The buzzword ‘going digital’ has been around for years now, and for most entrepreneurs, this has meant having a website with a logo, service or product offering, positioning and contact details.
At a recent learning event hosted by Entrepreneurs Organization (EO), a global peer-to-peer network of entrepreneurs, Ryan Sauer, Managing Partner at King James Digital, said that although a website is a critical starting point, there is more to effectively creating a digital presence at any level of business growth.
Sauer shares the myths that can be a stumbling block to successfully digitizing a business.
Myth 1: Build your website and people will find it
There are billions or websites on the internet and ensuring yours is found when people are searching or requiring your service takes effort, money and time. Simply telling your friends and family that you have a URL and an online presence does not mean that your potential client will automatically find your site if they have not been exposed to your brand. Set aside part of your marketing or digital budget to allow for some burst campaigns or an always-on, ongoing media campaign. There are long-term and short-term ways to get traffic to your website. Ensure you have a mixture of both.
Myth 2: You must have a Facebook page for your business
Not all businesses require a Facebook page and social media strategy. Social media takes time and effort and if you are going to spend time and money on it, ensure it serves a purpose. For example, if you are a small three-man aeronautical engineering firm, posting social media updates on a daily or weekly basis will not necessarily win new business, employees or followers. Find and invest in the correct channel for your specific business.
Myth 3: You must SEO your site
Some sub myths that stem out of this myth. Just because you ‘SEO’ (search engine optimization) your site, it is not guaranteed you will rank on the first page of Google for the words or phrases that you think you will. On this point, if your website and domain is brand new, SEO ranking and indexing can take some time. Be comfortable with the long-term strategy that SEO is going to take.
Myth 4: Email marketing does or does not work
“Whether you believe email marketing does or does not work, either way you are right.” I made that up but it rings true when I speak to clients that are on either side of this statement. It comes down to how well segmented your lists are and how clean and frequent you keep your communications.
Take the time to think through a marketing mail send out and what action you want the user to take.
Myth 5: Once I have a site there is no need to look at it again
If you spent money building a house and furnishing it, it requires maintenance and constant work and effort. Your website is no different. The internet changes, people’s mobile devices change, expectations of user experience change and that all results in websites requiring updates and content enhancements. Budget for a quarterly refresh or, if possible, make these changes even more frequently.
Coming out of the event, EO member and Managing Director at Vicinity, Ricky Frankental said that one of the key insights out of the session was the importance of having a clear strategy to drive an entrepreneur’s approach to digital marketing, and subsequently measure results.
Sauer says that there are many more components to a digital presence and entrepreneurs can achieve maximum exposure on a minimum budget if they plan their digital efforts right.
Credit: Eva Khosa - Atmosphere Communications
Insect pests cause almost half of the crop losses in Africa. If the continent is to feed its growing population, farmers must find ways to control them. Pests account for high losses in other developing regions too.
For smallholder farmers in particular, pest management needs to be affordable, safe and sustainable. It should avoid the drawbacks of synthetic pesticides as far as possible. Research is now showing that integrated approaches can achieve these goals.
The UN Food and Agriculture Organisation, for example, recently launched a comprehensive guide that will help millions of smallholder farmers across Africa to manage the fall armyworm. This is a new insect pest in over 30 African countries and a serious threat to maize crops, a staple food.
The guide suggests using biological control and local remedies rather than insecticides that can work in an emergency but may be ineffective and harmful in the longer run.
This is a good example of how farmers can be encouraged to balance the use of insecticides with other forms of pest control.
African smallholder farmers produce 80% of the continent’s food. It’s imperative that they have the tools and knowledge to sustainably control insect pests, avoiding the almost 50% losses that arise due to them. But it’s also important that as the pressure increases on them to produce more, they must also learn to think of their health and our environment. Governments should make farmers aware of the risks that come with insecticide use only.
Pesticides are popular because they are effective. They directly reduce the incidence of insect pests which severely limits crop yields. This means higher yields and surpluses, and therefore higher incomes for farmers, less malnutrition and improved food security. Also, many of the older, more dangerous, pesticides are cheap. The benefits are there, but they are short-term.
In the long run, their use isn’t sustainable because insects quickly become resistant and because their use can cause significant damage to the natural environment as well as the health of farmers and consumers. There’s also a lack of regulation on their use. The chemicals are often sold in used bottles, with little or no instruction on how to use them. And many farmers don’t follow appropriate safety measures.
A recent study explored the relationship between pesticide use on farmers’ fields, the value of crop output, and a suite of human indicators in four African countries — Ethiopia, Nigeria, Tanzania, and Uganda. It showed consistent evidence that pesticide use is correlated with significantly greater agricultural output value. But it is also costly in terms of human health and the loss of labour supply due to time lost to illness.
Agriculture needs a way to manage harmful insects without destroying the ecological balance of the environment.
Integrated pest management
Integrated pest management is an approach that doesn’t rule out the use of pesticides, but uses them as little as possible and only for strong reasons. It promotes the use of safer alternatives, like biocontrol, which uses natural enemies to control pests, and cultural control practices which modify the growing environment to reduce unwanted pests.
These approaches include:
The use of resistant cultivars. These are plant varieties that have been bred to resist insect damage
Crop rotation which changes the crops planted every season, or year, to break the life-cycle of insect pests and discourage pests from staying on the farm
Habitat manipulation techniques which involve planting a variety of crops in and around the farm in an effort to increase the number of natural insect enemies on the farm land
The use of pheromone traps. These are small glue traps that contain insect pest attractants.
Several research centres in Africa champion this approach. The International Centre of Insect Physiology and Ecology is one of them. It is the only institution that specialises in insect research. Since its inception in 1970, it has rolled out several integrated pest management programs for major insect pests. For example, between 1993-2008, itchampioned the biological control programme to control the stem borer pests; Busseola fusca, Chilo partellus and Sesamia calamistis – major pests for maize in Africa. As a result, it contributed an aggregate monetary surplus of USD$ 1.4 billion to the economies of the three countries where it was implemented – Kenya, Mozambique and Zambia.
This is one of many success stories. First used in 1959, integrated pest management has controlled many of Africa’s top insect pests, including aphids, Africa’s main cassava insect pest Bemicia tabaci), the legume pod borer a serious pest for cowpeas, and lepidopteran stem borers which harm cereal crops including maize, rice and sorghum.
Most importantly, it has been one of the most effective approaches in combating the fall armyworm. Early this year development and research agencies released a handbook on the approach which will serve as a resource to many African countries.
Despite its success, insect pests are still a major problem. This is because they are constantly adapting to methods used to control them and because there are new, invasive insect species and strains emerging everyday.
Integrated approaches to pest management appear to hold more promise than single approaches.
The challenge is to ensure that Africa’s farmers adopt practices that are sustainable and friendly to the environment and human health.
Farmers will need incentives and tools to change their practices. For example, access to insect resistant varieties of crops.
Uganda has sent a strong delegation to Kigali where African leaders will formally launch the African Continental Free Trade Area Treaty on Wednesday, but the country is reconsidering its full involvement in the pact as it is.
Uganda, in many ways like Nigeria, will investigate concerns by a sector of the business community before making major commitments. Some 27 heads of state are expected to attend the Kigali meeting, but it is unclear who will sign on to the CFTA right away.
Minister of ICT and National Guidance Frank Tumwebaze told the press on Tuesday that Uganda’s cabinet on Monday noted the agreement establishing the African Continental Free Trade Area (AfCFTA) and therefore directed the Ministry of Foreign Affairs and that of East African Community Affairs to examine the provisions within it.
Cabinet also constituted a Cabinet Committee which would discuss how to improve Uganda’s competitiveness in the Regional Economic Community and African Continental Free Trade Area.
Foreign Affairs Minister Sam Kutesa is representing President Yoweri Museveni at the Kigali summit and is joined by Minister of Trade, Industry and Cooperatives Amelia Kyambadde, and former Uganda Investments Authority Executive Director, Prof Maggie Kigozi.
Overshadowing the launch of what they say will be the world’s largest free trade area is the decision by Nigeria to pull out, highlighting the challenge in getting the continent to sign up.
Establishing the African Continental Free Trade Area (CFTA) with 55 African Union (AU) members having a cumulative GDP of $2.5 trillion is one of the bloc’s flagship projects.
Muhammadu Buhari, president of one of Africa’s largest markets Nigeria, this week cancelled plans to attend the Kigali launch and called for more consultations after business leaders objected to joining the world’s biggest free trade area in terms of countries.
“The signature of the CFTA is something that makes Africa look good on paper, but for implementation it’s going to have a lot of hiccups,” said Sola Afolabi, a Nigeria-based international trade consultant.
“Mr President will no longer be travelling to Kigali for the event because certain key stakeholders in Nigeria indicated that they had not been consulted, for which reasons they had some concerns on the provisions of the treaty,” the statement said.
“Consequently, Mr President’s decision is to allow time for broader consultations on the issue.”
The organised labour union, the Nigeria Labour Congress (NLC), urged Buhari not to sign the deal.
“We at the Nigeria Labour Congress are shocked by the sheer impunity or blatant lack of consultation in the process that has led to this,” said NLC President Ayuba Wabba.
“We have no doubt this policy initiative will spell the death knell of the Nigerian economy.”
Nigeria, Africa’s biggest oil producer and with a population of 190 million, is a massive market.
Amb.Monica Juma, Kenya’s Cabinet Secretary for Foreign Affairs and International Trade held a bilateral meeting with Hon. Sam Kutesa, Minister for Foreign Affairs of the Republic of Uganda on the margins of the AfCFTA Business Forum in Kigali, Rwanda.
– Trade between neighbours –
AU trade and industry commissioner Albert M. Muchanga said Africa’s fledgling industries and growing middle class would benefit from the CFTA’s removal of tariffs.
Currently, African countries only do about 16 percent of their business with each other.
“If we remove customs and duties by 2022, the level of intra-African trade will increase by 60 percent, which is very, very significant,” Muchanga told AFP.
“Eventually, we are hoping that all the African Union states will be parties to the Continental Free Trade Area,” he added.
With underdeveloped service and industrial sectors across the continent, African countries have for decades seen their fortunes rise and fall with the prices of exported commodities such as oil, cocoa and gold.
In recent years, nations like Ethiopia and Ghana have tried to wean themselves from this cycle by building factories and new infrastructure for local industries, spurring rapid growth. Landry Signe, a development expert with Stanford University in the United States, said the agreement could help these industries, while giving African countries a unified platform to negotiate trade deals with wealthier nations.
“With the CFTA, the manufacturing sector would be much more diversified, as the market would not be a few million people, but potentially 1.2 billion people,” he said.
South Africa, a vocal backer of the trade deal, has argued that African economies are too small to support economic diversification and industrialisation on their own.
Regional integration “is critical to reduce the vulnerability of African economies to global shocks, a vulnerability which results from their heavy reliance on commodities,” South Africa’s Trade and Industry Minister Rob Davies wrote in an editorial last week.
However in Nigeria, the plans have not gone down well with unions and business leaders.
“We have no doubt this policy initiative will spell the death knell of the Nigerian economy,” said the Nigeria Labour Congress (NLC).
– Easing trade and travel –
The CFTA is a key part of the AU’s long-term development plan Agenda 2063, which calls for easing trade and travel across the continent.
At its most recent summit in Ethiopia in January, AU member states agreed to a common air transport market that could drive down air fares, as well as plans for visa-free travel for Africans across the continent.
Which countries will adopt these agreements remains unclear, as do the prospects for the CFTA, which requires 22 ratifications at a national level after its signing to come into force.
Afolabi said countries with more developed industries would embrace the CFTA because it could open more markets, but nations whose ports served landlocked neighbours could opt out, fearing a loss of revenue.
He worked on setting up the Economic Community of West African States’s (ECOWAS) common market, which he has subsequently criticised for failing to punish countries that violated its terms.
“The regional trade agreements are not working and those are supposed to be the legs for the continental” version, Afolabi said.
“If there is no reward for compliance and there is no punishment for non-compliance, then it is going to be a very nice agreement without any teeth or any legs,” he said.
CREDIT: THE INDEPENDENT & AFP
Ghana’s agriculture minister said the country will not cut the pay of cocoa farmers, marking a turnaround from a previous announcement that producer compensation has to reflect a decline in global prices.
The change of plan in the world’s second-biggest producer comes after the finance ministry said in January that Ghana cannot continue to subsidise farmers’ pay to keep them at the level they were at before prices slumped more than 25 percent. The turnabout will prolong a pricing gap with neighboring Ivory Coast, the biggest producer, encouraging cross-border smuggling of beans.
“We can’t go to the poor farmer to say we are cutting prices,” Agriculture Minister Owusu Afriyie Akoto said Tuesday in a broadcast on Citi FM. “We will make savings through other means.”
Ghana Cocoa Board is losing the equivalent of about $600 for every metric ton of the 850,000 tons that it is purchasing this season until September, the regulator said earlier in February. The country has kept prices unchanged since setting producer pay at the equivalent of 7,600 cedis ($1,720) per ton in October 2016.
Zimbabwe’s President Emmerson Mnangagwa on Monday said nearly $600 million in illegally externalised funds has been returned into the country under a 90-day amnesty and named corporates and individuals that have yet to repay over $800 million in a list dominated by diamond miners.
Mnangagwa’s amnesty expired last month but only $591 million out of an estimated $1,4 billion in funds illegally stashed abroad was returned, he said in a statement, adding that those that did not comply could face prosecution.
The published list showed 1,884 individuals and companies, and firms in the mining, agriculture, manufacturing sectors and cross border freight businesses had the highest amounts spirited abroad.
The struggling African Associated Mines allegedly externalised $62 million while diamond miners, Marange Resources (54,2 million), Canadile Miners ($31,3 million), Mbada ($14,7 million) and Jinan ($11 million) are on the list. Government was a 50 percent shareholder in all the diamond miners, which operated in the Chiadzwa diamond fields.
Marange, Mbada and Jinan were among the seven miners shut down in February 2016 for resisting nationalisation while Canadile, a joint venture between Lovemore Kurotwi’s Core Mining and the stateowned Zimbabwe Mining Development Corporation suspended operation in 2010.
Operations at Shabanie and Gaths asbestos mines ground to a halt in 2008, three years after the government seized them from Mutumwa Mawere, under a controversial law that allows the state to take over assets of businesses deemed to be insolvent and incapable of servicing loans and charges owed to state institutions and agencies. The mines were subsequently placed under Zimbabwe Mining Development Corporation (ZMDC).
It is not clear from the list when the funds were externalised.
The funds were for export earnings that were kept offshore, payment of imports that never made it into the country and funds stashed in foreign banks.
- The Source
The South African economy looks uncomfortably the same to the one inherited when the country transitioned from apartheid to democracy in 1994. Which is why it’s time for a robust economic policy agenda to make it more open, productive and inclusive.
A number of obstacles stand in the way. These include the continued bias towards activities with relatively low productivity, high levels of concentration in key sectors and a lack of diversity in ownership.
Competition policy is a critical part of efforts to change the structure of the economy. But addressing entrenched economic power requires a much wider package of measures.
International experience shows that countries develop by moving towards more diverse, higher value-added and more sophisticated products, a process referred to as structural transformation. There is still no sign that this is happening in South Africa.
In-fact, research conducted by the Industrial Development Think Tank has found that South Africa regressed between 1994 and 2016. The economy has become less diverse and it’s failed to use existing capabilities to produce new products.
Take the country’s export basket. It continues to be dominated by minerals and resource based industries, which represent 60% of total merchandise exports. This is at the expense of increased competitiveness in industries which create more jobs such as plastic products which range from simple lunch boxes to complex automotive components.
The composition of the export basket also compares poorly to other upper middle-income countries. For example, in 2016 high-technology exports accounted for only 6% of South Africa’s manufacturing exports compared to Thailand’s 21% and Malaysia’s 43%.
If South Africa continues on this path, it will struggle to create employment at the scale that is required. The majority of its population will continue to be excluded and the social fabric will continue to unravel.
High levels of market concentration coupled with barriers to entry are a big part of the problem. South Africa needs to allow for economic rivalry. Its known that rivals bring new products and business models, and spur incumbents to invest in improving their own offerings.
A recent study of merger reports by the Competition Commission found that there was unilateral dominance – where a single firm has a market share in excess of 45% – in a large number of markets. This included communication technologies, energy, financial services, food and agro-processing, infrastructure and construction, industrial input products mining, pharmaceuticals and transport.
These sectors cover most of the economy. They are central to economic growth and to consumers’ pockets.
And the situation seems to be getting worse. Statistics South Africa data show concentration levels in manufacturing has intensified: in 80 sub-sectors, the proportion in which the biggest five firms held over 70% of market share increased from 16 in 2008 to 22 in 2014.
Concentration is bad
Economic concentration opens the door to market power being exercised in a way that undermines productivity. This can be seen, for instance, in value chains where downstream players have to pay high prices for inputs, with dire consequences for their competitiveness.
The knock on effect is that economic growth slows down and employment creation is affected if downstream industries are labour absorbing.
Such skewed economic power also translates into political power where dominant companies use their resources to lobby for ‘rules of the game’ that favour them. Some examples include:
Telkom, a partially state owned telecommunication company, has for a long time persuaded policymakers, in the name of extending access, to support its position in the fixed-line monopoly.
There’s been similar strong lobbying in pay TV to secure rules that hinder potential rivals.
In beer distribution and retail, Anheuser-Busch InBev spent millions of dollars lobbying against conditions that would have restricted its operations .
The other area that has felt the effect of big player dictating the rules of the game has been in the slow progress when it comes to meaningful black economic empowerment. Economic transformation initiatives have tended to reinforce incumbents as gate keepers in exchange for minority shareholdings.
Broader agenda needed
A lack of progress towards increased participation is one of the justifications for amendments to the country’s Competition Act. The Competition Amendment Bill is an important step in addressing concentration and increased participation. But it needs to be part of a broader competition policy agenda.
South Africa also needs to introduce a range of complementary policies. Three key areas in particular need to be addressed:
Promote new entrants: Economic regulations must be changed to favour entrants and ensure incumbents can be effectively challenged. This includes regulations to allow access to essential infrastructure. For example, in telecommunications, spectrum must be allocated to foster greater rivalry. Measures can also include soft regulation such as codes of conduct for supermarket chains to promote access to markets by suppliers and small retailers.
Enforcement: The country needs more effective enforcement against anticompetitive conduct that excludes smaller rivals. The Competition Amendment Bill goes some way to deal with this. It emphasises the competitive process and in important areas gives weight to the ability of smaller participants and black industrialists to enter markets and grow.
Support rivals: This can be done by expanding development finance for entrants. Funds could be drawn from competition penalties. Development finance should also consider extending support across the different levels of the value chain. An example is the funding that the Industrial Development Corporation has given to new entrants in the agro-processing value chain from the fund created from the bread cartel fines.
Talk of economic transformation needs to be backed by a coherent economic strategy that moves the country away from a concentrated, exclusionary, low productivity economy into an open, fair economy for all.
Pamela Mondliwa, a researcher at the Centre for Competition, Regulation and Economic Development at UJ, coauthored this article.
When Eritrea gained its independence from Ethiopia in 1993, Ethiopia became landlocked and therefore dependent on its neighbours – especially Djibouti – for access to international markets. This dependency has hampered Ethiopia’s aspiration to emerge as the uncontested regional power in the Horn of Africa.
Recently, however, the ground has been shifting. As we point out in a recent article, Ethiopia has attempted to take advantage of the recent involvement of various Arab Gulf States in the Horn of Africa’s coastal zone to reduce its dependency on Djibouti’s port. The port currently accounts for 95% of Ethiopia’s imports and exports. It has done so by actively trying to interest partners in the refurbishment and development of other ports in the region: Port Sudan in Sudan, Berbera in the Somaliland region of Somalia, and Mombasa in Kenya.
But it is Berbera, in particular, that will prove the most radical in terms of challenging regional power dynamics as well as international law. This is because a port deal involving Somaliland will challenge Djibouti’s virtual monopoly over maritime trade. In addition, it may entrench the de-facto Balkanization of Somalia and increase the prospects of Ethiopia becoming the regional hegemon.
Ethiopia’s regional policy
Ethiopia’s interest in Berbera certainly makes sense from a strategic perspective. It is closest to Ethiopia and will connect the eastern, primarily Somali region of Ethiopia to Addis Ababa. It will also provide a much needed outlet for trade, particularly the export of livestock and agriculture.
The development and expansion of the port at Berbera supports two primary pillars of Ethiopia’s regional policy. The first is maintaining Eritrea’s isolation. The aim would be to weaken it to the point that it implodes and is formally reunited to Ethiopia. Or it becomes a pliant, client state.
The second pillar rests on maintaining the status quo in post-civil war Somalia. Simply put, a weak and fractured Somalia enables Ethiopia to focus on quelling persistent internal security difficulties. It also keeps up pressure on Eritrea.
Ethiopia’s ambitions for Berbera have been hampered by two problems. Firstly the Republic of Somaliland – a de-facto independent state since 1991 – still isn’t recognised internationally. This makes engagement a political and legal headache. Secondly, Ethiopia, doesn’t have the critical resources needed to invest and build a port.
Ethiopia had been trying to get Abu Dhabi and Dubai interested in the Berbera Port for years. It’s latest push was assisted by a number of factors. These included a shift in the UAE’s military focus in Yemen and Ethiopian assurances of more trade and some financing to upgrade the port.
Ethiopia’s diplomatic push – which coincided with developments across the Gulf of Aden – finally got it the result it craved. In May 2016, DP World, a global mega-ports operator, signed an agreement to develop and manage Berbera Port for 30 years.
The Berbera Port deal
It is unlikely that DP World would have signed the deal if it didn’t see some long-term commercial benefit. The deal also includes economic, military and political dimensions.
Economically, for example, there will be investments in Somaliland’s fisheries, transportation and hospitality industry. The UAE will also establish a military installation in Berbera. The base is intended to help the UAE tighten its blockade against Yemen and stop weapons being smuggled from Iran.
Politically, the Berbera Port deal has provoked mixed reactions in Somaliland. There has been some popular anger aimed at Somaliland’s former president, Ahmed Mohamed Mohamoud aka “Silanyo”, and his family who reportedly benefited personally from it. Anger also stems from inter-clan and sub-clan rivalry over land, particularly in the Berbera area.
But the anger in Somaliland pales in comparison to the reaction in Mogadishu. This is because the Somaliland government has remained largely isolated internationally – until the port deal.
Somalia Federal Government ministers have publicly challenged the right of Somaliland to enter into official agreements with any country. The Ethiopian-driven deal means that Mogadishu’s claims over the breakaway territory have weakened substantially. The deal means that Somaliland has partially broken the glass ceiling of international recognition by entering into substantive deals with viable business partners and states operating on the global stage. Mogadishu can no longer pretend it controls the government in Somaliland’s capital Hargeisa.
The bottom line is that Ethiopia has engineered access to another port and enhanced its security and strategic economic interests. With the growth in annual volumes of transit cargo, Ethiopia has, for a long time, needed alternative routes from Djibouti.
In addition, Ethiopia has ensured its presence in the running of the port by acquiring a 19% share in the deal.
And by wangling a legally binding agreement between Somaliland and another state, Ethiopia has potentially paved the way for eventual international recognition of Hargeisa.
Ethiopia has also further cemented its hold over Somaliland through a combination of pressure and material incentives. By bringing significant outside investment and recognition, Ethiopia can also increasingly meddle in its internal affairs. This is a conundrum for Hargeisa. It finds itself increasingly emboldened to act independently. Yet it remains constrained by the need to get Addis Ababa’s approval.
As Ethiopia begins to move increasing amounts of goods and services on Somaliland’s new highway to the refurbished port of Berbera, Hargeisa may begin to question key aspects of the port deal.
But one aspect will not be in question: Ethiopia’s rising power and influence over the entire region.
Brendon J. Cannon, Assistant Professor of International Security, Department of Humanities and Social Science, Khalifa University and Ash Rossiter, Assistant Professor in International Security, Department of Humanities & Social Science, Khalifa University
Tiger Brands, the South African food giant at the centre of the listeriosis storm engulfing the country, is facing serious brand erosion as a result of the way it handled the unfolding crisis.
It could have responded better.
Tiger Brands was thrown into the centre of the listeriosis storm after South Africa’s National Institute for Communicable Diseases announced that its investigation had traced the origins of the disease to one of the company’s biggest meat processing plants. The culprit was identified as polony from the Enterprise Foods facility that produces a range of cold meats. Tiger Brands, a $2.5 billion Johannesburg Stock Exchange listed business, owns Enterprise Foods among other continent wide popular food brands.
South Africa has been struggling with the listeriosis outbreak for 14 months. Unable to find the source of the affected products, the outbreak developed into the worst case of listeriosis in the world. By the end of February 2018, health authorities had confirmed 948 cases with 180 fatalities.
The repercussion was always going to be unforgiving. But Tiger Brands has not helped the situation. It has overlooked a number of the accepted protocols of handling a crisis of this nature. As a result, the company’s brand equity is taking serious strain.
The brand erosion
Tiger Brands compromised its brand equity in three key areas.
Response speed: An organisation’s survival in a crisis, particularly when lives are at risk, depends enormously on the speed of its responses.
Tiger Brands could have been more rapid in its responses. The source of the listeriosis outbreak was announced by South Africa’s Health Minister, Aaron Motsoaledi, at midday on Sunday 4 March 2018. He announced that Tiger Brands had been issued with safety recall notices. But the company only held a media briefing a day later. Given that the minister would have given the company advanced warning (even before the official media briefing), its response was far too slow.
Continued strategic engagement: Since the media conference, the company has engaged in very limited meaningful communication that would have helped it reclaim some brand equity. Organisations need to understand that in a crisis, they are competing with every form of media – including social media – to tell their story.
If organisations don’t keep engaging with stakeholders, others in the media fill the vacuum. It also leaves the door wide open for speculation and innuendo.
The lack of engagement inevitably raises concerns about how transparent the company has been in handling this crisis.
Compassion: In its scant communication Tiger Brands failed to show compassion – an essential ingredient for navigating a crisis of this magnitude. Unless the organisation acknowledges how its audience is feeling, which Tiger Brands failed to do, any organisation in crisis is fighting an uphill battle. The company’s lack of compassion meant that the company came across as cold and unsympathetic. By showing compassion, an organisation creates a bond and puts audiences in a receptive state, key components to any successful communication.
Tiger Brands will be remembered for trying to deny responsibility and refusing to apologise. This impression was created by ill-advised comments made by the company’s CEO Lawrence MacDougall when he was grilled by journalists. In one response he said:
There has been no direct correlation between our products and the deaths yet, so we are unaware of any direct link.
The fact that the crisis had led to 180 deaths called for a dose of compassion, not a defensive response.
What now for Tiger Brands?
Tiger Brands will have to embark on serious brand rehab. To achieve that it will have to be totally transparent in the management of the crisis, engage strategically with stakeholders and be mindful of the tone of its engagement. The company will have to become more visible and must be seen to be a critical part of solutions.
But it’s also important to point out that the listeriosis crisis goes beyond Tiger Brands. It isn’t just a crisis for the company. The outbreak has had a major impact on food outlets – big and small – in the country. It has also affected companies and consumers beyond South Africa’s borders, so much so that the crisis could do long lasting damage to the country’s cold meats industry.
All stakeholders related to the listeriosis crisis, including the South African government, the National Institute for Communicable Diseases and the processed meat industry, should step away from trying to face the crisis on their own. They should also stop trying to shift responsibility. Instead they should think of working together.
This calls for a completely different approach to brand rehab after a crisis. It calls for a systems approach that envisages all the affected parties understanding that they are inter connected. In a cooperative, integrated system like this the equity of the one organisation’s brand is linked with the equity of other brands and institutions in the system.
South Africa needs to take a more collective approach if it’s going to deal with the crisis effectively.