Sobowale On Business

June 17, 2024

How to improve sales and profits in a depressed economy –3



By Dele Sobowale

“Manufacturers Association of Nigeria, MAN, Nigerian Employment Consultative Association of Nigeria, 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 inevitable loss of jobs.”

Dele Sobowale, VANGUARD, June 10, 2024.

In the article last week, I made a casual reference to the downward shift in aggregate demand for products of brewery sector without elaboration. The next day, GUINNESS Nigeria Plc announced that the parent company Diageo  had decided to pull out of the Nigerian market by selling its 58.02 per cent share holding to Dufil Prima Foods, an Indonesian company.

The Tinubu administration, seeking to downplay the significance of the change of ownership and a long term investor voting with their feet, emphasised the confidence demonstrated by the buyer in the Nigerian economy instead. I have no interest in making Bayo Onanuga’s work harder. But, if the absolute truth is eventually revealed, the sum total of GUINNESS’ departure outweighs the rescue mission by Tolaram Group – the parent company of Dufil. Most probably, GUINNESS  was aware of the situation to which I pointed out last week. For GUINNESS, the Nigerian market has now become a declining market; for Tolaram, just entering a shrinking brewery sector of the food and beverage industry here, it is ground zero. Only the future will tell whether or not it has made a wise decision. My own feeling is that it has a tough task ahead to succeed.

Another multi-national had expanded from packaged food products, in which it was the leader, to bottle water, which in the 1990s was then a promising sub-sector dominated by RAGOLIS, SWAN and EVA. The company’s head office in Europe had assumed that its reputation will provide an advantage. The Nigerian Managing Director engaged me to conduct preliminary research which revealed problems ahead. The European successor to the Nigerian, three years after, invited a foreign research firm – which not only recommended that the company should go into water, but, predicted it will be the largest brand in five years. The brand has remained a minor player in the water sub-sector more than 10 years after it was launched. Water is, indeed, food, but, a different kind of food. Companies selling both require different orientation to their markets.

Training is key for success

“If you don’t train them, don’t blame them.”

That was the punch line in our sales pitch at the Nigerian Institute of Management, NIM, in the 1990s whenever we went to visit organisations we wanted to enrol for our training programmes. We conducted training at all levels of the organisation, generic i.e broad-based training, as well as in-plant training which addressed the specific needs of organisations and their staff. The two are usually complementary because, every economy presents all organisations with problems and prospects that are general and at the same time different.

 A rapidly expanding market will create different rates of expansion for competitors within each sector. For instance, a deep economic recession invariably has little or no effect on the sales of luxury goods consumed by wealthy individuals. Sales of Rolls Royce and Mercedes Maybach remain steady because for the richest people the price is small change and most are committed to changing their cars every two or three years. The story is different for mini-sized sedans purchased by the lower middle income class. The volume drops significantly in a recession. But, even within product classes – luxury or low income, economic conditions affect brands differently; each product has its own elasticity of demand – which can be determined by the effectiveness of the sales team. This is where training can make a difference.

The first Buhari recession occurred in 1984; and swept off several breweries and their brands of lager. Asiwaju of Iresi, Osun State, Daisi Aina, now leading the Polytechnic, Iresi, is my witness. The year several breweries went down was the year Standard Breweries, Alomaja, Ibadan, went from selling 280,000 cartons in March to 1 million in December of the same year. Training of sales staff made the difference. And, the training programme involved the three aspects – knowledge, skills and attitudes. Most people would imagine that beer is a simple matter; there is nothing to teach anybody about selling it. That was the mistake our competitors made and many investors lost breweries and loads of money. Most were ruined for life.

 You would think that mosquito coils are as simple a product as you can find. But, not until your company tries to sell them and you have to make a living out of successfully selling them. But, outstanding sales of RAID Coil in the 1990s, based on regular sales training turned the Managing Director from an employee to a factory owner and an employer of workers; and a multi-millionaire, I might add. The fact is; many of us have not grasped the truth that everybody lives by selling something – the Pastor, the politician, the publisher and the prostitute. Invariably, the most successful are those who have mastered the simple art of satisfying customers. Having a good brand helps; but, the victory does not often belong to the technically best product. Let me give an example.

 I was once a subscriber to a monthly consumer products magazine which compares several brands in every sector and proceeded to rank them from best to worst. One day, after reading the magazine, I took a look around the house and discovered that only two of the brands judged best by the magazine were there. Then, it occurred to me that each time I went to a goods shop, the brand which had a sales person in attendance was bought – not the best or cheapest.

At North Brewery Limited, Kano and Standard Breweries, Alomaja, my staff and I went out to sell beer and we created records. Permit me to leave it at that.

Even newspapers can be sold. Uncle Sam put me in charge of marketing VANGUARD newspapers in 1996, when daily circulation was relatively low. We circulated (a high falutin word for selling) 150 per cent more than when I started the day after the 2007 presidential elections. I was the only Marketing Manager of any newspaper who visited all the states four times a year, who knew and was known by all the agents in Nigeria. I was always there at 7am drinking stout with them at the Circulation Centre. I brought our Circulation Staff and I closer to the primary customers. In December 2007, we organised a year-end party for all Agents at Mayflower Hotel, Mushin from contributions. They gave me money at the event. Take it from me; anything can be sold with the appropriate training for knowledge, skills and attitude. Companies ignoring training invite disaster.

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