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Wednesday, June 13, 2012

BRAND VALUE AND THE CREATION OF NATIONAL CHAMPIONS IN NIGERIA


      One may ask what national champions are, and who are these national champions? My answer is simple; they are global corporate brands who dominate a particular market segment and whose names, in most cases, goes with the image of the country of origin in the minds of the consuming public. But, the origin of the term can be traced back to the era when leaders such as French Charles de Gaulle wanted to create big companies that would champion their national interest. The modern revival of the concept, as national strategy to build huge national companies, is traceable to Vladimir Putin who pushes for the creation of national companies to control the production and marketing of Russia’s mineral resources. But, the term is not restricted to government own companies as it was then restricted to, as the term has expanded to include private companies whose national governments see them as of strategic national interest. For example, there are many instances where national governments prevent the take over of private companies by foreign buyers; these include the Dubai port World take over of an American company, the take over of French diary company Danone by an American firm, etc. Examples of national champions include, Samsung and Hyundai (South Korea), Nokia (Finland), Toyota and Sony (Japan), Coca Cola and General Motors (USA), Premier league and British Airways (England), Mercedes Benz and Siemens (Germany), Heir (China), Peugeot and Total (France) to mention just a few. In the 1960s and 70s the policy of creation of national champions was interwoven with the economic policy of import substitution industrialization and economic self dependency to create major national manufacturers in countries like Italy, Netherlands, South Korea, Spain and Taiwan. Today multinational companies such as BP, who is a private company, are turning to the old strategy of national interest to protect itself from growing American resentment in the wake of the oil disaster in the American coastline in 2010. Immediately Britain authorities resent that BP was been subjected to load of accusations and public inquiries, the old idea of BP being a national champion comes back.
     Brand value on the other hand connote ‘positive differential effect that knowing the brand name has on customer response to the product or service’,(Kotler, 2003). Thus, brand value can be put as meaning how strong do the consuming public feel about a particular product or service and how much cost they will pay in order to have it. Brand value is normally created over time through strategic advertisement and marketing by building customer loyalty and meeting their expectations. In Nigeria some of the most well recognize brands are those of very well known companies and biggest in term of capitalization. Example here includes Dangote, First Bank, PZ, Nestle, Zenith Bank, GTBank, MTN, Daily Trust, Guardian, Ashaka cement, to mention just a few. The most capitalize companies on the Nigerian stock exchange such as Dangote and banks like GTBank are also the most valuable brands in the country. This bring us to the question of creation of national champions, whether among the privately own companies or government own.  Does Nigeria have national champions like it is found in other countries we mention earlier? If the answer is yes, then who are these national champions and what are their contributions towards the growth of the Nigerian brand itself? The fact of the matter is that up till this moment we do not have any Nigeria company that is globally recognized as top brand, the few that we have can be said to be doing well in Africa, but in the global scene they are small time players.  Examples of Nigerian brands that are doing well in Africa include Dangote, GTBank, and UBA, they are therefore our national champions here. Other brands that are following in there foot step include Glo, First bank, Zenith bank, and Access bank.
    Nigeria itself is a brand that continue to growth as the economy grow, already Nigeria is ranked 3rd in Africa in the latest ranking of national brands after just South Africa and Egypt. Therefore, as other sectors of the economy moves ahead the national brand follows it, likewise other individual brands that bear the name Nigeria. For example, in term of music and local film production Nigeria is a top brand in Africa where every body is happy to associate with the brand. Likewise, in foot ball, despite the dwindling fortune of Nigerian foot ball the country is still a great foot balling nation in Africa. Other factors that contribute to the growth of the Nigerian brand include it growing significant in term of peace keeping on the continent; many see Nigeria as a giant power in this regard. The large numbers of Nigerian intellectuals who are contributing in different areas of human endeavors also contribute to the growth of the brand. There are also other factors that (from the negative angle) continue to tarnish the image of the brand around the world; such factors include the growing cases of fraud and corruption that is associated with the name Nigeria, the many Nigerians abroad that hold the passport of the country who commit crimes elsewhere around the world. These and some others, combine to devalue the Nigeria brand, and that can only be reversed by sustain efforts on the part of the Nigerian government and public. Coming back to the issue of creating national champions, Dangote group is one potential candidate that is on its way to becoming a true national champion from Nigeria. Already, the cement subsidiary is planning to be among the top tree cement company in the world and by the time it enters this league Nigeria can lay claim to having a national champion.  The next to come may likely emerge from the banking industry, possibly between the current top four banks in the country i.e., First bank. GTBank, Zenith, and UBA. The top country brand in Africa, the South African brand, can boast of national champions like the telecommunication giant MTN; but which bigger brand can Nigeria boast of that is operating in South Africa? There is none yet.
    The biggest national brand in the world, the United State of America, have more national champions than any other country in the world, in the last count it has about 50% of the top 100 global brand followed by Germany 11, France 9, and Japan 7. These top brands are its national champions that continue to fly the flag of the United State around the world. Some of these companies are behind some of the biggest invention around the world in the last decades and continue to pump more money into research and development. They are also among the most capitalized corporations around the world. The second biggest economy in the world in term of the size of its GDP, China, has few national champions compare to its size. And the answer for this is not far fetch looking at the emerging nature of its economy, but as the economy grows and matures we are bound to see more top brands coming from that world giant. Back to Nigeria, many corporations here are yet to give value to the significant of brand equity in the future prospect of their companies, as they are yet to pay any significant attention to the development of their brands. But, brand is like personal integrity, once it is not there, no body respects you and wants to do any thing with you. The quest for the creation of national champions cannot be left to the individual corporations alone to pursue, as government has a role to play in it as it happens in other countries around the world.  Nigerian government can help private sector companies to become its national champions by, for example, investing in research and development in conjunction with these companies, provision of suitable infrastructural facilities to aid the development of such companies, export grants and aids to those that show potentialities of venturing abroad, tax incentives, and pursuing of economic diplomacy in its relationship with other countries around the world.

SOURCE:

Kotler, P. (2003), “Marketing management”, Delhi, Pearson Education
Hallward, J. (2005), “Understanding Brand Value: A review of price, performance, equity, and category Dynamics”, Ipsos-ASI, Advertising Research Company