Presentation to Chief Executive Program-23

Lagos Business School

And Visiting Chief Executive Program Participants of the

Strathmore Business School-Kenya

Olu Akanmu

June 2014

http://olusfile.blogspot.com

Twitter:@OluAkanmu

Olu.akanmu@yahoo.com

Sharing Lessons and Perspectives in

Marketing

1 Olu Akanmu, June 2014

Marketing Myopia How defining a market too narrowly by product or delivery form rather

than by use/ customer need can lead to marketing doom

The story of Allenbury’s Glucose D and Lucozade My bosses at the old Glaxo in the mid-1980s used to say we had 90% of the

Glucose Market. Our competition was defined by product form (powder) rather than the

consumer need which was energy replenishment We were blind-sided by Lucozade which started small and niche as energy

replenishment for illness and today has extensions into sports and broader nutritional health drinks

Lucozade and its extensions is now the undisputed market leader. A Nigeria classic case of Marketing Myopia discussed in the famous Harvard

Business Review Classic by Theodore Levitt in 1960. Marketing Myopia is still happening today in many industries and categories

especially with very successful incumbents who refuse to innovate

2 Olu Akanmu, June 2014

Given the commoditization of many

industries and product categories,

the art of building strong brands

can be real competitive advantage

Understanding product architecture at core/ generic and augmented level

Product functional tangibles at the core and differentiating intangibles at the non core.- service, lifestyle, image, emotions

Product as reflections of consumer actual and ideal self concept

Lifestyle marketing

The softer issues exterior to product core tend not to receive enough senior attention as they seem less intellectual, yet they tend to be real driver of consumer choice especially in many industries where functionality is likely at par among players

Lovers Plus-South Africa, Gulder, MTN

3 Olu Akanmu, June 2014

With very significant income inequality in

Nigeria, where the top 20% of population

control 60% to 70% of discretionary spend, a

fair share of market leadership in the higher

demographic is critical to market leadership

Telecoms. MTN, Globacom

Consumer Goods

Financial Services. GTB.

4 Olu Akanmu, June 2014

Given that Nigeria is a young country,

brands that are positioned to be

youthful while being aspirational tend

to do well on the long run

Telecoms

Consumer Goods Beverages- soft drinks, toothpaste,

Scale from the youth demographic

Your target market may be slightly higher in terms of discretionary spend, but your image may be youthful

Nigeria is a strong aspirational society. Aspirational brands do very well

5 Olu Akanmu, June 2014

Making a strong and unique advertising

promise is easier than truly living the

advertising claim. If you truly live a

promise that is relevant and unique, this

is real competitive advantage

Advertising can buy you time

It can also destroy if customers go back with negative word of

mouth that you are not worth you claim

6 Olu Akanmu, June 2014

The toughest question for CEOs is “Why is

your company different in your industry?

Why should the customer prefer or

patronize you and not the other company?

I have seen so many CEOs ramble and blab about this or say the simple generic things that everybody says with the additional adverb of “better”

Understanding that better and uniqueness do not necessarily mean the same thing can be the foundation of great successes for business.

http://olusfile.blogspot.com/2008/11/be-different-or-die_9843.html

http://olusfile.blogspot.com/search/label/Let%20us%20De-Commoditize%20Our%20Industries

7 Olu Akanmu, June 2014

What is strategy?- Michael Porter HBR

Classic.

Olu Akanmu, June 20148

Opportunities, size and Markets

Differentiation and relative advantage

Choice of markets and trade-offs.

you cant do everything

Sustainability- Protecting the advantage with barriers

Relevant unique assets and capabilities

When the strategic questions of how to

compete in a differentiated and relevant ways

to customers are not resolved by business

leaders, they make their people to work too

hard for marginal returns

Olu Akanmu, June 20149

Are you blaming your people for not working hard?

Have you resolved the strategic issues of how to compete and win in the market?

Do you have a strategy or a series of tactics

There is no tactical solution to a strategic problem

While marketing may look outwardly like

common sense, the art of translating the

complex things that a business does into

simple understandable product benefits and

differentiated value propositions is a science

that needs professional training and

specialization.

Olu Akanmu, June 201410

Hire good marketing professionals and allow them to work

Hold them accountable strongly for market performance

Markets are rarely homogenous in its needs.

The segmentation of markets is key to

learning critical insights for market action

and developing compelling service

differentiation for winning in the market

place.

Olu Akanmu, June 201411

http://olusfile.blogspot.com/search/label/Market%20Segm

entation

Marketing is more than branding even

when branding is core to marketing. The

end goal of marketing is a business

franchise of loyal customers that

translates to strong market share, revenue

and profits

Olu Akanmu, June 201412

Marketing and finance must speak the same language in the board room

Branding is only a means to end? Brand equity metrics like awareness,

likeability and preference are good but they mean very little if it does

not translate to revenue, profits and return on investment

Marketing is more than Sales. Salespeople

are as successful as the products they sell.

Marketing is the art and science of creating

differentiated products and services that

makes the sales effort easier because of the

product’s compelling proposition.

Olu Akanmu, June 201413

Professionalize your product management

End to end responsibility for managing product markets for

market share, profit and return on investments

Your CFO should be a strong partner to

Marketing in creating long-term shareholder

value. Is your CFO a book-keeper that

manages the books in 30 days or a value

manager that works with Marketing to

manage market investments for long term

value creation?

Olu Akanmu, June 201414

User imageries of brands sometimes

need to be ahead of the user profile to

make the brand aspirational, to

command price premium and higher

return on investments.

Olu Akanmu, June 201415

The Gulder drinker in Ajegunle takes Gulder because he believes it is the beer taken by Ikoyi people.

Even the poor has life aspirations. Brands can be positive reinforcers of life aspiration to connect to the heart an soul of their target market.

MTN user imagery was deliberately made to be ahead of its user profile to build prestige and price premium unlike Econet.

Head-on collision with market leaders by

challengers will most always lead to failure.

Challengers must find the weakness in the

leaders strength and attack there with focus

and concentration for market success.

Olu Akanmu, June 201416

Never attack a market leader or incumbent on its strength

The market leader has more resources than you

Find its soft underbelly and attack there. Explore opportunity for flank attack on uncontested niches and spaces.

Guinness and Legend, Gulder and Satzenbrau, Guardian and Comet

How to attack a market leader: http://olusfile.blogspot.com/search/label/How%20to%20Attack%20a%20Market%20Leader

There are no unprofitable market

segments. There are only unprofitable

business models. Every market has got

its own key. You only need to find the

right business model to unlock it.

Olu Akanmu, June 201417

The microfinance or lending institutions driving financial inclusions are showing that even the bottom of the pyramids can be extremely profitable with the right business models

The use of technology to lower cost, innovation in distribution channels and product packaging is unlocking lower ends of markets that many thought traditionally were not profitable in developing countries.

Equity Bank of Kenya has unlocked the lower end of Kenya financial service industry, a different model from Barclays and Kenya Commercial Bank.

Social media has created a

sophisticated, well informed and highly

involved consumer who tells his story

and experience simultaneously with the

brand.

Olu Akanmu, June 201418

Real time information is available to company and customers in interactive relationships

A more transparent real time world. The highly sophisticated and networked consumer.

From one way communication to interactive dialogue and total customer engagement.

If you are not telling your story and engaging the customers, he is engaged in his community of

interest telling your story.

Bring Back our girls. Lesson from the Jonathan political brand.

Authentic brands endure and do so

for many generations. If you want

your brand to endure, find your own

authenticity.

Olu Akanmu, June 201419

The authentic is the original. It owns the category. Every other brand is a copy.

Guinness 1759. Nike..It is like Nike

Coca-cola- the authentic cola

The authentic commands a price premium

Create your own authenticity and defend it. If you are a challenger, don’t try to be like the original. Find your own originality or authenticity.

GT Bank found its own authenticity despite the authenticity of First Bank.

The customer relationship is more than a

singular transaction. Organizations that

have a life time value paradigm of their

customers beyond a single transaction

will build enduring franchises.

Olu Akanmu, June 201420

Think from singular transaction to lifetime relationship

Your profit at the customer level may not necessarily be at acquisition stage

How many products or market initiative have been killed because of business cases that have a short- term view of the customer relationship?

Businesses that are organized around

customer segments and their needs

tend to build better enduring franchises

than those organized strictly around

products.

Olu Akanmu, June 201421

How strict product view of a business can kill it. The Hotel and the Theme park story

Segment first before product. Break down product-silos.

Outside –in thinking versus Inside-Out thinking

The challenge of many banks. This is our product ., where is the market . Or, what does the market need..how can we satisfy it?

Does your accounting and financial reporting recognize customer segment? You may be taking mis-informed profitability decisions if not.

Only strong brands should extend

themselves into new categories. A weak

brand extending into the territory of a

strong incumbent is likely to be crushed

by the strong incumbent.

Olu Akanmu, June 201422

Gulder, Gulder Max and Guinness

On Gulder, Brand Equity and Extension.

http://olusfile.blogspot.com/search/label/On%20Gulder%2

0%20Brand%20Equity%20and%20Extension

Because knowledge and capabilities today

tend to diffuse very fast in industries, the

drive for innovation and bringing it to life

can be real competitive advantage

BankPHB and Retail Product Innovation

Glo per second billing

Telecoms and the art of constantly innovating around the edges Pricing, form, timing etc FMCG..lemon, strawberry and orange flavour Customer experience and shop design Innovation must be in the CEO’s agenda

23 Olu Akanmu, June 2014

Exploitation of current viability and capability (make money today but may not be there tomorrow

Exploration of future viability (Perpetual start up and does not make money. Permanently inventing a future that has not arrived.

Great business must be able to do so at the same time

Organizations need to be more

ambidextrous to be here today and to be

here tomorrow. Don’t be the blackberry of

your industry

24 Olu Akanmu, June 2014

In a dynamic world of constant change

of driven by regulation, changing

consumer preferences, technology,

industry convergence, organizations

need to be both stable and agile

Olu Akanmu, June 201425

Stability is key to exploiting current opportunities.

Agility and Flexibility is key to exploring future opportunities

A stable core at the centre and flexibility at the edge

Early start ups may need to be more agile than stable..

Your business and marketing skills can

make a great difference in social change

Social Marketing and the Society for Family Health

Advertising and marketing has played critical roles in the

adoption of positive reproductive health behaviour

Created program sustainability as people pay for their

products because they are convinced of their value

Branded and marketed products are used more than free

products from Nigeria to South Africa.

26 Olu Akanmu, June 2014

Leaders must build institutions that will

outlast them. It starts from the value

system of the entrepreneur and the

founder.

Olu Akanmu, June 201427

Institutions built on bad values ultimately self-destruct no matter their initial success

There is a greater purpose to business than profit. Great purpose inspires people to perform. It makes work to be greater than work. Altruism – solve a major social problem profitably Adventure- expand frontiers to where people have never been Excellence – setting new standards Support this institutional purpose with a good value system

Further References

Olu Akanmu, June 201428

15 Changing Context of Marketing Today.

http://www.slideshare.net/olu_akanmu/15-changing-

contexts-of-marketing-today

The Challenges of Marketing in Nigeria.

http://olusfile.blogspot.com/search/label/The%20Challen

ges%20of%20Marketing%20in%20Nigeria

Your boring product is what you make out of it !

29 Olu Akanmu, June 2014