Responding to Market Dynamics – A Frontline case study

In Tanzania, liquor sachets – 50ml and 100ml packs, had contributed a significant share to the overall liquor category, and were a key driver of spirit sales.

It was pretty simple: The sachets were low priced, and had very decent alcohol levels – good bang for the buck from the consumer point of view. The result was that sales grew quickly, and at one point these sachets were being sold on the street, by local hawkers.  This lead to uncontrolled sales and purchases. Sales to minors increased, and this quickly became a nationwide problem. At that point, the government stepped in and put a total ban on all sachet sales within its borders.

This clampdown caused a major shift in market dynamics. In fact, the total size of the alcohol market declined rapidly.

Our client, a leading player in the spirits and beer sector, asked us to consider the effect of the clampdown and investigate how they should proceed.

Through advanced data analytics, we were able to identify that, while some consumers up-streamed to a higher value spirit, a large portion of spirit sachet consumers had shifted to the more affordable “value beer” segment. However, our clients’ value beer offering did not seem to be benefiting from the increased sales in this category.

We headed into the market, and began visiting outlets where we had seen shifts in sales patterns.

It soon became clear that outlets were pushing up the price on our client’s value beers – hindering consumer shift to their brands. We were able to use our mapping systems to plot these outlets, and their demographics, and extrapolate this data to other areas, containing outlets at risk.

At the same time, we conducted a price analysis and identified price points where optimal sales were being achieved. Armed with this information, we had a win-win situation where both our client and the traders could benefit from better sales at the right price.

The client launched a trader and consumer information drive and, coupled with incentive offerings for traders, soon began to see an upswing in sales. At present, sales continue to grow, and what’s nice about that is everyone seems to have gained. For our client, a better share of the market, for the shopkeeper, better turnover, and for the consumer, a product offered at a fair price.

Frontline Research – Yes, we know Africa!

Find out about Frontline’s retail tracking services, strategic consultancy offerings, & mapping services, or follow us on LinkedIn and Facebook.

By Leander Gouws & Kevin Abraham