Nigeria Economy: No Longer At Ease.

“Things fall apart, the centre cannot hold…”

                                (The Second Coming, 1919) W.B Yeats .

The present state of the Nigerian economy is a very worrying state, with oil prices taking a downward spiral in fact the benchmark has been rubbished, the Organisation of Petroleum Exporting Countries (OPEC) not cutting output as well as the Central Bank of Nigeria’s (CBN) Monetary Policy Committee’s decision to devalue the Naira and the imminent deficit budget.

How did we end up in this mess?

One central cause is the decision of the Central Bank of Nigeria (CBN) to devalue the Naira late last year as part of palliative measures taken by its Monetary Policy Committee to stabilize the Nigerian economy. As a catalyst, the exchange rate of Naira to Dollar rose and remains on a high. At the same time, our oil revenue has dwindled as we have been using our reserves to keep the Naira stable.

While the Central Bank stepped in last year to send the Naira to its biggest one-day gain in three years, this ‘intervention’ in the market has reduced foreign reserves to a four month low of $37.8 billion, so we spent all the reserves trying to save our economy from an imminent downturn, and we didn’t maximize savings while the oil price was high.

As if this is not enough; oil, which is our major and arguably only source of revenue, started nose diving due to lack of demand. The oil price has dropped by more than 40%; as at June last year, it was sold for $115 per barrel, but is now sold for $47 in the main market (Bloomberg.com), and $45 in the black market (Economist.com).              

What caused this?

Firstly, oil prices are determined by supply and demand just like any other commodity. They are affected by changing economic activities as well as by decisions made by the Organisation of Petroleum Exporting Countries (OPEC). Experts believe that a growing switch from oil to other fuels, the turmoil in Iraq and Libya (which are major oil-producing Nations); and more importantly, America which used to be a major consumer becoming the world’s largest oil producer with more than 20,000 new oil wells since 2010, ten times more than Saudi Arabia’s tally (Economist.com); has contributed to the drop in oil prices. America’s recent rise in the oil business has been made possible by “frackling shale formations”, which is basically a mixture of water, sand and some chemicals injected into shale formations ‘rocks’ to release oil. It is a relatively new technology, and is also reportedly being secretly replicated in China and the Czech Republic.

How does this affect the common man?

Since the oil price is low, our external reserves are also low, Naira has been devalued, exchange rate for dollars is on a high, which means if you earn in Naira and incur costs in Dollars, then you are in for a very rough time. The Central Bank of Nigeria has taken several steps in stabilizing the economy, notably through increasing the percentage of Cash Reserve Ratio (CRR) for the private sector deposit from 15%-20%  and Monetary Policy Rate (MPR) from 12%-13% . This move is expected to help regulate inflationary rise. Also certain austerity measures as mentioned by Minister of Finance will be taken; top on that list is the removal of subsidy. This will ultimately lead to increase in pump price and so many other ripple effects will follow.

What is the way forward?

To ensure the situation does not get any worse than it currently is, the federal government should judiciously cut its expensive lifestyle and be more prudent with managing oil revenue. We must take drastic measures to find other means to internally generate revenue (aside crude oil) and diversify our economy. Encouraging indigenous manufacturers by implementing suitable laws, we have to stop being an import dependent economy; we export fuel and import petrol? In some quarters that’s gross foolishness, we have 4 (four) unused oil refineries, we expend natural gas and leave them untapped, solving all this issues would be a step in the right direction in this import eroded economy.

Re-branding and its Benefit

Re-branding a business is the process of creating a new look and feel for an already existing brand or product in order to influence its customer’s perception. This may include changing the name, logo or packaging. Re-branding can be a very challenging but extremely rewarding process. It requires careful consideration and planning to achieve the desired goal which is to breathe new life into a brand to attract new customers and increase its popularity. Nigerian Breweries, Oando, and Glo are examples of Nigerian companies that are constantly re-branding and are enjoying wide acceptance among the Nigerian public.

 In 1997, tech giant Apple was very close to declaring bankruptcy, but a little less than 17 years later, stock prices have gone up from $6 to $350 and the company keeps shooting in an upward trajectory. Apple did not only rebrand the company’s name, mascot and logo, but also started producing reliable and elegantly designed products, adding artistry to technology; as changing its name from Apple Computer to Apple enabled the company to produce innovative products such as iMac, iPod, iPad, and iPhone. Apple found a way to polish its brand and create a positive experience for its customers.

Until recently, McDonald’s had the image of a chain that served unhealthy meals sold at exorbitant prices; in fact, critics touted McDonald’s meals to be one of the leading causes of obesity. McDonald’s has since rebranded itself, now serving more healthy meals with reduced prices under the slogan “I’m lovin it”. This makeover appears to be having a ripple effect as there has been a reported 5.3 percent rise in sales according to Business Insider.

Wal-Mart, in a 2007 re-branding, replaced its tagline “Always low price” with “Save money. Live better”. This singular act changed the company’s reputation from offering retails at rock bottom prices to suggesting that buying items at low prices will improve the lifestyle of the customer. In 2010, Wal-Mart was the world’s largest public corporation by revenue, according to the Forbes Global 2000 for that year.

Re-branding is generally aimed at repositioning a brand or company, usually in an attempt to move the brand up market. According to Business Insider, it doesn’t only change the customer’s response to the brand but also helps the brand achieve its goals. It’s a careful strategy; often times subtle and methodical, and may involve both re-imaging and regeneration. Change, as it is said, is inevitable; it is pertinent that companies adopt new strategies when needed rather than sticking with the same strategy for years even when it starts to feel uninteresting with time.

Re-branding is considered a smart business decision for the following reasons:

• ·         Every brand needs refreshing to stay relevant as the 21^st century market is an ever evolving one, re-branding affords companies the chance to sort out a new strategy to make their brand relevant and more importantly, remain relevant.
• ·         Re-branding influences the customers perception, when a product wears a new look, or has a new feel or a company updates its marketing materials and strategies with a careful consideration of the target customer, the customer perception changes and tilts more positively.
• ·         Re-branding offers the opportunity to clarify image, while allowing room for future growth this naturally improves the bottom line by conveying a company’s core value and brand message.
• ·         Re-branding can breathe new life into a business when it is done with a strategy, a process, thought and most importantly for the right reasons. This will set the product or company apart from competitors.
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As has been undoubtedly witnessed in the examples of companies that have rebranded, re-branding brings along with it its own basket of gifts both for the company and their customers. It must be stressed that in re-branding, corporate establishments must take the current needs and desires of their customers into consideration but still stay true to themselves as a respectable brand as seen in the example of McDonald’s.

 Re-branding must also be meaningful and powerful enough that it would improve the relationship between the company and current customers as well as prospective new ones. Most importantly, companies need to rebrand to stay ahead of competition in a very competitive market where you can get left behind if you don’t keep up with the ever-growing demands of customers and the trends in the society that create such demands. This will ensure that brands don’t lose their usefulness and help them create a stronger voice for their brands.

                          

Sources:

Business Insider.

                                                                                                                       Adewale Socrates

Objection Handling Techniques:Nigerian Style

“Sometimes all it takes is goodwill or little improvisation…”

Adeola Oyeyipo.

Objection handling techniques: Nigeria style.

Once in a while prospects say or do things that hinder a smooth closing.  Sales personal are often devastated by objections especially if they have spent a lot of time trying to close the deal.  A few years ago I was in such a position with a prospect, we had agreed on the terms and all the paper work had been completed.  All I needed to do was to pick the cheque and deliver the products.  Suddenly out of nowhere the unexpected happens and the prospect was visited by an aggrieved customer who had had a bad experience of the product.  According to the aggrieved customer my product was not in demand, it was too expensive and so on.  As a result the prospect was no longer interested in our negotiations.  As you can imagine I was shocked upon hearing this.  I sprang to action. I understood that in order to handle my prospects objection I must first come with a “clean slate.”  I approached the aggrieved woman and assured her we could put things right.  I offered to resolve any issues and errors and re-stock her. This ordinary, but strategic, deed allowed for an easy passage; I didn’t just handle the prospects objection I also gained the trust of another customer.

According to the experts objections are a call for subtle action.  They say the last thing we should do is panic when faced with them.  Rather, it is how we respond to objections that determine the ability or inability to close a deal.  According to the marketing company Hub Spot, 58% of prospects that object tend to later buy.  Ordinarily objections are a positive because it means the customer has identified issues that have to be resolved before a sale can be closed. Ultimately, the sales person’s task is to manage these objections appropriately.  Let’s highlight a few…

Ø  According to Mr. Adeola Oyeyipo, Marketing Manager of Wemy Industries, ‘You need to understand the major reason why a prospect is objecting and be careful not to argue’. He went further by saying that in Nigeria, and practically all other countries, the major reasons for rejection are not limited to; lack of money, awareness of the product, negative past experience, competition and price.  Acknowledging and even pre-empting these objections is a jump start and will help build the rapport you need to adequately provide answers before the objections surfaces.

Ø  To handle objections successfully it is essential you have expert knowledge about your product.  If you want to be taken seriously you need to be knowledgeable about your customer’s needs.  Price, value for money (real or imagined), the cost of producing the goods, and most importantly the competition are all areas that need forethought.  Crucially, you must possess good listening skills coupled with the ability to think before you speak.

Ø  Direct your answers precisely to what the prospect is asking.  Handle emotional situations with care by treating them as if they are simply a lack of information.

Ø  When your prospect is objecting listen to them carefully. Don’t leap in too soon with your response.  First be certain that you understand clearly what their objections are!

Ø  When disagreeing with a prospect on any point always do so politely and assertively.  You have to find the correct balance because you don’t want to be too overbearing but equally you don’t want to come across as meek.  Be measured, concise and factual in all your assertions.

Ø  Show empathy.  Align yourself with the customer and always talk in layman’s terms.  Put yourself in their shoes and relate to their concerns.  Importantly, place more emphasis on the areas of agreement and underplay the disagreement.  This will show that you and the prospect have more alike than different; ultimately the prospect will then drop their guard.

Handling objections always comes down to having a strategy.  Once you understand the objection chart a line of action.  Always be positive when talking to the prospect.  Positivity is contagious!  You will be amazed at the results when you put all of these together.

                                                                                                  Adewale Aderibigbe Noah

MY PERSONAL EXPERIENCE USING PUBLIC TRANSPORT IN LAGOS

At last!, the wait was finally over the as yellow van stripped in black emerged from the boisterous traffic, in normal parlance called a ‘Danfo’. This Volkswagen vans took over from the monstrous ‘Molue' which is a corruption of the word “Maul Him”, a description given to it by the city’s elite, who were piqued by the incessant manner of the large bodied buses tear of clothes and even flesh. This ‘Molue’ (Benz 911s) were the major means of public transportation in the 1990s where one is normally rumpled from head to toe, mobbed or even robbed in this big trucks.

The ‘Danfos’ are usually ushered by the hoary cry of the conductors and the recklessness of the drivers, who sometimes feel they are fit for the “Grand Prix”, to compete with drivers like Michael Shumacher, Louis Hamilton and so on. The hustling and bustling begins in Lagos with securing a public transport and an affordable one is not mince meat, where one has to forget age or size to secure a seat and then negotiate price later. A friend of mine once said professionals who designed the public transport policies in lagos never use the public transport themselves. Almost all the vans in the untarred car parks are obsolete, even the palliative measure introduced by the Lagos state government, B.R.T buses, are almost going into oblivion because we lack the maintenance culture.

Personally the BRT (Bus Rapid Transit) would have been the preferred option but it is not always available, in fact one is almost in tears when one beholds the countless heads on the queue waiting for the next BRT bus, reminding me of Samuel Beckett’s “Waiting for Goddot”. So I have to settle for ‘Danfo’, the car engine only starting with the ritual of concocting wires and a push by the ever agile conductor who later squeezes himself into the van. The journey is punctuated by the occasional stops by ‘Agbero’ and the itinerant presence of potholes, the heat, the annoying jibes between the conductor and the driver.

Public transport in Lagos especially vans are not meant for comfort, in fact that word does not exist. Often I have to adjust and readjust my suit, which is usually rumpled. Ideally, transportation is meant to be a means to an end, not an end in itself but this is not the case here; most of the auto crash in Lagos are caused by human error and insensitivity of drivers. Some researchers assert that most public transport drivers in Lagos are half drunken, and we use transport to access facilities and services, jobs, educational institutions, healthcare facilities, banks etc. Quality and availability of public transport have an impact on the welfare and income earning potential of the masses. Good quality and well targeted public transport helps in pulling people away from buying cars, in fact intensive public transport use will not only contribute to the people’s welfare but also facilitate development in an urban environment like Lagos.

In a developing country like Nigeria, public transport plays an even more important role to the populace, providing access to social, economic and life enriching activities and services. It naturally adds up to conclude that Lagos state needs safe, efficient, reliable and affordable public transport to achieve equitable and sustainable development. I will suggest the Lagos state government acquire loans to purchase more BRT buses and also develop a mechanism, this mechanism will bridge the gap between the commuter and the policy makers, and also cater for the maintenance of the buses.

                                                                                                  Adewale Socrates Aderibigbe