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Sponsoring the African Cup of Nations
Why Sponsor or Launch a Product During a Sporting Event?
Many brands are launched during a major sporting event, especially if the brand wants to get new penetration into a growing market. This morning I was watching the African Cup of Nations (CAF) football championship and saw banners for Doritos and Samsung and wondered what these brands were doing in this market that made it worthwhile for them to promote their brands and offerings.
Africa is a growing market for multinationals to target with aspirational products. While most of the population lives in poverty there is a growing middle class that has disposable income and want to enjoy the lifestyle that they see on television.
Soccer (or football as it is known across the world) is the ideal medium to promote aspirational products. In Africa the heroes are the football stars who leave their poor nations and make it big in Europe playing for top clubs, earning top money. Everyone wants to be successful like these players.
Football is also like a religion, people want to watch football and if you can get your product in front of people they will aspire to buying it.
Specifically I'm going to look at the PepsiCo brand of Doritos and the Samsung Duracool product to understand why these are being promoted at the CAF right now.
According to PepsiCo the African region has potential for large growth for the brand and the products sold by the group. At the African Cup the PespiCo group are promoting Pepsi and Doritos. Doritos is a main sponsor with two banners at the side lines with a Pepsi can inflatable at the corner posts.
During the past year PepsiCo has generated 8% of operating income from the Asia, Middle East and African region with 13% of the net profits being generated. This suggests that the cost to produce and distribute the products is cheaper than in more developed nations. While it is expected that the price point of the product is at a lower price point the margins are much higher.
With developed nations become more concerned with nutrition and obesity, regions such as Africa become more attractive to multinational food businesses as the nutrition of the population is generally less saturated in fatty foods than in the developed nations. The population is also generally more aspirational and enjoying these western foods is more attractive.
Within the region the top PepsiCo brands are:
Part of the sponsorship deal could be to increase market penetration of Doritos because the production and distribution cost could be lower than the other brands.
To support this activity PepsiCo have signed a sponsorship arrangement from 2009-2016 that included the 2010, 2012, 2014 & 2016 CAF tournaments. However, PepsiCo do not sponsor FIFA, but they did get a 'rub' during the World Cup in 2010 due to their association with CAF. Further, this strategy suggests that PepsiCo are more interested in gaining market share and penetration within this region as the margins are more stronger than in developed nations that comprise most of the FIFA market eg Europe.
Droba Duracool Ad
Duracool promo video
One of the sponsors of the tournament is Samsung and their Duracool product. The Duracool refrigerator seems to be a product made for the developing world.
Duracool is a standard top mount fridge that is no longer popular in developed nations. A top mount fridge is a freezer at the top of the fridge and a fridge at the bottom, similar to those sold in developed nations from the 1950s to 2000s. Today in the developed world we want upside down fridges with the freezer at the bottom and fridge at the top as 'hot air rises', so it is much more energy efficient to have one of these & it can cut your electricity bill considerably.
In Africa, just having a fridge at an affordable price is a luxury for many people. The key with the Duracool product is that if the power goes out then there is a built in cooling cube that will keep the freezer cool until the power comes back on. In developing nations a constant supply of electricity is an issue and it can spoil your food.
So in essence Samsung have taken an old idea - a top mount fridge and added a cool pack! Priced at the right level, aspirational Africans will see the benefits and, hopefully for Samsung, will buy it.
To promote the product Samsung are using the Cup of Nations combined with an ad campaign starring Chelsea star Didier Drogba.
African Cup of Nations
In these two examples we see two very different reasons to sponsor the Cup of Nations:
- PepsiCo to increase market penetration and to increase sales of the low cost, premium Doritos brand
- Samsung to promote the benefits of the Duracool product to increase sales
But they are both targeting the aspirational African middle class who can afford these products. The additional advantage is that the telecast is going around the world. In Australia we can watch it on the EuroSports channel and in the UK on SkyTV.
For the record the game I watch this morning saw joints hosts and underdogs Equatorial Guinea beat the tornament 3rd favourite Senegal (both with Newcastle United stars Ba & Cisse) 2-1. This was on a very water logged pitch in trying conditions. Equatorial Guinea won the match in injury time to go to the top of the Division and to qualify for the quarter finals.