JWT’s AnxietyIndex is designed as a place to discuss how brands and consumers are responding to the global recession. With daily content updates, AnxietyIndex.com includes contributions from around JWT’s network, offering a truly global perspective.
With domestic sugar consumption topping 1.5 million tons annually, there’s no doubt South Africans have a sweet tooth. Added to this is the fact that 9 out of 10 children here have cavities. So Colgate recently installed clever cross-category point-of-purchase signage that gives moms permission to buy confectionary and helps assuage some of their anxiety about the consequences with the reminder: “Keep that sweet tooth healthy, head to the Oral Care aisle.”
Photo Credit: wwarby
In the past 10 months, the Johannesburg Roads Agency has received some 42,500 complaints of potholes across the city. With government in South Africa neglecting basic services such as road repair, people are agitated and anxious—in a difficult economic climate, the last thing motorists want is the expense of repairing or buying new tires and rims.
Brands have stepped in, taking advantage of the opportunities for CSR initiatives. Kentucky Fried Chicken has donated R200,000 (about $27,000) to help fill some of the potholes in and around Johannesburg. It seems like an awfully small amount, although KFC is positioning the move as part of a “challenge to other companies to help in any way they can.”
Meanwhile the Empowerment Gateway Group, a consulting practice, started an Adopt-a-Pothole project; it is now handing off custodianship and considering bids from businesses looking for a CSR cause. The program is positioned as one that helps alleviate unemployment along with improving roads.
One of the more successful such initiatives is from OUTsurance, an insurance company that has teamed with police to place branded pointsmen (traffic control people) at busy intersections to help alleviate congestion. It’s a good example of how brands can strengthen their image by helping to alleviate anxiety.
Photo Credits: http://www.outsurance.co.za, http://www.bizcommunity.com
One of South Africa’s “big four” lending institutions, Nedbank, is attempting to grow its client base by offering R750 (approximately $100) for new customers. Aptly named the “Fresh Start Account,” this targets consumers in their early twenties who have not yet formed any serious attachments to banks. When a minimum salary of R3,000 (about $450) is paid into the account, Nedbank credits it with R750 after 45 days. A “refer a friend” portion of the promotion attempts to tap into the social networks of these new consumers by offering R30,000 (just over $4,000) in a random drawing to one customer who has successfully referred a friend.
This is a good tactic by Nedbank. Not only is it providing a financial incentive for joining the bank (at a time when people really need extra cash) but it’s targeting people who will potentially stay with the bank for years and expand their product portfolio, generating revenue for Nedbank that will eventually eclipse the R750 it has paid out.
Although redeeming coupons is a common phenomenon in the U.S. that seems to be on the increase this recession—www.coupons.com has seen a 90 percent increase in the past three months—the concept has not taken hold in South Africa. Radio station Algoa FM in the Eastern Cape is looking to change this paradigm by encouraging listeners to download coupons from its Web site; local businesses are offering discounts on products and services. As this is a regional station, the tactic fosters a sense of community with listeners and benefits all parties involved: The station is seen as having the interests of its consumers at heart; the featured companies get free exposure; and the consumer wins through saving money.
By not offering discounts, South African marketers are missing out on a key opportunity to boost customer loyalty and retention. Whether these savings are presented in the form of loyalty schemes or coupons depends on the category and consumer, but when times improve, consumers will remember those who helped them through the tough times.
With mobile phone penetration in South Africa at over 90 percent, a significant percentage of disposable income is spent on recharge vouchers for airtime. In response to the recession, Cell C (one of the country’s four network carriers) is rewarding subscribers with “free minutes,” based on the size of the recharge voucher purchased. The campaign, “Woza Wheneva,” invites people to come together (“woza” is the Ndebele word for “come forward”) and keep talking—even through these hard times. But while it seems to offer a great value proposition—R50.00 (approximately $7) rewards the user with 100 additional free minutes—small print on Cell C’s Web site explains that free minutes are redeemable only on calls within the network and that the number of minutes redeemable each week is limited.
This isn’t the first time Cell C has misled consumers through “information management”—last year it came under fire from the Advertising Standard Authority for advertising subscriber benefits that had been discontinued. The company is in danger of eroding its brand value if it continues to consistently over-promise and under-deliver. While this type of offer is a good move at a time when all consumers are looking for bargains, people are also much less likely to forgive and forget misleading tactics.
The car industry has been hit especially hard by the recession. As a result, manufacturers have had to become innovative in selling their wares. Volkswagen South Africa has launched a “Recessionista” campaign (they define the term as a fashionista who makes the most of the recession). Fashion and style tips are provided to ensure that “the recession doesn’t get in the way of your style.”
The main objective of the campaign is to draw attention to the low price of a new VW Citi Golf (“Recessionista rule number 1″), but users are also encouraged to enter their own tips on how to beat the recession. These are listed on the site and range from the useful (“Don’t buy books, join a library”) to the obscure (“Cut your own hair. Messy is in.”).
Not only does this tongue-in-cheek approach to the recession lighten up what could be a depressing subject, but by encouraging users to add their own content, VW creates a database of potential future buyers. This enables them to keep in touch with the consumers and open the channel for future dialogue.
Kabnoury is a leading Egyptian aluminium manufacturer known mostly for its doors, windows and kitchen cabinets. The brand has established itself as a heavyweight through catchy advertising and smart marketing. Last year, it launched a massive “Money Back” campaign that created an interesting incentive for customers: Each item sold came with a 30 percent discount in the form of an investment certificate. The buyer could cash in the certificate after a certain amount of time had passed. The campaign was successful in encouraging hesitant consumers to spend now in exchange for savings down the road—and in showing that when you buy from Kabnoury, what you get is not only an acquisition but also an investment.
It seems like these sort of old-fashioned guarantees are resonating with people around the world.
As the global recession forces consumers to trade down in all areas, including where they buy their food, Woolworths—a high-quality, high-priced retailer here in South Africa—is seeking to keep its clientele by offering complete dinners for a family of four for less than R100 (approximately $10). It’s a popular tactic worldwide—in the U.K., Marks & Spencer is also touting a nice round number, urging customers to “Dine in for £10 with M&S this weekend.”
These bundled offers have two objectives: saving the consumer money and helping to answer the age-old “What’s for dinner?” question—more relevant than ever as people cut down on dining out. While Woolworths’ average basket cost is a lot higher than at most supermarkets, offers such as this—one that lends a helping hand and demonstrates the brand’s understanding of the customer’s needs right now—endear the retailer to its already loyal shoppers. And when the economic cycle turns again, Woolworths hopes to enjoy many more years of their support.
If you’re going to be tightening your belt in these uncertain economic times, why does it have to be an old one?
While shopping sprees are now out of the question for many consumers, shopaholics around the world are getting their retail therapy by attending clothing swaps. These gatherings recycle wardrobes among friends, with guests bringing items they no longer want or fit into and leaving with “new” clothes. No money exchanges hands, and at the end of the evening, all clothes left go to a charity. It’s an economically, socially and environmentally beneficial way to achieve the post-shopping glow.
In the mind of the average Egyptian, Chevy is a producer of expensive, gas-guzzling cars. Daewoo’s Lanos, however, is perceived in the region as a value car, both inexpensive and reliable. In the current economy, releasing a new model under the Chevy banner alone might have been risky, but the American manufacturer model is piggybacking off the Lanos’ reputation among Egyptian consumers, revamping the old model and placing the Chevrolet emblem on the front bumper.
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