MARKETING IN AFRICA (MNM2615)
SUMMARY NOTES.
, MARKETING IN AFRICA (MNM2615)
SU 1: MARKETING IN AN AFRICAN CONTEXT
The Impact of Regional Economic Communities on Africa’s Marketing
Strategies
• RECs in Africa a group of individual countries in sub regions that have come together for the purpose of achieving
greater economic integration.
• The main aim of RECs is to improve cross-border exchange of goods in order to improve the community’s
economy.
• The key roles are to ensure peace, security and stability in the countries.
• RECs were established to improve political, legal and economic development of the continent and has become a
significant influence in assisting Africa on its journey of becoming a developed continent.
• RECs are challenged with working with governments, civil society and the African Union Commission to raise the
standards of living of the people in Africa, and the progress and development of the continent through economic
growth and social developments.
• The RECs are central to various transformation programmes of the continent.
• RECs enlarge the target market and also lead to an increase in competitors.
• Marketing needs to be customers for African consumers.
• According to the African Union, in order to address issues of regional economic integration, peace, national rights,
cross-border communication, stability, cross-border education systems, illegal border activity and the international
exploitation of natural goods, countries on the African continent have joined forces to form trading or economic
blocs.
• RECs (also known as ‘building blocks’) are federations between African countries in sub-regions. The following
RECs or recognised by the African Union:
RECs Members Aim
Arab Maghreb Union (UMA) Algeria, Libya, Mauritania, Morocco, Improving cooperation between
Tunisia. regional institutions and international
dialogue.
The empowerment of the
independence of Union member states.
Common Market for Burundi, Comoros, Democratic Creating a free trade region- focusing
Eastern and Southern Republic of Congo, Djibouti, Egypt, on growth and development between
Africa (COMESA) Eritrea, Ethiopia, Kenya, Libya, the free trade regions, improving
Madagascar, Malawi, Mauritius, economic activity and cross-border
Rwanda, Seychelles, Sudan, economic activity, improving peaceful
Swaziland, Uganda, Zambia, and performance-enhancing dialogue
Zimbabwe. between member states, and
increasing international communication
and trade.
Community of Sahel- Benin, Burkina, Faso, Cabo Verde, Improving the economic, cultural,
Saharan States (CEN-SAD) Central African Republic, Chad, political and social integration of the
Comoros, Côte, d’Ivoire, Djibouti, member countries.
Egypt, Eritrea, Gambia, Ghana,
Guinea, Guinea Bissau, Kenya,
Liberia, Libya, Mali, Mauritania,
Morocco, Niger, Nigeria, São Tomé
and Príncipe, Senegal, Sierra Leone,
Somalia, Sudan, Togo, Tunisia.
East African Community Burundi, Kenya Rwanda, Uganda, Developing of programmes and
(EAC) United Republic of Tanzania. policies to improve cooperation
between member states concerning
economic, political, cultural, defence
and legal affairs.
Establishing a monetary union.
Economic Community of Angola, Burundi, Cameroon, Central Improve free trade between member
Central African States African Republic, Chad, Congo, states
(ECCAS) Democratic Republic of Congo, Maintain peace.
Equatorial Guinea, Gabon, São Develop political stability and a culture
Tomé and Príncipe. of human integration.
, Economic Community of Benin, Burkina Faso, Ivory Coast, Improve cross-border transactions
West African States Gambia, Ghana, Guinea, Bissau, regarding telecommunications,
(ECOWAS) Liberia, Mali, Niger, Nigeria, Senegal, transport, energy, agriculture, natural
Sierra Leone, Togo. resources, commerce and social and
cultural matters.
Intergovernmental Djibouti, Eritrea, Ethiopia, Kenya, Support sub-regional cooperation.
Authority on Development Somalia, South Sudan, Sudan, Promote peace and stability.
(IGAD) Uganda. Improve regional food security.
Southern African Angola, Botswana, Democratic Promote economic growth, peace and
Development Community Republic of Congo, Lesotho, stability.
(SADC) Madagascar, Malawi, Mauritius, Improve communication and exchange
Mozambique, Namibia, Seychelles, among national and regional strategies.
South Africa, Swaziland, Republic of Maximise employment and sustainable
Tanzania, Zambia, Zimbabwe. use of resources.
Protect the environment.
Fight decease.
Enlargement of Domestic Markets
• Due to the saturation of domestic markets, companies are under pressure to implement cross-border strategy is to
stay competitive internationally.
• Domestic markets and trading are limited to local markets was companies facing a specific set of competitive,
economic and market issues.
• These internal markets have limitations that can be detrimental to a business. These limitations include market
saturation and limited growth.
• It is important for businesses to grow as this translates to job creation, empowerment, political and socio-
economic stability, lifestyle improvement and maximise profitability.
NOTE: these are some of the major driving forces behind RECs.
• Companies are therefore forced to consider and implement cross-border strategies too in large domestic markets
to stay competitive both locally and internationally.
• Enlarging domestic markets implies that there will be bilateral and multilateral trade agreements.
Domestic and International Competitive Markets
• Competition is important as it overtly and covertly drives innovation and promotes growth, thus, trading in
domestic and international markets leads to companies and companies striving for competitive advantage to
remain relevant to the markets.
• Competitive environments are bound to be characterised by cartels as cartels have a major influence on the levels
of competition both locally and internationally.
• Cartels are widespread in constitute a major problem in society. They are the coalition or association of
manufacturers or suppliers with the purpose of maintaining high price levels (thus, restricting competition).
Examples of industries with these monopolistic features in South Africa include:
Telecommunications.
Electricity.
Transportation.
• Reduction of cartels will make it easier to enhance access and competition.
NOTE: according to the World Bank Group and African Competition Forum, by reducing food cartels and
introducing policies promoting competition it would enhance the access of basic necessities.
• The African continent has a relatively low gross domestic product and there is international doubt that this will ever
rise.
• The GDP is also misleading since Algeria, Egypt, Morocco, Nigeria and South Africa are responsible for 60% of
the continent’s GDP.
, • It is also important to look at the economic effects of colonialism. The balance of trade is unilateral, this means
that the importing of goods to Africa is built on a value-added process, whereas the exports are raw goods. The
refining process of rule goods is linked to added value and knowledge is absence, therefore it is difficult for
countries in Africa to overcome their status as the supplier of raw goods.
Technological Progress
• The traditional driver of mass-market of advertising is changing.
• Advertising communication vehicles of mobile and online driven advertising are becoming increasingly popular.
• The rapid progress in technology and mobilisation of the African landscape, mobile-driven word of mouth is an
upcoming star in the African marketing horizon.
• This digital revolution is highly influenced by the decrease in smartphone prices in Africa which is a result of
telecommunication providers partnering with smartphone manufacturers with the aim to provide an entry level and
affordable smartphone for the masses.
• Besides, improved interconnection, the booming telecommunications industry creates additional investment
opportunities.
• The use of mobile services and technologies has contributed to African governmental taxes as well as improving
the financial integration of a population who did not have used to have banking accounts.
• Mobile trends are also driven by the expansion of mobile networks, the improvement of mobile internet,
accessibility of smart devices, accessibility of service-to-go and the facilitation of real-time conversation.
The Impact of RECs on Marketing in Africa
• African marketing practitioners are continuously faced with problems of cross-border political and religious
integration, civil wars, and health and food supply bottlenecks.
• It is important that marketing strategies are aligned with global standards (Mass media communication vehicles
and online social-media communication vehicles can be used by marketing practitioners to advertise their brand or
product).
• The main aim of RECs is to enhance cross-border exchange of goods in order to improve the community’s
economy.
• It is the marketing practitioner’s function to acquire new markets through marketing campaigns tailored for specific
areas.
• Accordingly, RECs enlarge the target market which might lead to a bigger clientele as well as increased
competition.
• The best marketing approach is to develop strategies from a consumer’s perspective to enable marketers to make
marketing campaigns and products according to the landscape of the communities in which they are trading.
• To do this effectively marketing must be mindful of religious calendars and observations and plan and
accommodate these religious requirements of their markets.
Establishment of Business in Africa
• Africa is an emerging economy.
• Starting a business requires (besides natural resources), financial services, media and telecommunications and
logistics services.
Financial Services: Africa’s banking sector is growing rapidly and is due to financial reforms (the growth cam
with the consolidation of smaller banks with the aim of reducing administrative charges and improving
capabilities). This meant that a larger customer circle could be addressed. Third party services also help
improve financial services.
Media and telecommunications: different media channels and telecommunication is growing rapidly due to
the increase in broadband subscribers and the adoption of smartphones and tablets. This has led to
businesses within the telecommunications industry being very promising. This type of technology has led to
access to communication, information and entertainment 24/7 and is a game changer. This type of technology
can also be used to build up long-term relationships with customers.
