“Follow the money!” Any brand manager or marketing director would not be worth their salt if this simple credo was not the basis of their brand marketing strategy.
However, there is a massive untapped wealth of disposable income within the affectionately termed “B market” that many major players are not focused on capturing. The market I am referring to is the Bottom of Pyramid (BoP), LSM 1-4, the poorest of the poor.
Here are the facts:
• This market presents approximately 48% of all South African households. (R0-R50k annual H/H income) 1
• They represent 25% of South Africa’s annual food purchases, a staggering R103 BILLION 2
• 51% of this population is unbanked 2
• 70% of them live in three provinces (KwaZulu-Natal, Eastern Cape and Limpopo) 3
• 75% live outside metros or cities and 58% live in rural environments 3
• A staggering 80% are unemployed 3
So where does the money come from? South Africa has now the highest number of social grant recipients per capita in the world with over 15.3 million grants being paid out each month. The grants are paid out using more than 12 000 pay points throughout the country with over 70% of the monies paid out being spent on the day of payment. 4,5,6
The BoP market represents a huge opportunity to any manufacturer producing products for this segment and many have already taken the lead in dominating through various advertising platforms.
The question will always be, ‘how to reach this market’?
As an example SABC 2’s reported past 4 week viewership in KZN is less than 50% whereas Out of Home in the same market has a reported 4 week ad recall of 89.4%. 3Unlike the general population, the BoP Market are not heavy users of TV.
Shopping patterns within the BoP market help strengthen the argument for outdoor advertising and significantly reduce the number of sites needed to reach a high percentage of the market. Sixty percent of the BoP market claim to do one bulk shop a month with another 16% twice a month. 3 Bulk shopping requires shopping venues with substantial choice and size, thus requiring migration to the largest convergence nodes within a given area. Advertising at these nodes thus results in very high reach opportunities because this population converges every month at non-urban shopping nodes. These become the advertising contact points.
So who is succeeding in this market and why? Lucky Star dominates in the canned food market with a 49% past 4 week consumption in the BoP market with the closest competitor being Glenryk at 13%. Within the outdoor advertising market, Lucky Star “owns” this space with approximately 80 billboards greater than 18sqms.7
When one reviews the unprecedented success of KFC in this market, you discover that they have dominated the share of voice in outdoor with 49% of fast food category billboards, their massive 45% claimed past four week purchase market share in the food outlet category is thus not surprising. The nearest competitor is Chicken Licken with a much lower 8.8% claimed past 4 week purchasing share; therefore it is no surprise when one discovers that they have almost zero outdoor advertising presence. 3
Although a myriad of factors influence brand success, is it truly only a coincidence that the successful ones in the BoP are highly committed to outdoor advertising?
Ultimately, when one weighs up the good cost efficiencies vs. executional complexity of a sold outdoor advertising plan, any brand targeting BoP will have their success tied to their level of outdoor commitment. So rather than just following the money, chase it hard with great outdoor advertising opportunities.
Peter Lindström is executive: sales & marketing, Primedia Outdoor
1. BMR 2010: Distributed SA Households
2. BMR Expenditure 2010
3. AMPS 2011
4. Department: Public Service and Administration; June 2009. SASSA uses accessibility studies to optimise provision of social grant pay points. Information Brief 10.
5. Khumalo, Gabi; Feb 2012. SA starts social grant clean-up, upgrade. BuaNews.
6. Kay, Roedolf; January 2012. Press Statement. Online.
7. Outdoor Auditors 2011
This story was first published in the Out of Home Media South Africa (OHMSA) September 2012 newsletter.
PHOTO: Sourced from http://www.flickr.com/photos/flxy/5848277466/