Achieving Sustainable Market Growth: Understanding the Nigerian Consumer Behaviour

A few days ago, a quite incisive article by Raheem Kingbolt caught my attention, as he wrote on the competition in the carbonated soft drinks market (where Coca-Cola and Pepsi reigned heavily for decades in Nigeria) and the hurdles before AJEAST Nigeria Limited (makers of Big Cola, Big Orange and big lemon), the new entrant into the market.

He noted that, in accordance to an article in Financial Times, a combination of low-cost operating strategy and clever marketing has enabled AJEAST Nigeria Limited (a unit of AJE Group, a multinational beverage company) to make inroads in some markets in Latin America and Asia. Accordingly,  the strategy increasingly  employed and deployed by the unit of  AJE Group  in Nigeria is the focus on consumers from the perspective or position  of offering ‘big’ for everybody, i.e. giving more for less. In clearer words, while other supreme brands of soft drinks (Coca-Cola and Pepsi) of 50cl are being sold for N100, they give an extra 15cl for the same price so that consumers can be drawn towards them.

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However, further to identifying the biggest lessons in the strategy adopted by the Big Cola, one important question for the makers of premium beverage drink (AJEAST Nigeria Limited) is:  would a cheaper price-tag be the key-driver for Big Cola’s potential growth in the Nigerian Market? In other words, is the ‘offer-more-for-less’ strategy imbibed  by Big Cola  the strongest bet  they  have in displacing the global giants(mainly Coca-Cola and Pepsi) from the carbonated soft drinks market in the nation?

unfortunately, even the experts and A-list releasers in the nation’s carbonated soft drinks market are pointing their fingers at Mr. Time to tell or give us the answer.  Perhaps, they found that any answer they may be providing in respect of this big question will be certainly dicey, either on the short-term or on the long term.

It is on this note that I have chosen to fill this gap by taking a strategic approach to give the answers to this question and deliver the solution on a solid ground without necessarily waiting for at Mr. Time to tell or give us the answer. I mean a lot is yet evasive and elusive to man about Mr. Time. For instance; we don’t when he will choose to speak, how to get him to talk, how to interpret his language without missing out or mixing-up some meanings, and others things about him.

However, the fundamentals reasons why the answer to this question may remain scarce or elusive to us is not far-fetched as many are yet to increasingly recognise that; in a consumer-based market,  that is especially predominated by ‘traditional trade’, the relationship between cost and value grows more unique. As such, this ‘traditionality’ is hugely responsible, as if an enzyme, for the stimulation of hormones that generates the increased uniqueness in the relationship between cost and value.

Nigeria is predominated by ‘traditional trade’ in the sense that our consumers are highly aspirational in their taste of brands(especially as it relates to quality) and will remain  adamant on any product or service that will satisfy their refined taste and meet their quest for brands with strong appeal,  regardless of their financial status.

As such, in a market, particularly consumer-based market, the missing link between value and cost lies in the uniqueness of our consumer behaviour as ordinarily, cost should always correspond positively with value -that is, the higher the cost, the higher the value ought to be. And ordinarily, people (consumers) should cut your coat according to your cloth –financially- but that is not necessarily the case in a typical examination of Nigeria consumers, particularly as it concerns consumer-based market and businesses.

I will be taking take our plunge at this question from consumer behaviour perceptive as it as usually advised in a mathematics class that, when going about a solution to an equation, we are told to move from known to the unknown. In this articulate, in my attempt at solving this riddle, I will be laying out some pillars of understanding the Nigerian consumer behaviour from three views; cost, entrepreneurial and patriotism. That is, by the token of this article, I hope to have contributed to understanding of Nigerian Consumer Behaviour from the view point of cost, our entrepreneurship-spirit (Nigerians go-get attitudes) and from the view point of patriotism.

How do I mean?

Entrepreneurial Perspective: In the raw words of Raheem Akingbolu, ‘Nigerian consumers are exposed and aspirational, including those at the bottom of the pyramid. They are not easily swayed by any product or service that aims to fascinate rather than satisfy their refined taste and quest for brands with strong appeal’.

In the same vein, the Chief Executive Officer of MultiChoice Africa, Tim Jacobs, said recently that thing he finds specifically interesting about Nigerian is that ‘they are focused as consumers on what they need.’ He said this while fielding questions from the editors from African countries that witnessed the grand ceremony of CNN Multichoice African Journalist Award 2015.

However, the root of this unique consumer behavior by Nigerians is not far off, because not only are Nigerian consumers focused on what (as per quality) they need, they equally have a deep passion to be entrepreneurial, to get things done and to try to make a difference in peoples’ lives. That is, they are already focused on business opportunities.

Other countries (Scandinavian, Asian) are more formalized when weighed-in with Nigeria, especially when considering the fact that more people or citizens of these other countries are occupied with formal 9-5 jobs. Unlike Nigeria, the entrepreneurship sector, i.e. the Micro, Small and Medium Enterprises account for for over 80 per cent of the total number of enterprises in the country and employs over 75 per cent of the nation’s total workforce, according to the Minister of Trade, Industry and Trade, Dr Olusegun Aganga.

As such, it is this strong entrepreneurship trait in Nigerians that is being displayed in a ‘retaliating’ or activist manner when, they take the position of consumers.  It is their entrepreneurial qualities and culture that makes their taste quite exposed and highly aspirational. In other words, it is the go-get attitudes in Nigerian consumers that makes them   not easily swayed by any product or service. Simply put, it is because Nigerian consumers are very clear in their mind about what it is they are trying to do businesswise, that they are able to firmly determine their level of satisfaction, stick to their desired refined taste and quest for brands with strong appeal.

The logic behind the activist nature of Nigerian consumers under the guise of high-aspiration taste or quest for strong brand appeal consumers is better explained with a diplomatic language for emerging economies called South-South Trade (SST). South-South Trade is a term used in the circumference of import and export and it suffices that the quality of what is produced in a country (Nigeria, for example) must be acceptable locally before it can be exported. And if it is to be exported, it must to countries within similar level of development/quality or lesser as on one would want or buy wear a rag and he can make a good dress for himself. Illustratively, If Nigeria  produces doors and its local market is  not satisfied with the products, the doors cannot be processed  as an  export   product to  a countries a country like  Turkey  who may  have higher quality of doors but may be  an export product  to  Benin Republic who probably have less quality doors.

For instance, when our textiles factories were working, what Nigerians had against other countries was the quality of the yarns. If ordinarily, the quality of what is produced is not acceptable locally, we won’t be able to export it. As such, Nigerian consumers don’t take less quality on the basis that their entrepreneurial skills and passion makes them easily assess problems or flaws of a product especially when the brands are competitive.

Further, the pronounced culture of entrepreneurship in Nigerians has made the Nigerian market and the Nigerian consumer quite ‘activist’; typically, Nigerian consumers tend to react quite strongly to anything that they perceive as negative. Impulsively, they tend be embittered, confrontational, reactive or repulsive to change that they perceive is not in their best interest as consumers. Regardless of how national challenges have forced consumer-based investors or business to adjust for an increase in price, Nigerian consumers may not necessarily agree with such change, either on the short or long run. As such, the onus is on the companies to think quite deeply before they decide or implement a change that may result in a negative impact because of the activist nature of Nigerian consumers.

Cost perspective: However, although Nigerian consumers don’t like surprises or changes in system, particular increase in price, quality products will always resonate with them, even those they are financially handicapped. In other words, most Nigerians may be poor but they have a high aspiration that gives them a strong sense of entitlement to quality.  Once their satisfaction is rightly met or a brand offers them their desired strong appeal, purchase is inevitable by the Nigerian consumers regardless of his or financial status.

Patriotism Perspective: More so, though Nigerians can be very patriotic, their consumer behavior in terms of loyalty to trusted brands (however international) seems to hold more value to them at a personal level. That is, Nigerian consumers will maintain their tastiness and satisfaction of brands (though imported) even in their spirit of patriotism. Many international brands are doing well in Nigeria over the local brands because of the preference given to them by Nigerian consumers.  In an article written by Adebiyi Adeyemi inn 2013, titled ‘Economic Patriotism: A concrete factor for Nigeria’s Economy boosting’, it was held that; although Nigerians are quite patriotic in the national sense, their economic patriotism shares a contrary testimony.

Recommendation & Conclusion: For consumer-based businesses to achieve sustainable market growth, the management must be on top of their game. That is, they increasingly need to ascertain that what they do in the Nigeria is in the general interest of the consumers and not just in the interest of the business. It is in this way that consumer-based businesses are able to minimize the negative impact of consumer behavior viz-a-viz whatever changes is been made or implemented for the growth of business by the management. However, owing to globalization and the poverty of our nation, it is now equally necessary or imperative for business to also consider the interest of the general public and not just their consumers and the company’s purse. This is best described in what is called Corporate Social Responsibility (CSR).

Conclusively, government should be increasingly strong on policy decision-making so that they can withstand the negative impact of  either local or global fluctuations of the market or economy, thereby preventing  consumer-based businesses from changes- like increasing prices of products or services-  on the ground of national difficulties or challenges.

References

Martins O. How to achieve sustainable market growth, by Jacobs, Multichoice boss: Available on http://www.ngrguardiannews.com/2015/10/how-to-achieve-sustainable-market-growth-by-jacobs-multichoice-boss/ ; 2015.

ADE O. Non-oil export business imperative for sustainable growth, says Sarumi: Available on http://www.ngrguardiannews.com/2015/09/non-oil-export-business-imperative-for-sustainable-growth-says-sarumi/ ; 2015.

Adebiyi A.J.  Economic Patriotism: A concrete factor for Nigeria’s Economy boosting: Available on https://yemilluminati.wordpress.com/2013/07/23/economic-patriotism-a-concrete-factor-for-nigerias-economy-boosting/comment-page-1/ ; 2015.

Raheem A. Some Big Lessons for Big Cola: Available on http://www.lindaikejisblog.com/2015/11/some-big-lessons-for-big-cola.html   ; 2015.

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