Why The Kumbafu Hawkers Are Our Best Hope For A Super New Economy
The recent announcement by Safaricom of record unprecedented profits, never before achieved in East and Central Africa has hardly been taken with the impact it deserves.
The leading mobile phone company in the region reported a staggering profit of a whooping Kshs 12.2 billion before taxes. Those earnings for their financial year ending March 2006 were equal to about 63% of the entire profits of the banking industry. In other words the profits made by the big four, Barclays, Standard Chartered, KCB and Citibank put together. Profits rose by a huge 44.6 per cent from 8.4 billion the previous financial year.
This unprecedented achievement by Safaricom proves one thing beyond any doubt. And that is the fact the economy is crying out for a change in direction and a change in policy. For starters the main diving force behind the extra-ordinary Safaricom profits was… you guessed it, the Kumbafu hawkers and small road-side kiosks and small tiny traders. Those are the people who sold the bamba 50 shs airtime scratch card like crazy. The sell phone company openly admits, that it was the bamba 50, more than any other single factor that caused the exceptional financial performance.
This is clear evidence that the country has a large force of persons who do not need to be persuaded to be a working nation. They just need the opportunities.
But Safaricom is not the only company that has been smart enough to see the potential in the mass market. You will have heard of a small bank called Equity Bank (opps it is no longer small, thanks to the Kumbafu riff raff).
When all mainstream banks were behaving the way the government is behaving now and basically saying that they had no time for the kumbafu riff raff. Equity concentrated on serving this ignored sector of the market. The big banks laughed at their stupidity and concentrated on putting all their money in government paper (treasury bills). You know the story, today those same guys who were laughing then are desperately trying to play catch up with Equity.
Safaricom or Equity would have chosen to sing the song I am sick of hearing Kenyans sing and said that growth in profits takes time. And they would have been nowhere today. What we need are government policies that are designed to bring in ordinary Kenyans into the action.
Sadly many readers of this blog do not see any problem in having a growing economy side by side with growing unemployment. I understand these kind of people very well. Empathy is not one of their strengths. They have either been brought up in a life of privilege and comfort and have probably never used a pit latrine in their lifetime. So they would hardly understand that almost half of the Kenyans living in Nairobi do not even have the luxury of a pit latrine. They use paper bags and then dump them where the rest of the garbage is. This blogger uses pit latrines regularly to keep his feet firmly on the ground.
How would such people appreciate the fact that no economic policy that does not have the creation of jobs right at the top of the list will work in today's Kenya? How will they see the grave danger in security and peace when we continue to give only lip service but basically ignore the massive unemployment situation in the country? How will they realize that economic policies that were used in the 60s and 70s when Kenya was a young growing nation will not fly today, at least not for long? How will they realize that the vast majority of Kenyans are crying out for real change and are so desperate that if change does not come soon, something will have to give?
What is urgently required is for us to restore opportunity to the rapidly disappearing middle class and low-income earners in Kenya.
I appreciate the fact that my posts are getting read by people who sound like they are seasoned economists who understand the issues very well. But many of them seem to believe that it is unrealistic and downright untenable for low-income earners to be brought into full participation in the economy so quickly. To them anybody who says they can make an attempt to bridge the widening gap between the rich and poor in Kenya is nothing short of a hopeless dreamer.
Here is what the next government should do as a matter of urgency;
i) Put employment creation at the top of the list of priorities of government policy.
ii) Apportion a certain percentage of all government procurement to small businesses and micro-enterprises. If it was upto me, I would say at least 50% for starters.
iii) Guarantee a hefty amount in small business bank loans with leading banks so that small traders and entrepreneurs can access bank loans to establish and expand small business.
iv) Create small business "incubators" countrywide and identify talented hawkers and small traders who can be assisted to quickly expand their businesses into the next level, thus creating employment.
v) Support the establishment of websites to promote and sell juakali products worldwide.
These are just a few of the many things which can be done, including passing the necessary legislation, which can help boost small business.
It is not a bad idea to encourage many small traders to come together to form things like co-operatives of sorts and lobby groups to fight for better opportunities (as has been suggested), but this will not have a serious impact if these small traders are not coming together from a position of strength.
P.S. We can learn yet another important lesson in the Kencell/Safaricom saga. Early on Kencell (which has now been bought off by Celtel as a result of business policies that did not work out too well) made a deliberate decision to go upmarket where all the money was (exactly the thinking of the current government). Safaricom decided the money was with the Kumbafu riff raff. The results speak for themselves.
P.S. 2: Bill Clinton made the same bet in 1993, the crux of his economic policy was to reduce the government deficit while restoring opportunity for the middle class. The result was unprecedented continuous growth of the America economy for 10 straight years.
To do what must be done, we need a change of government. ODM Kenya can't do it either (it's the same guys). I don't know who can do it yet. But what I know is that the time for change is now, and that person (or group of people) will come forward before election day. Anybody out there whom this blog can support to carry forward this economic policy that is the only chance for Kenya?
I rest my case on the issue of the Kenyan economy.
=======
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Tuesday, October 31, 2006
Monday, October 30, 2006
Why Clever Positioning Means That Kibaki Has Already Won Re-election… Barring Extraordinary Circumstances
Clever Positioning Of Their Man By The Kibaki Think Tank Led By An International PR Company Means That Barring Extraordinary Circumstances Kibaki Has Already Won Re-election
…But It's Going To Be A Very Violent One
Here's Why…
To Understand What Has Been Done, You Must Understand What "Positioning" Is.
Two gentlemen by the name of Al Ries and Jack Trout wrote what in my view is the most important marketing book ever written in the 60s called Positioning. This book changed marketing forever and every Kenyan needs to understand the basic principle behind positioning as presented in this book before it is too late. This is because the Kibaki campaign machine is about to steal an election based on this simple principle of marketing and human behaviour.
I want to remind you of something… Remember all the noise we all made when it was reported that the government was hiring the most expensive public relations outfit in the world to improve its' image? Remember how we all said that it wouldn't work, and that they didn't know enough about Kenyan politics. And then remember how we all just dismissed them and forgot about them?
Well, these guys have been working overtime and they've just pulled off something that is going to guarantee a Kibaki win in 2007, unless we all wake up to what is happening before it is too late.
Bear with me for a minute while I explain what positioning is.
The book by Mr Ries (pronounced Rees) and Mr Trout broke new ground because it changed the way we look at marketing. Until then people always knew that marketing wars were fought out there in the field in the marketplace. Trout and Ries told us that they are fought in the minds of people and suddenly it dawned on everybody how true that was.
Mention the product "soft drink" and the first name that comes to mind is Coca-cola, mention "toothpaste" and the first name that comes to mind is Colgate. Those two are positioned at the top of the minds of consumers. So to sell a competing soft drink or a toothpaste successfully, you must first be able to "position" your new product properly and not in the field or marketplace but in the minds of consumers.
So this guys comes up with Uncola or a non-Cola and positioned their soft drink directly opposite Coca-Cola and their marketing has proved to be very successful. But probably the most successful positioning was that of Avis rent-a-car in the US. Everybody knew that Hertz was the number one rent a car outfit so to positioning themselves as number one was not believable. (This is one of the most important aspects of positioning. And that is, it must be believable to occupy a position in the mind). So Avis deliberately positioned themselves as No 2 and they said in their adverts that they were number two, but there was a kicker to that statement. What does a number two company do that a number one company doesn't do? They try harder of course. So that implies that customers will always get a better service and a better deal from a company that is trying harder because it is number two than from a usually arrogant market leader who is already number one. That clever position caused an unprecedented rise in sales.
So positioning is very important to marketing and it is even more important in politics. George W. Bush did not win in 2004 because he was popular. He won because his clever handlers positioned John Kerry as the candidate Osama Bin Laden preferred to win the presidency because he was not as tough as Bush was. That was enough. When Osama himself released a tape on cue shortly before election day, I knew Bush had won. Images of 9/11 were still too fresh on the minds of Americans and nobody wanted Osama taking over America, which is exactly what was being implied in the George W. Bush TV ads.
So what is Kibaki's expensive PR consultancy and his handlers doing?
They have simply positioned Raila as the only chief opponent of the Kibaki government, with his ODM Kenya party. Have you noticed that the minute you criticize Narc Kenya or president Kibaki, you are labeled a Raila sympathizer. This positioning has been done so well that even if Kalonzo Musyoka were to win the ODM nomination, it would be impossible for him to shake off the Raila label. If he loses and defects, he really won't matter because the race "in the minds" of voters is between Kibaki and Raila, yes and also between Kikuyu and Luo. The Kikuyu with their sympathizers and the Luos with their sympathizers. All those politicians who crowded into ODM are finished as far as the Presidential race is concerned. Yes, even Uhuru Kenyatta has lost a golden chance to position himself as an alternative candidate under a unified Kanu. So now, whoever wins the ODM nomination, it really doesn't matter because the presidency will be a fight between Raila and Kibaki in people's minds.
The effect has been dramatic. Most Kenyans no longer look at issues. The whole thing has already degenerated into a tribal thing. It is now simply what that Jaluo is saying or what lies that Okuyo is telling this time. If you doubt it, just try and take a middle position in any debate, or even those online discussion forums. You will find that it is impossible.
Notice how this is in sharp contrast to the original Narc (National Rainbow Coalition) in 2002 whose strategy and famous summit was under the full control of Raila, but nobody saw those elections as Moi versus Raila. We all saw it as Moi versus a united opposition. Or Moi versus the rest of Kenya.
I keep on warning about this, and I will never get tired of doing it, because I see real danger here. Kibaki was warned about the referendum in November last year, he ignored the warnings. To date, almost a year later, the wounds of that November Referendum are yet to heal. Let the President take the warnings seriously this time round, because the result could be catastrophic and the bucks stops on his desk.
Kenyans should pray very hard that we do not go into the general elections in this kind of set up. Tensions will be way too high and there can only be one result, chaos. We are not yet ready for a Luo versus Kikuyu presidential race, which is exactly what the 2007 polls are shaping up to be.
Quick Question
Why would anybody want John Michuki dead? And if they were serious why wait until he has left the house to fire shots inside? Why not stake him out or ambush him? Why Is Michuki himself so sure that it was an attempt on his life, before any investigations have even been done? Citizen TV says that the slain chief met with people who at first identified themselves as policemen but shot the chief dead when he asked for further identification to prove that they were policmen. Oh... and the chief bumped into them totally by accident. Then at around the same time things steal Kalonzo Musyoka's secret game plan for election 2007. Oh please... what game plan is there in ODM Kenya that is different from everything that we have seen in the past and is valuable enough to be stolen?
It is the rapidly approaching general elections, stupid.
Tomorrow: The Exciting Alternative To Kibakinomics And What We Can Learn About It From Safaricom and Bill Clinton. Don't Miss It
=======
Join in the heated debate over this thorny Luo-Kikuyu relationship issue
(Please scroll down to the bottom of the page (and click on the "Post A Comment" button) to post your comment.)
========================
Get more help with you invention ideas by reading this invention ebook by a man who has sold millions of units of his own inventions.
Use A Software Package To Earn Millions From Adsense And Blogger
…But It's Going To Be A Very Violent One
Here's Why…
To Understand What Has Been Done, You Must Understand What "Positioning" Is.
Two gentlemen by the name of Al Ries and Jack Trout wrote what in my view is the most important marketing book ever written in the 60s called Positioning. This book changed marketing forever and every Kenyan needs to understand the basic principle behind positioning as presented in this book before it is too late. This is because the Kibaki campaign machine is about to steal an election based on this simple principle of marketing and human behaviour.
I want to remind you of something… Remember all the noise we all made when it was reported that the government was hiring the most expensive public relations outfit in the world to improve its' image? Remember how we all said that it wouldn't work, and that they didn't know enough about Kenyan politics. And then remember how we all just dismissed them and forgot about them?
Well, these guys have been working overtime and they've just pulled off something that is going to guarantee a Kibaki win in 2007, unless we all wake up to what is happening before it is too late.
Bear with me for a minute while I explain what positioning is.
The book by Mr Ries (pronounced Rees) and Mr Trout broke new ground because it changed the way we look at marketing. Until then people always knew that marketing wars were fought out there in the field in the marketplace. Trout and Ries told us that they are fought in the minds of people and suddenly it dawned on everybody how true that was.
Mention the product "soft drink" and the first name that comes to mind is Coca-cola, mention "toothpaste" and the first name that comes to mind is Colgate. Those two are positioned at the top of the minds of consumers. So to sell a competing soft drink or a toothpaste successfully, you must first be able to "position" your new product properly and not in the field or marketplace but in the minds of consumers.
So this guys comes up with Uncola or a non-Cola and positioned their soft drink directly opposite Coca-Cola and their marketing has proved to be very successful. But probably the most successful positioning was that of Avis rent-a-car in the US. Everybody knew that Hertz was the number one rent a car outfit so to positioning themselves as number one was not believable. (This is one of the most important aspects of positioning. And that is, it must be believable to occupy a position in the mind). So Avis deliberately positioned themselves as No 2 and they said in their adverts that they were number two, but there was a kicker to that statement. What does a number two company do that a number one company doesn't do? They try harder of course. So that implies that customers will always get a better service and a better deal from a company that is trying harder because it is number two than from a usually arrogant market leader who is already number one. That clever position caused an unprecedented rise in sales.
So positioning is very important to marketing and it is even more important in politics. George W. Bush did not win in 2004 because he was popular. He won because his clever handlers positioned John Kerry as the candidate Osama Bin Laden preferred to win the presidency because he was not as tough as Bush was. That was enough. When Osama himself released a tape on cue shortly before election day, I knew Bush had won. Images of 9/11 were still too fresh on the minds of Americans and nobody wanted Osama taking over America, which is exactly what was being implied in the George W. Bush TV ads.
So what is Kibaki's expensive PR consultancy and his handlers doing?
They have simply positioned Raila as the only chief opponent of the Kibaki government, with his ODM Kenya party. Have you noticed that the minute you criticize Narc Kenya or president Kibaki, you are labeled a Raila sympathizer. This positioning has been done so well that even if Kalonzo Musyoka were to win the ODM nomination, it would be impossible for him to shake off the Raila label. If he loses and defects, he really won't matter because the race "in the minds" of voters is between Kibaki and Raila, yes and also between Kikuyu and Luo. The Kikuyu with their sympathizers and the Luos with their sympathizers. All those politicians who crowded into ODM are finished as far as the Presidential race is concerned. Yes, even Uhuru Kenyatta has lost a golden chance to position himself as an alternative candidate under a unified Kanu. So now, whoever wins the ODM nomination, it really doesn't matter because the presidency will be a fight between Raila and Kibaki in people's minds.
The effect has been dramatic. Most Kenyans no longer look at issues. The whole thing has already degenerated into a tribal thing. It is now simply what that Jaluo is saying or what lies that Okuyo is telling this time. If you doubt it, just try and take a middle position in any debate, or even those online discussion forums. You will find that it is impossible.
Notice how this is in sharp contrast to the original Narc (National Rainbow Coalition) in 2002 whose strategy and famous summit was under the full control of Raila, but nobody saw those elections as Moi versus Raila. We all saw it as Moi versus a united opposition. Or Moi versus the rest of Kenya.
I keep on warning about this, and I will never get tired of doing it, because I see real danger here. Kibaki was warned about the referendum in November last year, he ignored the warnings. To date, almost a year later, the wounds of that November Referendum are yet to heal. Let the President take the warnings seriously this time round, because the result could be catastrophic and the bucks stops on his desk.
Kenyans should pray very hard that we do not go into the general elections in this kind of set up. Tensions will be way too high and there can only be one result, chaos. We are not yet ready for a Luo versus Kikuyu presidential race, which is exactly what the 2007 polls are shaping up to be.
Quick Question
Why would anybody want John Michuki dead? And if they were serious why wait until he has left the house to fire shots inside? Why not stake him out or ambush him? Why Is Michuki himself so sure that it was an attempt on his life, before any investigations have even been done? Citizen TV says that the slain chief met with people who at first identified themselves as policemen but shot the chief dead when he asked for further identification to prove that they were policmen. Oh... and the chief bumped into them totally by accident. Then at around the same time things steal Kalonzo Musyoka's secret game plan for election 2007. Oh please... what game plan is there in ODM Kenya that is different from everything that we have seen in the past and is valuable enough to be stolen?
It is the rapidly approaching general elections, stupid.
Tomorrow: The Exciting Alternative To Kibakinomics And What We Can Learn About It From Safaricom and Bill Clinton. Don't Miss It
=======
Join in the heated debate over this thorny Luo-Kikuyu relationship issue
(Please scroll down to the bottom of the page (and click on the "Post A Comment" button) to post your comment.)
========================
Get more help with you invention ideas by reading this invention ebook by a man who has sold millions of units of his own inventions.
Use A Software Package To Earn Millions From Adsense And Blogger
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