Milk Industry: Endangered Beverage Brands Fights For Survival

The milk industry is no doubt saturated, but those that have created niche for themselves still enjoy high patronage from consumers. The future of the new entrants is so endangered that most of them don’t even know who there target audiences are and which location they should see as there strength while some are in extinction.

Some consumers claimed that the endangered brands in the beverage industry include Nunu milk, Jago milk, Blue Boat, Coast and Olympic milk.

Nunu Milk from the stables of PZ Cussons, makers of a host of other household market brands, in a vast and highly competitive market structure is to be ‘groaning’ under the overwhelming weight of other beverage brands who have either advanced new marketing strategies or accepted the ‘olive branch’ that  brand extension option offers.

Barely four months ago, precisely 10^th September, 2011, Nunu milk was re launched with great promises for the future in its bid to withstand troubled waters of cut-throat competition.

Speaking at the re-launch of Nunu milk products, Mr. Judson, Public Relations Officer said the milk has proven in the last three years to be the fastest growing brand currently enjoys a 10 percent market share in relation to the other milk brands in the market. His statement makes one wonder how good is the brand doing even before the relaunch.

A newspaper quoted him to have said “We are pushing forward with our strategies to ensure that our brand does well across the length and breadth of the country and the re-launch was aimed at creating brand awareness and patronage among the public and we promised consumers will save money in terms of price compared to the other brands’.

In a sharp contrast to Mr. Judson’s panacea for putting the beverage brand in focus on the maps of enviable beverage brands, the turn of events in recent times has proved otherwise. Even after relaunch. One can ask; as Nunu milk gotten to the mind of most of its target audience? Some claimed that Nunu milk has most of its consumers in the northern part of the country which make one wonder how successful can it be rated if out of 36 states in the country less than five states is aware of the existence not to talk of patronage.

Other milk brands like Jago from Sosaco Nigeria limited is almost in extinction. The ones nation wide celebrated milk brand can now be visible on places like Onitsha, a less that 3% of milk consumers population. Likewise Coast, Blue Boat and Olympic milk are so endangered that the new generation of consumers don’t even know the name not to talk of consuming it.   

Some consumers of beverages are of the opinion that the endangered brands has failed to the extent that some of them now distribute their products in schools just to familiarize the products with children. A visit to some schools where such products was distributed revealed that most of the pupils who consumed the products call it another name, Cowbell, a competitor name in the industry that is doing fantastic well.  This makes one wonder if the content of these endangered brands are of high quality like that of its competitors what then is the problem: is it the packaging or marketing strategy employed by the manufacturers?

Speaking to some major distributors, Suppliers and traders in the suburb of Lagos shows a dismal patronage of Nunu milk especially.

Obinna, an apprentice at a supermarket shot his eyebrow in a fit of repulsion at our reporter when quizzed about the Nunu milk. He said ‘We do not buy Nunu again because people don’t buy anymore. As you can see from products on display, the competition is much and we have stopped buying it since customers prefer others.

It might interest you to know that of the four major distribution channels and five grocery stores in Ikeja, only one distributor and a grocery store had a few sachets of Nunu milk on display.

Outside Lagos, Sokoto precisely, the likes of Jago and Coast milk makes sway but in Lagos, the first determining location of a successful brand, these brands are not making shelve presence not to talk of paronage.

According to Yinka Olaito on his blog (http://networkedblogs.com), competing on brand survival, he is of the opinion that brand survival today is dependent on sound strategy. He added that the level at which the brand intimately knows its competitors is a good a factor and one of the best weapons in building sound strategy which aids brand’s prosperity is competitive intelligence.

‘Many brands have overlooked the importance of competitive intelligence and had never bothered to find out how competitive intelligence’s ingredients help build strong and healthily lifestyle for the brand.  It will be important to first examine the four processes involved in Competitive intelligence. The first step is information gathering. Brand must understand the need to gather relevant industry information and how it affects its existence. From here, a viable information analysis process must be able to indentify brand’s opportunities and threat. After this, the process should naturally move towards creation of actionable steps which may aid objective achievement. When this is properly done, efforts must be made in ensuring actions conform to objectives’ he wrote.

He added that ‘But for a lot of brands, competitive intelligence is confused with market research. It is important to note, while competitive intelligence may incorporate some of the same tactics used in market research, competitive intelligence answers are highly targeted and specific, rather than reflecting broad market or product trends.

One fact we must keep in mind always is that the level of brand communication success and by extension brand success is directly related to how personally you know your competitors, and what’s going on around them.  A good grasp of how fairly well researched and you can analyze all these will help in no small way’.

As daunting as the challenges of these endangered milk brands, Nunu milk, Jago milk, Coast, Blue Boat and Olympic milk may seem, efforts can be geared and sustained by the makers to create a winning brand.

Chima Nwuke, a Marketing expert and Brand icon posits that developing a brand from the scratch and relauching a brands that were almost extinct does not come cheap.

Furthermore, he stated that the process of building or sustaining winning brand is a painstaking one and too important to be left under the whims of a brand manager alone. In fact, the job of all employees is to deliver a winning brand that the future of a business is assured.

To get to this point, there are certain factors to be considered. Mr. Chima pointed out that a deep knowledge of the brand is very important in building winning brands. It is when you have good information that you can afford to be a good brand custodian and be able to differentiate it clearly in the market.

He advised that good knowledge of product costing helps innovation pricing and sometimes communication decisions when there are challenges especially in markets full of uncertainties like ours is vital.

Hence, the makers of these endangered milk brands must realize that the dynamism in consumer taste will create a winning brand.

How Femi Otedola’s 36Billion Debt Wrecked UBA….Investors Groan

UBA Plc, one of the top banks in the country, has issued a profit warning in respect of its 2011 Year End results.

Analysts are expecting the company to report a loss of anywhere between N 2 billion and N 12 billion for the 2011 year due to non performing loans it sold to the Asset Management Corporation of Nigeria (AMCON) at a steep discount.

One such loan was N 36 billion owed UBA by Femi Otedola’s Diesel trading company, Zenon. UBA was forced to write the loan off its book and sell it to AMCON for approximately N 21 billion, according to information provided by analysts at Nexus Capital.

“This represents a haircut of 40%”, says Soji Solanke of Renaissance Capital. “UBAs haircut was the highest relative to other banks on Zenon, and the highest haircut it took on any singular loan sold to AMCON.”

The Renaissance Capital Investment Analyst stated in an emailed report that UBA’s books are now very clean with only 3% non-performing loans and going forward in Q1, 2012, the bank would have to meet its forecasted profit in order to appease investors.

UBA disclosed to the Exchange today that it would make N 12 billion in the first three months of 2012.

The following is the full excerpt of a disclosure release the company provided the Nigerian Stock Exchange:

United Bank Africa Plc profit warning for FY11 and profit forecast for 1Q12

United Bank for Africa Plc hereby issues a profit warning for FY2011 in respect of its FY 2011 results following the preliminary review of the Group’s management accounts for the year ended 31st December 2011.

The Bank expects to announce a loss, driven principally by one-off writes against earnings, including those arising from the transfer of loans to the Asset Management Company of Nigeria (AMCON).

Management does not anticipate further similar write offs in 2012 and following these actions, affirms that the Group’s Balance sheet and Capital are in a robust position providing a solid foundation for the Group’s future growth path. Earnings from the underlying operations of the group’s Nigerian business give considerable grounds for optimism for the coming year and the group continues to witness significant growth in its operation across Africa with an increasing contribution to group profitability.

Accordingly, the group is increasingly confident on the outlook for FY 2012 with an indicative forecast profit before tax of NGN15bn for Q1 2012. January results have been impressive and confirm our belief that the forecasts will be achieved barring any unforeseen circumstances.

STARCOM MEDIA AND SHAREMIND SET TO WORK ON HEINEKEN BRANDS ACCOUNT

Heineken has announced that it is to consolidate media planning and buying for its brands worldwide into one media agency. The move to globalize media buying is in line with a number of other initiatives across several aspects of the company's business designed to leverage its global scale, including the appointment of a global advertising agency for the Heineken brand and the creation of the Global Business Services organization.

Publicis' Starcom MediaVest and WPP's MindShare, have been shortlisted and their affiliate in Nigeria Starcom Media and Sharemind will handle the account in the country. The chosen agency, in first instance, will focus on Heineken's top fifteen markets, which represent 85% of the company's media spend and will be tasked with maximizing the effectiveness of the company's world-class brand building and fully utilizing the company's increased buying power. The company plans to have the new agency in place by the middle of 2012.

Heineken already works with both agencies in the majority of its regions. The Company operates 140 breweries in more than 70 countries..

In Nigeria, the two global agencies (represented by Starcom Media and Sharemind) also work for Nigerian Breweries Plc, Heineken’s brewery in the country. Between them they manage planning and buying for leading Nigerian brands including Heineken, Star, Gulder, Amstel, Legend, Maltina and a host of others that were added as a result of recent acquisitions.

Celebrity Brand Ambassadors: Does It Make Any Impact on Consumers?

With telecommunication giant, Globacom having over 20 Nollywood artistes as its Ambassadors paid multi-million naira, It is quite interesting to see the rate at which endorsement is growing in the country as more brands adopt the promotional tool too lately.

According to report on Nigeria films, Ramsey Nouah and Chioma Chukwuka Akpotha earns N15 million, while Ini Edo, Rita Dominic, Uche Jombo, Mike Ezuruonye, Funke Akindele being paid N14.5 million, N13 million, N13 million, N12 million; Monalisa Chinda and the two newly appointed a Glo ambassador too, Kunle Afolayan, Odunlade Adekola are paid N10 million.

Other artistes on the brand lists also include: Bright Okpocha [Basketmouth], Ego Ogbaro [Ego!], Ali Nuhu, Desmond Elliot, Mike Ezuruonye, Sammie Okposo, Nonso Diobi, Yakubu Mohammed, Stereoman Ekwe, Wasiu Alabi Pasuma, P-Square and Casey Edema.

Before now Chivita, Guinness, Airtel, LG among others leverage on brand endorsement as a promotional model tool by seeking A-List actors, actresses and musicians with the aim of creating increase in product awareness, providing product information, creating an association in the consumer's mind between the brand and a particular idea as well as handing items to consumers, such as a sample of the product itself, a small gift, or printed information.

This year, the trend was hugely embarked on by more brands, adopting brand ambassadors as part of their way of preserving status and prestige in the competitive world of business.  Early in the year, Sasha and Banky became Brand Ambassadors of Samsung, while Ikechukwu, Durella, D'bang, Kingley (former KC Presh), Stephanie Okereke, Agbani Darego also became Brand Ambassadors for Sminoff, Chevalier Brandy, Chris Aire, Grant of London, Kanekalon, Arik Air Nigeria with Kel and Mo’chedda also endorsing Soulmate hair cream respectively.

On the world scene, David Beckham, a man that needs no introduction was signed up by Samsung Electronics Co. Ltd to act as its global brand ambassador.  The market leader in consumer electronics and the Worldwide Olympic Partner for Wireless Communications Equipment announced an exclusive agreement with David Beckham to be its global brand ambassador for the London 2012 Olympic Games. Beckham began his ambassador role with immediate effect and presently playing a key part in raising awareness of Samsung's sponsorship of London 2012 as a Worldwide Olympic Partner.

According to Wikipedia, a Brand Ambassador is an official representative of a brand, a product or a company. His duty is usually to help customers, answer their questions and motivate them to purchases. Brand ambassadors contribute to building brand-awareness, help to customer service and direct promotion. Brand ambassadors are usually paid external employees selected from community of loyal customers or people who know the market and customer needs well.

A Brand Ambassador(s) is someone who embodies the brand he or she is endorsing and most times are personality, employed to provide credible, trustworthy promotion and visibility to a brand with a give and take with her and the brand. Just like they represent the brand’s product, values, style and personality; the brand must reflect the Ambassador’s character as well. This often is an enthusiastic customer who is not hired by the brand but her positive reviews provide grassroots exposure.

They work at the grass roots level in a marketing campaign. They do it in the streets with the consumers who are being targeted for these products. Their job as a BA is to know the product trough and through as if they made it. They need to know the product so they can not only explain what it’s for, but to also highlight strong point and answer questions if people have them.

No doubt, the whole battle between brands is the war of relevance. The challenge of the marketer is to find a hook that will hold the subject’s attention and gain more market share. Like every other promotional tools, the use of brand endorsement in Nigeria have recorded a huge increase this year.

The question is: does it really have any impact on the customers? When BrandIntelligence toke to the street of Lagos, to find out from consumers, many agreed that it sometimes affect there purchase decision making and by this means, have made them to buy more of some of the brands over time.

Dare Oyetunji, a Sociologist, believes many brands are seeking for other alternative to be unique in their way of reaching out to their target prospect and thereby leveraging on brand endorsement as a tool to further get them into the mind of their target market.

His words: "The modern world is filled with advertisements, and it is hard to get noticed. Differentiation is difficult to set and so is to get the viewer’s attention. The various marketing tools like magazines, newspapers, billboards, websites, radio and television etc. are all cuddled up to steal even the customer’s smallest fraction of time, so that they can blabber out everything attractive about their product. I think brand ambassador(s) help to extend the awareness of the brands and its working for the brands in Nigeria."

Michael Smith, a Mass Communication student, said: "Yes! I bought my Samsung phone when I saw one of my favourite artistes, Banky W in a Samsung TVC endorsement.  Brand Ambassadors really help drive great interest in a brand and I think that is why more companies are having more A-list personalities to endorse their products.

"I think it is working, if not more companies will not be following the trend and pay so much to have a Brand Ambassador. Personality appeal is an element of advertising that help create a good promotion and patronage from the customer because of the confidence people have in celebrities and always wanting to emulate them", stated Ishola Adebowale, an Economist.

A student and musician, Sokale Samuel agreed with Adebowale, stating that most youth of today paying attention to most of the top celebrities who are mostly found at latest parties, events, concerts, and movie premieres, hence want to be like them. “Sometimes I found out that I buy some things that I do not really need them and I found out that I buy most of them because I saw them on my role models in the entertainment industry most especially the top artistes like D'Bang, Tuface, Psquare and the likes”, he claimed.

Adefila Tunde, also a student said: "No, it's not working because today's prospects know what they want. I'm not usually move by it. Sometimes those celebrities are out of fame, they are no longer relevant to their own industry not talk of them commanding any brand prospects loyalty. For me, it's a new strategic appeal that creates awareness for the brand but do not change my purchasing decision."

"As for me, I believe it’s not everyone that can be bought over by a brand through endorsement by celebrities. Moreover, some of those celebrities do not use the products at times; they only pretend to be a good customer too - all in the name of brand ambassadors. I don't see the reason why I would fall for that and go for such products" said, Ugo Daneil, a Business Analyst.