CONSUMERS LOOK FOR BRANDS THAT MEET THEIR NEEDS – Aremu

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FIKAYO AREMU with over 15 years experience in Business Intelligence, Market Research & Predictive/Business Analytics is currently the Director in charge of FINTECH and Media Research, Kantar TNS Nigeria, managing the combination of clients in the financial, telecoms, technology and media sectors. Before joining Kantar TNS Nigeria, he had garnered experience as Market Intelligence Consultant at IDC West Africa; Marketing Investment Planning & Analytics Manager at Nokia and lately Planning, Analytics & Insight Manager at Microsoft.

A graduate of Statistics with Masters in Business Intelligence at Sheffield Hallam University, UK and currently studying for a professional certificate in Strategic Decision and Risk Management at Stanford University, USA. He is an Associate member, Market Research Society, UK & Member International Institute of Business Analysis, Canada.

What’s wrong with the Nigeria economy?

I try not to meddle too much on what is wrong with the economy because I am not an authority on economy but we all know Nigeria is in recession.  There is an economic meltdown in Nigeria and people are crying foul because things are hard.

From market research perspective, what are the patterns of consumer behavior during recession?

Everybody is talking about economic recession also referred to by some as “down turn”; the first thing that consumers look at is to cut down their spending.  when there is a down turn. That means the income you have can no longer buy what you used to buy because prices of goods have gone up  due to inflation. There is scarcity for the things you used to buy and  most consumers look for cheaper alternatives We  found out from research that it is actually not totally true that people stop spending during recession, it is that people appropriate their spending, which we also call Share of Wallet. They push their money from something else to somewhere else.

When you talk about brands, they may likely move from a more premium brand to a cheaper brand or they move to where they can source what they need at a point in time.  Need is important because  needs are the basic things you must have. So Consumers have to meet their needs and at the same time spend less.

Basically, we found out that two things come up when you talk about consumer behavior during down turn.

Firstly, they look for satisfaction. Regardless of what is happening – whether I am changing where I am buying or changing brands I am buying, the most important is that I want my need to be met.

The second one is planning; everybody wants to plan before they buy. That is why we see so many sites coming up where you can compare prices. Those are the two major things we see in consumer behavior when it comes to down turn in Nigeria.

What are the several ways companies and brands can generate growth during recession?

Generation of growth is what every brand or organization is talking about. Therefore during recession we still want to make money and have good profit or revenue. There are two things they need to look at. The biggest of them is innovation – trying to look for new ways, new ideas and new product to deliver, to meet the needs of the consumers. Remember when I talked about consumer behavior, where I said they want to meet their needs, consumers look for brands that meet their needs and two things are key-Satisfaction and the Planning. At the other side of the brand or organization, what they should be talking about is how do they bring out new ideas which is innovation on meeting those needs and that is very key.

Another thing we talk about is relevance. Yes you may bring an idea but is it relevant to that market? Everybody may say “oh! This is working elsewhere” but is it relevant to Nigeria or the sector you are serving?

The third one is excitement, when you bring something new even if it is relevant to consumers or customers are they excited to engage with this product and there are so many things that are attributed to that.

Why do innovations fail in some cases?

There are so many definitions of innovation but simply put, “innovation is a process of translating a new idea or what people call invention into a service that will create value to your customers”. When it creates that value, your customers will want to pay for it willingly. There is a new idea or invention that creates value for the customer and the customer is willing to pay for it.  So four things are key:

  1. What’s the new idea?
  2. What value are you creating?
  3. Who are you creating it for
  4. Are they willing to pay for it?

If you can cover those four things; that’s purely a process of innovation. Now on why some innovations fail? The problem is that most people don’t think through the process. Most people stop at the first point which is the new idea or invention. We fail to look at the values that is being created, we fail to understand who our customers are and we fail to understand how much they are willing to pay for that. Most of the times brands focus on the first stage of the process and forget the last three stages and that’s why innovation actually fails. The first stages must be followed through and at Kantar TNS, we have experts in innovation and product development.

How can technology fuel innovation?

People talk about this very often. I want to start like this: Technology is not equal to Innovation. Many people think that when you are a technology company or when you have a lot of technology investment that you are automatically innovating. In fact, I want to try and put an insight into this. According to Forbes 2016, the topmost innovative organizations are not technology companies, bulk of them are pharmaceutical companies. Number one which is Chrysler is an automotive company in the U.S. The next two or three are pharmaceutical companies and then we have other ones like Sales Force in the customer service. However, technology is an enabler for innovation but not automatically the innovation itself.  .So for all these pharmaceutical companies, automotive and others, they leverage technology to drive precision, for measurement and for simplicity and speed. So that’s why I said it is an enabler but it is not in its own innovation but a very strong enabler that drives innovation.

Read Also:  Nigeria FinTech Survey Report 2017

Do you think that brands in Nigeria are doing what they should?

A very difficult one to measure because as Kantar TNS what we try to do is that we drive every decision with data we find, so normally we talk about what we can measure. However, what we have seen over the years is that decisions in Africa are based on feelings, perception and some people often import new ideas to drive innovation. But what we may find as the challenge is that the four processes I mentioned earlier are not followed through, and that’s why most businesses fail. However for few multinational organizations that invest in research and development who would want to know what new ideas they want to go into some of the local businesses put investment into research to understand what the new things they can do are.  But most of those companies that put thoughts on feelings and perception are unable to pull through when you talk about embracing innovation.

However, one thing is key in an economic downturn like the one we are talking about Nigeria , it is so critical for every brand to think innovation and that is what sustainable brands have done over the years and there are so many examples that we can have.

U.K is one of the five countries that together contribute 79 percent of the total spending on research and development worldwide, what do you say about Africa’s spending on R&D?

As I said we always want to drive everything with data and thanks for that on the U.K. In Africa according to UNESCO, the R &D investment is less than 30 percent. Actually it is about 12.5 percent of total Africa GDP that is spent on R&D and this is mostly accounted for by South Africa. Out of that 12.5 percent, South Africa accounts for almost half (about 46 percent) of R&D investment in Africa while other countries like Ethiopia, Ghana, Kenya, Mozambique and Gambia that take the rest of the investment.  It is so shocking Nigeria was not prominent when it comes to R&D. We call ourselves the giant of Africa with the largest economy but we are not investing in research and development, more reason embracing innovation is low in this part of Africa. If we were investing in R&D automatically it would fuel innovation for us and we would know the need for new ideas to drive new products and services and that will automatically grow the economy. So it’s a sad one for just 12.5 percent of total Africa GDP on R&D.

Do you think innovation budgets should be maintained despite the need for widespread cost cutting?

Every business wants to grow in revenue and profit and there is something you need to do to drive that growth. There is this normal saying that “if you keep doing the same thing you’ve been doing you’ll continue to get the same result”.  If you want to turn things around for good then you need to invest in innovation. And if you want to invest in iinnovation regardless of whether you are cutting cost or not you need to put in mind research to drive the right innovation.

What most people do is imported innovation-if it has worked somewhere it can work in Nigeria. That’s where budget for research and development comes in.  So before innovation it should be research first to find out if that is viable, if there is opportunity for me in my country or in my space to do this.

Practically speaking, I have few of my clients that say they prefer to invest in research that guides them than to start in innovation and fail. So if you invest some few millions on research it will guide you whether to go or not  than you invest in innovation; spending so much on capital expenditure and at the end of the day there’s no result to show for it.  We always encourage people to put investment in research because that will guide on how you are going to invest in innovation in the future.

What do you think about creating your innovation roadmap?

In Kantar TNS we pride ourselves to be leaders when it comes to driving innovation and product development.

There are seven things we want every business owner, organization or brands to think about when you are creating your roadmap for innovation or success. Remember I said there are four stages which I have highlighted initially.

Once you have identified the four stages there are seven questions you ask yourself and that is how we approach our advisory services when it comes to innovation: Is it an opportunity that is financially viable? Can my innovation idea deliver benefit required to take that advantage? Is that opportunity already existing or served by another competitor such that it is no longer an innovation? Does that innovation drive incremental growth for revenue for your business?  Is my business created already to support this innovation or new product. That is when you look internally considering whether you have the human and capital resources, natural resources in place to support the innovation? Will my customers be excited to engage with this innovation when I eventually come up with it?

If these questions are answered, trust me that business is on the right path to coming up with the right service or product to driving growth.

 

 

 

 

(Research-Intelligence)