Marketing guru Mazi Sam Ohuabunwa in his latest book WIRED TO LEAD written to mark his 70th birthday has hailed Mike Adenuga’s Globacom as one of the Nigerian companies giving the multinationals a good fight and “a run for their monies” to build a marketing company that “essentially understands the power of marketing and innovation.” “What this basically means is that if you get your marketing right, you are most likely to get your business right. I strongly recommend this to business managers who come from accounting and operations background and often see advertising and some other aspects of marketing as avoidable expense,” he wrote. Excerpts:
The impact of marketing in propelling business growth is not generally well understood in many climes. In many cases where there is head knowledge or intellectual understanding, there is no adequate practical demonstration. In Nigeria, it was mostly the multinationals who understood the true impact of marketing, as most Nigerian businesses and products were under-marketed, though the tide is turning. The matter is worse with businesses in the small and medium scale enterprises sector. Many of them have neither the intellectual understanding of marketing nor the ability to execute marketing programmes. For many, marketing is same thing as opening a shop and displaying wares, then pray and hope that customers will come!
As a fellow of the National Institute of Marketing of Nigeria and fellow of the Institute of Management Consultants, I have undertaken several business consultancy assignments. Also, as Founder of the Sam Ohuabunwa Foundation of Economic Empowerment, I have offered free consulting and counseling services to many young entrepreneurs, including many that I mentor. One thing always stands out: Insufficient appreciation of the ramification and impact of marketing on business growth. When I review their business plans, the focus has always been on production and procurement, with paltry provision for advertising and promotions—which are very critical elements of marketing. From these interactions, I have come to the conclusion that poor marketing is at the root of the poor performance of many businesses and it is also the reason many Nigerian businesses remain small for too long.
As I said, the first real problem is lack of proper understanding of the role of marketing in business performance and growth. Many business owners and managers seem not to know that marketing means creating customers for their business or products and that without customers, there is no business. If any business desires to justify its existence or wants to grow, then its central business is marketing—creating customers and growing the customer base. Very few understand that marketing comes even before the creation of the product or service! Marketing uncovers the needs which a product or service will satisfy through marketing research. The second problem is the limited understanding of what constitutes marketing. All activities and efforts to win customers or make a sale constitute marketing. And that includes marketing research, advertising (print and electronic; online and offline), promotions, exhibitions, selling and public relations. And it costs money! The third problem is poor funding. Many Nigerian businesses are poorly financed. And in a high-cost economy, business owners are struggling with many costs that have become more or less “fixed” and by the time they are done, there is not much for “discretionary” expenses like advertising and promotion. Matters are not helped by the fact that advertising is a strategic expense which may not yield the anticipated result immediately. Sometimes it does, but often it does not. For those who understand, it is often yesterday’s advertising that yields today’s customers and income, while today’s advertising will yield tomorrow’s customers and income.
When I consult for companies, very often, it comes down to two major issues: poor business outcomes (low sales and poor profit) and poor financing (capital to grow the business or to meet existing obligations). My starting point will always be to find out if they have a good product or good service. Does the product meet its label claims? If yes, my next step is do a market research to see if there is an underlying demand for the product or service. If there is, then I do marketing survey to determine the competitiveness of the product or brand. How does the brand compare with similar products in its category in the marketplace—in terms of brand appeal, pricing parity etc.? These are essential marketing diagnostic tools. Thereafter, I will look at their marketing spending and compare with competitive brands. Then I will check on the sales formation and selling plans, reviewing the quality of the experience and skills of the human resource. Following from this, I make my recommendations, which essentially is to request a thorough re-jigging of the marketing and sales functions and activities. In most cases, those that accept our recommendations and allow us to support or monitor the implementation of the plan have shown a rebound in revenue, profitability, and market share. It is true that poor financing is a critical reason many small and medium scale businesses are not doing well. It is also true that this category of business find it difficult to obtain bank loans. But in my experience, we have solved financing problems through effective marketing. First, is that effective marketing leads to increase demand for products; increased demand leads to faster conversion of raw materials to finished goods and finished goods to cash. And with more cash, we can place more orders for raw materials and/or finished goods, pay creditors and meet other financial needs of the business.
Second is that increased sales and cash flow will attract credit from suppliers, which means we can buy more stock without first paying for them, so we can produce more and sell more. Third, through effective marketing, demand increases for the product and this can then attract more distributors, some who can be made to deposit cash or pay in advance for goods, thus improving inflow to the business and enabling it to expand operations. This is how effective marketing can help solve many business problems.
In Nigeria, example exists of how the Nigerian-owned telecommunications company, Globacom (or GLO, for short) is competing favourably with multinational telecoms companies (MTN, AIRTEL, ETISALAT). This is essential because the company understands the power of marketing and innovation. Such smaller brands in the SME food and drinks sector like Bigi, Chivita and Lacasera have given bigger multinational brands like Gala, Five Alive and Coca-Cola a run for their monies.