Listen! A professor of marketing is talking (1)
By Sun News Publishing
Monday, March 31, 2008

Abimbola Photo: Sun News Publishing

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Dr. Temi Abimbola, who was in Nigeria, recently, is an Associate Professor of Marketing at the Warwick Business School, University of Warwick, UK. She is also a strategic marketing thinker who focuses on helping organisations to generate and implement innovative ideas.

In this interview with Ofuma Agali, she takes on marketing issues bothering on the Nigerian economy, competitive sectors such as the telecoms, and the new thinking on innovative and strategic marketing in the world today. Excerpts: Culled from M2.

Give us your background in brief
I am an Associate Professor with the Marketing and Strategic Management Group at Warwick Business School. My research, consultancy and teaching areas are on the marketing of financial services, management research methods and consumer behaviour.

I recently received a major grant for a research on marketing in telecommunications, HighTech and BioTechnology firms. Prior to joining the academia, I worked for Shell (UK) Downstream Oil, Uniliver Plc (UK) and has consulted on major projects for Cadbury Trebor Schewppes (UK), IBM and the BBC. I am currently the Regional Chair of Academy of Marketing, UK, responsible for more than 75 UK universities (including major players such as Cambridge, Birmingham, Leicester, Nottingham, Warwick among others).

You have been in Europe for a while now. As a Nigerian, can you make a comparison between the concept of marketing in the UK and in Nigeria?
I must first of all comment on the positive and vibrant marketing community that we currently have in Nigeria. Although, it still evolves around promotional and advertising activities, marketing has certainly come a long way in the country.

We clearly have a major schism between marketing in developed economies and as it obtains in Nigeria. This is because marketing has evolved a lot since its origin in the US, close to a century ago. Marketing in Nigeria is closer to the situation in some of the BRIC countries (Brazil, Russia, India and China). To expatiate on this, marketing can be conceived as either:

(i) functional activities involving the development, implementation and refinement of the major mixes such as pricing, promotion, advertising, packaging, pricing and product development; or,
(ii) as strategic value creation process.

The functional orientation is at the heart of marketing in Nigeria and many of the BRIC countries. In the UK, the strategic orientation of marketing is beginning to take hold again. I am saying this again because marketing as espoused by people like the late Peter Drucker, Peter Doyle, Theodore Levitt, George Day at Wharton; Nigel Piercy, and Robin Wensley at WBS, represents the strategic view of marketing that was originally at the heart of what we call the Anglo-American approach. This approach sees marketing as pivotal to competitive economy.

At the heart of this approach is that successful organizations in an open competitive economy must ‘do’ marketing. The dominant logic of strategic marketing is that the market and the customers from the market should be the starting point in the development of any business model and strategy formulation.

Central to this strategic view of marketing are: Customer, Competitors, and Choice. Your ability to develop innovative offerings (e.g ideas, goods, services, products etc) must logically stem from a clear understanding of the core customers that you are likely to attract and the best way of delighting them with such offerings. One also needs to have a clear understanding of current and potential competitors and alternatives one will be competing with in such market.

Finally, the imperative of numerous alternatives available to customers in an open market means that one must think about the factors that are likely to influence customer choice and purchase decision making in developing any offerings.
What are those things you can consider as new thinking in marketing today?
As marketing evolves to become the heart of profit and non-profit organizations, a lot of ‘new’ ideas and innovative thinking on existing ones are beginning to emerge.

These are thoughts that are likely to dominate and influence the strategic orientation of organizations throughout the world. They can be summarized as follows: Servicisation, Innovative ways of learning about customer behaviour; Approach to segmentation; the development of new offerings to delight customers in a continually fragmented segments grouping; increasing importance of CSR issues (such as fair trade, organic food, ethics, sustainability and environmental impact of packaging) as hygiene factors in value propositions; and Sustenance of premium pricing.

What can you say we are doing right or wrong in Nigeria?
Certainly, marketing is on a positive, albeit early, stage in its development ladder in the country. In particular, the development of retail outlets such as supermarkets and shopping malls and their relationships with national brands are major issues to address. We are certainly doing something right as far as marketing is concerned, for instance we have seasoned practitioners such as Bola Akingbade, Chief Marketing and Strategy Officer at MTN and a number of up and coming ones such as Tunde Falase formally at Cadbury now at Guinness Nigeria Ltd., and so on.

Looking at the Nigeria economy and business environment in general, what is your opinion of the level of marketing knowledge in Nigeria?
The level of marketing knowledge in any society is a reflection of economic advancement of that society. Nigeria is no exception. For example, almost 20 years after perestroika that led to the abandonment of centralized economy in the formal USSR and that of the economic reform in China, one can see the immediate in-road that marketing has made in those countries.

The same thing applies in Nigeria particularly in the last seven years. We had an initial start that was stultified by the economic upheaval following the Structural Adjustment Programme in the country. Certainly, we have lost a lot of ground and have to catch up as our economy rebound back on the growth path again. My view therefore, is that although, the level and the development of marketing is not commensurate with our educational history, it is so for the level of economic development of the country.

What are the major marketing challenges for business growth in Nigeria?
In operational terms, logistics of distribution, retail outlets and the development of meaningful customer segmentation strategy are major challenges. These are symptomatic of our lack of basic infrastructure such as effective and integrated transport systems (road, rail and waterways) and chronic power shortage.

Perhaps most importantly, we also need to imaginatively develop our human resources beyond university degrees. For instance, many of our major universities do not have credible courses on marketing and where they are available, they are simply reduced to functional marketing that may not necessarily equip their graduates to work as independent leaner capable of developing innovative ideas for their employers.

Companies have begun to make a lot of branding efforts aimed at differentiating their brands from others. However, sometimes they find themselves in an open field where price is the only differentiating factor. Why is this so and how can they get out from this?
When a sector is so ‘crowded’ and price is the only differentiating factor, clearly we have a product parity situation. There are a number of factors that could be responsible for product parity. Lack of innovation (in design, value propositions and basic product) and the inability to meet changing consumer needs effectively, are two key factors. In a sector without innovation, customer inertia quickly sets in, and this leads to price competition. Another factor could be over reliance on USP rather that brand value propositions.

This is to say that although such brands are product driven, they do not innovate, maintain and improve this core element of the brand as user knowledge of it improves with time.
To get out of brand parity position, firms must offer perceived benefits that balance perceived monetary sacrifice in relation to the consequences of not buying a brand. They must develop the emotional and perceptual aspects of their brands. As economic prosperity and possible trickle down effects rebound across the country, aspirational level would rise with it. Brands must develop perceived quality factors as much as their objective quality factor to maintain their differentiating ability.

What are your views about brand Nigeria? What are those things we need to fix? And those things we need to play up?
‘Brand Nigeria’ is at a pivotal stage at the moment. We initially confused branding with advertising. This is a common misconception. Let me explain further. Branding is about the development of cohesive, appropriate and relevant value propositions that you think your would-be customers are likely to be delighted with.

In that sense, although advertising and other integrated brand promotions and communications are important, it is essential to have coherent and relevant distinguishing value propositions to communicate. The same thing applies to nation branding.

Therefore spending a lot of money to improve our image without changing our behaviours and offering something good that we want to be known for, does not seem to be the right approach in my view. If we are now able to attract tourists and they arrive in our country without adequate infrastructure, peace of mind to enjoy their tours and stable political certainty to reduce their perceived risk of ineptitude, then our nation branding efforts are likely to have the opposite effect.

We have a saying in marketing that nothing will kill a bad product better than good advertising. So, if we have good image building advertising and no correspondent improvement in our social, political and economic refinements, such ‘image’ building would only expose our soft underbelly of incompetence. Take the example of China, after the Tiananmen Square massacre in 1989, a lot of bad publicity followed. However, subsequent economic development in China has virtually reduced the negative effect of that massacre for the country.

For me, we need to fix our economy, and to do that our infrastructure need fixing. We need to play up the size of our market, natural and human resources potential. For example a report by the Marketing Science Institute looking ahead at the global market place in 1973, 2003 and 2013, place Nigeria on the list of 5 countries for growth in the world (along with China, Brazil, India, Indonesia). We certainly have a lot going for us if we can only fix our infrastructure and in turn the economy, and then also, maintain our fledging democracy.

Certain sectors of our economy are very competitive. Taking the telecom sector for instance, how can companies in that sector compete effectively against each other?
For me, it is going back to the basics; and this includes making sure that they have a robust value creation process in place. The sector has to balance its technological benefits, service elements and the logistics of delivery in sync with each other.

While this is easy to outline, in reality it is more involving to link them together in a way that maximizes consumer perceived value propositions as determined by the customers’ willingness to pay premium price for their offerings.
Even as saturated as the telecoms market is in Nigeria, a fifth GSM Company, Mubadala, is coming up. What does this portend for the existing operators?
I am in disagreement with you on this. Actually, the Nigerian market is too large for just four operators. The number of providers are currently not enough to provide (coverage or they do not have enough capacity to provide seamless coverage).

I have noticed that a number of customers now own two or three mobile numbers to provide them with full coverage across the country. My UK service provider 02 works effectively all the time, not only in the UK, but everywhere around the world including the provision of roaming services from the three key operators in Nigeria. The irony of this is that my UK provider has better coverage in Nigeria than all the local Nigerian providers.

In entrepreneurial strategy, people like Edith Penrose aptly suggested that at a stage in the development of rapidly growing entrepreneurial organizations (they are entrepreneurial in taking the high risks that the Nigeria opportunity represented before they entered the country), they will become so large and enter an interstice stage.

This is a stage in which such organization will begin to shed ‘crumbs’ from the market that they are too big to serve. Such small market will in turn represent ‘niche’ market for small operators that are likely to follow this success. It is this interstice development that will give rise to more and more firms as the market develop further to serve 100% of the market.

The challenge for MTNs of this world is to think imaginatively ahead and strategize on how best to sustain their growth either in the same market through horizontal or vertical diversification. Such diversification would include technology and/or innovation-based, geographical-based, or service-based diversification. For example there are a number of existing propositions that the major players should be able to provide.

In my view, increased competition in the sector represents challenges for the major and opportunities for further developments in service provisions for consumers and the Nigerian economy in general.
In today’s crowded and ever dynamic market, what strategies do you recommend that businesses use to maintain their competitive advantage?
Entrepreneurial marketing. This entails the development and integration of marketing and entrepreneurial strategies of creative destruction and innovativeness. ‘Creative destruction’ is an economic idea applied to marketing strategy and it is at the heart of competitive economy. The late Joseph Schumpeter was one of the most notable economist who used the phrase to describe the process of transformation that accompanies radical innovation in an idea, product, process or service development leading to new product developments.

Its application in brand portfolio management entails the process of brand mutation that continually develops new offerings such as the creation of master brand, brand extension or category extension to keep up with customers’ taste for newness and uniqueness and maintain strong market presence.

Examples of this in the technology market are (i) the quick obsolescence of fixed land-phone at the onset of cellular/mobile phone, and, (ii) the destruction of main frame computer sector with the advent of desktop PC. In the first example, the market of fixed phone creatively became the main outlet for internet access. Creative destruction occurs when something new and/or innovative eliminates or surpasses something older through innovative development.

In practice, the idea is that any organization with portfolio of products must not view any as ‘sacred cow’ if it is no longer a viable offering in the light of better alternatives or technologically superior offerings. Hence, if you have products that are no longer able to command leadership position where it was able to do so previously, you have to find innovative means of reviving such products or you re-invent it.

Branding facilitates the process of gaining from entrepreneurial marketing. Brands help organizations to build, nurture and maintain their competitive edge in time and space. For example, if you see a picture of the original Benz built over 100 years ago, it is nothing more than a horseless carriage compared to the state-of-the-art machine that is Mercedes Benz today.

However, the brand is the same, it is this ability to renew, reinvent and help organizations to develop their reputations that is the key reason why branding is at the heart of the success story of developed economies.

Afterall, the majority of global brands such as Coca-Cola, Adidas, Cadbury, Pampers, Dove, Nike, Gap, Guinness, etc. earn more from their marketing and branding efforts than from the manufacturing aspect of their operations. Hence, branding as competitive strategy of differentiation based on the development and maintenance of innovative values (note that this is values, not value)should not be equated with ‘cheap’ or ‘low-cost’.