity, friendliness and welcoming

hospitality, especially with the upcoming 2010

FIFA World Cup, we must be able to deliver a

globally acceptable standard.

Yet, in my opinion, this will only be achievable

if a service ethos is adopted across all sectors and

through every level of society, and moreover can

be maintained in every interaction visitors have in

their experience of SA. We cannot hope to

improve our service record without commitment

to making a difference across all sectors. While

fulfilling service commitments, meeting expectations

and achieving customer satisfaction are service

basics, delivering a level of customer service that

creates a positive experience and makes people

feel their interaction with a company – or a

country – adds value, sets it apart.

Service must become a real priority for SA to

‘get right’ over the next two years. More

customer service support facilities and enablement

channels will be needed with contact centres

being critical to providing visitors and South

Africans alike with access to information, travel

and ticket information, fulfilment of bookings

and a host of others 2010-related services.

Yet, many call centres in SA do not provide

consumers with a satisfactory service experience.

Based on customer satisfaction market research,

the major gripe that consumers have with call

centres is their failure to appreciate that the caller

is their customer, not merely a member of the

public or another number in the queue! While

call centres’ primary function is to render

support, customers are demanding people who

expect their individual requirements to be met.

Even as call centres cannot be everything to

everyone, agents should nonetheless be adequately

equipped to manage customers’ expectations.

While agents are trained to handle all types of

customers, my observation is that call centre

agents fall short on the basics. Most notably, they

do not readily take the time to listen and properly

understand a customer’s query; and then seldom

respond with solutions. This leaves customers

feeling disregarded and frustrated, and having

wasted precious time. Companies know only too

well that it takes just one poor service experience

for a customer to go elsewhere. Therefore, more

emphasis should be placed on sensitising call

centre agents to be more empathetic and responsive

to their customers.

Furthermore, customer service and call centre

agents need to better understand how to

communicate the brand that they are actually

representing. In my experience, agents do not see

themselves as an extension of the brand and

therefore do not understand that they represent a

component of the value a company offers the

customer. Yet, consumers expect value, and expect

a value-added service or experience from their

chosen brand. Marketers understand this, but call

centre or customer service agents typically do not.

Marketing departments in companies could do

much to remedy this situation through educating

call centre agents on the value proposition of a

brand, the key benefits, what marketing messages

have been communicated, what the market

perception of a brand is, and therefore what

customers’ expectations of a product or service

are likely to be. Such training should not apply to

contact centre personnel only, but to every single

person in a business. If everyone across a

company understood what their customers

valued about the company’s brands, and were

effective in harnessing its efforts to increase that

value through delivering exceptional customer

service, the odds are that they would outshine

the competition. �


52

Services SETA

Welcome to 2009 and to an exciting year, packed with value,

engagement, growth and self-actualisation for Chartered Marketers.

The past few months have seen the Temporary Advisory Committee

hard at work, putting in place a number of CM (SA) building blocks.

There is still work to be done, but progress is steady and the future

is bright.

More detail on some of our activities will be shared shortly – but to

keep you as motivated as the team is, we are pleased to share with you

our achievements to date and list the areas we are working on for

delivery by July this year.

So what’s in progress?� The Communication Strategy and Plan is complete and the regular

communication to CM (SA)’s and to prospects will commence

shortly.

� The 2009 CPD Workshop schedule is close to finalisation – thanks

to Dr Michele Serfontein, CPD Project Manager.

� The CM (SA) Constitution is in development and will be completed

within the next three months, following consultation and engagement.

� We are currently formulating processes around the establishment of

the permanent ‘Advisory Committee’, which we are anticipating will

be in place by July 2009.

� The Committees responsible for CM (SA) quality, for benchmarking,

standards, CPD development and more will be in place shortly.

Various academics and industry marketing leaders will assist in

finalising this aspect.

� The process is underway to employ, under the auspices of our

custodian, the Services SETA, within their body – Communication

Management Services Chamber – a full-time, dedicated marketing

co-ordinator and project manager.

� The process for CM (SA) and Marketing Practitioner, or MP (SA),

from initial interest through engagement workshops, PoE submission,

CPD maintenance and more, has been fully documented.

� The CPD Activity Providers process and protocols are currently

being finalised.

� The re-registration of current CM (SA)’s is now complete and a

re-accreditation ceremony is planned for the first months of 2009.

Congratulations to those who were successful – communication in

this regard will reach you shortly.

� New CM (SA)’s are currently undergoing the CM process and we

expect to have two Board Exams written this year – those dates

being 27 March and 30 October 2009.

� The Marketing Practitioner (MP) (SA)’s systems, processes,

procedures and rollout plan is also being competed. MP (SA) applies

to marketers with three years working experience as apposed to CM

(SA) which requires 10 years in the workplace, at a senior level.

� Overall, great progress has been made and more positive outcomes

are expected soon, so watch this space and look out for the first CM

(SA) Newsletter coming to you soon.

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

About the CPD Programme The Continuing Professional Development (CPD) programme for

Chartered Marketers that was initially introduced by the Services SETA

in 2007 has received much positive feedback from delegates. More than

125 Chartered Marketers participated during the course of 2008, in each

of the three regions, where workshops were presented.

All the costs associated with these workshops were covered by the

Services SETA. This made it possible for every Chartered Marketer to

CM (SA) updateCM (SA) update

The Marketing Practitioner (MP) (SA)’s systems, processes, proceduresand rollout plan is also beingcompeted. MP (SA) applies tomarketers with three years workingexperience as apposed to CM (SA)which requires 10 years in the workplace, at a senior level.

The purpose of the programme wasand is, as we go forward to facilitatethe maintenance of the currency ofthe competencies of CharteredMarketers in order to ongoinglyaward the designation of qualifiedChartered Marketer SA.


54

Services SETA

attend without having to consider additional expense. Marketers who

are members of the Services SETA and who are working for themselves

or small business owners were especially appreciative of the opportunity

to participate.

The purpose of the programme was and is, as we go forward to

facilitate the maintenance of the currency of the competencies of

Chartered Marketers in order to ongoingly award the designation of

qualified Chartered Marketer SA. In 2009 the programme will be made

up of three components:� A compulsory CPD calendar made up of four sessions presented as

three-hour workshops in Johannesburg, Durban and Cape Town –

two workshops will be run by renowned international marketers and

two by leading South African marketers. Chartered Marketers are

required to attend all four sessions in order to comply with the CPD

requirements.� Participation in registered CPD activities offered through registered

CPD activity providers, such as PRISA, SAMRA, the DMA SA,

GIBS, Wits Business School, UCT Graduate School of Business

and others. � Various activities promoting the continuing professional development

of Chartered Marketers including the reading and publishing of

articles and papers; giving of speeches and lecturers; supervising,

mentoring or coaching of other practitioners and professionals;

attending courses and seminars; membership of marketing

professional bodies and industry organisations; and participation in

community or social development projects.

Look out for details of the 2009 CPD Programme which will beavailable online from mid-February on www.serviceseta.org.za

The 2007/8 programme ran most successfully and was concluded

with the submitting of completed CPD record cards on 31 October

2008. Close too 100 Chartered Marketers completed and submitted

their record cards and have now been re-accredited.

All submissions were evaluated by the CPD and Exemption

Committee, under the guidance of Dr Michele Serfontein, CPD Project

Manager contracted by the Services SETA.

Verification of participation in continuing professional development

is a new component that has been introduced to the programme during

2008. In line with this, twenty-five percent of the CPD submissions will

be required to submit additional supporting documentation, providing

evidence of participation in the CPD.

Compulsory CPD Calendar – a View on 2008A diverse group of marketing experts participated in the CPD calendar

of workshops. Although some of the topics were not applicable to all

Chartered Marketers, who work in diverse industries in specialised

areas, the CPD workshops established an opportunity for Chartered

Marketers to interact with each other, the subject matter experts and

the programme managers.

“Being forced to participate in a workshop that you don’t find

particularly relevant to your work has taught me that I can learn new things

from other areas of marketing,” commented one of the participants.

The topics led to great discussion and introduced new and challenging

ideas that could be used by participants in refining and improving their

marketing strategies:

The Pivotal Role of Direct Marketing – Traditional and NewMedia, Trends, Quick Wins and Techniques (presented by Michelle Perrow)This workshop showed marketers how direct marketing has moved

from a ‘silo’d’ discipline to an integral part of the marketing mix.

Marketers need to maximise direct marketing by introducing new media

to traditional channel usage and by appreciating the critical role of

the marketing database. Best practice was discussed through the

presentation of various successful customer- and enterprise-relationship

management programmes and loyalty programmes. Metrics pertaining

to direct marketing was considered, as well as trends propelling direct

marketing into the future.

Sports Marketing and Sponsorship (presented by Michael Goldman)Sport sponsorship has been shown to be extremely successful in

creating emotional brand connections and building consumer loyalty.

Tapping into the fans’ passion and sustaining the connection requires

strategic thinking, brand positioning and an approach to partnership

that moves beyond traditional views of sponsorship. Measuring the

effectiveness of sports sponsorships as part of an organisation’s

marketing investment is key to understanding its value to the

organisation. The objective of this workshop, therefore, was to expose

delegates to current local and international best practices and leave them

with an actionable approach that could improve the performance of

their organisations. It assisted the delegates to integrate their sports

marketing and sponsorship activities into their organisations’ broader

brand and marketing strategies.

Consumer Loyalty Beyond Delivering Quality and BringingSatisfaction: The Creation of Perceived Customer Value (presented by Francis Petel)The workshop covered a perceived quality, the different approaches to

customer satisfaction measurement and the focus on churn analysis –

what triggers churn events and their analysis in terms of risk manage-

ment. It also looked at the role of incidents in loyalty, as well as brand

loyalty and consumer resistance, especially the effect on marketing

strategies and how to address these issues. Finally, it considered a ‘value’

approach to loyalty with a discussion covering a comprehensive range of

loyalty related issues, as they occur in European and mainly French

consumer behaviour.

Building a Customer-centric Organisation (presented by Nicola Kleyn)Organisations are increasingly focusing on becoming more

customer-centric as part of their attempts to grow revenues. This module

provided marketers with insights on how to mobilise their

organisations and value delivery systems to put customers back at

the centre of the organisation’s activities. Delegates were shown how to

conceptualise the construct of customer-centricity, before focusing

on the core components of a customer strategy, which if not in place,

renders an organisation’s customer-related activities unfocused and

less effective. The workshop was concluded by identifying the core

organisational behaviours that need to exist in order to promote customer

satisfaction, retention and equity, and by looking at the role that marketers

can play in enabling these.

Measuring the effectiveness of sports sponsorships as part of anorganisation’s marketing investment is key to understanding its value tothe organisation.


Services SETA

55

Building and Protecting Corporate Reputation (presented by Prof. Russell Abratt)Managing corporate reputation, communicating about corporate brands

and building corporate identity, are vital issues facing companies and

other corporations today. New environmental pressures have led to

increasing importance being accorded to these topics. Possible effects

of eroded reputation include a drop in share price, decline in market

share, difficulty in recruiting talent and discontent in the communities

in which the company operates. Senior Marketers have to become aware

of the fact that corporate level marketing needs to play a very important

role in developing and maintaining an organisation’s reputation among

all its stakeholders. This workshop explored the role of corporate identity,

organisational identity, corporate image, corporate communication and

the corporate brand in reputation building and management.

Marketing Renaissance (presented by Dr Steve Burgess)With marketing enjoying a renaissance worldwide, this upbeat seminar

explored two important trends that are helping the discipline regain the

boardroom influence it once held. The first trend concerned the ability

to leverage our new insights into the institutional context of emergent

markets. The second trend concerned the advent of the new ‘marketing

engineering’ era. This seminar showed how marketers could leverage

these marketing renaissance trends to establish and stoke emergent

market learning laboratories and propel their companies and personal

careers to new heights. Opportunities and challenges in this new

marketing engineering era, which draws on soft and hard market

knowledge to hone market orientation within the firm, were discussed.

Delegates also discovered how marketing learning laboratories use four

stages of research and marketing analytics to identify routes to superior

performance outcomes.

Innovation, Marketing and Branding in South Africa (presented by Gordon Cook)This provocative and energising workshop discussed areas requiring

innovation in marketing and branding in South Africa. It also looked at

current innovative thinking taking place in the fields of branding and

marketing. The following question was raised: is business the brand or is

brand the business? Delegates were challenged to think beyond the

paradigm of a brand being developed as a result of a business being

established. Rather, business is established because someone has ‘had a

dream’. The dream is converted into a product or service and a brand is

established. Integrating the responsibility of building the brand into the

business is the paradox faced by marketers wanting to stand out as

professionals fighting for recognition at boardroom level.

Trading currencies for the buying and selling of media spaceand time (presented by Dr Paul Haupt)This presentation focussed on providing a broad perspective on media

audience research; SAARF and its critical role in the advertising,

marketing and media industry; and how it can be used to support and

inform best practice in marketing in South Africa. The workshop

covered the history of and rationale for media audience research and the

development of the South African Advertising Research Foundation

(SAARF) since 1974. It also looked at trading currencies for the buying

and selling of media space and time, the segmentation of audiences

focusing mainly on the SAARF Universal Living Standards Measure

(SU-LSM), and explored future challenges.

Chartered Marketers can look forward to a similar scope of CPD

topics in 2009. This will ensure that each CM (SA) is up to speed with

both traditional and new media trends.

Michelle Perrow

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

Managing corporate reputation,

communicating about corporate

brands and building corporate identity,

are vital issues facing companies and

other corporations today.


56

Law mix

If you thought the current Tobacco

Products Control Act placed a burden on

smokers, the current Amendment Bill has

set the bar much higher. The Bill was recently

passed by the National Assembly and is now

awaiting signature by the President before

coming into force.

The purpose of the Tobacco Products

Control Amendment Bill is defined in its

preamble. It includes, inter alia, the provision

of new control over the smoking of tobacco

products, the provision of standards in respect

of the manufacturing and export of tobacco

products, and an increase in penalties for those

who contravene the Act, once it comes into

force. Each of these individual “sub-purposes” is

discussed below.

New controlPreviously, the smoking of tobacco products in

any public place was prohibited. The Tobacco

Products Control Amendment Bill now indicates

that, inter alia, “no person may smoke any tobacco

product in a public place, any area within a

prescribed distance from a window or entrance

to a public place or any motor vehicle where a

child under the age of 12 years is present.”

Furthermore, where public place was previously

defined as “any indoor or enclosed area which is

open to the public or any part of the public and

includes a workplace and public conveyance”, the

definition of public place will be amended to read

“any indoor, enclosed or partially enclosed area

which is open to the public and includes the

workplace and a public conveyance.”

Another amendment in the control over

the smoking of tobacco products is that an

employer must ensure that employees may,

without any retaliation, object to smoking

in the workplace, which is in contravention of

the new Act. Furthermore, an employer must

ensure that employees who do not want to be

exposed to tobacco smoke in the workplace are

not so exposed, that it is not a condition of

employment that an employee is required to

work in any portion of the workplace where

smoking is permitted and that they are not

required to sign any indemnity for working in

any portion of the workplace where smoking

is permitted.

At a first glance, one wonders how, among

others, restaurant owners, their customers and

their employees will adjust to this new law.

Manufacture and exportAnother purpose of the Tobacco Products

Control Amendment Bill is to make provision

for standards in respect of the manufacturing and

export of tobacco products. The Act itself will

not expressly state these standards; rather, the

Minister will later promulgate regulations in

this regard.

However, no person will be allowed to

manufacture a tobacco product unless it

complies with such standards. Furthermore, the

standards will require every manufacturer of a

tobacco product to provide information about

the product and its emissions to the Minister and

the public as may be prescribed, in a prescribed

manner and within a prescribed time. Finally, no

person will be allowed to export a tobacco

product from South Africa unless it meets the

product and testing standards of the country of

final destination. If no such standards exist in the

country of final destination, the standards as

prescribed in South Africa will apply.

Therefore, where an exporter previously

need not have stated warnings on their tobacco

products meant solely for export because the

destination country had no prescribed standards,

the new law seeks to set such standards based on

those applicable to South Africa.

PenaltiesThe provisions relating to penalties have certainly

been the more drastic changes to the current

Act. Previously, the fines persons would be liable

for, if they contravened certain sections of the

Act, ranged from R200 to R200 000. The

Amendment Bill penalties now range between

R500 and R1 million.

Any person who is caught smoking in public

is liable to a fine of up to R500. Owners of

restaurants and other public places are now liable

to pay a fine of up to R50 000 if they contravene

the new laws. Furthermore, employers who force

employees to work in smoking areas against their

will, will be liable to a fine of up to R100 000.

Advertising houses and their clients as well as

tobacco manufacturers and exporters are liable to

a fine of up to R1 million for contravening the

provision of the Act relating to the advertisement,

manufacture and exportation of tobacco

products respectively.

One can only conclude that these increased

fines are meant to give the current Act a bite that

will match its new bark. �

Rachel Sikwaneassociate Bowman Gilfillan Inc(011) 669 [email protected]

Tobacco products control

act – where do we stand?

Marketing Mix Jan Feb 2009

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