Marketing In An Economic Downturn –

Some Perspectives From the Nation

Brand and from a Marketer

Tshepiso Malele

30 May 2016

Brand South Africa

• Marketing to the cash-strapped consumer

• Exports – what does this mean for South Africa?

• Recent Eskom power crisis; Water crisis; and Rand exchange rate – Domestic negativity

• Possible Strategies for Marketing in an Economic Downturn

• Getting the message across against negative consumer sentiment

Navigating the storm…

Agenda

Brand SA Introduction

What is a Nation Brand?

Brand SA marketing activities & response to the challenges

Research Update

Case studies

WHO ARE WE AND HOW DO WE OPERATE

● Brand South Africa was established in August 2002 to help create a positive and compelling brand image for South

Africa.

● Our main objective is the marketing of South Africa to domestic and international audiences.

● Brand South Africa is tasked with positioning South Africa as a competitive destination of inward investment, trade,

skills, tourism, etc.

● The message of South Africa’s competitiveness must be anchored in facts and borne out by the reality experienced by

various audiences.

● Brand South Africa’s key job is therefore to engage with a range of stakeholders and identify those areas in which we

have either distinct, or competitive, strengths which will assist Brand South Africa to fulfil its mandate.

Brand South Africa – Who We Are

5

Sluggish economy, negative perceptions, corruption… What would you do as a marketer?

Our Mandate

6

Build South Africa’s Nation Brand reputation to contribute to

South Africa’s global competitiveness

Inspire and instil active citizenship amongst South Africans

The official agency established to market South Africa; responsible for building the

Nation Brand and managing reputation.

Face similar challenges as other product / commercial brands…

Programme: South African Competitiveness Forum (SACF)

● A strategic platform through which stakeholders from government, business &

civil-society identify the competitive, reputational strengths, and challenges

the brand faces

● Facilitate discussion on how improved competitiveness and strong

international reputation can assist the country to achieve long-term

development, social, transformational and economic objectives

● Focuses on themes such as:– Manufacturing and related services

– Education, Skills & Labour

– Youth

– Innovation

– Foreign Direct Investment

– Global South Africans’ part in creating a competitive nation brand

– The role of Labour

Programme: Global South Africans (GSA)

• Aimed at enlisting the talent, experience and credibility of South Africans living

abroad to build the Nation Brand internationally

• South Africans living abroad are often the first point of contact for people

overseas whose judgements have a profound impact on the fortunes of our

country

• GSAs can show the world what South Africans are made of, why we are worth

investing in and partnering with and how we can help find creative solutions to

the world’s problems

• By becoming part of the GSA network, you are saying you want to act as a

“brand ambassador” for the country

Programme: Nation Brand Master Class

● To educate, guide and empower key stakeholders

with the intricacies of handling a nation brand

● Everyone has a part to play in making our country a

complete and competitive nation

● The Master Class is about building a nation brand

that at its core is unified through its diversity

Programme: Play Your Part

• A nationwide social movement created to

inspire, empower and celebrate active

citizenship in South Africa.

• Aimed at all South Africans – from corporates to

individuals, NGOs to government, youth

platforms and young to not so young.

• It aims to encourage South Africans to use some

of their time, money, skills or goods to contribute

to a better future for all.

• Ultimately the end result is for every South

African to make a positive difference in the

communities in which they live and operate.

To achieve VISION 2030

Play Your Part

nomination

Domestic

1. Brand alignment - active

citizenship, civic pride,

ambassadorship & social

cohesion.

2. Stakeholder outreach and

partnerships (Government,

Business & Civil Society).

3. Profiling the SA’s vision,

achievements, develop and

inclusive growth efforts – NDP

4. Championing regional

economic integration and its

benefits to SA and the

continent

5. Leverage strategic domestic

platforms to profile SA as ideal

business destination.

International

1. Expose international media to SA

proposition as attractive business

destination [Press trips]

2. Engage key stakeholders and

target audiences critical to the

positive positioning of SA

[Investors, Media]

3. Sustaining a reputation

management programme in

target markets to entrench

relevant key messages.

4. Facilitate coordinated marketing

and messaging of SA attributes.

5. Leverage strategic international

platforms to promote brand SA.

Strategic platforms

• WEF China

• Africa Programme

• Branding Summit

• WEF Davos

• Mining Indaba

• In-country Round

Table discussions

• FOCAC

• WEF Davos

Other Strategic Focus Areas and Initiatives

Shift of focus from big productions, sponsorships etc. to more on-the-ground

engagements over time

THE NATION BRAND

Nation Branding

The practice of highlighting, encouraging, reinforcing,

communicating and aligning a nation’s attributes in

order to present the nation in a way that helps it reach

defined strategic goals

Nation Brand

is the sum of people’s perceptions of a country across

six core areas – the Nation Brand Hexagon

The Nation Brand Hexagon* - identify assets within each element…

ExportsTourism

Governance

Culture and Heritage

PeopleSkills and openness

Investment Potential and

attractiveness to outsiders

Commercial and cultural

products and sporting prowess

Competency fair

governance, human

rights, international

contribution

Potential attractiveness

and economic

contribution

Level of

satisfaction with

country’s products

and services

Investment &

immigration

* Anholt-GfK Roper

Brand South Africa Stakeholders and Target Audience

16

Government

• Political leaders

• National government

• Local government

• Trade & tourism entities

• Political parties

Business

• Business Associations

• Corporates

• International Chambers

• International Trade Councils

• Export Councils

• Tourism players

• Film makers

• Conference organisers

• Economists & Analysts

• Public

• Political Parties

• NGO’s

• FBO’s

• Labour leaders

• Youth Formations

• Academia

• Gender advocacy groups

• Clubs, societies & special

interest groups

Civil Society

Media

Influential forums

• United Nations

• AU

• SADC

• World Bank

• IMF

• BRICS

• World Economic Forum

• IATA

• WWF

Opinion leaders

Competition for share of voice in a crowded market place for:

Inward investment

Trade

Exports

Tourism

Telling your own story – selling the country proposition

Changing Perceptions and Image

Build strong brand Image = Nation Brand Equity

Help restore international credibility and investor confidence

Why is a Positive Nation Brand Important?

17

MARKETING IN AN ECONOMIC DOWNTURN

How did we get there?

19

• A drop in Mining

• A credit bubble

• Increased government spending

• Labour unrest

• Sluggish global markets

• Low levels of investment

Typical responses

21

● Consumers set stricter priorities - and reduce their spending

● As sales start to drop, businesses typically cut costs, reduce prices, and postpone new investments

● Slashing of Marketing expenditures

● Less brand loyal during recessions

Working in a structured and

customer-centric way in

order to create customer

value

PRODUCT BRANDING

• Concerned with promotion of physical / tangible products largely for end-user consumption

• Product positioning is influenced by confluence of marketing ‘Ps’, such as Product, Price, Promotion and Place

• Manufacturer has full control of most elements of the brand/product

NATION BRANDING

• Concerned with promotion of intangible and largely fluid national reputations for global competitiveness

• Nation brand positioning is influenced by confluence of investment, export, governance, tourism, people, culture, and heritage reputations

• No single manufacturer. Nation brand is owned and ‘produced’ by all players linked to the nation.

Challenge when dealing with the Nation Brand…

Consistent delivery of the Nation Brand

24

ExperienceWhat customers experience

when they engage us

ImageHow they see us

CapabilitiesOur capacity and ability to deliver

CultureOur behaviours, beliefs

and way of life

Alignment with stakeholders in terms of messaging and branding:

Communication to respective regions in the context of a South Africa that is competitively positioned in the global arena

Creating synergies in the projects that our stakeholders are working on in order to create IMPACT

By unifying all country brand messaging we ensure a coherent and cohesive communication that strengthens our position as a nation.

Achieve co-ordination such that all stakeholders can leverage from what each one is doing

Heightened need for collaboration with the brand’s stakeholders

What are the key ingredients necessary for successful place branding?

26

● A favourable political framework which allows for the development of solutions that are market

efficient and not politically motivated.

● Managers with expertise in the area of place branding.

● Tradition of co-operation among the people that represent the different organizations.

● A common understanding of the need to attract resources and to differentiate a nation from

competitors

● A shared mission and a shared vision of what they are truly trying to achieve together.

Brand SA perspective: some of the challenges in the current

environment

● Reaching (and convincing) a diverse global audience in the current environment

– Restricted marketing budgets (as a result of economic downturn)

– Less budget for big campaigns

– Disengaged audiences

● Restricted buying power / decision making processes of audiences

● SA’s population profile: disenfranchised youth

27

Brand SA responses to the challenges

● Collaborate: partnerships that create value for all

● Relevance: continue to gather insights and share with stakeholders who have an impact on

the nation brand

– What do they think about us?

– E.g. Homecoming Revolution research: not all South Africans leave the country for negative

reasons.

● Continue to build the brand:

– Media partnerships (domestic & international) vs. traditional buying

– Flighting of INW on digital media

– Increasing use of digital platforms to engage with audience

28

SOME OF SOUTH AFRICA'S COMPETITIVE

STRENGTHS

South Africa’s People

● South Africa’s population of 53 million people is definitely a massive competitive strength

● South Africa’s population is extremely diverse with over 15 different ethnic communities within the

borders. South Africa has 11 official languages

● Because of our diversity combined with the spirit of reconciliation and forgiveness, South Africa is

known as the rainbow nation.

● SA’ns that have inspired new ways and redefined acting world e.g Charleze Theron, Terry Phetho

South Africa’s Financial Sector

● South Africa has the 12th best developed financial sector in the world according to the WEF GCI

– South Africa’s performance is outstanding in the following sub- indicators:

• Regulation of Securities Exchanges (2nd);

• Financing Through Local Equity Market (1st)

• Affordability of Financial Services (3rd); and

• Availability of Financial Services (6th)

• Soundness of Banks (8th)

● The JSE is the largest exchange on the African continent and the 19th largest in the world

31

South Africa’s Corporate Sector

● South Africa’s corporate contributes to the country’s competitiveness – when corporates have an international

footprint, the global community experiences South Africa through these companies and are therefore very important

to the brand:

– 5 South African tech companies founded after 1980 worth over R10 billion eachhttp://mybroadband.co.za/news/business/133720-5-south-african-tech-companies-founded-after-1980-worth-over-r20-billion-each.html

• MTN – launched in 1994, has a market cap of R379 billion

• Vodacom – launched in 1994, has a market cap of R211 billion

• EOH – founded in 1998, has a market cap of R23 billion

• Dimension Data – founded in 1983, had a market cap of R22 billion in December 2010

• Datatec – founded in 1986, has a market cap of R14 billion

32

South Africa’s Cities

● 3 of South Africa’s cities feature in the 2015 City Brand Index which measures the worlds

most globally competitive cities: Johannesburg (44), Cape Town (43) and Durban (48)

33

South Africa’s Tourism

34

• South Africa’s tourism sector is amongst the most competitive in the world.• Significant contributor to the country’s GDP • According to the Travel and Tourism Competitiveness Report 2015, South Africa is amongst Africa’s Top

10 tourism-ready economies

South Africa’s Higher Education

● South Africa is competitive in the higher education sector, and is an attractive destination to study.

● 4 South African Universities are ranked in the top 5 universities of Africa .

● The University of Cape Town is the fourth best university amongst the BRICS and emerging economies

according to the World Economic Forum.

CONTINUING TO SEED THE POSITIONING

The Inspiring New Ways TV commercial on digital platforms

INFLUENTIAL PLATFORMS – WORLD ECONOMIC FORUM DAVOS

MEDIA PARTNERSHIPS: INTERNATIONAL

MEDIA PARTNERSHIPS: DOMESTIC

Media Tour on Margins of FOCAC

Objectives:

Host international and local media to showcase South Africa’s

competitiveness in:

- Science and Technology

- Business and Investment

- Arts, Heritage and Culture

Audience: International and Local Media

Outcomes:

• Strengthen relationships with media

• Showcase South Africa’s competitive strengths

• Position Brand South Africa as a go-to-point for information on South

Africa’s competitiveness

Department of Home Affairs Training

Objectives:

Building the nation brand from the inside.

Part of DHA’s Customer Service Improvement training programme.

Audience:

Home Affairs officials at ports of entry and city offices.

Outcome:

Officials from various offices trained – covering pride, patriotism,

active citizenship and domestic insights.

Collaborating to deliver value for both partners and consumers

Objectives:

Encouraging Active Citizenship during economic downturn

Interactive digital marketing & communication campaign: Use GEM app to

mobilise citizens to play their part by participating in 1 of 10 identified

activations around Gauteng

Audience:

Gauteng based active citizens, stakeholders & media

Outcome:

Extending reach of PYP, along with clear call to action

Over 360 volunteers dedicated their time to contribute

to various causes

Google Maps launches the Mzansi Experience

● Discover South Africa for people across the world to discover the wonders of the

country.

● He hoped that visiting the country through Google Maps would inspire a deeper

appreciation for the country, the wildlife and Africa's beauty.

Read more: http://www.mediaclubsouthafrica.com/visitsa/4424-google-maps-launches-

the-mzansi-experience#ixzz49SuGiebD

Brand South Australia – leveraging the state brand…

CHARLESWORTH NUTS

● Produces high-end nuts, fruits and chocolate products for consumer and corporates

● Family business in South Australia since 1934, with a focus on 11 company owned retail shops and their online store.

INCORPORATING THE STATE BRAND INTO MARKETING

● Charlesworth Nuts invested a small amount of time and some creativity in looking for positive opportunities to use the State Brand.

● As a business already investing money in their marketing, simply adding the brandmarkinvolved no additional costs.

THE IMPACT

● Charlesworth Nuts believe it is an important and positive layer in their corporate identity that indirectly translates into sales and growth.

● Now it’s much easier to identify them as being a truly South Australian company.

44

Calgary – recovering from economic disaster…

● ‘Calgary: Our Doors are Open’ was launched on the day the city lifted its state of emergency. – Print

– Radio

– Social media

● It featured numerous residents holding up signs saying ‘Open’, along with a campaign on social media that revolved around tongue-in-cheek slogans.

● It’s not just policy makers who can drive crisis management for places. Residents of the place also play an important role in restoring confidence in the brand.

● The effect was rapid and tourism numbers rebounded strongly.

45

EgyptAir – regaining altitude against all odds…

46

● EgyptAir turned its logos black and white on social

media in mourning after EgyptAir flight MS804 crash.

● Celebrities join digital campaign to support EgyptAir

● Egyptians and Arab people ignited an online initiative to

support Egypt’s national airline.

Final thoughts…

● Do not despair… Do not panic – stay true to your brand

● Collaborate: explore innovative partnerships that create value for all

● Relevance: continue to actively engage with consumers and stakeholders

● Seek cost-effective platforms to build the brand

47

THANK YOU

@brand_Sa @PlayYourPartSA

@MediaClubSA @sa_info

Brand South Africa / Play Your Part / Media

Club SA

BrandSAtv