Post on 19-Mar-2018
transcript
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Business Proposal
Team #: 94
Client (Company): Daffodils Games & Publishing (Daffodils GP)
Chosen target country: Nigeria
Product/Service (a brief description, 3-10 lines):
Daffodils GP is a privately-owned company that strives to provide its consumers with a means to
“intelligent fun” through the development of games for recreational and educational purposes. Its
products are distributed in a variety of formats, including through web, mobile, events, and competitions.
The products are customizable based on its purpose, such as through the publishing of educational books
as teaching aids for schools. The two products of interest are Bonanza, a card game where players try to
form the highest or lowest whole number with the cards they have, and Nudu, a board game where players
strive to reach fulfillment in life.
Number of pages, including title page: 31
Team members:
Name Country Work completed: Please briefly describe the work completed
by each team member
Elizabeth K. Steen USA Marketing strategy, competition research, proofread/edited
report
Reid Johnson USA Staffing strategy,
Jacob Dahl Paul Sweden Entry mode, proofread report
Kristina Kiseleva Russia Select a market (research)
Man Nga Chan Hong Kong Analysis of the client organization and product,
Lily Wu Canada Market success factors, Executive summary, Select a market
(writing), Staffing strategy, edited and proofread entire report
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EXECUTIVE SUMMARY
Situated in Ghana, Daffodils Games and Publishing (Daffodils GP) is a private limited
liability company that develops and produces games for its customers as tools for socializing and
learning. By positioning itself as a source of “intelligent fun”, Daffodils GP aims to attract
consumers from all cultures and age groups. In addition to producing games, the company
provides assistance to game designers through its consulting services.
The two products Daffodils GP wishes to introduce to the foreign market are Bonanza, a
card game drawing on players’ mathematical knowledge, and Nudu, a board game centering on
life fulfillment. To succeed economically in foreign ventures, Daffodils should assess the
market’s demographic trends, income levels, and cultural environment. Games should be
affordable to the target market and tailored to the needs of each age group, while accounting for
consumers’ values and tastes. Nigeria, being Africa’s largest economy, is the recommended
market for entry due to its cultural similarity with Ghana across the Hofstede dimensions.
Nigeria has effective monetary and countercyclical policies in place to reduce budget deficit,
illustrating efforts to strengthen its economy. Development of stronger public-private
partnerships for roads, agriculture, and power increases the ease of conducting business there.
To penetrate the Nigerian market, Daffodils should export its goods to a wholesaler and
launch an online store, allowing the company to assess demand levels for its goods in foreign
markets while minimizing the risk to do so. A regiocentric staffing approach will be used,
employing Nigerian wholesalers for the export method and currently employed Ghanaians for
their online store. To increase awareness of its brand and current products among target
consumers in the Nigerian market, Daffodils should position itself as “intelligent fun” through
the use of radio and Facebook ads.
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ANALYSIS OF THE CLIENT ORGANIZATION AND PRODUCT
Daffodils Games and Publishing (Daffodils GP) is a private limited liability company
established in 2009 in Ghana. The company strives to develop and publish an assortment of
games to provide fun, challenging, and educational experiences for individuals of all ages and
cultures. To differentiate itself from competitors, Daffodils positions itself as a gaming company
that creates “intelligent fun”. Daffodils produces games tailored to the needs of organizations and
institutions, such as teaching aids for schools. It continuously strives to improve the
entertainment value and functions of its products to meet consumer demands.
Daffodils GP strives to become the leading publisher of games worldwide by developing
games in many formats such as mobile, web, events, competitions, etc. (Daffodils GP, 2013). Its
current channels of distribution are direct selling, sales representatives, and distributors/agents.
Most recently, the company has been actively promoting its brand and products on the Internet to
strengthen its web presence. Daffodils created its own Facebook page in 2013 and joined Twitter
the following year (Daffodils GP, 2013).
Daffodils is introducing two products into the new market: Bonanza and Nudu. Both
games are suited for players of all ages and cultures. Its key competitors are Monopoly from
Bestman Games, Taytronik’s mobile version of Ayo, and Winning Moves UK’s Whot! which has
been developed into a mobile format by nKanika Inc.
SWOT ANALYSIS
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INTERNAL STRENGTHS
Since Daffodils is currently focused on promoting only two products, it can direct more
effort and resources to ensure product turnover. Competitors who have a vast array of products to
promote could potentially experience cannibalization among similar products. Additionally, the
resources available at their disposable would be limited, potentially reducing the quality of its
promotional efforts.
Daffodils has diverse product lines and business operations. In addition to games, books
and other educational tools have also been published, such as RUPC a card game designed to
teach new drivers Ghana’s Highway Code (2013). Developing games in a variety of media
allows for a greater reach of customers. The company also offers design consultancy services,
providing clients with creative solutions to their designing needs. Diversification protects
companies when mature products have reached the end of their life cycle (Porter, 1987). It also
allows companies to invest in profitable areas where growth is promising (1987).
INTERNAL WEAKNESSES
Daffodils GP is a small player in the gaming industry, owning a smaller proportion of the
market relative to its competitors. To date, it is operating on a small scale, exclusively serving
the Ghanaian market. It has fewer products available compared to competitors, losing benefits
associated with economies of scale and vulnerable to changing consumer tastes.
EXTERNAL OPPORTUNITIES
Research conducted by Gfk (2012), a German market research firm, suggests that 1.72
billion ZAR are currently generated by South Africa’s gaming market. Consequently, South
Africa is an attractive market for Daffodils GP to enter. The rise in the usage of smartphones
worldwide also presents an opportunity for Daffodils to further develop its mobile-based games.
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Additionally, predominantly young populations in regions like Nigeria and South Africa are
attractive to gaming companies like Daffodils as this consumer segment has greater demand for
leisure goods and learning tools (The World Factbook, 2014).
EXTERNAL THREATS
Consumer expenditure amounted to about $600 billion in Sub-Saharan Africa in 2010
and is expected to reach nearly $1 trillion in ten years (Hatch et al., 2011). This trend attracts
numerous competitors into the African market. In fact, Bestman Games has launched the
Nigerian Centenary Edition of Monopoly on February 25th
, 2014 (Bestmangame New Edition,
2014). Evidently, growth of the African market brings about serious competition to Daffodils.
Daffodil GP’s key competitors are well-known worldwide. For example, Monopoly
creates different versions of the game tailored to specific target cities. Bestman Games’
responsiveness to local tastes was a highly successful strategy, making the Lagos City edition of
Monopoly a popular board game in Nigeria. Originated in Nigeria, Ayo is one of the oldest games
in the world; it is now the most popular board game in West Africa. Whot! has grown to be one
of the most prevalent social games on mobile devices through Facebook, Android, and iPhone
iOS. Evidently, Daffodils must focus its efforts on increasing brand and product awareness to
pursue a greater share of the market.
MARKET SUCCESS FACTORS
Global expansion is a growth strategy employed by companies who wish to capitalize on
the untapped or underserved needs of their target market. In order to be successful, companies
must strategically analyze the presence of key success factors in the potential market that would
favor entry into its industry. Through careful examination of the gaming industry, the most
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significant factors of economic success for Daffodils GP are the new market’s demographic
trends, economic environment, and cultural environment.
Daffodil GP’s two products of interest are Nudu, a board game designed for players from
ages twelve and up, and Bonanza, a multi-player card game for individuals from ages nine and
up that elicits players’ mathematical fluency. As such, population characteristics should be
investigated prior to market penetration. Many countries have developed rating systems to
provide consumers with better guidance to user suitability. For instance, South Africa’s Film and
Publication Board ranks games from A to XX, with content suitable for all age categories to
being strictly limited to adults (“FPB Classification Guidelines”, 2014). If the region of interest
has a relatively young population, the game’s level of sophistication should be minimized to
attract the largest customer base. Consequently, games could be designed around the use of
cartoon pictures rather than numbers and abstract concepts. Additionally, younger populations
have greater demand for Daffodils’ educational products as they still attend school. Assessing
population trends will be useful for meeting the needs of targeted age groups as they mature.
Another notable success factor would be the target region’s income levels. Games are
classified as wants, often occupying individuals’ wish lists but never a necessity for survival. In
the world of economics, Daffodils’ products are classified as “normal goods”. These are goods
where an increase in income results in an increase in demand for the good (Black et al., 2009).
Those with lower levels of income exhibit a higher degree of price sensitivity and are less likely
to purchase leisure goods. Thus, income levels should be sufficiently above the region’s poverty
line to ensure product affordability and attractiveness to target consumers.
The region’s cultural environment also plays a significant role in Daffodils’ economic
success. For instance, there may be confusion across cultures regarding the interpretation of
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gaming instructions. Take Nudu, where the objective of the game is to reach “fulfillment in life”.
The word ‘fulfillment’ itself contains ambiguity. From the lens of an individualistic society,
where emphasis is placed on personal achievement and independence, fulfillment would likely
be regarded as individual career advancement (Hofstede, n.d.). Collectivistic societies are
characterized by harmony and group well-being, where fulfillment might involve marriage and
procreation to adhere to societal norms (n.d.). Thus, gaming instructions must account for a
region’s cultural context to ensure relevance to the target market. Product packaging also plays a
significant role in consumer purchasing decisions across cultures. It is important to avoid the use
of gender-specific references, abbreviations, colloquial language, humor, and culture-specific
metaphors (Aykin & Milewski, 2005). Furthermore, careful selection of colors that do not invoke
negative emotions and perceptions will maximize the product’s success (Choungourian, 1968).
For instance, research conducted by Wooten (2011) revealed that use of the color purple
generated perceptions of luxury to the British but signaled low quality to the Taiwanese. In
general, brightly coloured packages with high contrast attracted a greater level of interest –
particularly female attention – than duller ones (Aslam, 2006). If Daffodils GP wishes to
penetrate the North American market, incorporating a yellow light bulb in its advertisements
would adhere to its slogan of “intelligent fun” as it symbolizes innovation. Used appropriately,
color and imagery can be great tools to help a company build brand identity and preference
among targeted consumers.
SELECT A NEW MARKET
Since Daffodils GP is a relatively small player in the gaming industry, the most suitable
region for the company to enter would be Africa. Of that region, the most attractive countries are
Algeria, Nigeria, and South Africa. However, Nigeria and South Africa are the two most
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promising markets. Like Ghana, the official language for both countries is English (The World
Factbook, 2014). Therefore, language barriers would not be an issue in conducting business.
Located in North West Africa, Nigeria is the most populous region and makes up the
continent’s largest economy, with a GDP nearing $502 billion U.S. in 2013 (The World
Factbook, 2014). The country is experiencing annual growth at a rate of 6-8% from the
telecommunications, services, and agricultural industry (2014). This is beneficial for Daffodils
since it develops many mobile-based games. Nigeria has developed public-private partnerships
to address its inadequate power supply, which is favorable for Daffodils in effectively delivering
its web-based games. As depicted in the population pyramid below, Nigeria has a very young
population like Ghana. The majority of its population is under age twenty, illustrating the
opportunity for Daffodils to tailor its products to meet the needs of schools. Its products Nudu
and Bonanza are suited for players aged nine and up, targeting a major age group. Future growth
is promising, as the younger age groups mature.
According to the World Bank, Nigeria is a lower middle-income country with individuals
earning around $480 to $645 U.S. per month on average (Adewunmi, 2011). This level of
income leaves enough money for them to spend on leisure goods (Hatch et al., 2011). Nigeria’s
official unemployment rate in 2011 was 23.9% (The World Factbook, 2014). However, strong
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monetary and countercyclical policies implemented to reduce budget deficit increases its ability
to handle economic pressures (2014).
Comparing Nigeria to Ghana, the two score similarly across Hofstede’s cultural
dimensions implying that cultural barriers are less prominent in conducting business. Both
countries have a high score on power distance indicating its acceptance for hierarchy (Hofstede,
n.d.). A low score on individualism depicts a collectivistic society that values group well-being
and the maintenance of long-term relationships through trust and loyalty (n.d.). The two
countries differ along the masculinity dimension. Nigeria is a masculine society with a
preference for achievement, competition, and material success. In contrast, Ghana is a feminine
society, where quality of life and equality take precedence to standing out among peers (n.d.).
Thus, it would be important for Daffodils to import these cultural values into its games to ensure
its relevance to the target market. For instance, life fulfillment for the game Nudu in both
countries should incorporate group achievement. Ghana would focus particularly on the group’s
quality of life rather than status, while Nigeria on competing with other groups to advance one’s
own. In regards to advertising, the color green which symbolizes Africa’s “abundant natural
wealth” is common to both countries, as indicated in their flags and is appropriate for product
packaging (Znamierowski, 2011).
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South Africa is home to the 16th
largest stock exchange in the world (The World
Factbook, 2014). It has well-established financial, legal, communications, energy, and transport
sectors (2014). This is attractive to Daffodils in regards to its mobile-based games and
distribution of its product to urban centers. Compared to Ghana, South Africa’s population
pyramid shows that the country is comprised mostly of individuals aged above twenty. Thus, the
opportunity for learning tools and leisure activities may be limited as this age group matures.
South Africa is an upper middle-income country, with enough disposable income per
month to spend on leisure goods (World Bank, 2014). However, it has an official unemployment
rate of 25.2%, with poverty and inequality among the highest in the world (The World Factbook,
2014). Unlike Nigeria, a significant budget deficit limits South Africa’s ability to effectively
address these economic pressures.
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According to Hofstede’s cultural dimensions, South Africa and Ghana are more culturally
distant. South Africa scores lower on power distance, indicating its preference for egalitarianism
(Hofstede, n.d.). The country is individualistic, valuing independence and personal achievement
(n.d.). Additionally, it is a masculine society that emphasizes competition and performance
(n.d.). Thus, games relevant to South Africa would center on actively competing to obtain
individual wealth. This cultural distance suggests that Daffodils should be particularly sensitive
to using culture-specific metaphors, humor, colloquial language, etc. in advertising.
After much analysis, Nigeria is the selected market for entry. Nigeria experiences similar
demographic trends as Ghana. This is important since many of Daffodils’ promotional activities,
like the MOBA-ADISCO 2014 fun day games, attract a greater percentage of youth. Upon
launching Bonanza and Nudu, the company will likely have greater success introducing
educational products. The Nigerian market is more culturally similar to Ghana’s, indicating that
they likely hold similar values and tastes. This complements Daffodils’ market development
strategy, where a company launches old products into a new market (Porter, 1987). As a small
player in the industry, it is crucial for Daffodils to enter markets with a high degree of similarity
to its own as it minimizes the need for product customization – an option that may not be feasible
if there are insufficient levels of capital at hand. It is important to note that South Africa has an
unstable electricity supply; with power plant construction postponed which limits Daffodils’
online market potential. In contrast, Nigeria is continuously developing stronger partnerships to
deliver stable sources of power to its citizens. Lower levels of unemployment, relative to South
Africa, indicate that the majority of its population can allocate income to leisure goods. Nigeria’s
decreasing budget deficit leaves room for government interventions during times of economic
hardships. Accounting for Daffodils’ interests, the Nigerian market is most suitable for entry.
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ENTRY MODE
When entering a foreign market, there are generally three different questions a company
must address. Firstly, the company must consider which market to enter (which is discussed
further in the previous section). Next, it must decide when to enter the selected market (in the
case of Daffodils, the desired time of entrance is the nearby future). Lastly, the company must
then focus on what scale of entry they wish to pursue. When these three questions are answered,
it can start focusing on which method of entry would be optimal (Hill & Hernandez-Requejo,
2011).
A vast array of options are available at a company’s disposable when deciding to enter a
new market. Although there are no right or wrong choices, certain options are more feasible than
others. In regards to Daffodils Games and Publishing, exporting, licensing, creating a wholly-
owned subsidiary, engaging in a joint venture, and signing a management contract are the most
appropriate. The following matrix pinpoints some of the biggest advantages and disadvantages of
the options listed:
Method Advantages Disadvantages
Exporting Avoids the substantial costs of
establishing manufacturing
operations in the foreign
country
Helps the firm achieve
experience curve and location
economies
Company can have more control
on areas such as pricing and
distribution
Company can diversify its risks
(i.e. losses from domestic
market operations can be
recovered from gains in the
foreign market)
Travel and service costs
Required to keep track of the business
procedures which takes more time
Trade barriers
Poorly marketed product. Daffodils
would export to a wholesaler that also
sells other companies’ games, which
gives them a divided loyalty.
Therefore, the company will not market
the product with the degree of effort
that Daffodils would have.
Licensing Feasible to companies with low
levels of capital due to lower
High brand risk with a chance of the
company losing control over the
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costs and risks
Minimizes effects of trade
restrictions
manufacturing, marketing and strategy
Less profitable, as return must be
shared between the parties
Without good legal representation, high
risk of losing intellectual property (i.e.
licensee may sell similar products
when the agreement expires),
Wholly-
owned
subsidiary
(Greenfiel
d ventures
or
acquisition
)
High degree of control over
operations in different countries
100% share of the profits
Method is very costly and risky
Daffodils does not have a lot of
products and it might be costly to set
up their own store just to launch two
products. (In that case an acquisition
would be better than a greenfield
venture, since they might acquire other
products as well. Still, this option is
very expensive)
Difficult to change the culture of an
acquisition
A lot of work with a greenfield venture
Joint
venture
Share the risk and cost with
venture partner
Easier to enter the market with
the help of venture partner
Gain the experience, resources
and information from the
venture partner
Political advantage: lower risk
of being subject to
nationalization or adverse
government interference
Might be challenging to build the right
relationship with another business
Different cultures and management
styles result in poor integration and co-
operation, particularly if the companies
have different strategies and goals
High brand risk
Manageme
nt
Contract
Hire expert help from people
with experience
Assurance of the continuity of
the business
Lower risk
High brand risk
Lack of awareness about new market
trends
Risky on international markets due to
social and political reasons
(Hill & Hernandez-Requejo, 2011)
Marc-Peter Zander (2012), CEO of XCOM Africa, confirms that distribution models like
exporting are the preferred model for the Nigerian market as it provides companies with low
overhead costs and a wider product coverage. Further, he points out that it is important to
conduct a thorough assessment of suitable candidates to partner with in the foreign market
(2012). This allows the company to leverage its partner’s social networks, facilitating access to
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target consumers. Although Nigeria has a tariff rate averaging 10.6%, both Ghana and Nigeria
are members of the Economic Community of West African States (ECOWAS, 2007).
ECOWAS’s objective is to support regional integration in “all field of economic activity,
particularly industry, transport, telecommunications, energy, agriculture, natural resources,
commerce, monetary and financial questions, social and cultural matters” (2007). Furthermore,
the African Union is striving for a continental free trade zone by 2017, eliminating current
restrictive trade policies (African Union, 2013). By choosing to export to the foreign market, the
company will be able to avoid costs such as building a foreign subsidiary, licensing fees, etc.
Since Daffodils GP has only two products to present to the new market, there are relatively high
costs and risks related to the other options available. Setting up a factory to produce only two
products limits a company’s ability to exploit benefits like economies of scale. In contrast,
exporting allows the company to penetrate the market on a smaller scale to “test out the waters”,
thereby obtaining information on market perception and demand levels for its products. This
helps Daffodils GP learn more about the Nigerian market so they can use their newfound
knowledge to achieve a bigger market share in the gaming industry and expand into other
potential markets.
There are two different ways to export: direct and indirect transporting.
Type Description Advantages
Disadvantages
Direct
Exporting
Selling the
goods/ services
directly to end
customers
Greater degree of control
throughout the transaction
since the owner controls
logistics and after sales
services
Greater potential profits via
elimination of intermediaries
Develop a better
understanding of the
Takes more time, effort and
money than the owner may
be able to afford
The owner needs to bear
more responsibility when
servicing the demands of the
business
If the owner decides to
venture on a more
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marketplace.
Greater flexibility to
improve or redirect the
marketing efforts to the
specific marketplace, since
owner manages the
transactions
technological product, they
must be prepared to respond
to technical questions
regarding the product and
provide start-up training or
ongoing support services.
Slow response times to
customers due to absence of
local agent
Indirect
exporting
Selling
good/services
through an
intermediary
who in turn
sells the
products either
directly to
customers or to
importing
wholesalers.
Fast market access
Concentration of resources
towards production
Little or no financial
commitment, as the clients'
exports usually covers most
expenses associated with
international sales.
Low risk for companies who
consider their domestic
market to be more
important and those that are
still developing their R&D,
marketing and sales strategy
Export management is
outsourced, alleviating
pressures on the
management team
Less control over
distribution, sales, marketing
as opposed to direct
exporting
Wrong choice of distributor
and market may lead to
inadequate market feedback
affecting the company’s
international success
(Delaney, 2014)
Since Daffodils GP is a small player in the gaming industry, it may be difficult for them
to provide the level of capital and the ideal number of products needed to develop a wholly-
owned subsidiary. With the given conditions, indirect exporting to a wholesaler would be the
best option for Daffodils at the given time. They would benefit from the wholesaler’s reputation
and get access to the in-depth market research conducted. The wholesaler would have assessed
the attractiveness of each market segment and strategically positioned themselves to reach their
target consumers. Since the gaming market is well established, players are unable to capture
benefits of being the first mover. Therefore, we feel that the costs and risks associated with
establishing a wholly-owned subsidiary would outweigh its benefits. Instead, they would benefit
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most by first entering the market at a small scale before possibly penetrating deeper into the new
market. Daffodils would still have a high degree of control over their products due to in-house
production.
Further, we recommend that Daffodils GP launches an online store to distribute its
products. This channel would increase consumers’ awareness of other upcoming products,
making its business more competitive. Currently, their webpage presents the products in brief
along with downloadable instructions for each game; the visitor cannot order any products
offered by the company. By opening an online store, customers from across the globe get access
to Daffodils’ products, allowing the company to compete in an unlimited number of markets. As
internet usage rates in Western regions of Africa are growing rapidly, it is strongly recommended
that a company like Daffodils be prepared to compete online in order to reach its target
consumers (Internet Live Stats, 2014). This helps the company become an early adopter in the
use of new technological tools to strengthen its market share. As a small player in the gaming
industry, operating online would allow Daffodils to differentiate itself from key competitors.
Since the company projects an image of “intelligent fun”, leveraging new technology helps
strengthen this position. Additionally, online operations complements Daffodils’ exporting
method. A disadvantage of indirect exporting is that the company loses sight on who their true
end consumer is, limiting its ability to tailor products to satisfy their needs. Operating an online
store gives Daffodils a source to collect data on current market trends and get a better sense of
their customers’ evolving needs for the future.
STAFFING
Daffodils GP will take a regiocentric staffing approach, with talent sourcing based on the
regional context of Daffodils’ business operations (Dowling et al., 2013). This approach is
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sensitive to local differences and facilitates communication across regions due to the constant
need for collaboration with company headquarters (2013). A list of viable options to staff
Daffodils’ entry strategy is presented below.
Indirect Exporting:
OPTION ADVANTAGES DISADVANTAGES
Current Ghanaian
Employees (Parent-Country
Nationals)
Understand the company’s
strategy and organizational
culture
Develop better
understanding of Nigerian
market via direct, ongoing
contact
Limited knowledge of
international market (e.g.
local laws, tastes)
Costly to relocate
employees to Nigeria (e.g.
housing, healthcare, visa)
Difficulty adapting to new
environment (e.g. being
away from family)
Outsource Product
Distribution (to Nigerian
Wholesaler)
Able to use established
networks to push product to
the market
Better knowledge of the
market
Less costly
Also sells competing
products
Split profits with
wholesaler
(Dowling et al., 2013)
Launching Online Store
OPTION ADVANTAGES DISADVANTAGES
Current Ghanaian
Employees (Parent-Country
Nationals)
Knowledge of the company
and its organizational
culture
Have the technical skills
required to operate a
webpage
Increases employee morale
via opportunities for
promotion
Lack of outside
perspectives on issues like
how to improve webpage to
attract a diverse market
Nigerian Employees (Host-
Country Nationals) Better knowledge of the
Nigerian market
May require additional
training (e.g. webpage
designing)
May lack knowledge about
the company
(Dowling et al., 2013)
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We recommend that Daffodils outsource product distribution to a Nigerian wholesaler for
its exporting activities and staff its online operations with current Ghanaian employees. The in-
depth market knowledge of a local wholesaler is particularly crucial for a company with limited
international experience. Having a Ghanaian international sales manager to oversee Daffodils’
exporting activities would be less efficient, with time and money being allocated on traveling
across borders. Additionally, the manager’s difficulty adapting to a different environment could
impede productivity. In regards to its online store, using Ghanaian employees is the optimal
choice because Daffodils can also get feedback on the Nigerian market through online sales.
Daffodils already operates its own webpage, indicating that its employees are already equipped
with the necessary skills. Separating online store operations by region would be problematic as it
results in duplication of tasks and results in a narrow view of the company as a whole.
INDIRECT EXPORTATION
For Daffodils’ indirect exportation, we recommend that four host-country nationals be
hired. The four wholesalers will be responsible for handling imports, ensuring shipments are on
schedule, and that adequate levels of inventory are on hand. Each will be separated by region
(i.e. north, east, south, and west) to ensure wider product coverage. These wholesalers will be
compensated based on an hourly minimum wage plus commission based on sales performance.
The minimum wage in Nigeria is currently 18,000 per month (Minimum-Wage, 2014).
Commission will amount to a percentage of sales to align the wholesalers’ interests with the
company, pushing Daffodils’ products over its competitors. This will be paid on a monthly basis,
giving frequent feedback to employees so goal setting and corrective action can be taken
throughout the year to maximize the achievement of yearly sales targets.
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Wholesalers will be hired based on their regional context. Each region will have the
opportunity to get a year-end bonus if sales targets are met, instilling regional commitment and
interregional competition among wholesalers, which aligns with the collectivistic and masculine
society. These individuals will be externally recruited through search firms or networks that
Daffodils may have in the Nigerian market. In terms of selection, interviews can be conducted to
ensure that candidates have the necessary skills for the role. Wholesalers must have a strong
sales background, a few years’ experience dealing with exporting companies, and great
communication skills.
A propose payment schedule is illustrated below:
ONLINE STORE
Daffodils GP has its own webpage, suggesting that they currently have staffing for their
online functions (e.g. making the site aesthetically pleasing, promoting products and events,
etc.). However, to support the launch of its online store, two additional employees will be hired.
One employee will be responsible for the management of online sales, handling issues like
shipping method and collecting data on consumer tastes and trends. This individual will be paid
an hourly minimum wage. The minimum wage in Ghana is 180 GHS per month (Mywage,
Commission Based Pay
Sales (in units per month) <500 501 - 1000 1001 - 2000 2001 - 3000 3001 - 4000 4001 - 5000 >5000
Percentage of Sales Comissioned 0% 0.50% 1.00% 1.25% 1.50% 1.75% 2.00%
Estimated Cost of Commission Pay (In units of product) 0 2.505 - 5 10.01 - 20 25.0125 - 37.5 45.015 - 60 70.0175 - 87.5 100+
Exportation Staffing PaymentDaffodils Games and Publishing YR 2015
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2014). The second employee is responsible for providing after-sales services, handling issues
like returns and obtaining customer feedback. Both employees will have an opportunity for a
team bonus at year-end if online sales targets are met, aligning with collectivistic values. They
will be recruited through conducting a talent management inventory, with staff currently
operating the website as preferred candidates. The selection decision will be made based on
recommendations. To qualify for the job, candidates must have a few years’ experience working
with computers in a similar role, strong analytical capabilities, excellent customer service skills,
and good communication skills.
A proposed payment schedule is presented below:
MARKETING
Daffodils Games and Publishing’s expected marketing challenge is to increase awareness of its
products, Bonanza and Nudu, among consumers in the target market and to uniquely position themselves
against key industry competitors. The objective of the product promotion strategy is to increase the
company’s awareness level by 25 percent by January 1st, 2016.
To Daffodils’ advantage, playing games is a common leisure activity in Nigeria that helps “bring
about a peaceful co-existence” (BattaBox.com, 2013). Nigerians can often be found playing board and
card games after school or work with friends and family for recreation, socialization and to stimulate their
minds (BattaBox.com, 2013). Daffodils’ products positively align with the values and attitudes of
Nigerian game players with Bonanza, a thrilling card game that exercises the mind, and Nudu’s spiritual
element of fulfillment.
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COMPETITION
In order to be successful in this market, Daffodils must uniquely position its products against key
competitors including: Monopoly distributed by Bestman Games, the mobile version of Ayo created by
Taytronik, and Whot! distributed by Winning Moves UK and the mobile version developed by nKanika
Inc. To compete in the Nigerian market, Daffodils should emphasize its position as being “intelligent fun”
offering high-quality, entertaining and challenging learning experiences through board, card, and online
games.
TARGET MARKET
The ideal target market for Daffodils’ products is the Rising Strivers, the middle-class segment in
the Sub-Saharan African market. This market segment is comprised of individuals who have obtained
more purchasing power through their access to credit and/or developing in-demand skills (Hatch et al.,
2011). They have a monthly income of about $250 to $750 U.S., leaving extra money to spend on special
occasion items (2011). In terms of product qualities, durability is ranked as the most significant factor in
purchasing decisions (2011). Rising strivers aim to advance further into more affluent segments. Thus,
they invest in their children’s education to reach these goals (2011).
Nigeria’s middle-class is well educated with 92% having completed a post-secondary school
education and accounts for 23% of the Nigerian population (The Guardian, 2014). According to an
estimate by Nigeria’s National Bureau of Statistics study in 2007, the country’s middle-class accounts for
30% of the population and is continuously growing (Rundell, 2009). As well, it is important to note that
Nigeria has a very young population, with half of its citizens being under twenty years old (The World
Factbook, 2014). This renders Nigeria as an attractive market for players in the gaming industry.
There are several factors to keep in mind when trying to reach Nigerian consumers. Firstly, the
irregular supply of power could potentially affect distribution activities. Low literacy levels of the
population as a whole may limit the attractiveness of certain market segments. Lastly, high costs of digital
Page | 22
devices relative to the country’s gross domestic product could influence the advertising channels at the
company’s disposal.
ADVERTISING STRATEGY
Since Daffodils is introducing a new product and is not an established brand in the Nigerian
market, the advertising strategy should focus on reach over frequency. By emphasizing reach, Daffodils
can increase awareness among the target audience. Two advertising channels that would best complement
this strategy are radio and the Internet. Many Nigerian consumers own or have access to equipment such
as radios, internet-connected personal computers, and internet-enabled mobile phones, which exposes
them to these advertising media (Akoh & Jagun, 2012).
RADIO
The top two sources of media consumption in Nigeria are radio and television. According to the
International Telecommunication Union, radio is the dominant medium reaching 75% of households
(2012). Radio is also a more cost-effective medium compared to television. Also considering the irregular
power supply, expensive television advertising would be a risky and potentially ineffective use of the
advertising budget.
Page | 23
INTERNET
Digital media supersedes print media. Less than 10% of the population reported reading a
newspaper or magazine in the last four weeks.
This can be explained by the significant growth in Internet use in the last decade. As of
December 2012, there are 56 million Internet users in Nigeria, which is 33% of the population
and amounts to 167 million people (Ghedin, 2014). The expansion of mobile phone use is the
key driver of Internet user growth, with mobile phones being the primary medium of Internet
access in Nigeria (Vanguard, 2010). According to the Nigerian Communications Commission,
54% of the population consisted of active mobile phone users in the first quarter of 2012. The
rising middle-class and the young population can explain the increase in mobile phone users.
Online advertising presents various benefits. First, it provides the company with wide
coverage, facilitating greater reach to its target audience. Advertising online is a very affordable
and cost-effective method, giving plenty of flexibility in terms of budget allocation. It drives
traffic to the company website, increasing consumer awareness for other products and
Page | 24
promotions available. Online sales are relatively easy to track and measure, allowing Daffodils to
make more accurate forecasts in demand levels to avoid shortages or surpluses of inventory.
ADVERTISING TACTICS
FREEDOM RADIO AND WAZOBIA
Radio listenership overall has continued to grow significantly, with news programs being
the most consistently listened to radio programs. The most popular station in the North West
region of Nigeria is the privately owned station, Freedom Radio 99.5 FM, located in Kano which
features informative, independent/investigative news, current affairs, educational and
entertainment programs (Dutse, 2014).
The top two stations in Lagos, Nigeria are Radio Lagos and Wazobia. Radio Lagos is the
most widely listened to station in Lagos; however, it broadcasts mainly in Yoruba and Ogu with
only 2% being English bulletins (Radio Lagos Eko FM, 2011). Wazobia 95.1 FM, Lagos
broadcasts mainly in Pidgin English in the most populous city in Nigeria. Wazobia features
music, global and national news, sports, interviews, games, and entertainment programs. The
target audience is the masses having programs that also attract the upper classes (Wazobia FM,
Page | 25
2013). The station reaches approximately a total of 30 million people located in Lagos, Epe,
Abeokuta, Badagry, Ikorodu, Shagamu, Ijebu-Ode, and Ibadan (2013).
Every other month, Daffodils will air a Freedom Radio ad starting in January and
continuing every odd month. The Freedom Radio commercial will last 30 seconds long at a mid-
news rate of about 11,377.59 Naira which translates into about $65.44 U.S. (Dutse, Radio Rates,
2014). Wazobia ads will air during the even months starting in February. The Wazobia ad will be
a 30 second spot during the weekdays between 5AM-11AM at a rate of 10,800 Naira, which is
about $62.12 U.S. (Wazobia FM, 2013).
Daffodils will use the same radio script for both stations, sharing information about both
Bonanza and Nudu with fun and engaging background music. The ad will share information on
where to buy the games, both in stores and online. Using the theme of “intelligent fun”, the radio
ad script will describe the games as being thrilling, engaging, addictive, fast-paced, fulfilling,
and appealing to individuals of all ages. The ad will also direct listeners to the Daffodils website
and Facebook page.
The reach of social platforms is wider and cheaper than traditional platforms. The number
one social networking site in Nigeria is Facebook and in May 2012, it was the most visited
website in Nigeria. As of September 2014, Nigeria has the most Facebook users in Africa with
just over 11 million users (Lesotho Times, 2014). Tolu Ogunkoy and mediaReach OMD predicts
that as an advertising medium, Facebook “may overtake radio and press in the not-too-distant
future” (The Economist, 2011).
Page | 26
There are two bid methods for Facebook ads: cost per click (CPC) and cost per thousand
impressions (CPM). For CPC, the account is charged every time a Facebook user clicks on a
CPC ad. On the other hand, whenever a CPM ad loads, the account is billed regardless of
whether or not the user clicks or even notices the ad. The cost per impression is cheaper than cost
per click. However, choosing CPM may lead to poor performance without accurate audience
targeting. CPC is beginner friendly and less risky (Okafor, n.d.). Until Daffodils has a better
understanding of its audience, the company should take advantage of CPC ads.
The company will only pay for the clicks they receive up to the amount set in the budget.
With the choice of either a daily or lifetime budget, Daffodils will use a lifetime budget where
instead of setting an amount to spend per day, the lifetime budget will be set to be spent across
the lifetime of the ad set. The Facebook system will automatically try to spend the amount out
evenly across the entire period of time selected. The average CPC for Facebook ads in Nigeria in
November 2012 was $0.78 U.S. (Statista, 2014). If Daffodils sets a lifetime budget of $1,000 for
the year, $2.74 U.S. would be spent each day. If the ad set ever spends less than $2.74 U.S. per
day, the system will try to make up for the missed amount at a later date within the ad set
(Facebook, 2014).
Page | 27
With the objective of raising awareness for Daffodils’ brand and products, the Facebook
ad set will include three different ads for Daffodils as a brand, its products Bonanzu, and Nudu.
The ads will incorporate the theme of “intelligent fun” and will vary from month to month, with
each ad being featured for a total of four months. Colorful and engaging, the ads will share
product and brand information, encouraging Facebook users to click on them. The Daffodils
brand ad will direct the user to the Daffodils Facebook page where the user can “like” the page,
engage with others in the community, and learn more about the company and its products. The
Bonanzu ad will bring the user to the Bonanzu product page on the main website. As well, the
Nudu ad will bring the user to its corresponding webpage.
The objective of the advertising strategy is to increase awareness while driving traffic to
the company’s Facebook page and website. Each radio and Facebook ad will be consistent with
the brand image and the “intelligent fun” theme. Through integrated marketing, Nigerian
consumers will become aware of and develop a better understanding of Daffodils and its
products as being fun, interactive, social, learning experiences for adults and children of all ages.
Page | 28
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