I write this from Nairobi, where on Tuesday night Millward Brown held the launch event for its new operation in East Africa, Millward Brown East Africa Ltd, a joint venture with Nairobi-based Scangroup. On my first visit to Kenya, I am struck by the blend of old and new, local and global, similarities and differences. Here are some of my impressions.

Like everywhere in the world, food prices are climbing in Kenya, helping to drive inflation to its highest level since 1994. When the mass of people spend up to 85 percent of their income on food, the consequences of rising prices are significant, possibly catastrophic.

This economic backdrop has important consequences for brand marketers here in Nairobi and elsewhere in Kenya. Marketers have done their best to make their products and services accessible to the less well-off, usually by offering smaller pack sizes at lower unit costs. For instance, Weetabix breakfast cereal comes in pack sizes ranging from 900 gram boxes to pouches weighing only 17 grams. The latter contain two bars of cereal and cost only 25 Shillings, the equivalent of 50 U.S. cents. Unilever’s Omo also comes in a range of pack sizes, from bags weighing several kilos to sachets that retail for less than ten cents. However, when the price of tomatoes, cooking oil, carrots and maize flour have increased by as much as 40 percent in the space of a few months, it is no surprise that people are spending less on packaged goods. Volume sales are reported to be down for many brands.

While commodities are still commonly bought in open markets, modern trade is well established in Nairobi. When I visited stores in the Uchumi and Nakumatt supermarket chains, I was presented with familiar store layouts and an interesting cross-section of global and local brands. Global brands, like Colgate, Coca-Cola, and Nivea were especially visible, with their large end-displays dominating the scene. But I also noticed many prominent displays of brands that will not be familiar to people outside Africa. For example, Royco soup, spices and stock cubes dominate half an aisle in the Westlands Uchumi store. Royco is actually a Unilever brand, but it has been around so long and is so dear to the hearts of many Africans that is firmly entrenched in the local culture, and therefore seems like a "local" brand.

Do not imagine that marketers in Africa are behind the times. Among more affluent 20- to 35-year-old urbanites, energy drinks are a big hit in bars and dance clubs, and Coca-Cola has just launched its own offering, Burn, in this growing sector. Burn is a caffeine and herb drink that appears to be aimed squarely at Red Bull. In the Nakumatt Lifestyle store, the two brands were displayed side by side, surrounded by a host of other less familiar brands: Shark, Bullet, Bomba and XL. As The Standard newspaper reports, Burn’s launch is supported by the use of Coca-Cola models dressed in black T-shirts with red trimming featuring the distinctive flame image from the package. This type of promotion reflects the fact that in Kenya just as in the rest of the world, marketers are turning to new ways to market their brands. While TV, radio and outdoor remain strong, experiential marketing, sampling and in-store digital video screens are becoming an accepted part of the marketing mix.

In driving around Nairobi, I noticed the prominence of Shell gasoline. Almost every major through road seems to feature the familiar "pecten" symbol. (For those of you who may not know, "pecten" is another word for "scallop"; thus it’s describing the shell that is the Shell symbol.) From what I understand, this strong presence is due in part to the withdrawal of BP from Kenya in 2006; Shell acquired 127 BP stations as a result.  While the acquisition doubled Shell’s presence, it also required the company to reduce its shares in the new venture to come into compliance with local monopoly regulations. As allAfrica.com reports, Mr. Rob Routs, Shell’s Executive Director, told journalists: "BP was willing to pull out. We saw an opportunity and we took the direction to double our business in Kenya…we can now implement the Shell brand which is a very strong brand."

As in real estate, gasoline sales are highly dependent on location. I have little doubt that the acquisition provides Shell with this all-important asset.

Just in case you think that the Kenyan market is totally dominated by global brands, I can tell you that many of the names here are new to me. One of the most prominent is Tusker beer, which seems omnipresent. Beer in Kenya still seems to be decidedly local, although Diageo’s Guinness has been around so long, and in a decidedly African guise, that it is definitely considered a local brand. By adopting a locally-oriented communications campaign, the brand has revitalized its sales here in Africa.

All in all, this visit has been fascinating. It drives home the lesson that international brands can be very successful in markets like Kenya but that to do so they must take account of local needs and culture and market their brands appropriately.

This entry was posted on Wednesday, June 4th, 2008 at 1:03 pm and is filed under Brands. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Print this Page