Marketing to the bottom of the pyrimid

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John West Discover the Best

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Target Market
Too often marketers and manufactures overlook a crucial segment of the market, The Bottom of the Pyramid (BoP), which comprises the poorest people in the world. Together they constitute more than half of the world’s population (approximately 4 billion people) and they annually spend five trillion US dollars.

At last week’s TNS Breakfast Series talk, the guest speaker Sebastian Janini, Regional Director of the Consumer Sector for TNS, expanded on this issue.

Janini notes that when considering the BoP, many marketers and manufacturers don not fully know how to approach and reach these audiences. Marketing to these consumers is notably different than to the middle or upper classes. Furthermore, he highlighted that even consumers with a very low income are willing to pay extra for a product that will add quality and deliver better value to their lifestyles.

In addition, he pointed out that BoP consumers are highly sociable and community based. The influence of these social groups can greatly affect the success of a product. It is therefore essential to always consider the social context and then cater to the community as a whole, opposed to the individual.

The Bottom of the Pyramid constitutes a large portion of the consumer market with significant unmet needs. Those who are willing to innovate will be met with a wealth of opportunities. In terms of the domestic potential, with approximately 50% of the population living under the global poverty line of $2 a day, the bottom of the South African pyramid is very large indeed. This must surely be the single biggest growth opportunity for the next 10-20 years and that is without taking the rest of Africa into consideration.

For more on this issue, click here to download Sebastian Janini’s full presentation.

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Outlook for African Retail in 2011

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An insight for the year to come
From what’s come through my desk and over the internet over the last few days, it seems reasonable to speculate that the local retail industry has enjoyed a decidedly positive Christmas trading period for the first time in two years. Although details for the December /January period have not yet been released, several retailers have reported improved results despite seeing significant price deflation for the period.

Shoprite Holdings reported 9.5% rise in first-half turnover, with comparable store sales up 2.8% in the six months to end December and an internal deflation of 1.2% for the period. Massmart also reported a 13.3% increase in sales in the latter half of the year and an estimated 2.9% deflation was recorded year to date. The Clicks Group enjoyed an increase in sales of 16.8% with selling price inflation of only 0.9%.

In the final weeks of 2010 TNS Research Surveys released its latest Economic Confidence Index (ECI) results for metropolitan adults, conducted in the first week of November. The overall ECI was up four points from the previous quarter to 137, maintaining the highest levels it has seen for 2 years. Click here for more

This increase in consumer confidence, together with the lowest interest rates seen in the last 30 years, could make 2011 the year of the consumer comeback. Prof Deon Tustin, executive research director of the Bureau of Market Research (BMR) at Unisa, provides further impetus with the release of his report, Forecast Of Economic Indicators And Formal Retail Sales By Product Group For 2011. Amongst other things the report forecasts a 3.4% real growth rate for formal retail sales in 2011 which, if it holds, is cause for optimism amongst retailers. Click here for more

Despite very high levels of debt amongst consumers, 2011 has the potential to be a year of strong sales growth for the FMCG industry. The sales growth is positive but retailers will have to cope with very low levels of price inflation, this environment should provide a platform for the most efficient retailers to outperform competitors and gain market share. It will be interesting to see who the 2011 winners are.

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New Liqui-Fruit Vitality™ – The new generation of Health Drinks Liqui-Fruit, South Africa’s leading and most innovative fruit juice brand, proudly introduces the new generation of health drinks - the Vitality range with Superseed™; 100% pure pressed superfruit juices, loaded with grape seed extract. read more

Talking Retail Technology

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The Alternative Consultancy

In the modern age technology is an integral part of almost every business. In the retail industry where efficiency is critical retailers have been early adopters of technology, many innovations used in other industries have been developed specifically to address problem areas in the retail supply chain. This is a trend that will no doubt continue and while developments in many of the processes of retail - logistics and point of sale – are slowing there is much activity in the “soft” elements such as marketing and customer interaction.

Recently, the Intel Corporation launched its Connected Store concept in New York. Dubbed by some as ‘the future of retail’, it looks to show off the best of current technology and how it could affect retailers and consumers alike.

Using various Intel processors makes it possible for retailers to integrate several services, monitor statistics with ease and offers the luxury of remote manageability. In addition to this, Intel has also unveiled the Intel AIM Suite, a video analytics technology for anonymous audience measurements, this enables retailers to monitor age, gender and length of attention of each customer in the store. If used properly information will revolutionise customer interaction as we know it. Imagine the possibilities for marketing and advertising teams.

Although widespread adoption and implementation may still be a way off, the point is that it’s coming. Retailers need to embrace the change and invest prudently in technology in order to ensure the long term sustainability of their business. The future of retail really is an exciting place for those with an open mind.

Click here for source article



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