By Victor Ikem

Recession, which has worsened the purchasing power of the vast majority of Nigerians have combined conspiratorially with weak brand loyalty to turn the Nigerian marketing space into one sprawling casino. From banks to telecom, the case is the same. Customers are daily drawn into one form of disguised lottery or the other all in the fight for market share. I have been wondering how banks which between 2005 and last year when Lamido Sanusi put the brakes on certain aspects of banking, have been profiting from retail promotions. No bank has ever come out to state exactly how one sales promo affected its deposit base, customer volume or bottomline but that is an issue for another day.

Players in the Nigerian economy are a lucky lot. There are just too many festive seasons and as many people planning to celebrate one thing or the other. So the market for season-centric lottery is here in abundant. If we are not celebrating Christmas (the biggest of them all), we are doing Sallah. If we are not here, then we must be on the threshold of Easter, Democracy Day, Independence and so on. Those whose memories are not as short as my own would remember very clearly that Valentine Day has gradually become favourite celebration period for everybody, young and old. It has become its own season and it would surprise no one if some hay brains start agitating for this day to be made a formal public holiday.

Joking apart. Companies in Nigeria have stretched sales promotion strategy thin and experts are beginning to wonder whether it still serves its purpose. The idea of sales promotion was conceptualised to enable brands take advantage of discounts offered during this period to scoop huge patronage that would otherwise not have been possible in the ordinary course of marketing. This, in addition to opportunities to win series of prizes is thought to have potential to drive patronage. Sales promotions can also attract a different audience and encourage people to try a product for the first time. But do they stay “tuned” at the end?

Research has shown that sales promos do not usually drive brand loyalty. In fact, consumers are known to have felt negatively towards brands after several futile attempts to win prizes offered in sales promos. They even tend to rebel and demonstrate this by veering over to competition. In a market like ours where the integrity of virtually everything is taken with a pinch of salt, any possible rumour that the sales promo is fraudulent is capable of doing irreparable damage to the brand.

So why, in this country, do we have this rich harvest of sales/consumer promotions? A research conducted in Singapore in 2002 by a company called Emerald Insight and published in the country’s Journal of Brand Management concluded that “managerial use of sales promotions is influenced primarily by competition and short-term pressures.” Another research by US-based Science Direct says that “The benefit of sales promotions is that they induce choice. However, this benefit may be offset by undermining preference for the brand when it is no longer promoted.

Despite the fact that sales promotions have long been employed in marketing practice and researched academically, a clear understanding of the impact of sales promotion on post-promotion brand preference continues to evade brand managers and marketing scholars alike These findings cannot be truer. In the Nigerian marketing landscape, pressures from competition can be identified as the chief driver of this strategy and I cannot discuss this without citing the cases of Nigerian banks. At the time sales promos was vogue in the financial services sector, there was noticeable pressure on the marketing staff in the area of selling several of their retail products, especially children’s savings accounts and the regular savings accounts. The banking industry got to a point where all the products were generic and the only differentiator available was in offering customers the opportunities to win one prize or two. But soon nearly all the banks were doing the same thing and what did customers do? Those who wished to play the lottery simply moved money from one account to the other depending on who was in the market with which promo.

What about the telecom industry? What about the breweries? The story is virtually the same. In telecom, the drive for market share is intense with the top three o close it is sometimes difficult to define leadership. So to sustain loyalty and generate the cash necessary for expansion, sales promos become the only resort.

But the greatest challenge facing sales promotion strategy is its short term nature. Sales promos do not build brands. They do not even reinforce loyalty in the long term. People are wont to forget one sales promo and move over to the next. At this point, sales volume drops, sometimes so dramatically that the brand suffers considerably. This means that measurement of market share could be misleading during periods of intense promotional activity by one brand, especially if competition was not flying anything at the time.

I really think what marketers in Nigeria should do is to invest greater energy in identifying long term bonding strategies not tied to particular seasons. People tend to forget very easily things that do not connect with them in the real sense. And if the promo becomes too frequent, consumers get bored and might be unwilling to spend the extra cash that would make the difference. But in a market like ours with endless seasons, I doubt if this short term strategy would not be long term for us. Especially when it is the easy way out for battle-weary marketers and brand managers!

Victor Ikem works with Novelpotta Y&R, Lagos