27th March, 2012
As the saying goes, when two elephants fight, the grass suffers. The unsavoury experience of the grass in this analogy perhaps best mirrors what the average Nigerian consumer goes through on a daily basis as the marketing wars between rival companies go into overdrive. These wars can be seen in almost all the industries, especially in the food, beverage and manufacturing sectors.
Nevertheless, while observers believe that competition is good for the ‘health’ of not only the consumer, but also for the brand, some market analysts are quick to point out the negative effects of some of the marketing techniques used by some companies to get ahead of competition. This is commonly known in marketing circles as ‘malicious marketing’ or ‘demarketing.’ Some of these unwholesome marketing techniques range are enticing retailers with expensive ‘gifts’ in forms of branded items, passing false information about rival brands and the signing of brand exclusivity agreements with retailers to exclude rival brands’ products from their shelves.
Musiliu Adekunle, a brand analyst who claims to have been following the trend, presents several examples of such marketing techniques in the beverage industry. “We have discovered through research and investigation that the modus operandi is to sign brand exclusivity agreements with retailers, which forces the retailers to sell only their products, and the total delisting of rival brands products,” he said.
According to him, these brands do this by enticing the retail outlets like small shops, supermarkets, bars, restaurants and pubs with fancy electronic products such as refrigerators, deep freezers, generators, plasma TVs, and branding of their outlets, among other interesting offers.
“In some instances, retailers who also exhibit other brands’ products are compelled to make them appear less attractive to consumers who may opt for these products,” he added.
For instance, he said, some supermarkets are known to position certain brands ahead of others on the shelves thereby offering customers easy reach to these products. Some are even left dusty on the shelves which undoubtedly turns any customer away. The beverage industry is not left out as it was discovered that in some clubs, bars and restaurants, some brands are made more attractive as they are offered chilled to their consumers, while the rest are presented warm.
Adekunle feels that the demarketing strategies are indeed going overboard, arguing that there are better acceptable ways a brand can endear itself to consumers. He cited sales promotions, consumer events and trade activities as more suitable ways to win brand loyalty.
Charles Maduka, a brands and marketing consultant agrees, and lamented that the unsavoury practices of the sales/marketing teams of certain companies have really left much to be desired. He blames this on the absence of enabling marketing and consumer protection laws to keep things in order. “What these people are doing will be deemed unlawful in certain countries, but we do not seem to have enough anti-trust laws in place to checkmate the situation here. Our consumer protection bodies are trying but they also seem limited. Consumers have the right to choose what they want to buy,” he said.
He further stated that demarketing is not allowed in advanced countries and companies could be prosecuted if caught. Demarketing does not allow for fair competition; all legitimate products have a right to sale. Furthermore, demarketing denies consumers their constitutional right to choose between products. “Our legislators should note that we need strict anti-trust laws in this country to stamp out such unwholesome practices,” he said.
Nonetheless, he encouraged government agencies, especially the Consumer Protection Council (CPC), to look into the matter and address the situation, which according to him goes against the spirit of fair play.
Demarketing also has far reaching socio-economic consequences. Lack of sales can force companies out of business which would mean job losses for employees and loss of revenue for the government through taxation.