Senior Correspondent GODDIE OFOSE examines the N300 million consumer promo by Dangote Cement and its impact on the industry
The decision by Dangote Cement to empower primary target audience (PTA) in the cement value chain proposition with N300 million consumer promotion has jolted the market.
This is the first time a cement brand is embarking on promotional activity to empower end users.
Cement no longer a commodity
Prior to this announcement, consumer promo was synonymous with fast moving consumer goods products and/or brands.
It is rare to see a car brand, building materials commodities and other related items engage in promotional activities.
The reason for adopting that marketing strategy is that customers would always come for those materials whenever they are in need of them.
It was, therefore, almost out of place to see such commodity owners engage in advertising, promotions, lotteries and sweepstake, media relations, brand activation, and other modern marketing strategies.
The only and most portend sales strategy for them was word of mouth and the ability to give goods out on credit for a certain period of time.
“In the past building materials such as cement, roofing sheets, plank, nails and others were merely monopoly products so there was no need to advertise,” recalled Ayodeji Salako, a building material merchant based in Lagos.
That has changed.
Nigerite, Lafarge, Dangote Cement, and other unknown organisations have made marketing communications the heart of their business.
Marketing budget by these companies keep growing year on year and they have embraced sales and consumer promotions to grow volume, equity, and reward consumers.
Dangote Cement Chief Marketing Officer, Oare Ojeikere, reiterated that, for the company, cement is no longer seen as commodity, it is now a brand.
End users’ sweepstake
Dangote Cement is the first brand in its segment to float a consumer promo. And it turns out to be the biggest consumer promotion in 2015.
Ojeikere said the primary reason is to reward and empower consumers who are usually neglected and for the company to be true to its brand, having moved from a commodity level to occupy brand status.
“We want to be true to our brand. Dangote is a brand that stands for empowerment and we want to be able to give back to the end users.”
He said most organisations attend to distributors and retail partners while those using the brand are forgotten.
“We tend to do things for our distributors, our retail partners but in cement we have never really done anything for the end users.”
Empowerment fund
When an organisation spends three months to give out N300 million, the terminology would change from a promo to empowerment.
For Ojeikere, it is a corporate social responsibility (CSR). And CSR is selfless while promo is a bit selfish.
“This is really about giving back to the end users, especially at this tough time when people are trying to make ends meet. Giving out as much as N10 million to three people and N1 million to 180 people is significant.”
The other thing for the company is to make a leadership statement through an initiative like this.
“People usually see cement as a commodity but for us cement is a brand, we have a strong brand in 3X and the only 42.5 cement grade sold in this market, and also in some way we can excite and reward our base that we intend to forget for quite a while.
“We are going to do this within a three and a half month period and especially because it is going to coincide with the holiday season and it should in some way give people needed excitement they will require this season.”
Packaging
Dangote Cement Stakeholders and Corporate Communications Executive Director, Mansur Ahmed, described the promo as a major event for his company, which is in line with its motto of touching lives, and is meant to say thank you to customers.
He said the promo is part of effort to provide affordable cement as everybody needs housing and some form of infrastructural facilities, of which cement is a critical part.
Ahmed explained that because customers are key elements of business, the company also feels it is good to share its success with customers who have kept faith with it and ensure it remains in business.
He promised that Dangote Cement will continuously scale up to ensure better satisfaction for customers and stakeholders.
Ojeikere said there is N30 million for the grand prize for three persons, N180 million for the N1 million prize given to two people every day for 90 days, N90 million consolation prizes for 20 people every day, which amounts to N50,000 in 90 days, all totalling N300 million.
Targets
Unlike some promos that target middlemen, Dangote Cement Mega Dash is for end-users in the cement value chain – block makers, masons, bricklayers, building contractors, and home owners.
Ojeikere said to qualify, one needs to buy Dangote cement. Each bag has a mega million’s token on it.
“Cut out the token and collect five of them and put them in an envelope with the entry slip which you would have prepared yourself (a piece of paper with your name and address and phone number and your signature).
“After completing it you drop it in any of our collection centres such as branches of Access Bank, our partner and collection centre, which was created in the areas where cement is sold or used across the country.”
Promo not to drive volume
Ojeikere rejected suggestion the promo is a ploy top soar up dwindling volumes because of the poor economy.
“I think we are having an excellent period. October was probably one of our best months ever, so we are having a really spectacular time in terms of sales volume.
“What is different in our case is that we have a production capacity in Nigeria of 29.4 million metric tonnes but right now this country consumes 21 to 22 million metric tonnes.
“We make more cement than this country can consume, so there is no reason why we cannot sell more or push to sell more.
“We have capacity that is lying idle, we have brought down the price of cement, make it more affordable. Cement sells in some parts of the country for as low as N1,350, N1,380 and N1,400 per bag.
“This is just to ensure that people who want to buy cement know that cement is affordable and they can actually buy and choose us.
“It is not because we have low sales. In fact, at this time, we shouldn’t actually be running a promotion but it is because we have a capacity which we can sell.”
