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Semo market: Manufacturers intensify competition for market share

…Crown flour, Honeywell, Golden Penny deploy strategies

By Princewill Ekwujuru &Yusuf Kazeem

LIKE in the wheat flour market, manufacturers of semo flour (a fibre-rich particle made from durum wheat), have been narrowed to top three brands which are Mama Gold Pure White Semolina produced by Crown Flour Mills, a subsidiary of Olam International, Semolina produced by Honeywell Flour Mills Plc and Semovita produced by Golden Penny Nigeria Plc.

Golden penny

The three brands have deployed the marketing tools of direct marketing, pricing or volume discount, product quality, growth and promotional strategies to reach their target market. The market leaders have been riding on the increased market size in recent years propelled by high demand for the product.

The rising demand is said to be majorly caused by increasing number of adults and youngsters who want to shift away from the traditional meals of pounded yam, gari and cassava flour consumption.

Incentives to consumers

The leading brands are also said to be offering additional incentives to consumers and distributors such as price discount, cash gifts, and trucks and other consolation prices depending on set target for the distributors.

Strategies: Vanguard Companies and Markets, C&M, findings show that the three manufacturers are benefiting from the marketing penetration strategy they have deployed. The strategy has helped the manufacturers reach their primary targets and improve on their sales margin.

The segment has witnessed a strong growth driven by the growing market size and the expansion of mass grocery retail channels in the urban areas, according to C&M findings.

Based on this, the leading semo flour manufacturers who control 90 percent of the market have deployed all marketing arsenal within their reach to battle foreign incursion into the market, which has paid off for them, leaving 10 percent of the market to the imported brands.

There are about 10 semo flour brands in the Nigerian market presently. In addition to the top three, other manufacturers operating in the industry include Standard Flour Mills Limited, Lagos, Mercury Mills Limited, Ogun State, Life Flour Mill Limited, Sapele, Delta State and Valloumbra Flour Mills Limited, Enugu, Nigeria Eagle Flour Mills, Oyo State and Dadaka International Flour Mill, Gombe State, which play in the regional market.

Five of them control 90 percent of the market, while the top three are the most preferred by consumers who answered to C&M inquiries had majority of the respondents signified their preference on the above mentioned three brands which they claim comes topmost when choosing semo products. The consumers said the brands had appealed to them by improving on their product quality, a strategy that has improved product patronage.

Aside the marketing tools deployed by the producers, retailers are also segmenting the products for consumers who cannot afford a bag of the product, by repackaging the products in smaller sizes in nylon, which they sell at lower unit costs. However, price is not an issue in the market, but taste, whiteness and texture of  the products have helped to heighten competition in the market.

Consumers

A wholesaler, Madam Sewa, at Oyingbo market, Lagos, said Semolina sells more, and comes out in a more whitish form and sold quickly particularly when scaled down and tied in nylon. In addition, a consumer, at the same market, Madam Motunrayo, said Semolina looks more like pounded yam when prepared and does not contain seeds.

Another consumer, who gave her name as Mrs. Obiefule, declared her preference for Semovita, claiming that it contains low sugar but commended Semolina, according to her, it is easier to prepare. She added that the slight difference is in the smoothness which she said has given Semolina a slight advantage in the market. Other wholesalers stated that the reason consumers patronize Semolina more than Semovita could be traced to their choice and taste and that the differences are not noticeable.

Price

Though price competition is not significant, it appears premium is placed on Semovita. A wholesaler, Maxwell Okafor, Jahbros Enterprises located along Alaba-rago, a Lagos suburb, who obliged C&M, revealed that prices of the products show that 10 kilogramme of Semolina sells forN2,950, Semovita  of the same kilogramme sells for N3,000.

The selling price for 5kg Semolina and Semovita is N1,600 and Supreme semolina produced by Crown Flour Mills sells for N1,700. While 2kilogramme of Semolina and Semovita sells for N750 and N700 respectively, 1kilogramme for both brands sell for N400 and N370. For Mama Gold Semolina, the prices of the different sizes are much same as other brands’ above.

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