Sobowale On Business

June 10, 2024

How to improve sales and profits in a depressed economy-2 

economy

Lagos

By Dele Sobowale

•Corporate mind-set and attitude -2

“The future will ever come and it will be different”

That was the verdict of a Management expert during the late 1960s and early 1970s. He used that declaration to warn managers of businesses to beware of thinking that the strategies, plans, products and corporate mind-sets which led to their success in the past and present will also ensure their sector leadership in the future. One President of S C Johnson Wax, a global leader in air-fresheners, insecticides and other industrial chemicals, in the early 1990s warned his global managers against complacency – which eventually afflicts successful companies or organisations. As American best selling author of the book, THE BRIGHTEST AND THE BEST, David Halberstam said about victorious Generals, “Most Generals are good at fighting the last war.”

Marketing/Sales functions represent the civilian equivalent of military engagements. Like soldiers, practitioners, like me, seek to capture markets, gain market shares, beat our competitors and earn the rewards which result from victory. Losing is never an option because retrenchment invariably follows. In my MBA class in Boston in 1970, only three of us opted for Marketing and Sales; two for Human Resources Development; the rest chose Finance. So, from very early in life, it was clear to me  that battles for market supremacy were going to be my source of livelihood. And, permit me to say so, I was very good at it. Perhaps, starting with a degree in Economics was an advantage. It made it possible for me to read business cycles and forecast what might follow in the economy and to plan against the unforeseen. My experience in the Nigerian economy since 1974 has been based on future forecasting. The predictions have also induced changes of attitude as the circumstances required. Most managers of Nigerian businesses seldom consider the future beyond the next year; and they rarely endeavour to alter the corporate culture until disaster strikes. Two examples would illustrate the point.

 Nigerian Tobacco Company, NTC, based at Ibadan, was once as much the darling of the Nigerian Stock Exchange, NSE, as Boots Company Nigeria Limited, BCNL, was. It even paid better salaries and other entitlements. An in-law, then a Director, asked me to apply for the job of Sales Director because the company was no longer meeting its sales targets; and the Sales Director was about to be sacked. Who in his right senses would turn down a job paying 50 per cent more – and all the cigarettes you could smoke? I did; and told my in-law why. From my research into the sector, cigarettes were a declining sector. Apart from the intensified global campaign against smoking, I had discovered that the next generation of Nigerians coming after us were smoking quite alright. But, it was not cigarettes. Our current national problem with drug addiction had its origin in hemp smoking instead of cigarettes. NTC folded up a few years later.

For hundreds of thousands of Nigerians associated with NTC, it was unthinkable that the company could ever fail. And, it was not only NTC which went down, Phillip Morris, its biggest rival also went down. My late aunt, who was the biggest distributor of both, suddenly became unemployed for the first time in 47 years. That is what complacency can do to managers.

 Right now, several companies in the Food and Beverages sector are in danger of following NTC to the graveyard of companies which were once very successful but for which demand has not only declined precipitously, but, the trend downwards will continue for a long time to come; and for the same reasons. Nigerians between 18 and 40, who constituted the bulk of consumers of certain products, as they enter the job market and start climbing the ladder, no longer graduate to those products. It will amount to a blunder of monumental proportions for the managers of breweries, for instance, to regard last year’s woeful corporate results in the sector as a temporary setback for the sector. I will not go further now. But, the Manufacturers Association of Nigeria, MAN, the Nigerian Employers’ Consultative Association, NECA, and other business groups in Nigeria would be best advised to get their members to individually and collectively address the issue of permanent shrinkage of markets and the inevitable loss of jobs. Annual Reports and Accounts seldom reveal the volume of products sold – only the turnover. However, as an indirect distributor of two beverages, I am aware that increases in turnover in 2022 and 2023 occurred on account of higher prices despite low volume sales. That already told me something. The youth segment of the population is gradually turning away from the traditional beverages for enjoyment.

They are increasingly turning to something else. I know what they are; but, this is not the forum for disclosure.

What are the implications of this? Let me use an example from the 1970s to illustrate how mind-set can determine the outcome of competition.

 I was recruited in the US and returned to Nigeria in 1974 by Bristol Myers, marketers of SIMILAC baby milk which was just entering the Nigerian market after oven ten competitors. Sales ladies, usually nurses, were employed by the companies to promote the products. According to tradition, the sales ladies resumed at 8 am; went round maternity hospitals; visited Midwives and closed at 5pm. I asked why? The answer was, “that is how we do things in Nigeria.” I went to Island Maternity Hospital, Lagos Island and discovered a truth hiding in plain view. Babies are born every hour 24 hours everyday – not 8am to 5pm. I sent a memorandum to our UK office asking to be allowed to change our working hours by engaging sales ladies on three shifts – 7am to 3pm. 3pm to 10pm and 10pm to 7am. Expectedly, there was some resistance, which was overcome by paying shift allowances and shift changes every Sunday – which was a work-free day. Within six months SIMILAC was number three; and we were number two in less than a year. The first face every new mother at Island Maternity saw, after being brought to the ward, after 5pm was a sales lady from Bristol Myers bringing two free cans of SIMILAC. Our competitors had gone to sleep while we were taking their market shares. That became national policy after the successful trial in Lagos. Thereafter, reaching a new mother first before any competitor became the core of our mind-set.

That change brought about a change in supervision. I was no longer an 8am to 5pm Marketing Manager. To be sure the sales ladies were not goofing off, I had to pay surprise visits at 2am, 3am, 4am to Island Maternity and Massey Children’s Hospital as well as others. I felt a sense of achievement when one night, the Managing Director reached Island Maternity before me at 2.45am. Without talking to him or writing a memorandum, I had succeeded in altering my boss’s behaviour. He has become a part of the sales team.

Suddenly, we were allocating products to dealers instead of struggling to sell them.

 Right now, the Marketing and Sales Departments of many Nigerian companies are headed by people who can best be described as “the best generals for another war”. They are leading their businesses to disastrous defeat with wrong mind-sets; for which everybody will pay dearly.

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