Strategic customer management

Kinshasa’s women traders hold the key to corporate strategy. Hervé Barrère is an amiable Tahitian with an easy smile and a flair for Congolese dance. He also has an eye for the ‘mummies on the table tops’. These are the women traders at markets across the Democratic Republic of the Congo, and Mr Barrère, the country director for Nestlé, the Swiss consumer group, believes these women are key to understanding local tastes and purchasing decisions. At ‘Petit Pont’, Kinshasa’s main spice market, one of the 29 open-air markets in the capital, a sprawling array of wooden tables are topped with loose garlic, onions and red chillies, near to a rickety bridge that gives the market its name. Mummies are pitching cartons of Maggi’s red and yellow-wrapped stock cubes – the Swiss company’s flagship brand – against cheaper competitors from Spain’s Jumbo and China’s Top. Mr Barrère believes Maggi is now winning thanks to four strategic aspects – taste, margins, marketing and trade organisation. ‘We had to work on trade and consumer insight; you need to immerse yourself in his understanding,’ says Mr Barrère, who regularly visits the markets to talk to the mummies. As attempts to cash in on the ‘Africa rising’ phenomenon go, picking DR Congo must be among the bravest. For all the allure posed by untapped African markets and consistently impressive growth rates, few multinationals set their sights on the vast sprawling country at the heart of the continent. It might have a population of 70m with growth rates close to 9 per cent a year, but poor roads, poor legal frameworks and poorer customers – 60 per cent exist on less than $2 a day – make it a tough market to crack. Since Nestlé took the plunge, investing $43m in a new factory in Kinshasa that started producing in 2011, the company has set about overcoming the hurdles in a fashion reminiscent of a smaller, more nimble business. But it is far from plain trading. The Swiss corporate is already in court over tax issues there and sales have been disappointing. It sells the same number of its Maggi stock cubes in neighbouring oil-producer Republic of Congo, a country of 5m people, as it does in DR Congo, a country of 70m albeit with a per-capita income 15 times as small. The Kinshasa factory site remains spacey: only a few machines fill the void. Mr Barrère, however, is confident that the factory will be furnished with more equipment in the future. ‘I am waiting for the [growth] wave to come; we need to be ready before the others,’ he says. ‘Consumption will come if the country is growing, if the people [have] money. Since we got a better understanding of the market we are growing very fast.’ Senior executives credit Mr Barrère with turning around prospects in DR Congo. The company is now selling 100 tonnes of Maggi a month, up from 30 tonnes when he arrived two years ago, and sales in the country are growing at 30 per cent a year. It is this expansion that gives Nestlé – which also sells dairy products in the country – the confidence to bill Maggi as the market leader. Mr Barrère says it is all down to a better understanding of how DR Congo’s markets work, with ragtag stalls and profit-seeking micro-entrepreneurs, and structuring sales to match. To this end he goes into people’s homes to see how women cook and what families like to eat, in an attempt to develop the right product as well as encourage higher usage. While Kenyans like their stock cubes filled with salt and coriander, and Nigerians go for a more fermented soya taste, DR Congo has a more eclectic palate, based on spices Nestlé has tried to replicate in its products. Even its ‘standard’ flavour is adapted to the market, with extra doses of nutmeg and garlic, and in others, extra aubergine and dried fish. Five years ago, Nestlé even developed the green ‘pondu’ tablet, a flavour made specifically from cassava leaves to match the beloved Congolese stew made from the same. ‘In Lubumbashi they cook with tomatoes and in Kisangani they cook with pondus,’ says Mr Barrère keenly aware that tastes vary throughout this forested country the size of western Europe. Developing a successful sales chain to sell the stock cubes, which start at 50 francs (three pence) for two individually wrapped 4-gram portions, has been the hardest task. Although open-air markets take only a quarter of sales, he believes their role in the trading chain and their potential reach into the population makes them critical to Nestlé’s expansion in DR Congo. ‘The mummies are really at the heart of what we are doing in terms of our business. I have been married so many times with them!’ he jokes, saying social interactions in DR Congo must be ‘super energetic’ and ‘extremely positive’ if they are to succeed. He refused to cut his hair this year until he made his first-half sales target, prompting laughter from women traders in a country where long hair on men is more commonly a sign of madness than market determination. ‘For the mummies on the table top, if you don’t have the right margin you’re out of the market; they have to be clear how much they will earn and be clear what the demand is,’ says Mr Barrère. That is why, under their new director, Nestlé overhauled its sales approach. Previously, it sold to both retailers and wholesalers, which made pricing chaotic. In order to impose order and discipline on prices and the distribution chain, Mr Barrère now sells only to wholesalers. The company sends agents to oversee the chain, ensuring the mummies secure daily credit to buy fast-selling stock, meaning they can  repay the loan by lunchtime. They even oversee such minutiae as the arrangements of merchandise on the table tops. The company puts on regular Maggi neighbourhood promotions – Mr Barrère frequently jumps up on stage and dances at such events. It also holds cookery demonstrations, encouraging women to use three stock cubes, which Mr Barrère says is more healthy than the women’s typical method – using two plus extra salt. Following Nestlé’s market reorganisation, Beatrice Betuma is now one of only two wholesalers in the whole of Kinshasa. In the past two years, sales at her shop at a crossroads where women cook stews in huge vats on the ground have gone from $30,000 a month to $170,000. ‘I have a lot more customers; now my name is famous,’ says Ms Betuma, once a ‘mummy on a table top’ herself. Loyalty programmes, targets and incentive schemes – Nestlé took Ms Betuma on a holiday to South Africa as a reward for increased sales – are key. ‘Now I want to go to Canada,’ says the 51-year-old mother-of-three, whose husband lives in neighbouring Angola. Penetrating DR Congo beyond Kinshasa is a further feat. Due to hazards such as theft, damage and red tape, sending cargo by train to Lubumbashi takes two months. But Mr Barrère insists it is worth doing, claiming to have tripled sales in Lubumbashi in the past year and a half. In the east, access was so prohibitive, and the road over-run by rebels at the time, that he took to airfreighting the goods to Goma until only two months ago, making them ‘the most expensive stock cubes in the world’. Last month, he managed to deliver a consignment by the huge, bending Congo River for the first time. ‘It is so amazing,’ says Mr Barrère. ‘It is like, how do we conquer the full Congo.’ Further reading: Emotional appeal Supporting the local economy appeals to marketwomen, and Nestlé draws on this, says Hervé Barrère, the company’s Congo director. Unlike Nestlé’s products, competitors’ stock cubes are made and imported entirely from abroad. However, some of Mr Barrère’s toughest competition, he discovered, came from Nestlé itself: its stock cubes had been smuggled from Nigeria and Kenya. In both cases the taste and the packaging – in English –were not adapted to a French-speaking market with a more eclectic palate. Several tours to the factory, which employs 60 people, convinced the women to switch. ‘It was very emotional: one of the mummies cried because . . . she realised she has a role to play to develop the country.

1 How does strategic customer management differ from selling? How is it strategic?

2 How is Nestlé using strategic customer management in the Democratic Republic of the Congo? What are the benefits of such an infrastructure?

3 How is such an approach also helping with the rest of the marketing mix?

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