Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. South Africa
  4. Johannesburg Stock Exchange
  5. Vodacom Group Limited
  6. News
  7. Summary
    VOD   ZAE000132577

VODACOM GROUP LIMITED

(VOD)
  Report
End-of-day quote. End-of-day quote Johannesburg Stock Exchange - 11/26
133.97 ZAR   -2.21%
11/19South Africa's MTN exits Yemen in Middle East pull-out
RE
11/15Vodacom Group Limited Reports Earnings Results for the Half Year Ended September 30, 2021
CI
11/15Vodacom 1st Half Net Profit Fell
DJ
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

How Nigerian Brands Navigated Difficult Moments

09/30/2021 | 11:06am EST

Some of the world's preeminent brands nearly caved recently having encountered crisis and negative media reportage. In this report, Raheem Akingbolu writes on the strategies embarked upon by promoters of some brands in Nigeria to stem bad press and instability

Airtel Identity Crisis

Perhaps the most controversial brand crisis in the corporate Nigeria in the last 20 years is the story around frequent name changes by what is today known as Airtel. The brand started in the Nigeria market in 2001 as Econet Wireless, and just a few months in operations the brand into a storm. In five years of operation, the company had changed ownership, name, management and brand identities four times before it finally settled for Airtel as the fifth name few years ago.

For the management of the company and its creative and public relations partners, there was a challenge of maintaining regular corporate and brand visibility despite the odds. Fortunately for its promoters, the company maintained positive public perception in the first year of launch and subsequently earned the brand the epithet of the 'people's network'

However, the peak of the crisis in its evolution was the moment it was renamed Vodacom. Following the strident quest for funding, the board of Econet Wireless Nigeria signed a Management Service Agreement (MSA) with Vodacom, the South African mobile operator. Three months into the MSA, Vodacom withdrew from the agreement citing alleged corruption. The sudden withdrawal took the company by surprise but the Vodacom secondees elected to resign en masse and stay back in Nigeria to run the fledgling mobile company. The implication was that the company had to drop the Vodacom brand immediately.

Overnight, working with Centrespread Advertising Limited, the Marketing team led by South African Lawrie Golding, developed a new brand livery (name, logo, colors and pay-off line). This was presented to the Board of Directors in the morning of the following day and upon approval, a media statement was issued announcing the emergence of the new brand! It was classical but it put all stakeholders on their toes.

The Coca-Cola/CPC Crisis

On October 27, 2014, the media was awash with stories of a criminal suit filed against Coca Cola Nigeria by the Consumer Protection Council (CPC), alleging the violation of the rights of Nigerian consumers. The issue was triggered by two half-filled cans of Sprite which was discovered during a routine inspection. The discovery gave the impression that Coca Cola was violating both the content specification and possibly the health standards specified for the packaged goods sector. Consequently, The Quadrant Company was recruited to manage the aftermath of the crisis generated by the brouhaha.

Among other strategies, the PR firm was able to put together a Crisis Management and Litigation Communication Plan, part of which includes issuing firm rebuttals of the CPC claims by way of holding statements and press releases.

At the end, the campaign was able to douse the heat generated by the issue as the firm was able to create a pool of corporate and initiate endorsers, which led to a balance of views and opinion on the crisis. Through proper management of judicial media around the issue, the suit was withdrawn by the CPC

As part of the counter action, an agenda was set and a coordinated campaign was initiated to call attention to the positive side of the story. This was achieved through independent advocacy groups, opinion page articles by concerned independent writers and spin of the case by judicial reporters. In framing the issues, efforts were made to show and convince the public about the company's world class production facility through a media tour of Coca Cola's production facility. Aside from influencing judicial reporters to tell a different story in the court of public opinion, the company's spin doctors won the war for the singular reason of using business and consumer advocates as champions of their strategy.

GTBank / Orange Logos Similarity

Guaranty Trust Bank, which is today popularly known as GTBank or GTB, is a wholly African brand, conceptualised by two visionary young Nigerian bankers, Fola Adeola and late Tayo Aderinokun. Against all odds, the brand became an instant success and warmed its way into the heart of the banking public within the first five years of operation. Today, it is not only one of the most respected banking institutions but also one of the most admired brands by its patrons and other members of the public.

Its early towering equity notwithstanding, the brand, which has evolved into a holding company, was to later attract bad publicity over the similarity between its corporate identity and that of a global brand, Orange Telco. In the weeks that followed, the issue became a hot debate among top brand analysts and journalists.

For a local brand that had little or no strong crisis management strategy in place prior to the upheaval, the situation literally put its then known consultants; Enterprise IG (a South African firm) and Alder Consulting, on their toes. That was the beginning of hot water navigation for a brand that was then seen as Nigeria's pride. Except for the different names, the colour and shape of the square-shaped logo of both organizations were similar.

Though both the bank and its consultants tried unsuccessfully to prove the originality of the concept, GTBank won the war because of the solidarity it enjoyed from the Nigerian public. Besides, the 'Orange Rules' campaign conceptualised by Alder was like a magic wand as it connected well with Nigerians and registered strongly on the minds of most citizens. Finally, the fact that GTBank was mainly domiciled in Nigeria then, compared to Orange that was already spreading across Africa, made the case inconsequential to an average Nigerian. Both brands retained the orange colour.

Etisalat/9mobile

The month of July 2017 started with most Nigerians exchanging "Happy new month" messages via WhatsApp. Nobody saw the impending implosion in the telecom sector (especially at Etisalat Nigeria) coming. But what happened to the brand that month remains its major crisis till date.

Etisalat Nigeria took out a $1.2 billion (N377.4 billion) loan with 13 Nigerian banks in 2013 to refinance an existing loan and fund expansion. By 2017 there was an impasse over repayment of the said loan and this led to the exit of Etisalat International and all the United Arab Emirates shareholders in Etisalat Nigeria.

Following the exit, Etisalat Nigeria was given three weeks' notice to stop trading with the Etisalat name in Nigeria. The management was still trying to negotiate with Etisalat International until it became clear that they had a seven-day hard stop date to rebrand.

The former chief executive officer of Etisalat, Boye Olusanya, put together a crack team of his best talents across functions to deliver this uphill task with the then five years old agency, X3M Ideas, as the arrowhead.

A team of X3M Ideas creative, strategy and brand management executives checked into Oriental Hotel for the week and from the warroom set up there, the 9mobile brand was conceptualised and delivered.

Prior research had shown the possibility of massive churn if the Etisalat name was changed, but the rebranding was managed so seamlessly with little or no damage to the equity of the brand. 9Mobile has become firmly etched in the minds of Nigerians as a reliable network provider.

Dana Air Plane 2012 Lagos crash

On Sunday June 03, 2012, a Dana Air flight 992 crashed in the neighbourhood of Iju-Ishaga, a Lagos suburb close to the airport, killing 153, comprising of 147 on board and six on the ground. The crash immediately created a crisis situation given the level of damage and destruction caused. The media became immediately awash with news on the crash focusing on many angles. The crash created a reputation management problem as Dana Air was prior to the crash seen as the safest domestic airline to fly.

However, by dint of hard work on the part of The Quadrant Company, the Public Relations agency hired by the management of the airline, the story was retooled to present the facts and coordinated opinions on the cause of the crash. It was also followed by human angle stories emanating from the lives and times of passengers and crew members on board.

The outcome of the engagement was that sizable balanced coverage of crash incidents in local and international media were churned out to the public. At the end, Dana got a softened regulatory treatment with regard to the withdrawal of its air licence. This helped to normalize the company's business operations after the restoration of its license.

MTN/FG Faceoff

Though a pacesetter brand, the overwhelming success of the 20 year-old MTN brand in Nigeria was soon to become a burden for the telco brand. Like every big brand, there is always the tendency to get carried away and dare the authorities and test their resolve.

The first major brush MTN had with the authorities was in October 2015 when it was accused of not deleting over five million lines, which were not registered and were still being used by subscribers. The federal government had decreed that every GSM user in Nigeria, irrespective of service provider, must register their lines on or before a stipulated time frame after which the lines so unregistered would be deleted.

However, it was discovered by the Nigerian Communications Commission, NCC, via the compliance audit carried out by the commission, that MTN had about 5.2 million Subscribers Identification Modules, SIM, simply known as lines, that it had failed to disconnect or deactivate. Invoking Section 20, Subsection 1of Telephone Subscribers Regulation, TSR, Law on MTN, the NCC fined the GSM service provider a staggering $1000 for each of the 5.2 million lines that were not deactivated by the company. This amounted to $5.2billion.

On November 2, 2015, MTN wrote a letter to the NCC admitting wrongdoing on its part and asked for reduction of its fine and also be given more time to be able to pay the fine.

In its response, the NCC said the decision on the fine was final but that the two parties could meet to see how the deadline for payment of the fine could be reviewed and structured. On 16th November 2015, the NCC assured the public that the payment of the penalty would not be enforced until the two parties had come into an agreement.

It was a major public relations crisis for the company and heads had to roll. The then chief executive officer, Sifiso Dabengwa, had to resign. He was not the only one. The head of the Nigerians operations, Michael Ikpoki, had to go too. The Head of Corporate Affairs, Akinwale Goodluck, resigned.

In resigning, Dabengwa had this to say: "Due to the most unfortunate prevailing circumstances occurring at MTN Nigeria, I, in the interest of the company and its shareholders, have tendered my resignation with immediate effect."

What followed were diplomatic efforts by the South African government and its Nigerian counterpart to give MTN a safe landing and mitigate the effect of such a humongous fine on its finances. At the end of the day, a compromise was reached and MTN had to pay $3.2 billion instead of the initial $5.2 billion.

Guinness Nigeria and Cash Dividend

It came as threats from shareholders who protested the non-payment of cash dividend by Guinness Nigeria Plc but by the time the dust settled, the brand had lost its goodwill.

Again, The Quadrant Company was brought in to manage the strategic communication to stave-off the crisis by convincing shareholders to accept the benefits of raising capital for expansion by converting the payment of an annual dividend to a scrip option: effectively meaning no cash that year to shareholders, most of whom were pensioners! To avert an impending crisis, a campaign was broken to underscore the urgent need for a savings and investment culture in Nigeria; subtle comparison with the saving/investment culture of "Asian Tigers", and the growth of their national economies and individual fortunes. This was achieved through coordinated media campaigns featuring notable corporate players in separate interviews endorsing the need for savings and investments and tying in with the Guinness Scrip dividend option.

Indomie's Alleged Product Contamination

As the only company producing noodles in Nigeria then, De-United Foods Industries, manufacturers of the popular Indomie noodles had enjoyed patronage and loyalty from consumers until pandemonium broke on the 9th of May, 2004. It was reported and rumoured that Mr. Yemi Motiriwon, a 25-year-old man died while many more victims were in the hospital after consuming meals of Indomie noodles. The negative publicity the crisis attracted cost the brand a massive erosion of its market share.

This was not however the only crisis the brand experienced. Earlier, precisely 11 years after entering the market, Nigerians woke up one day in 2001 to the news surrounding the alleged contamination of a batch of Indomie noodles and several anonymous consumer alerts via viral messaging. The news instantly attracted public outcry but a notable PR firm was quickly brought in to manage the crisis which had moved from negative media coverage of the contamination saga to a hostile altercation with government and the regulatory authorities.

The agency quickly put together a crisis management plan and drafting of holding statements. This was followed with the setting up of a media loyalty group to contain the groundswell of negative media. To assure the public of purity of its product, a media facility tour of the Indomie Noodles factory was organised to show the production process. There were also stakeholder workshops and tasting sessions to dispel rumours of contamination. After this, pitching features and editorials were promoted to balance the issues generated by the crisis.

After obtaining regulatory endorsement, Indomie was able to retain its market leadership despite initial threats of customer attrition and sales decline.

La Casera and the Panic Campaign

Does La Casera contain bleaching chemical? This was a question the handlers of the carbonated drinks were struggling to answer few years ago when a video in which the drink was being used to lose screw went viral. Before they could put their acts together, competing brands had leveraged on the scrupulous campaign to gain some patrons of La Casera.

Unfortunately for the promoters of the brand, their initial approach was counterproductive because they failed to address the contentious issue. Rather than address the unsavoury issue of the brand being dangerous for human consumption, the custodians had organised an event meant to unveil a repackaged La Casera Apple Drink as well as celebrate its dealers, distributors, consumers and stakeholders. Instead of the move to divert public attention from the issue of bleaching chemicals, it aggravated it as Nigerians saw it as overconfidence.

It was when the approach failed that the management collaborated with the company's PR agency to mobilise reporters and consumer advocates to embark on a tour of the company to see the manufacturing process of the carbonated drink.

It was during the tour that it was discovered that the campaign was meant to kill the brand as the management demonstrated how it was being produced under hygienic standards and it was proved that no bleach was included in the production process.

"Our integrity stands," assured the then Quality Assurance Manager, Mr. Odeku Emmanuel, while taking the journalists, including this reporter, on an official tour of the La Casera production facilities.

He said the company was committed to customer satisfaction, and would do nothing to jeopardise the trust it had built with the public over the years. "We give customers the best quality and that's why we have continued to grow strong all these years," he highlighted.

Perhaps as a result of the number of carbonated drinks that surfaced in the market while the crisis continued, La Casera has not won back its huge market share in the market till date.

Fearless, Predator Clash

In May, this year, the Nigeria Bottling Company (NBC), bottlers of Predator energy drink and Rite Foods Limited, manufacturers of popular Fearless energy drink, clashed over the lion insignia embossed on both brands. While analysts and consumers were still comparing the pet bottles, Rite Foods Limited had quickly fired the first shot by dragging NBC to the Federal High Court Lagos for allegedly infringing on its trademark.

The plaintiff, Rite Foods Limited, had filed a motion ex parte for an interim injunction against the defendant, NBC, restraining it from further promoting or using any sales promotion material for its "Predator" energy drink in a manner that infringes or passes off or that is capable of infringing or passing off the plaintiff's "Fearless" energy drink, until the interlocutory application for an injunction is determined.

Perhaps because of the towering image of NBC in Nigeria, the bottling company was not forthcoming in subtly denying the allegation. But Rite Foods made a second positive move through its Public Relations agency, TPT International, by assembling close to 100 journalists drawn various beats and took them to Ososa Ijebu's factory of Fearless for brand academy. It turned out to be an eye opener as the management of the company was able to further tell the story of the brand as well as taking through its manufacturing process.

The third subtle move was the emergence of Rite Foods Limited as the headline sponsor of the Nigerian Idol Season 6, a music reality show. With this development, Rite Foods was able to sway public opinion and won consumers to its side.

Copyright This Day. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

Stocks mentioned in the article
ChangeLast1st jan.
EMIRATES TELECOMMUNICATIONS GROUP COMPANY PJSC 1.00% 30.3 End-of-day quote.79.29%
VODACOM GROUP LIMITED -2.21% 133.97 End-of-day quote.7.70%
VODAFONE GROUP PLC -4.01% 109.52 Delayed Quote.-9.36%
All news about VODACOM GROUP LIMITED
11/19South Africa's MTN exits Yemen in Middle East pull-out
RE
11/15Vodacom Group Limited Reports Earnings Results for the Half Year Ended September 30, 20..
CI
11/15Vodacom 1st Half Net Profit Fell
DJ
11/15EMEA MORNING BRIEFING : Stocks Face Cautious Start Despite Some Reassuring China Data
DJ
11/15EUROPEAN MIDDAY BRIEFING - Stocks Rise, Inflation -2-
DJ
11/15S. Africa's Vodacom targets financial services growth as earnings drop
RE
11/12Ethiopia expects second telecoms operator to start in Q1 next year
RE
11/12Ethiopia expects second telecoms operator to start in Q1 next year
RE
11/10GLOBAL MARKETS LIVE : Rotschild, Adidas, Allianz, Apple, AstraZeneca...
11/10South African regulator to license 'provisional' spectrum ahead of auction
RE
More news
Financials
Sales 2022 102 B 6 257 M 6 257 M
Net income 2022 17 546 M 1 076 M 1 076 M
Net Debt 2022 33 576 M 2 060 M 2 060 M
P/E ratio 2022 13,5x
Yield 2022 6,25%
Capitalization 227 B 13 967 M 13 925 M
EV / Sales 2022 2,55x
EV / Sales 2023 2,39x
Nbr of Employees 7 642
Free-Float 33,2%
Chart VODACOM GROUP LIMITED
Duration : Period :
Vodacom Group Limited Technical Analysis Chart | VOD | ZAE000132577 | MarketScreener
Technical analysis trends VODACOM GROUP LIMITED
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 11
Last Close Price 133,97 ZAR
Average target price 149,09 ZAR
Spread / Average Target 11,3%
EPS Revisions
Managers and Directors
Mohamed Shameel Aziz-Joosub Chief Executive Officer & Executive Director
Raisibe Kgomaraga Morathi Chief Financial Officer & Executive Director
Sakumzi Justice Macozoma Chairman
Dejan Kastelic Chief Technology Officer
David Hugh Brown Lead Independent Non-Executive Director
Sector and Competitors
1st jan.Capi. (M$)
VODACOM GROUP LIMITED7.70%13 967
AT&T INC.-15.79%174 740
T-MOBILE US-15.81%142 992
SOFTBANK GROUP CORP.-21.37%99 289
KDDI CORPORATION11.55%68 001
AMÉRICA MÓVIL, S.A.B. DE C.V.28.43%57 397