Posts Tagged ‘brand’

Tecno and Nokia: The tale of two brands

Chinese mobile maker’s original brand strategy succeeds in Africa: Transsion’s Tecno

This year, Nokia got shoved out of the top 10 most admired brands in Africa list, not bad for a company that had lost its way in emerging markets 7 or 8 years ago. As an old (in all senses of the word) Nokia fangirl, here are some of my favourite posts from the heyday of following Jan Chipchase around Africa vicariously through his blog. These days, I tramp my own paths in Africa.

Luthuli Avenue, Nairobi, Kenya, July 2012 [Photo Credit: Niti Bhan]

What’s interesting about this list is Tecno, a mobile phone brand that’s unknown outside of Africa. Transsion Holdings, the Chinese manufacturer that owns this brand has a clear strategy and focus. They own Itel and Infinix brands of phone in addition to the Tecno brand and focus only on the African consumer market. You’ll note Itel is listed at number 16 in the chart above.

According to a report released by market analysis company Canalys, Tecno, iTel and Infinix, which are all sub-brands of Transsion, overtook Samsung with a 38 percent market share in the first quarter, compared with a 23 percent share for Samsung. Via

Rather than the old Nokia strategy of a product aimed at every price segment whilst keeping hold of the mother brand, Transsion has broken branding rules by deploying three brands each with their own persona – Itel for example is very popular for its featurephones among border market traders in Kenya and Uganda due to its week long battery life. Few are aware of Transsion itself. Until its time to add up the numbers.

This brand and design driven original manufacturing strategy reminds me of the work Prof. John Heskett had done in the Pearl River Delta before his untimely death.

John, posing for me when we met in Singapore, back in 2009

This slide captures the essence of his teaching. I only have my class notes.

Transsion’s focus, rise, and brand strategy are all hints of his influence, either directly or indirectly in their approach and work. I’m very glad to be reminded of him today, and I recognize that I will be back writing on more of his work in the very near future.

Marketing the Unbranded: Avocados on the side of the Road

Brand stickers on avocados sold by the side of the road, Kenya. April 2013

Brand stickers on avocados sold by the side of the road, Kenya. April 2013

These stickers caught my attention. The only one of a long line of makeshift wooden stalls by the side of a highway in Central Kenya to display what looked like branded avocados. Were they part of some cooperative or horticulture exporter’s leftovers?

They turned out to belong to Maude, the ambitious and aspirational market woman whose avocados stood out among the crowd. No other type of produce was on sale in this roadside cul de sac lined with at least 8 or 10 stalls piled high with avocados.

She’d heard that branding her produce would help it sell. It was a marketing strategy. And so she’d invested in these stickers for her fruit. Did she sell to supermarkets or the formal retail sector, we asked, still thinking these were part of the formal value chain, given the familiarity of the stickers on fruit and veg.

Nope, just here, by the side of the road. But she aspired to sell them under her brandname, and her ambition was build a reputation for quality that would, perhaps, lead to greater things. She wanted people to come back and ask for her by name.

 

 

Branding the Unbranded: The story of Cookswell Jikos, Kenya

Nakuru jua kali market, Kenya, Aug 2010 Photo Credit: Niti Bhan

 

These are jikos metal stoves that use charcoal – displayed for sale in the jua kali market in the town of Nakuru, Kenya. Made from scrap metal, using the most rudimentary tools, under conditions of resource scarcity, they are one of the everyday products churned out by the informal manufacturing sector. These are made of metal, as you can see, and are not very efficient. A couple of decades or more ago, Dr. Max Kinyanjui was instrumental in the development and dissemination of a simple yet impactful innovation – the Kenyan Ceramic Jiko (KCJ).

Nakuru jua kali market, Kenya Aug 2010 Photo Credit: Niti Bhan

 

According to wiki:

The KCJ is simply the traditional Jiko mated to a ceramic liner, producing a stove that is at least one fourth (and up to 50%) more efficient than traditional all-metal alternatives, costing only $2 to $5. The initial model has a distinctive shape, differing from the traditional cylindrical jiko, with the top and bottom the same diameter, tapering at about 30 degrees to a waist.

Nakuru jua kali market, Kenya Aug 2010 Photo Credit: Niti Bhan

This energy efficient version is also available for sale throughout the East African region. You can see many variations on the theme displayed for sale in the photograph above. These products are unbranded and handmade by artisans across the country in makeshift workshops. There are no warranties or guarantees of quality or performance or even after care service. This is the informal trade ecosystem – spanning material supply, fabrication and sales.

Branding the Unbranded

The next generation of Kinyanjuis at Cookswell Jikos, Kenya. Photo courtesy

Recently, I had was able to connect with Teddy Kinyanjui, Dr Max’ son, and speak with him about the company he runs with his sister – Cookswell Jikos – just outside of Nairobi, Kenya. They manufacture and sell the energy efficient charcoal oven, ceramic jikos of course, and lately, innovative and inspired designer barbecues and space heaters.

Cookswell Jiko workshop, Kenya. Photo courtesy

While I’ll probably be referencing again the extremely fascinating insights Teddy was able to share with me over the phone, in this post I’m going to focus on how Cookswell Jikos sets themselves apart as a reputable, branded manufacturer of products more commonly made and sold in the informal sector.

1. Intellectual Property and Copyright of Design

Teddy says this is something they just don’t worry about. Of course the product design will be copied by the informal sector, its a given in the context of the market. In fact, he says, he’s more concerned if an innovation has not be copied within 18 months, as that’s a signal that there’s no demand for it in the market.

Cookswell Jiko Charcoal Ovens, photo courtesy

For instance, the energy efficient charcoal oven is something his father, Dr Max Kinyanjui, designed. As you can see below, something similar to it is on sale in Nakuru market.

Charcoal oven, Nakuru jua kali market, Kenya Aug 2010 Photo credit: Niti Bhan

The difference, says Teddy, boils down to quality, durability, reliability and performance. And those who choose to purchase the more expensive branded original from Cookswell know that if there’s a problem, they’ll get customer service and repair on the spot. Its a business investment for an entrepreneurial bakery and the last thing you need is high energy costs when you’re a startup. This leads us to the second point, keeping trained artisans happy and incentivized.

Artisan at work, Cookswell Jikos, photo courtesy

2. Entrepreneurial business model that resonates with the informal sector’s mindset and worldview

Cookswell Jikos does not employ their artisans nor do they run their operations like a sausage factory. Each artisan is an independent entrepreneur who works on their premises, being provided with the tools and materials, and is paid on their delivery of agreed upon piecework.

In the jua kali sector – over 70% of Kenya’s manufacturing is in the informal sector – workshops along the entire informal industrial ecosystem’s supply chain work in the same fashion. The guy melting down aluminium scrap to mould parts for an autoparts fabricator gets paid for batch production on delivery.

Cookswell Jikos delivery, photo courtesy

However, as an incentive for quality work, which isn’t as consistently available in the jua kali sector, Teddy doesn’t pay them for any repairs or rework that might be required on their products. He’ll send them out to fix a problem on the spot and this takes time away from money they could be earning that day.

Along with design and quality, timeliness of delivery is part of building a reputable brand. Cookswell’s customers know they’ll get their order on time and just the way it was agreed upon. Which brings us to the third key point in the way they’ve carved out a market opportunity in the informal economy – reaching new customers.

Branding the Unbranded, Cookswell Jikos Kenya Photo collage: Amari Bakery

3. Social media and the aspirational African middle class

According to Teddy, his efforts in branding and marketing Cookswell Jikos products have shown him clearly that there’s an economic emergence happening in East Africa, and much of this is reflected by the role of internet and the mobile phone. Where word of mouth and referrals would build a reputation and thus a brand, over time, now can happen overnight due to social media. He says more and more people find him online, through Facebook primarily and Twitter of course, and place their orders online. They’ve even had a guy in the Netherlands who purchased a container full of ovens.

He said that this online activity was one of the very real indicators of the way people’s buying behaviour and purchasing patterns were changing. He’s also seen signals of the aspirational upward mobility and evolving values. Designer barbecues in the backyard look cool yet still offer the same homecooked taste.

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Designer charcoal barbecue, Cookswell Jikos, photo from twitter

Formalizing the informal with new product innovations

Their product may look the same as the products sold on the side of the road by jua kali makers and perform the same function but their target audience and customer base knows the difference. They’ve demonstrated that its possible to build a thriving brand in a highly competitive, price sensitive market with little or no regulation.

Where SABMiller crafted an affordable opaque beer to reach the homebrew drinkers, Cookswell Jikos taps into the aspirations of the upwardly mobile with their branded quality. Either way, they’re bridging the informal with the formal in uniquely African ways to carve out whole, new markets.

 

African consumer market insight from Chinese flip flop manufacturer in Tanzania

This recent interview of the Chinese owner of a flip flop factory based in Tanzania offers some interesting insights into the mindset of the East African consumer.

Trade in commodities has been the dominant feature of China-Africa relations over the past 20 years, but many traders, particularly those who arrived in Africa early, are now well aware that there must be more to the relationship than that.

“It’s very important to set up a factory in Africa to ensure that one’s products have staying power in this market,” says Wu Quanman, owner of Li Lai International in Dar es Salaam, which makes flip-flops.

He first came to Africa in 1998, to Rwanda, and moved to Uganda in 2000, and set up the factory in Tanzania in 2006.

With a bit of search, I was able to dig up this BBC article from 2006 about the state of the flip flop market in Tanzania.

But at Tanzania’s only flip-flop factory, these are dog days.

A few years ago 3,000 people worked at OK Plast and their wares were exported to 22 countries across the region.

Today the factory employs just 1,000 and Fadl Ghaddar, the Lebanese general manager, told me it was struggling to break even.

All but a few varieties of Africa’s flip flops now come from China and local companies cannot compete.

Yet, Mr Wu says they average a 100,000 pairs a day in his Tanzanian factory:

“If we wanted to grow this business, building a factory in Africa seemed to be the only solution, and it was certainly ideal for us. After thinking carefully about the possibilities, we decided to build the factory in Tanzania, given that Rwanda is landlocked and the Ugandan market was limited.”

00221917e13e164b82aa1fIt made me wonder whether he’d purchased the struggling factory mentioned in the older BBC article and how he turned it around? Even if he didn’t purchase that factory, his business was apparently booming as the interview quotes him on his plans to invest in local manufacture of the materials required for making flip flops.

The key seems to be consistency – of quality, of supply, a matter of reputation. As Mr Wu says:

“Another thing that prompted us to open a factory here was the significance of brand in the market. African customers are very keen on well-established brands, but previously our products in this market were very random, with various brands from China, so we need our own brand and reputation.”

One valuable lesson Wu learned in Uganda came directly from the customers. Wu says they complained every time they were given products that they were unfamiliar with, and it was decided that if the business was to be sustainable, it needed to sell a well-known brand.

There are a couple of insights here that are interesting. The first is the importance of a brand, or rather, a reliable way to identify a consistent product that had been “tried and trusted” i.e. the familiar and known.

This also makes me wonder why the original local factory was unable to compete and was struggling. Was it that they were accustomed to pricing high in a seller’s market and then unable to offer a wider range of patterns when the market first flooded with Chinese imports? Or was it that they had not invested in building an established brand? We may never find out but the snippet leaves me with the feeling there’s a story behind it.

The other interesting insight from this interview is the fact that customers “complained every time they were given products that they were unfamiliar with” … there is nuance in here whose further exploration will be critical for consumer product companies accustomed to pushing “New and Improved” every so often to increase their market share.

If this reluctance to embrace the unfamiliar and/or unknown is simply a matter of unreliable product quality – a common factor of bulk Chinese imports sourced primarily on price – then global brands can rest assured their systems are in place to meet the expectation of this emerging consumer market.

But if this preference is for the tried and trusted, the familiar and known, and may possibly imply that the consumers are not enamoured of the “new and improved” then this characteristic is worth noting for those seeking to enter these markets successfully.