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AGAIN, DE-MARKETING STARES BREWERS IN THE FACE

By NBF News
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By Princewill Ekwujuru
De-marketing, that un-healthy marketing practice which caused ripples within the banking industry, has once again reared its ugly head in Nigeria's brewing industry, a sector that contributes over 28 per cent of Manufactured Value Added (MVA) goods and provides direct employment to millions of Nigerians.

Whilst observers believe that competition is good for the 'health' of not only the consumer, but also for brands, some market analysts reeled out the negative effects of some of the marketing techniques deployed by companies to get ahead of competition, which is referred to in marketing circles as 'malicious marketing' or 'de-marketing.'

Some of these unwholesome marketing techniques gear towards connecting distributors and enticing retailers with expensive 'gifts' in form of branded items, passing false information about rival brands and the signing of brand exclusivity agreements with retailers, which reads, Obligation of the Customer: to ensure that only (Company's Name )  larger brands are sold at the outlet to the absolute exclusion of any other competing larger brands. Commencement and Duration: This agreement shall come into effect on the …….of……2012 and shall be subject to satisfactory performance and clause 4 of this agreement remains in force for a period of one (1) year.

Musiliu Adekunle, a brand analyst, who claims to have been following the trend, drew an analogy 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, brands do this by enticing retail outlets 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.

Adekunle feels that the de-marketing strategies are indeed going overboard, arguing that there are more  acceptable ways a brand can endear itself to consumers, while citing sales promotions, consumer events and trade activities as more suitable ways to win brand loyalty.

New face of De-marketing:
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.

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 de-marketing was not allowed in advanced countries and companies could be prosecuted when caught. De-marketing does not allow for fair competition; all legitimate products have a right to sell. Furthermore, de-marketing 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.

However, Vanguard investigation showed that the de-marketing trend is unfolding between top players in the industry, who control nearly 80 per cent of the larger market share and the fringe operators in the area of marketing and trade promotion.

The big players, who have recorded ample success in terms of product quality, price advantage, superb technical back-up, availability of ample financing and skillful personnel, by this act, are hell bent on creating an oligopolistic market in the brewing industry.

Some distributors in Lagos, Benin, Ogun States hinted how a big player allegedly told them point blank to stop stocking a particular product of a brewery company with a threat that all trade incentives would be withdrawn if they defy the order.

The beer-brewing industry is presently concentrated with two largest firms, Nigerian Breweries Plc and Guinness Plc who are consistently dominating the industry, both in terms of output, sales volume and their input (labour).