COLA WAR IN NIGERIA (DAY 9)

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Brand Spur
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SARANGKOT, KASKI DISTRICT, NEPAL - 2016/10/02: Empty Coca Cola bottles in crates are piling up. (Photo by Frank Bienewald/LightRocket via Getty Images)

Welcome to in Nigeria Day 9.

Today, we will review the activities of the big brands in response to the penetration strategy of the new entrants and how effective it has been. This can be called a prompt response to changes in market dynamics.

The way and manner things change these days are the fastest ever. There are disruptions every day based on economy, technology and climate change. This has made events highly unpredictable and uncertain. We have seen a president’s tweet affecting the price of crude oil.

Consumer behaviour is also changing rapidly in response to these changes in the macro environment. These realities make a prompt response by marketing professionals inevitable. Survival in marketing in the present age and time is traceable to the fluidity of actions.

The management team must be highly flexible to be able to tweak their strategies in relation to the changing market dynamics in the environment. There must always be a prompt response to these conditions as they change. Days of being rigid are far gone.

You can’t stick to old ways of doing things and excel in this age of rapid changes. The dynamism of an organization in the present day of fast and ever-changing economic, environmental and political climate is what keeps the company ahead of its competitors.

Recall that the disruption started by Big Cola in 2015. Pepsi was quick to react while Coca-cola reacted late. Bigi Cola came in 2016 and its rate of disruption was high. This evidently made Coca-cola lose volume sales in 2017 and 2018 as it continued to increase the price.

Details of the activities of these brands regard pricing had earlier been discussed in the previous series. The big brands in response to the price issues had to bring back products with 50 NGN price point supported by a lot of media campaign. This was the game changer.

The new entrants have always been gaining market share with their 100 NGN price point products but the introduction of the Returnable Glass Bottles (RGB) with 50 NGN price point is doing the magic for the big brands. However, the volume of the RGB is 35cl.

The result the RGB is generating is giving credence to the fact that price is a major factor in an economy that the out of pocket spends of the people are shrinking due to inflation and the devaluation of the naira.

With the 50 NGN price point, consumers can easily walk into a shop and quench their thirst with 50 NGN. Those who are having parties can reduce their spend on the parties by buying the RGB and in case of bottles get broken, the added cost will still make it cheaper than PET

One of the limitations of the RGB is that it can’t be sold in traffic and it can’t be taken on the go but it has met the needs of some people. The mistake made many times is to ignore those who are at the bottom of the pyramid who are quite large in Nigeria.

Also, Coca-cola has made some variants such as Zero Coke available at 100 NGN as that continues to fight with the new entrants. The challenge for the new entrants is that they can’t respond with RGB as quickly as possible as it is another capital investment.

We will stop here today and continue tomorrow but the good news is that the RGB response from the big brands at a price point of 50 NGN is resulting in more sales for them. See you tomorrow as we continue the series.

Written by: 

Oluwole Dada, (Regional Sales Manager at Nestle Nig. Plc; Member, Chartered Institute of Marketing (UK))

For more insightful conversations, follow Oluwole Dada on Twitter  @oluwole_dada