Thread by @FinPlanKaluAja1

Let me share a story on strategic marketing I was taught in Business School.

We start with a question....

Which brand has a higher nutritional value?

From the lecture, I understood both Peak Liquid Milk & Cowbell Milk have same nutritional value (I still don’t believe it but...)

I understood later that one brand has vegetable fat..😐....but essentially, they are both milk....calcium etc

WAMCO dominated the Nigerian milk market via a premium brand called Peak Milk. Peak was perceived as high quality by consumers.

Marketing Ps for Peak Milk:

1. Product: Premium brand, but sold as liquid milk.
2. Price: Healthy profit margins, but expensive.
3. Place: Extensive market coverage, sold in all major supermarkets.
4. Promotion: not a lot, Peak brand was king

(how do you beat them?)

“What did Cowbell do?:

They conducted market research to find out why Nigerians actually drink milk. What do you think was the number one reason for drinking milk?

hint in a tough recession like economy in the 1980s/1990s?”

The research showed that during the 1980/90 recession, milk had become an "essential commodity" (ask your parents what this means).

Nigerians could no longer afford to drink milk as it was too expensive.

Drinking Milk was an earlier "I better pass my neighbors"

With this reserch, Promasidor introduced Cowbell

1. Product: not premium, sold in powdered form in sachets

2. Lower margins, but sell more quantity

3. Place, "ignore" supermarkets, create new distribution channel

4. Promotion. use a new cheaper way to carpet bomb d market

Let's see how Cowbell went to war so we learn.

Using the research, Cowbell Milk gave the Nigerian market a way to drink milk again, to say “I at least can make my tea white with milk” Cowbell first foothold was emotional”

Very important, connect EMOTIONALLY with your market.

“There was a very funny true story to back this up. Cowbell was selling fast in Kano to “Mai Shai” (traditional tea sellers)

“Peak Milk” went and told Mai Shai, that “Cowbell” was not nutritious. Maishai responded “even if it’s chicken milk, it’s better than no milk”.🤣🤣

Product: Cowbell identified a key weakness in Peak Milk and exploited.

Peak Milk was only sold in liquid form, thus once opened must be consumed, put in fridge or it does bad. In a nation with poor power supply Cowbell introduced powered milk, opened & used without a fridge.

Cowbell has arguably a "better" product and understood the psychology of the buyer
but that is not enough. How do you distribute this new wonderful product? you are a start up, no cash, no logistics, no brand name recognition. The solutions were a masterpiece.”

Cowbell built an alternative marketing & distribution network. With no sales in supermarket, no credit.

Cowbell partnered with a religious organization that normally went door to door to take their products to small "aboki" stalls. Aboki's paid cash. bought sachets and retailed

These small stalls were everywhere.

A student could wake, walk to a stall and buy a "roll" of milk and consume.

Cowbell by capturing the market, forced the bigger stores to carry her brand....normally its the other way

Cowbell used bold aggressive guerilla marketing, no expensive TV or Radio.

Promasidor started painting houses near markets in company brands

These Kiosk to Kiosk sales and low cost marketing allowed Promasidor push inventory at a fraction of costs of competition.

What else? Pricing.

Cowbell was N5 period.

Even if Peak Milk could sell at below cost, they could not destroy their premium brand and sell it for N5. At the small shops, you bought a sachet of milk for N5 only when you needed to.

All these moves are great but they would have been in vain if Peak milk had responded.

WAMCO were aghast that consumers were even comparing their brand to a "sachet" brand… They refused to even consider Cowbell as competition reasoning Cowbell was “D” brand.

Big mistake.

Cowbell simply built up their brand recognition and extended the brand. They slowly become acceptable to the middle class…they introduced coffee and to kill the Peak advantage of “quality” began to communicate that Cowbell also has nutritional value. They gained market share.”

Eventually Cowbell became a recognized brand in Nigeria, but most importantly, they had gained market share from Peak milk, they had beaten "Goliath"

Very important point, Gain market share from the market leader.

WAMCO was forced to respond. They “sacheterized” Peak. (Imitation they say is the best compliment).

In effect, they were responding to Cowbell brand not dictating the pace

However a sachet Peak did not solve the Cowbell N5 problem i.e. Cowbell Milk was affordable.

So in another nod to Cowbell Milk WAMCO introduced Three Crowns Milk (in sachet of course) to compete price to price with Cowbell.

The damage had been done, Cowbell Milk was in.

We have seen an upstart product gain significant market share from a premium brand..

A bigger question is why WAMCO failed to see the threat? Arrogance? Hubris? Managerial RIP Van Winkle?

Same question: How did First Bank, (a bank older than Nigeria) allow “upstart” banks like Zenith and Access Bank get even close to them?

Why do companies believe the most of money, brand name and experience can protect them from a determined competitor?

If you read this trend and you are at the top….keep rising because the competition is small today also rising. kill them early.

If your at the bottom, looking at Goliath, keep throwing stones, the big boys could be asleep.

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