When segmenting the African Market, one must be well versed with the fact that the continent is categorized into rural and urban markets. The exercise to segment the market should therefore begin with a definition of location for the different segments followed by a tally of the population with purchase power in the various regions. This will allow good insight into the highest concentrated regions as well as how much spending capability each region has. Once this is done a look at the customer should then begin.
The major characteristic in the segments found within the African Market is that a majority of the population fall within the mass market and fewer are found within the high-end segment.
The difference in the mass market and the high-end market is indeed the price range. High-end market products are high value while products for the mass market should take into consideration the fact that the customer within this segment are going to have share of pocket considerations. Share of pocket arises due to the fact that this segment of customers still has psychological and safety needs at the forefront of their decision making.
Let us distinguish between the two:
Mass Market:
- Share of pocket is quite high with psychological needs taking priority
- Share of voice is on a high with most brands targeting this segment with communication
- Urban and rurally placed hence brand availability into all regions of a market should be considered
- Most populous segment in Africa
High-end market
- Have purchasing power
- Consider luxury brands as a show of capability
- High urban population with some rural placement
- They are fewer to find and target within Africa
The decision to serve the most populous segment of the African continent will need to take into consideration the product being positioned for them, the price of the product in light of their purchasing power, the accessibility of the product to those in this segment and how the product will be promoted.
To target the mass market effectively a product that is practical to their way of life is necessary. This product needs to be within SKUs that are strong in utility for this segment. The pricing of the product also needs to be within favorable reach for the segment. Finally, the closer the product is to these customers in accessibility then the more favorable the product to them and indeed how the product is promoted is also key in ensuring they can identify with this product and include it in their purchase decisions.
When the decision to position a product into the African Market is made, one will find that reaching a wider clientele will suit their revenue generation providing them favorable performance on the products within their market of choice.
Nyangi Consultants LLP 