The African Marketing Association defines a brand as any feature that identifies a company’s products and services as distinct from those of its competitors.
It goes on to state that the concept of a brand has evolved to encompass identity insofar as it affects the personality of a products, company, or service. Companies spend millions, if not billions, of brands investing in their brand to ensure at aligns with their stated business objectives. And with anything marketing related, these brand campaigns are designed to elicit those elusive warm and fuzzy feelings amongst end-users to ensure that they continue to buy the products and services related to that specific brand.
It is for this reasons that the Brand Africa 100 will get the tongues wagging: it is based not on companies with the biggest marketing budgets but rather on what consumers think. The research uses a methodology that encompasses qualitative, quantitative and secondary research developed by the Brand Leadership Academy in partnership with TNS, an international consumer knowledge and information company, and Brand Finance, an independent valuation consultancy.
Brand Africa 100 is the first survey across the continent to explore the pan African brands. “What makes this inaugural study unique is that it’s not just consumer based or values based as most studies, says Thebe Ikalafeng, founder and chairman of the Brand initiative.
“It truly oks at brands that are valued by consumers and investors taking into account their affinity with brands and how that translates into value for investors.”
The study recognises the most admired international and African brands on the continent and is rated by consumers across Botswana, the DRC, Ghana, Kenya, Nigeria, South Africa, Tanzania, Uganda, and Zambia.
For the research buffs “We looked at the most developed markets in Africa and focused on the urban environments in those countries. Respondents were asked to name the five local and global brands they admired in order.
Because we did not provide them with brand lists, the responses were completely spontaneous”, says Neil Higgs, senior adviser and head of innovation at TNS in term of the methodology, TNS calculated a score for each brand based on rank sums (simply the sum of all the mentioned ranks for each brand).
This was obtained by multiplying the rank by the number of people for each rank. In turn, the index was created by taking into account the sample and population of each country. A weight was then created for each country. “People were very clear on the top 20 brands in the Brand Africa 100, but thereafter the decreased”, continues Higgs.
Curiouser and Curiouser
One of the things that quickly grabs attention is fast Nokia was rated as the most admired brand in Africa. “This is a totally different shift from what we are seeing happening globally with the brand.
Nokia has been taking a hammering nationally and is seen to be playing catch up to Apple. Yet in the Brand Africa 100, Apple does not even feature” says Oliver Schmitz MD for South Africa at Brand Finance. But he quickly points out that this is hardly surprising, given the high end target market for Apple devices. “In Africa, the are basic Nokia handsets appeal to a wider segment, as people use their mobile phones for SMS and their entry level features”, he says.
What digital divider?
In fact, live of then top ten companies in Brand Africa 100 are either telecoms or electronics. companies. “With brands such as Nokia, MTN, Samsung, LG and Globacom featuring in the top ten, it is clear that mobile technology is huge in Africa. Handsets are important in Africa. As bandwidth improves and people get access to cheaper smartphones, the adoption rates will be even quicker,” says Higgs.
He believes that as markets mature, mobile content and applications will gain relevance, with South Africa expecting to leapfrog the developed market in this regard. “However, there are many countries in Africa more advanced than South Africa when it comes to bridging the digital divide Other African countries do not have the same bandwidth problems that exist here. While feature phones currently drive South African mobile adoption, the increasing availability of cheap Chinese phones will see this change as people jump past laptops and on to internet-driven handsets, Higgs continues.
Quality issues Adding to this is how people perceive the difference in quality between African and international brands. “African brands need to push their local agenda. They need to make people aware of their economic investment, development and the associated employment they create,” says Schmitz. Coca-Cola, which ranks second in the Brand Africa 100 in terms of admiration, sets the example of how a multi-national drives the local agenda. The beverage company is continuing to invest in the health of communities from an economic, social and environmental perspective. It feels that the content of its character is as important as the content of its beverages.
The prominence of Nokia and MTN are further testament to how people are more interested in technology that empowers them to drive their own businesses. “To a certain extent, technology is becoming more accessible and affordable in Africa. This is especially true when you compare it to the automotive industry. With South Africa containing 50% of all cars in Africa, it shows just to what extent product in affordability comes into the equation.” Schmitz says.
Getting the brand strategy right
But it is not only because of technology developments that mobile brands feature strongly. “By brand value, MTN is the star of Africa. It was the only African brand to make our Global 500 survey, coming in at 199th position. MTN is doing the right kind of things when it comes to brand. It started small and then began its African expansion,” says Schmitz.
For Absa Group chief marketing and communication officer Happy Ntshingila brands connect with the needs that culture, and social standing. And since Absa leads the Brand Africa 100 banking sector in terms of brand value, he just might have a point.
“The philosophy of building a brand remains the same irrespective of the geographical location. However, the nuances of each market’s particular needs call for different focus and investments to meet that particular need. Building a brand in southern Africa is much easier when you have a long heritage and recognised presence in the market,”says Ntshingila. But are there differences between African brand value and admiration and those of other international markets?
Schmitz feels so. “An example is Coca Cola, which is seen differently in other international territories than it is in Africa. If one looks at the Brand Africa 100, there are a number of smaller brands that feature prominently.
Having said that, 66% of brand value has been generated by international brands, he says. He argues that African companies are not leveraging the full effect of what can be achieved in Africa, But it is difficult to pin it down to capital (local versus multi-national budgets) or intellectual property (limited local funding versus multi-national investment into research). “In Singapore for example, the government stepped in and tried to help develop local brands. This was done by subsidising brand value creation there. Whether something similar would work in Africa remains to be seen,’ says Schmitz.
Another potential reason for the high proportion of international brands in the Brand Africa 100 could be trust. “Even though people pay a bit more for international brands, they argue that if it is good enough for the rest of the world, then it is good enough for us. There is still a stigma associated with African brands. One only needs look at civil wars, local unrest and corruption to see the negative impact on local brands,” believe Schmitz. “One only needs to look at Nigeria to see this in action “he says. Schmitz believes that it is difficult for Nigerian brands to go global because of the perceptions of the country. “South Africa is still seen to be the leader in terms of brand on the continent. In part to the successful hosting of the 2010 FIFA World Cup. No matter how you look at it, though, there still a lot of work for nations and governments to rebrand the negative perceptions.” he says.
