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Willie Loman, welcome to the Sahara.
The life of a salesman in Africa is far from easy. Poor telecommunications infrastructure, uncertain roads, and faulty mail systems mean that many current sales techniques simply aren't applicable in many countries on the continent. According to several experts in the conference panel on "Marketing, Distribution and Sales: Getting Your Products to the Customer," old-fashioned sales techniques often work best when selling in Africa.
"If you want to sell in Africa, you can basically put all your products in a trunk, and you can travel around Africa and I guarantee you you'll sell," said Kennon A. Brennen, president and CEO of Phyto-Riker Pharmaceuticals. His company supplies high-quality generic drugs to 18 African countries from Nigeria to Senegal down to Cameroon and the Congo.
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| A lot of sales techniques that were avant-garde in the U.S. 15 or 20 years ago work very well [in Africa today]. | |
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| —Peter Baird, of McKinsey & Co. |
"You can build a business in Africa—it's rough and it's tough. But that's how business was built in the United States in the 20s and 30s," he pointed out.
Panel moderator Peter Baird, an associate principal in McKinsey & Co.'s corporate finance and strategy practice in New York, has considerable experience working with African companies. Baird has also witnessed firsthand the difficulties of introducing new services to Africa. "Marketing, sales, and distribution has, in my experience, been the biggest difficulty for most of the African businesses I've worked with," Baird said.
Papering Africa
Brennen told the audience that he once gathered every African phone book he could find and had his office in New York compile a database of the fax numbers of as many African pharmacies as possible. His company then faxed its price lists to pharmacies in advance of its sales force visiting the stores.
"I papered Africa. You can do it," said Brennen.
"A lot of sales techniques that were avant-garde in the U.S. 15 or 20 years ago work very well [in Africa today]," Baird added.
But some products and services are challenging to sell regardless of the marketing. Baird spoke of a private health care company in South Africa he considered to be very well run. The company did a great deal of advertising –#150; on the backs of taxis, through direct mail, through newspaper and radio ads – and yet it was having difficulty attracting customers.
"We found it was very difficult to raise brand awareness to the level where people would get sick and think of Prime Care," Baird said. But the company didn't worry too much over the lack of consumer interest, since employers were its main target. It hoped to sell companies health services for their employees to engender a healthier workforce. That didn't work so well, either.
"We found that by and large, a lot of South African companies didn't think this was valuable," said Baird. "They didn't think their employees' health was important to the fiscal health of their companies." Convincing employers otherwise remains a challenge for that company, he noted.
Another example Baird mentioned was a company that had been successful in selling funeral insurance to middle-class South Africans. The company did so well that many of its salespeople were driving Mercedes thanks to the commission checks they'd received.
Baird had hoped the company's model could be applied to other financial services companies. However, he said, "We found that it didn't scale, and we couldn't take this sales force, which was working well, and figure out what the salient lessons were and apply them in other areas. And it led to the bigger question of how do you create an effective, consumer-oriented sales force in Africa?"
Targeting an entire continent
Brennen and Isaac Hasson, founder and CEO of the Pan African Communications Network, or PACONET, provided two different perspectives on the subject of expanding sales in Africa. Hasson's company, begun in 1999, has acquired telecom licenses in eight countries in Africa and has $14 million in funding from the AIG-Africa Infrastructure Fund. One problem Hasson thinks companies and investors run into is a perception of Africa as a monolithic area in which conditions are pretty much all the same.
"We have to get away from the perception that Africa is one country… You're dealing with different people, different cultures. We forget that there are well over 1,000 languages spoken in Africa," he said.
Brennen, on the other hand, said he felt he could not be too country-specific when establishing his company. "Africa isn't one country, but there's sometimes a very small amount of business in each country by American standards," he said. "If you're interested in building a large company, $250 million to $1 billion, one has to operate in multiple countries. It's the only way to do it."
The absence of a single large market meant his company needed to target a number of countries with a relatively uniform strategy. Brennen also felt his company couldn't market every product it was selling, so it created a strong brand and logo that was recognizable in many countries, and worked to make the brand synonymous with quality medicine.
"If you develop the business in one country specifically, then you will be successful in the country, and when it's time to expand, then you will have the problems of intercontinental expansion. If you develop an intercontinental plan from the beginning, then you will solve those problems from the beginning," he observed.
Brennen said he keeps tight control over the distribution of his medicines as well. He knows the possible shipping routes and how long it takes to move products from one country to another.
Credit pitfalls
Another problem for companies trying to increase their sales is the lack of credit. Brennen is considering extending some credit to his best long-time distributors, but it's a practice he has avoided up until now. He has skirted the issue by allowing pharmacies to buy small quantities of his products rather than purchasing large quantities on credit.
"By having small amounts, we empower these people" to build their businesses, he said. Pharmacies themselves must often give credit to their customers. And Brennen acknowledged that it is nearly impossible for some industries to operate without providing credit to their customers.
"Obviously, credit infrastructure drives business to an extent, and depending on what your product is, sometimes credit is all you have," Brennen said. "[But] since people need medicine, they'll find the money."
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