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MarketingFocus Africa

Africa!Reality:

Most of the bushes are natural game parks. Some of them are world famous! Excellent opportunity to grow tourism.

There are many African Cities which are far better developed and have better infrastructure compared to other DEVELOPING COUNTRIES.

There are economies in Africa which are ahead in per capita income than India (South Africa, Botswana, Algeria, Egypt, Morocco).

Very rich in natural resources (forest products, minerals, marine resources, oil).

Population of African Continent: 1.12 billion (2013)

Africa!

TEN POPULOUS COUNTRIES (in mln)

1Nigeria185,043,0002Ethiopia90,076,0003Egypt88,523,0004D. R .Congo71,246,0005South Africa54,844,0006Tanzania48,829,0007Kenya44,153,0008Algeria39,903,0009Sudan38,435,00010Uganda35,760,000

Focus AfricaVast continent comprising of 55 CountriesPopulation 1.12 billion, second biggest after AsiaSimilarity in profile with India. Each country is like a province of India. Culture, food, language, vary from North to South and East to West.Almost all countries has good relationship with India

Focus Africa Well acceptance of Indian products & ServicesIdeal market for unbranded generic productsLow purchasing power unlike Europe or US makes Indian products acceptable.African economy is in nascent stage, with huge growth potential An ideal place to invest

Opportunities & Early BirdsAirtels takeover of Zain telecom making Airtel one of the leading cell phone service provider in Africa. Currently present in 17 countries.Essar Group invested US$ 275 million in Steel plant in Zimbabwe (ZISCO) leading to hundreds of Indian Expats getting job. Ancillary supplies from India.

Opportunities & Early BirdsAdcock Ingram a Pharma Giant from South Africa acquired Indian Pharma Company Cosme Pharma for Rs 480 crores.Ethiopia is the largest exporter of Rose to Europe with estimated volume of US$ 127 million.Ghana the biggest producer of coco. Annual exports pegged at US$ 2300 million.

Opportunities & Early Birds

Cultivating Dreams: Harvesting Potential. Addressing Food Security BSE: 531687 NSE: KNL Bloomberg: KFT@IN Reuters: KART.BOCase Study

Karuturi highlightsWorlds Largest Cut Rose ProducerProduction units in Kenya (154 ha), Ethiopia (100 ha) and India (10 ha)Land bank of 3,11,700 ha acquired in Ethiopia for production of Agri cropsImplementation on 90000 ha Cereal Crop (70000 ha) & Oil Palm (20000 ha)Revenues - USD 115 Million Working partners 10000. Expected to be 50000 in the years to comeMarket share is 9% in the European Cut Rose market Substantial demand of Comessa (Community of Sub-Saharan States of Africa).

Project Highlight Cut Roses

Case StudyAfter completing his engineering and MBA, it was but natural forSai Ramakrishna Karuturito join his family business. A three-year stint and he realised that he wanted to explore new pastures and not stick to his father's business.After toying with various options he finally settled for floriculture -- he decided to cultivate and export roses.But cultivating flowers in India is an expensive affair. After a chance meeting with a former colleague he moved to Africa, where the seeds of his fortune were sown.

Case StudyWith 15 per cent of the global market in his grasp, Karuturi, today, is the world's largest exporter of roses.Three years ago, headded agriculture to his bandwagon. Today, his company Karuturi Global Ltd has 3,000 sq km of agricultural land in Ethiopia (that is 5 times the size of Mumbai!) and 239 hectares of land for rose cultivation.The company's turnover in 2013-14 was Rs 650 crore with net profit of Rs 108 Cr.

Major Exports from IndiaIT / Software : Current Export of estimated US$ 4 billion.Major Countries: South Africa, Nigeria, Egypt, Kenya Major clients: Bank & Other Financial Institutions, Govt agencies, Telecom Sector and Industries.Beside software exports, thousands of IT professionals are traveling / staying for demonstration, training, implementation and running the installed software / systems.Major IT companies (TCS, INFOSYS, COGNIZANT) have opened local offices in strategic locations (Cairo, Nairobi, Johannesburg, Lagos)

Major Exports from IndiaPharmaceuticals:

Exports from India started by end of 70s in unstructured way. Started shaping up by early 90s.

Current export from India to Africa more than US$ 3 billion.

Bulk Drugs, Intermediates, Finished Formulations, Surgical, Devices, Disposables.

Indian Pharma companies have invested in Africa by setting up subsidiary offices, distribution net-work and even into manufacturing (Ipca, Aurobindo,Zydus, Intas, Glenmark, Ranbaxy).

No of manufactures have bought stakes in Local companies (Cipla, DRL, FDC).

Major Exports from IndiaTextiles & Fabrics:

Estimated exports US$ 800 million.Major market Nigeria, Ghana, SudanTextile export is in decline in competition with China, Taiwan, Indonesia.Cotton export is USD 2.3 billion.

Major Exports from India

Major Exports from India

Agrochemical Country Markets 2011 $ m

HerbicidesInsecticidesFungicidesOthersTotal World195401163211620122344015AF/ME414558140181130South Africa11543566220Export from India1812088211482

Indians have migrated to Africa since 18th century in search of greener pastures and settled down creating a huge Diaspora. They were mostly traders and later many of them entered into manufacturing.Mostly settled in East & Southern part of Africa. Later many of them migrated to West like Nigeria, Ghana etc.Human Resource

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Human ResourceA new class of Indians the professionals started migrating to Africa from 80s. Mostly Technocrats (Civil, Mechanical, Telecom & Mining ENG & Accountants)Later from 90s Marketing & IT professionals.Working with Govt agencies, Local companies and in deputation for Indian Companies.

Important Exports from India

Concept of Marketing Marketing is a social and Managerial process by which individual and groups obtain what they need and want through creating and exchanging products and value with others- Philip Kotler

Concept of Marketing

Transforming needs into wants and desires and there by creating demand for a specific product or services to satisfy the consumerA human need is a state of felt deprivation of some basic satisfactionWants are desires for specific satisfiers of these deeper needs.Demands are wants for specific products that are backed up by an ability & willingness to buy themDemand leads to the Product / Brand in the market

Employee Employer, Police Citizen, Church - Member

Consumer BehaviourMaslows Hierarchy of NeedsMaslows theory helps to understand how various products fit into plans, goals and lives of potential customers

Selling & MarketingExchanging product or services for a value based on demand.

creating awareness/demand for a specific product or services to satisfy the consumer. (building a brand)

Selling vis--vis MarketingSellers Market In absence of Competition or very few competitors

Buyers Market When consumers have the choice to decide from multiple options available

Today Consumer is the KING. Consumer is always RIGHT.

PROCESSTo identify Product matching destination marketTo conduct market surveyTo identify the ImporterKnowledge on Import norms (Duty, regulatory, Tax etc.)To finalize Business modelTo confirm Price structureTo conclude AgreementTo obtain Commercial orderExecute the order

Marketing Tools TOOL-1Pre-Launch Market survey to work out Launch strategy

Meticulous Launch Planning based on market survey Effective Implementation of launch strategyPost launch follow-up

Own brandCompetitionManufacturerSpecificationPackPrice to end userUnit sales /mthUSP

SWOT Analysis / Selection of Markets TOOL 2

PopulationGDPRecovery of paymentProduct potentialStrengthWeaknessOpportunityThreat

Cost, Margin, Price TOOL 3

CostMarginFOBFreightCIFRaw materialPacking materialManufacturing costPromotional cost (If branded)Any other

MarketingFinancials (Working capital, Turnover)Market reputationCredit ratings (ECGC)Coverage area / Customer reachDistribution Infrastructure (field force / delivery vans)Warehouse spaceExisting PrincipalsBusiness projectionPricingPayment TermsSelection of Business Partner TOOL 4

Designing Marketing Strategy, Positioning Brand TOOL 5

Parameters -Nature of ProductDemography of MarketPotential of MarketCompetitors activitiesMIS data

Market ClassificationAdvance & Regulated Markets:Stringent laws and mechanism in place to monitor imported items.Govt agencies vigilant to ensure only products meeting quality standards only enter the country.Pre-shipment quality check in place.Lengthy regulatory formalities especially for finished formulations. Restriction in importation of Food items.Product quality should be comparable to Europe, US exports.Expect a good price, sometimes even better than Europe South-Africa, Tunisia, Libya, Morocco etc.

Market ClassificationSemi-Regulated Markets:Most of semi-regulated markets will become regulated market in next 5 years time.Most of the systems of regulated markets is in place with a degree or two less.Many of such markets have import ban on a number of items, which are locally manufactured to incentivies local industry.Margin is reasonable but business volume is higher.Nigeria, Ghana, Zimbabwe, Ethiopia, Kenya, Tanzania.

Market ClassificationNon-regulated Markets

Countries having relaxed regulatory environment.Mostly backward, poor and countries in ethnic conflict.Easy to export in absence of stricter import regulations.Expect low margin, competition from small suppliers, poor quality of products, at times payments are un-safe.Many countries in last one decade have become semi regulated from non-regulated. Zambia, DRC, Angola, MozambiqueBurundi, Chad, CAR, Eritrea, Benin, Gabon etc comes in this category.

Market Classification

Export vs. Export MarketingExport: Approach -- Exporter to Market

Find out an importer in a country for the product or commodity intended to export.Convince importer on quality of productNegotiate commercial terms and conditionsDecide on payment instrumentExport said product or commoditySelling of product is the responsibility of importerLow investment Mostly Exporters margin is less than Importer.Example: Cereals or Pulses, Fruits, Minerals, Bulk Drugs Formulations etc., Tender participation

Export vs. Export MarketingExport Marketing : Approach -- Market to Exporter

Understand demography of the country in relation to the product or services intend to export.Thorough market survey to identify need & demand for the product. Potential of the product.Identify competitors and their activitiesDesign a marketing strategy and chalk our sales promotion activity.Invest in sales promotion to create BRAND.Appoint distributor / sales team to reach customers.High investment Healthy MarginBRAND recognition, sustainable business Examples: FMCG, Consumer Durables, Machineries, Software, Branded Generic Formulations.

Entry StrategyDraw a matrix for product vis--vis MarketShort list countries that are prospective.Gather basic data for selected marketMarket size, existing products, Patent / IP status, current pricing, future growth prospect, political situation, local currency stability.Do a SWOT analysis based on gathered data.If SWOT analysis is in favour, look for prospective importers / distributors / investors depending on the model of business.

Entry StrategyCheck back ground / performance history / financials of prospective importers / distributors / investors. Discuss various terms of business (expected business volume, price, payment terms) with prospective importers / distributors / investorsAfter thorough evaluation, who ever meets the required standards should be considered for final selection.If & when required plan a visit to physically assess before signing agreement or contract.

Case StudyLakshmi Narayan Mittal was born into an Indian business family inRajgarhinRajasthan, India. His family moved from Rajasthan to Calcutta. He graduated from St.Xavier's College, Calcutta, with aBachelor of Commercedegree in business and accounting. His father, Mohan Lal Mittal, ran a steel business,Nippon Denro Ispat.Until the 1990s, the family's main assets in India were a cold-rolling mill for sheet steels in Nagpur and an alloy steels plant near Pune. Today, the family business, including a large integrated steel plant near Mumbai, is run by his siblings Pramod and Vinod, but Lakshmi has no connection with it.

Case StudyArcelorMittal was created by the takeover of Western European steel makerArcelorbyNetherlands-based multinational steel maker Mittal Steelin 2006, at a cost of 40.37 per share, approximately $33billion total. Mittal Steel launched ahostile takeoverbid which replaced a previous planned merged between Arcelor andSeverstal, which had lacked sufficient shareholder approval. The resulting merged business was named ArcelorMittal and headquartered in Luxembourg.

Case StudyLakshmi Mittal(owner of Mittal Steel) is the Chairman andCEO. His family owns 40% of the shares in the company. As of 2011 the company employed over 260,000 persons, of which 37% were in the EU, with a further 16% in non-EU European countries, 16% in Asia, 14% in North America, the remainder split between South America and the Middle East and Africa

Awards and honours

Case Study

Year of Award or HonourName of Award or HonourAwarding Organization2010"Dostyk" 1Republic of Kazakhstan.2008Forbes Lifetime Achievement AwardForbes.2008Padma VibhushanGovernment of India.2007Grand Cross of Civil MeritGovernment of Spain.2007Dwight D. Eisenhower Global Leadership Award[36]Business Council for International Understanding.[37]2007FellowshipKing's College London.2004European Businessman of the YearForbes.2004Entrepreneur of the YearWall Street Journal.20048th honorary Willy Korf Steel Vision AwardAmerican Metal Market and World Steel Dynamics.1996Steel Maker of the YearNew Steel.

4Ps and Evolving StrategyProduct / ServiceWhat kind of product or Services?Is it relevant to targeted market?

Place (Country)Which Country?Whats the potential?Opportunities / Threats

4Ps and Evolving Strategy PriceCurrent price trendEstimated bottom lineFuture challenges

PromotionTrading / Brand promotionMarket competition / Competitors activitiesEstimated expenses for brand promotion

Classification of Markets

Regulated / semi-regulated / non-regulated.Quality sensitive / price sensitiveHigh margin / Low volumeLow margin / High volumeECGC ratings

Classification of Markets

Currency Stability

Patent / Trade mark

Political stability, growth potential

Demographic conditions

Finalizing Business ModelTransfer price / Profit sharing / JV

Trade sales / Brand promotion

Registration / Trade Mark expenses

Appointment of Field Force / Business Manager

Payment Terms (LC/DP/DA)

Backward Integration of Infrastructure

Regulatory set-up in-house / outsourced to meet country specs

Packaging development cell in-house / outsourced

Procurement (raw material / packaging material) to offer quality inputs at right price and in scheduled time

Manufacturing set-up (International accreditations)

Quality Assurance (QA) to ensure best product rolls out of plant

Backward Integration of Infrastructure

Logistics to co-ordinate movement of finished stock from Plant to Port

Pre-shipment inspection (like SGS, Intertek, Veritas etc wherever applicable)

Freight agent to carry out seamless shipment process Immediate Dispatch of shipping documents to ensure importer receives documents before shipment arrives.

R&D to be in place for continuous improvement of the product

Approach to Private MarketType of productFinished / Semi-finished / Raw Material / servicesSize of Private marketExpected volume of businessEstimated promotional expensesExpected bottom line (margin)Nature of market (Private buyers : Govt purchase)Existing competitors (MNCs / Generics)

Approach to Tenders Type of productFinished / Semi-finished / Raw Material / servicesTendering Authority (Govt, Private Inst, NGO)Guideline given by Tendering AuthorityTendered Quantity & SpecificationsPast tender results & awarded priceTender Funding (Private, Govt, International Organizations like UN, World Bank WHO) Payment terms

Classification of Export ItemsRaw Material (Iron Ore, Polymer, Cotton, Bulk Drugs)Semi finished material (Chemicals, Drug Intermediates) Finished product (Electrical Appliances, Apparels, Machines & Tools, Soft ware, Formulations)Services (Professionals, Post Installation Machine support, Soft Ware / Systems support)

Human Resource (Field Personnel): Most important resource to make other tools resourceful.Impart product knowledgeImpart selling skill

Promotional Theme & MaterialMedia Marketing (FMCG, Consumer Durable, OTC)Sales Promotion (Holiday Package, Credit cards, Insurances) One to One promotion (Pharmaceuticals, Investments Portfolio)

Pre-Launch Market survey to work out Launch strategy

Meticulous Launch Planning based on market survey

Effective Implementation of launch strategy

Post launch follow-up

Export Model TradingExport at agreed price. Responsibility of Sales lies with importer.Private market promotionInvolves sales promotion to create demand and achieve sales target.Depending on agreed arrangement responsibility lies on exporter, importer or shared by both parties. Contract manufacturingManufacture and supply with importers labelResponsibility restricted to production and quality.

Regulatory requirementMost important for Pharmaceuticals (Formulation & API)ChemicalsHospital Equipments & devicesDisposablesAgrochemicals (Fertilizer, Insecticide)Food products

Regulatory SupportStudy regulatory guideline of the CountryPrepare dossier as per country guidelineArrange all QA related data from plantSubmit related documents like API data, working standards, testing samples etc.Provide Site Master File, plant documentsAppropriate reply to queries from Regulatory Authorities.

Inter-departmental Co-ordinationExport is a teamwork. Co-ordination & cross functional support from respective departments is extremely important.

PlanningCosting PurchaseProductionRegulatoryLogistics

DocumentationRegistration documentation

Product informationProduction processQA / QC certificatesGMP certificateCOACOPP

DocumentationTender documentationDetailed reading of entire documentationEnsure all relevant data filled / documents attachedCheck required product specificationBid Security / Performance GuaranteeClosing date

DocumentationCDA / Term Sheet / ContractsAgreed business modelProduct detailsOwning of Brand name / RegistrationBusiness projectionCommercial terms (price/payment)

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