Case Study: Huge Marketing budget doesn’t mean Sales!!!

Generally, most Middle Eastern FMCG and Retail brands spend enormous amount of money on communications each year to sustain survival or grow by a small fraction. Most of these Brands hardly double their digits over the years; some claim that they’ve doubled their sales, HOW? You need to grow in channels to double your sales but it’s merely impossible to double your sales from the previous two years without Channel Reach. We witness price increase every few years and that should not be the comparing yardstick with previous years. Only by Innovating values to address different segments of the Market, over extending SKUs, can add to growth

Now most marketers base their decision on Market Research, hardly any that I’ve met or known is thinking outside the box to move away from the long repetitive patterns that we all witnessed throughout the past generations. For example, what Nescafe started as a trend is followed by many local Brands, what Pampers started as a trend is followed by many to this day

The look and feel of Brands are relatively the same across the board and since most professional marketers in the region are graduates of the two multinational schools i.e. P&G and Unilever, they intend to follow the same pattern of their respective experience at local level, even the practice remains the same. Now, we understand at the local level that the scope is different as it requires all sort of development unlike the previous experience on both Brand and Marketing strategy as well as Tactics

Most of the local Brands hardly own any Brand strategy; they carry two types of strategies:  ‘Design’ and ‘Communication’ (both are extremely evident on their Brands). Now, most require a massive Communication budget in order to maintain the current level of sales or increase by few percentages each year, why? In most cases if you don’t own a relevant Brand or Marketing Strategy, you’ll depend on Advertising to push your message forward, for example: Management and Advertising agencies are aware of Rabea’s new Positioning and Promise but is the public aware? Did Rabea educate the public on their recent evolution? Not from what I saw but apparently this seems to be the current logic which is commodities over Brands

If we look deeper, into the local FMCG Brands, their 2 major problems are their ‘Brand Strategy’ and ‘Marketing Mix’ that’s resulting in a small fraction in growth which is between 5-10% because most are missing the point that Brands are about Values and not Market Research Data that dictates what they should do next. For instance, if we take Cofique and Rabea as local brands from FMCG sector, hardly their audience can understand their Market Positioning, Brand Promise or even the single idea they’re trying to sell, they are relatively offering the same values of their Direct Competitors who are also the category owners, Nescafe and Lipton respectively

If you take Al Nahdi as a Retail Brand, hardly their audience is connected with their Repositioning, though their goal is to move from Pharmacy to Lifestyle (to grab Market share from Faces, Paris Gallery etc.), that’s a Category Shift in which the Brand must resonate before the Marketing Mix. Today after 3 years, customers still think of Al Nahdi as a Pharmacy same as before (with only a face lift and addition of more product categories). The incredible amount  Al Nahdi spent on communication at the launch with the message ‘Hope’ addressed a particular value, NOT all of values that Al Nahdi  had planned to offer. It had a message but lacked the Brand strategy that could’ve helped the evolution. If one plans to apply the Boots model, then you need to apply the model across the board. I must say that they’ve done an incredible work if compared with their past

There are reasons why would we use massive Communications budgets, there are reasons why we need them and how will they support our overall goals. If the single goal is to help deliver your tactical strategies (promotions) then fine because it’s relevant to be in store (customer experience).  There are fundamental issues here, so what will a huge communication budget do? Rabea for instance has over 40 SKUs, Cofique has a good number of SKUs for a Brand that launched 5 years ago, I mean the Brand never fully matured and the management already extended their SKUs. Cofique is offering Nescafe’s values and that’s very evident but management need to understand that to solve the problem is to offer different values as consumers find Nescafe relevant and preferred, not Cofique.  Cofique spent enormous amount of money on Marketing since its launch and yet for the past 5 years the brand suffered enormously. I predicted Cofique’s failure from the day they launched. I advised the management of their approach but they seemed to take things personally and they ignored my advice, the sad reality in our region is that no one likes to be corrected or be recipients of advice from subject matter experts

Let’s looks at sales of the following brands for 2015 and you, the readers, be the judge. This case study is based on 4 different Brands (3 FMCG & 1 Retail). The Brands are Rabea, Cofique, femi9 and Code Red (the energy drink)

  • Rabea tea is a heritage tea brand with over 60 years in the business, founded by a family with great legacy in the tea business. Today in 2015, Rabea’s annual sales stand at SR. 400 million ($ 107 million) with 40 SKUs more or less. Rabea’s annual sales 5 years ago were approximately SR. 300 Million, an additional hundred million increase since five years is partially due to Price increase. Rabea annual marketing budget is relatively good amount of money that goes across all activities. Here’s the breakdown:
    • Rabea Sales 2015: SR. 400 million
      • Loose Tea: SR. 150 million
      • Tea bags: SR. 150 million
      • Other SKUs: SR. 100 million

Loose Tea is losing sales because of Tea bags as they are considered more trendy and convenient by younger generation

Tea as a category is losing 2% to Coffee because the latter is becoming more favored by the younger generation due to its variety of tastes (Mocha, Espresso, Cappuccino etc.) plus it’s also considered as a trendy drink due to growth in café culture that is adding to this perception. Rabea should own the tea category but that’s not the reality today. 5 years ago with a SR. 30 million budget, Rabea was growing 5% and bottom line 10%, on average. Today, Rabea has aggressively evolved the proposition and introduced different SKUs like long leaf in Tea bags, yet sales are not very high compared with past levels

  • Cofique is a local coffee brand which since its launch has went through aggressive Brand visit exercise for the past 5 years and yet suffers to connect with the audience till today, why? Well the sales values that are owned by Nescafe. Their total annual Sales are almost 10 to 15 million with over 20 SKUs. Sounds crazy, doesn’t it? Well they’ve spent enormous amount of money since launch and one will expect that in their 5th year they’ve reached maturity in their sales. In 2010, I had the honor of meeting the head of Marketing and I advised him NOT to go ahead with his plans but he felt offended, took things personal and decided to go ahead anyway. A free advice could have saved a lot trouble. They should’ve launched a subcategory than go head to head with the category owner
  • Code Red is a local energy drink focused mainly on Marketing Mix and a defined audience. Their total sales in 2015 have been SR. 350 million from one single SKU, Code Red spent around SR. 100,000 on Advertising in the past 10 years, they don’t own a website, nor they are active on Social Media. In fact all the videos and social media pages are created by their ‘loyal customers’, Code Red offered a unique set of values to their audience. Many might argue and say, Code Red is not in modern trade, therefore not much Marketing budget is required but the reality is that Code Red had a clear Marketing strategy addressing the entire Mix. It focused on a target audience more relevant to Code Red i.e. which doesn’t shop for energy drinks in modern trade

    Branding and Marketing is all about relevance which is why today Code Red is a Brand!

  • Femi9 is a Saudi fashion retail outlet focused on women casual wear that started from a humble beginning with two stores in Riyadh. The owner is a visionary and ambitious, today Femi9 operates in most of GCC, North Africa and Switzerland with total approx. sales of SR. 200 million. The Brand spent less than SR. 10 million on advertising in the last 15 years. Its growth continues to this day

So I beg to ask, what would a huge Communications budget achieve? Great results? No! Can any of the Marketers work without a Communications budget? Well, a brilliant Brand and Marketing strategy would achieve enormous growth. Code Red and Femi9, both local Brands, are able to continuously grow with minimal Marketing budget and yet both Brands have their loyal customers that advocate for them. Today out of one SKU Code Red earns 75% of what Rabea earns with over 40 SKUs, you would expect Rabea to sell more given the fact that they spend more on Marketing. Cofique which also spends a lot on its Marketing but with such sales, it needs to re-visit their proposed values and the Brand itself  

Some might discount this case study because I consulted both Femi9 and Code Red in the past which is why I favor them but that’s not true. I intend to speak on huge Communications spendings that should equal results i.e. SALES, therefore logic must prevail for businesses to grow. A brilliant Brand and Marketing strategy is more than enough to create short and long term growth which is why Brands are supposed to be sustainable unlike commodities. Create Your Space and evolve from the old school of Marketing

*All figures obtained from Euromonitor, Nielsen and other sources


Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renown Brand Consultancy firm Siegel+Gale on Branding in the Middle East

He can be reached on

The article was first published on Linkedin Pulse on 13th January, 2016

Cofique: Brand or Commodity?

Why did Goody wait too long to evolve their ‘Cofique’ Brand?

I came to know Cofique when I saw an advert on a billboard in Tahlia Street, at first I thought it was Nescafé, little that I knew that I would be shocked to read the name Cofique, a ‘Me too Brand to Nescafé’. I immediately called few friends to investigate who is behind this new launch. I was shocked to find out that it was ‘Goody’ (Basamh Trading Co.’s Brand) which made me question as to why would it embark on such business move? The opportunity that arose from Nestlé and Basamh’s breakaway, left the market void of Nescafé, which Goody found as an opportunity to fill in as a ‘Me Too Brand’

Eventually few weeks down the line I had the opportunity to meet the head of Marketing and the Brand Manager of Cofique at their office to discuss my reservations, the second meeting took place at Starbucks in Tahlia, with a member of their Advertising agency. All my reservations were ignored and put aside, I guess they had a different perspective

Today, four years later after our first meeting, reality validated my reservations. Cofique went through several exercises to validate its existence but each path was faced with a challenge. I have always respected ‘Goody’ as a Brand but this strategy of ‘Me Too Brand’ made me wonder why would such company make a detrimental business mistake. The following points illustrates past and present of Cofique:

The Past

  • Launching as a ‘Me Too Brand to Nescafé’ validates the Brand Power of Nescafe. Literally, Cofique endorsed Nescafé
  • Cofique went on with a massive Advertising campaign during the first launch as a ‘Me Too Brand to Nescafé’, this campaign reminded the consumers of Nescafé, the category leader
  • When Nestlé was back as a Foreign Direct Investor in Saudi market, Nescafé filled the supermarket shelves, Cofique took the defensive approach and focused on the single Marketing Mix (Price) in order to compete
  • Cofique claimed 8% market share on their 3rd year. Well, in Instant Coffee category, only the first and second years matter. With Cofique being a look alike Brand to Nescafe, the 8% market share as a commodity makes 100% sense
  • Cofique is in a battle of being a Brand vs commodity, halfway through the journey they diverted from the ‘Me Too Brand’ idea by placing few design elements on their packaging

The Present

After 4 consecutive years, the management at Goody decided to take action to evolve Cofique from a ‘Me Too Brand’ to ‘Somewhat I’m different’. Clearly the re-positioning exercise missed many different attributes of change but again the end result in our region as ‘Brand’ is Design and Advertising. I still have to give Cofique the credit to the new offering which is not too distant from Nescafe’s offers

  • Cofique (the name) is well connected to ‘Me Too Brand of Nescafe’. Most Cofique consumers use Cofique as second choice to Nescafe, the name still validates Nescafé’s Brand attributes. Should the mission be evolution or revolution? Re-Branding, Re-Positioning or a whole new Brand altogether? Cofique’s management says ‘Equity’, well what is this equity associated with?
  • If we think of the recent changes that Cofique initiated, the question would be: Did Cofique needed a Re-Branding or a Re-Positioning exercise? If the strategy was to move completely away from Nescafé and create sub category then a new Brand was needed, if the reason is to identify market opportunity and fill the gap, then Re-positioning would be the best and still both type of evolution are dictated by the new business strategy. If Cofique re-positioned, GREAT! But to what? Flavored coffee? Instant coffee? The name is so much associated with Nescafé that the current SKUs are not too distant from Nescafe’s offerings; in fact I don’t see the Brand relevance
  • As much as I agree that Cofique needed to evolve from the ‘Me Too Brand’ taboo, I excepted a Revolution not an Evolution. Cofique needs a personal identity and a Value that will elevate the Brand from the shadow of Nescafé. The Goody coffee brand needed a new name but still holding on to the name ‘Cofique’ makes room for just another commodity, only
  • It’s clear to the management that Brand Equity is the priority, keeping the name Cofique is a must, it’s the Equity they care for but to us as Brand experts the name is a plague, it’s associated to Nescafé Brand Signals. Nescafé owns the SKU 3 in 1 and Cofique offers the same proposition so in terms of strategy, Cofique promotes Nescafe’s 3 in 1
  • Nescafé’s 3 in 1 makes Cofique the second choice based on Price (commodity)
  • Cofique will enjoy sales and gain market but not for long if the vision was to build a Brand rather than create just another commodity

So what is Cofique’s Re-Positioning besides following Nescafe’s Value and Re-Designed packaging? Will Cofique evolve further? Yes, plenty of money to be made as a second choice to Nescafé but only as a commodity and not as a Brand

I wish for Cofique and the management of Goody the best with the relaunch, their Marketing strategy and Brand strategy are worlds apart

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renown Brand Consultancy firm Siegel+Gale on Branding in the Middle East

He can be reached on

The article was first published on Linkedin Pulse on 28th December, 2014

Don’t blame Advertising

A Brand with 8% Market share spent dreadful amount of money on Advertising, still thinks the window of opportunity exists being a (‘ME TOO’ Brand). The company thought that Trade Marketing and Advertising would increase their market share instead the Brand is running negative numbers since the day of launch. Question is: Where did they go wrong? Product and the rest of the Marketing Mix? or the Brand itself?

We know that Marketing has short term goals and Branding has long term goals and both work closely together. The thought of being a (‘ME TOO’ Brand) didn’t do justice with Brand itself, particularly in a weak category but definitely gave the consumer more reasons to believe that the leader of the category is STILL the better choice

Did they really think by being a ‘ME TOO’ Brand to the first would help them capture the category? Can Advertising do justice with a ‘ME TOO’ Brand? Here, I can’t blame Advertising, the company is the champion of the Brand and the sole decision maker

People underestimate the process of how Marketing and Branding can work closely, thinking that Logo and Advertising would do justice with the Brand is absurd. I would imagine experts in the field of Marketing and Branding would scratch their heads to find answers for a ‘ME TOO’ Brand that uses Advertising to build Brand Recognition and Awareness

Said Baaghil is the ‘Unconventional’ Branding and Marketing Adviser to reputable companies in the Middle East, author of many reputable books including the ‘The Power of Belonging’ and a Speaker. Baaghil appeared in books published by America’s experts on Branding and Marketing such as Dan Hill and Libby Gill. Most recently Baaghil was interviewed by world renown Branding Consultancy firm Siegel+Gale on Branding in the Middle East

He can be reached on