Still Untapped

Companies trying to connect with the buying public through creating unique brands is still a fairly new phenomenon in Ethiopia. Even so, some companies are starting to take the creation of a unique brand seriously, as a way to imprint a specific image of their company in their customers’ minds. EBR’s Kiya Ali spoke with some companies and branding professionals to get a sense of how they are going about building a better brand.

Fasil Asmelash is a young man who likes to define his standards based on his branded belongings and the places where he spends time. He lives in Hawassa but frequently comes to Addis to visit family.

Fasil is one of the people who value brand names and are willing to pay a premium, evidenced by the Sketchers shoes he favours. “Whenever I think of one product or service, the first thing that comes to my mind is the brand. If someone says Apple, Nike, Samsung or Ethiopian Airlines, I imagine their logo, price, comfort or level of technology,’’ Fasil said, during a shopping trip to Zefmesh Mall.

Like Fasil, many consumers are not interested in buying products and services just for the sake of their tangible benefits. Rather, consumers also acquire products and services for the image and prestige of using certain brands. As a result, companies spend a huge amount of money on branding in order to maximize their revenue.

Branding is by no means a new phenomenon. In fact, the use of brands and the application of branding can be trace back all the way to the 16th century, when brands similar to those seen today started to take shape. Josiah Wedgwood, an English ceramist and Rose Bertin, a French fashion designer were among the pioneers of branding. However, it was after the 18th century that branding started to massively expand and develop.

Although the concept and full application of branding is still in its infancy in Ethiopia, various companies are starting to build strong brands. “Companies that produce beer and consumer goods, and financial institutions are trying their best to build strong brands and invest huge sums of money in it,’’ Alazar Ahmed, a marketing expert with vast experience in the area, explained. “A few years ago, there were only sales and marketing managers who focused on issues other than branding. Now, marketing departments in various companies focus on branding and even prepare branding manuals.”

Zemen Bank is one of the financial institutions that values branding. It has its own branding department and branding guidelines. “We emphasised branding from the beginning and got involved in a niche market. Initially, our target customers were individuals and corporations with high net-worths but now we also serve middle class customers,” Tigist Genene, branding and promotion manager at Zemen Bank told EBR.

According to her, all of their staff members are trained immediately after employment based on branding guidelines. “We do everything with the approval of the branding department so our services are consistent in all branches,” Tigist added.

However, Aschalew Tamiru, marketing communication and operation manager at the Bank of Abyssinia, argues that despite the inclination towards building strong brands, marketing in general is the least understood profession in Ethiopia. “For instance, some TV show hosts in Ethiopia detach the label on the bottled water they serve their guests to avoid advertising. But the water can be identified based on its shape,’’ he explains.

In today’s dynamic marketing landscape, brands play a vital role and help one company to stand out and shine among its competitors. One example of the power of a brand, is bottled water.

According to the Ethiopian Conformity Assessment Enterprise there are 70 licensed bottled and mineral water companies in Ethiopia. These factories sell similar products, yet they convince their target groups to purchase their products and try to foster loyal customers by creating a brand and binding it to their value. Some of them associate their brands with quality, and other with refreshment or health.

However, according to experts, although water has no taste, odour and colour customers tend to prefer one over the other based on the association of qualities like health or refreshment with the brand.

Top Water has been involved in the bottled and mineral water industry since April 2018. After a total investment of ETB273 million, it has a plant that can produce 24,000 bottles of water an hour. Before the company entered the market it conducted a study to decide on a branding strategy. “We found out that bottled and mineral water companies that choose colours other than blue for their packaging were pushed out of the market,” Shemelis Ajema, sales and marketing director of Top Water explains. “This is why many bottled and mineral water companies, including us, use blue on our packaging because it is closely associated with nature and purity.”

According to Shemelis, in the bottled and mineral water industry it is difficult to differentiate a product from the competition. “However, we try to distinguish our product from other using different brand elements that signify the quality and untainted nature of our water bottle,” he added.

However, Aschalew argues that many businesses as well as buyers in Ethiopia associate brands with logos or slogans. “A brand is the identity or existence of one organization and can be sensed with our five sense organs. So a brand is a vehicle of communication and it is more than visual,” he says.

Globally, there are various understandings about the content and meaning of brand equity, which is a set of brand assets and liabilities linked to a brand that can add to or subtract from the value provided by a product or service. Although no common viewpoint has emerged so far, marketing experts like David A. Aaker, Professor Emeritus at the University of California, stress that brand equity can be explained from the manufacturers’ and consumers’ viewpoints.

In a study entitled ‘Managing Brand Equity’, Aaker states that manufacturers are interested in the strategic implications of brand equity: they are more interested in the total value of a brand which is a separable asset- when it is sold or included in a balance sheet.

“A brand can be an intangible asset and includes business philosophy, architecture, place, mission of the company and the like,’’ Fikru Letinsay, marketing director at Wegagen Bank, states. “Branding matters for the growth and development of an organization. It benefits firms by providing recognition and awareness to clients, by creating shared values and connection with stakeholders, and by serving as a competitive edge.”

On the other hand, from the buyers’ point of view, the power of a brand depends on what customers have felt, seen and heard about the brand as a result of their experiences over time. As a result, brand equity can be defined as the special response that the brand knowledge triggers on consumer.

Aaker explains that there are four determinants of brand equity; brand awareness, perceived quality, brand associations and brand loyalty. Brand awareness is the ability of consumers to identify the brand under different circumstances. Kedir Husen, a shop keeper, has seen it in action. Some of his customers specifically buy bottled water of a certain brand, and if it is out of stock, they move on without buying another type. Other customers request specific brands, but are willing to consider others if their preference is unavailable. “There are also indifferent customers. As long as it is water they don’t give much attention to the brand,” states Kedir.

Brand association refers to the level of relations consumers have with a particular brand. Selam Girma is one of the people who prefer to drink Top water. “I prefer to buy Top every time,” she tells EBR. “If I can’t get it after trying two or three shops, however, I take alternative brands.”

While perceived quality is part of the consumer’s subjective assessment about a given product, brand loyalty refers to the probability of a consumer to stick with a brand. Marketing experts argue that brand loyalty is closely linked to a unique value associated with the brand.

Abraham Getnet (name changed to protect his privacy) is customer of Zemen Bank. “Zemen provides distinguished services like door to door service, and special service for its Z- club members (whose minimum monthly balances total ETB500,000). Since they give exclusive service I chose Zemen Bank,” says Abraham.

However for Fikru the chance of branding being a competitive point in the Ethiopian financial market is small. He says that the service given by one bank can easily be copied by competitors. “We are in a red ocean,’’ argues Fikru.
For Aschalew one of the factors that hinders the growth of branding in Ethiopia is a lack of training centres. “Even the marketing department at Addis Ababa University started giving master’s degrees in marketing just nine years ago. It is a young profession in Ethiopia,’’ he says.

According to Alazar, the growth of the branding concept among various stakeholders benefits creative and advertisement agencies as well. “In addition to generating income it paves the way for local agencies to work with global agencies as partners or affiliates, and share experiences or get training.”

Semegn Tadessa, CEO of Arma, a branding, production design and advertising company says, “The improvement of branding in Ethiopia, the dynamics of the business and competition among producers is vital for our survival.’’ On the other hand, the biggest challenge for him is a lack of firms willing to try new things. “They don’t want to risk their investment on an experiment.’’

For Yasser Bagersh, managing director of Cactus, a leading company involved in branding, the major difficulty is when clients think they know better than him. “Clients should trust professionals. When we are developing a logo, which is one part of the brand, some clients want to include everything in the logo. They forget that a logo is just an icon.’’

But brands are also in flux, as companies change and develop over time. “The fragile nature of a brand, innovation and time may lead a firm to rebrand,” says Fikru. Wegagen and Abyssinia banks have rebranded themselves recently, as has the government-owned transport company Anbesa Bus, due to different factors, such as an inconsistency between branches for Bank of Abyssinia, and an improving strategic plan on the part of Wegagen.

Although branding is in the early stages in Ethiopia, it has the potential to positively impact businesses. “However, since a brand may have an emotional attachment for a client, if what one organization says and does don’t align, it can also be a source of trouble,’’ explains Aschalew.

8th Year • Jan.16 – Feb.15 2019 • No. 70


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