Dear Nigerian businesses: Who is your market?

Dear Nigerian businesses: Who is your market?

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Back in 2015 when I still worked in Marketing on the agency side, I was part of a meeting involving a brand manager from a prominent brewery company. Said company was in the process of launching a new alcoholic beverage that was apparently going to blow the competition out of the water and smash sales records. The meeting was one of those ones where everyone was trying to sound intelligent in front of the client, so you would hear lots of something…something…“Organic Talkability…” something…something… “Estimated Reach…” something…something…“Target Audience Profile…” something…something…“TOMA.”

I must have sat through hundreds of such meetings at that point and in my typical style, I wanted to cut through the buzzwords and get to the point. So I asked a pointed question, “Who are we selling this drink to?” I wanted a clear understanding of who this target audience was, so that we could get down to figuring out how to achieve maximum market impact with our new product. The answer from the brand manager is why I am writing this article today.

Bear in mind that during my time in the UK, I had seen this very drink marketed as the drink of tough, working class bricklayers, satellite TV installers and window washers. In Nigeria however, it was to be presented as a “premium” drink – a sort ofcross between an award-winning San Francisco craft beer and the finest French Sauvignon Blanc, lovingly brewed to the sound of soft Alté music on a starlit Lagos beach by a shirtless Richard Mofe Damijo.

“Pretentious” does not quite describe it.

Targeting nonexistent customers: A Nigerian obsession

According to the brand manager, this drink – known around the world as a generic blue collar working person’s drink – was targeted at a professional Nigerian man or woman, aged 24 – 35, with a disposable income of at least N150,000 a month, who liked to “be part of a group and assert their individuality at the same time.” Putting aside the rather sad idea of buying a pretentiously branded drink in lieu of having an actual personality, what struck me was that this profile was based on absolutely nothing.

Where are all the 24 – 35 year olds in Nigeria with an annual disposable income of N1.8 million? A simple look around shows the very stark and obvious reality that the overwhelming majority of young Nigerians in that age bracket are unemployed or underemployed. Statistically, a Nigerian making N150,000 a month at the age of 40 is a very lucky person indeed. Even I, who just about fit the supposed customer demographic profile at that time, would certainly never have been found in a bar after work cradling a bottle of the overpriced liquor in question, desperately hoping it would give me some personality.

I would either drink something cheaper and less pretentious because of my tight budget, or I would go all out and spend a quarter of the month’s salary on something genuinely premium in a moment of early-20s bravado. In other words, the personality and demographic profile that the brand manager built the entire campaign on was nonexistent. We were trying to sell a product to a customer that did not exist. Unsurprisingly, the launch campaign flopped, and after a few months of underwhelming sales, said brand manager was quietly culled.

This is a common story across pretty much every major Nigerian consumer space. Today it might be a Nigerian car maker proudly announcing that its auto financing program enables people pay 25 percent of the list price of its N7 million vehicles, and then pay the remainder over 48 months. No matter that anyone with N1.75 million in this economy is never going to spend it on a down payment for a tiny entry level sedan assembled in Nnewi –obviously, they would rather buy a used imported vehicle for the same money. This is clear to everybody except the carmaker, which continues to advertise its “amazing” finance offer that nobody ever takes up.

Or it might be the rent financing startup that markets itself as the long-awaited solution to the problem of annual rental payments in Lagos, only to restrict its financing options to salary earners banking N200,000 a month and above. This base of N200,000/month jobs simply does not exist in any reasonable concentration anywhere in Nigeria, so this startup and hundreds of others end up competing for a tiny and shrinking slice of the total market, which means they can never really achieve any appreciable scale. But, premium. Because, you know,premium.

In my previous column, I described the phenomenon of real estate developers attempting to gentrify entire districts of urban Nigeria without any of the upward wage pressure or high paying jobs that should ordinarily support such price movement. In a country suffering dangerously low economic growth, with at least half of its population numbering among the very poorest people in the world, luxury real estate is clearly not an industry with good growth prospects. But who will tell the developers?

Everyone is furiously committed to building, manufacturing and selling products to a class of aspirational, well-travelled, cash-flush youthful, well-paid Nigerian consumers whose existence has never been proven. Where, pray tell, are they? Where are the dozens of millions of young bourgeois Nigerians making up this mythical “premium” market? I have never seen them. Have you?

Unlike Nigerians, facts do not lie

On some level, perhaps one can feel some sympathy for Nigerian businesses that fall into the “premium trap.” Nigerians after all, are world champions at presenting themselves in a way that suggests they are better off than they actually are. Without reliable market insights, it can be easy to fall for the “there is money in Nigeria” illusion, leading one into an unending rabbit hole of hopes, dreams and unfulfilled promise. So what do the numbers actually say?

Well first of all, the most important number of all – Nigeria’s population – is basically unknown. Depending on who you ask, we are anything from 130 million people to 210 million people. Nigeria has never had a census – a real census that is, and not the exercise that mysteriously finds more people in Kano than Lagos, and reports greater population density in arid areas than around water, in defiance of all human settlement patterns in recorded history. Since no one knows how many people are in Nigeria, “x hundred million people” are not the “market,” except for the purpose of selling oneself a dream.

Nigerian businesses need to define their market realistically. As previously established, this country has an addressable “premium” market of just about 5 million people. Playing outside of this tiny market entails realistic pricing, packaging and branding. Dettol for example, has just launched in cheap sachet form. One of Coca Cola’s most successful distribution channels is roadside hawking. MTN famously built its unrivalled user base using a buy-one-get-one-free promotion. These are businesses that understand the reality of the market they operate in, instead of basing their business models on nonexistent 25 year-old millionaires.

If you are in charge of the market strategy of a Nigerian company, it would help to take a stroll outside of your air-conditioned office space every once in a while, and experience the country the way most Nigerian consumers do. In so doing, you might just avoid coming up with more fantastic solutions to problems that do not exist.

 

David Hundeyin



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