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WELCOME

WELCOME. Branding and Marketing in South Africa Presented by: Prof FJ Herbst (18 November 2009). Map of South Africa. What is marketing?.

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WELCOME

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  1. WELCOME Branding and Marketing in South Africa Presented by: Prof FJ Herbst (18 November 2009)

  2. Map of South Africa

  3. What is marketing? Marketing is an organisational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders. (http://www.cbpp.uaa.alaska.edu/afef/marketing%20re-defined.htm)

  4. Segmentation Segmentation is the process of dividing a heterogeneous group into homogeneous subgroups.

  5. Market segmentation criteria • Demographic - Reflects who the customers are • Geographic - Reflects where the customers are • Behavioral - Reflects how they behavein this usage category

  6. Market segmentation in the wine category [Gluckman (1990: 35) and the South African Research Foundation (2007:2)]

  7. Segmentation tool used in SA in B-to-C www.saarf.co.za • LSMs (Living Standard Measures) VALS segmentation framework

  8. The LSM • LSMs (Living Standard Measures) • LSMs are a measure of wealth based on durables found in the household, and covers the population aged 16+ years. • There are 10 LSMs in South Africa. • LSM 1 = lowest standard of living, LSM 10 = highest. • LSM 7-10 is considered the equivalent of first world consumers. • LSM 4-6 are urban emerging market consumers. • LSM 1-3 are rural and the equivalent of the poorest consumers in the developing world.

  9. Regional breakdown by LSM Limpopo Mpumalanga Gauteng North West Free State KwaZulu-Natal LSM 1- 4 LSM 5 LSM 6 LSM 7 LSM 8 LSM 9 LSM 10 Northern Cape Eastern Cape Western Cape

  10. SAARF @ www.saarf.co.za

  11. Bipolar LSM Groups comparison LSM 10 HIGH (3.0%) DEMOGRAPHICS 35+ Matric and higher, Urban R25 520 avehh income per month MEDIA Wide range of commercial & community radio TV: SABC 2,3, e.tv, M-Net, DStv Daily/Weekly Newspapers, Magazines Accessed internet 4 weeks Cinema & Outdoor GENERAL Full access to services Full ownership of durables, Incl. PC, DVD and satellite dish Increased participation inactivities, excludingstokvel meetings LSM 1 (3.4%) DEMOGRAPHICS Female 50+ Primary Completed Rural Traditional Hut R1 080 avehh income per month MEDIA Radio a major channel of media communication - Commercial radio; mainly African Language Services (ALS) GENERAL Minimal access to services Minimal ownership of durables, except radio sets

  12. SA spending power

  13. Black Diamond segmentation

  14. Segmentation by a leading SA retailer

  15. The marketing strategy in context

  16. The marketing mix • The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives • 7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment • Traditional 4Ps extended to encompass growth of service industry

  17. Product

  18. What is branding? (Kotler & Keller, 2009) A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

  19. Top global brands 2007/2008 http://www.marketingweb.co.za

  20. Favourite brands in South Africa 5 9 1 2 6 10 7 3 4 8

  21. SA BRANDS

  22. Price

  23. Promotion (IMC)

  24. ATL Ad spend in SA (2008)

  25. The TOP 10 ATL (media) spenders in SA 2008

  26. Media growth in South Africa

  27. Some competitive ads.... BMW started it

  28. Audi replied

  29. Subaru needed to say something...

  30. Bentley Chairman had the last word...

  31. Polka advertisements based on the cultural differences in South Africa

  32. Place

  33. People

  34. Processes

  35. Physical environment

  36. SA retail industry

  37. How does Retail fit in?: SA economy: Sectoral contribution to GDP 2008 Source: BER

  38. SA retail industry: Key findings [http://www.researchandmarkets.com/reports/473605/south_african_retail_industry_forecast_2007_2011] • In South Africa, convenience store format continues to register the highest growth in comparison to other retail formats,. • Another reason for the growth of C-store format is changing consumer patterns that have compelled retailers to take this format to consumers. The franchise model will also be used more extensively to attain a faster conversion of unorganized retail sector into organized one cost-effectively. • Retail key sectors such as motor vehicles, furniture, clothing, media, property, and cellular phone - all are benefiting from the booming middle-class and will continue to reap benefits in the future as well.

  39. SA retail industry: Key findings (continue) • Real disposable income is the core driver for consumer spending and it is expected to grow at a moderate rate during the review period (2007-2011). • Although the demand for durable goods (furniture and appliances) and semi-durable goods should remain buoyant over the forecast period (2007-2011), but the greatest opportunities for retail sales growths are likely to be in the food and groceries sector. • Organic food market, the fastest growing segment in the food sector after baby food market.

  40. South African retail industry

  41. Major players in the SA retail industry

  42. Shoprite is the most shopped store in LSM 2-6Pick ‘n Pay is the most shopped store LSM 8-10 • 17% of LSM 10 consumers shop at Woolworths – same for Checkers! • Woolworths and Checkers has the same consumer penetration into LSM 10. • 78% of LSM 10 consumers shop at Pick ‘n Pay (Source: AMPS 2008)

  43. Clothing and footwear market overview • South Africans spent R82.7bn on textiles, clothing, footwear and leather goods in 2007 - Statistics South Africa • The Retailers’ Liaison Council (RLC) members account for around 60% of this with balance in smaller chains and independents Source: RLC, Investec Securities Research

  44. Food and grocery market overview • The total South African food and grocery market is valued at around R250bn roughly split evenly between wholesale (retailed through small stores and informal outlets) and the formal retail sector • The total annualised general dealer market measured by Statistics South Africa was worth R167bn in 2007 • The Retailers’ Liaison Committee (RLC) measured sales of R 73bn for the large chain stores in 2007 Source: RLC, Investec Securities Research

  45. Retailing in the townships and rural areas A spaza shop is a small informal business that is usually run from home

  46. Spaza shops (continue) The ZOK facility is a compact multi-function business unit that operates out of a refurbished shipping container. The name is taken from the initials of the three original partners - the Zion Christian Church, and top local football clubs Orlando Pirates and Kaiser Chiefs.  The ZOK brand was initially established in 2005 by ZOK and a company associated with JSE-listed Blue Label Telecoms, based in Johannesburg. Now the ZOK container has been officially launched with assistance from Blue Label Telecoms and in partnership with Vodacom, Absa Bank, and Premier Foods. Other key partners are software giant Microsoft and wireless internet provider iBurst, while the three initial partners are still shareholders in the ZOK brand.

  47. Thank you !

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