One of the several aspects that makes African mass markets more inclusive and resilient than formal corporate marketing systems is their ability to exploit gossip and grapevines productively.
One of the questions that agricultural economists and policy makers continually ask is, “Who sets mass market prices in Africa?”
This is a natural question, especially from those who have been through the formal education system, where it is assumed that committees must exist to determine the prices of goods.
Gossip and the grapevine have a huge impact on pricing in Africa’s fluid mass markets, where there are often no institutions responsible for integrating data from thousands of economic actors participating in a single ecosystem. influence.
In addition to dictating pricing, Gossip and Grapevine are primarily responsible for influencing other important aspects, such as the measurement of various goods, which is informed by excess and scarcity. If you want to understand how human instincts influence people’s behavior in the workplace, visit your nearest African mass retailer.
Farmers and traders participating in mass markets have become adept at using gossip to gain the ability to process real-time information. In formal institutions such as supermarkets, pricing is dictated by a board of directors or management, whereas in mass markets, pricing decisions are made based on fluid conditions.
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No wonder the price of tomatoes is usually the same between traders selling the same product in the same market. Depending on its various uses, livestock trade in mass markets in Africa tends to follow channels shaped by gossip and grapevines. This is partly due to the lack of formal mechanisms for selling goats and native chickens.
Also, the difference between mass markets and formal enterprises is that mass market actors understand the special role of leaders, such as market committees, who are also participants selling goods in the same market. As an active participant, the Market Committee recognizes the difficulties in implementing changes in liquid market operations and the paths to overcome such challenges. Market leaders use their power constructively to enhance social and economic harmony.
Challenging superficial notions of market connectivity
Many government departments, development agencies, and formal private actors have a rather superficial conception of market linkages as a simple process of linking farmers with formal buyers.
But in fact, a full-fledged farmer does not need anyone to arrange such a contract and can easily visit wholesalers, hotels, processors and many other buyers. Because some formal companies have marketers and contact information such as mobile phone numbers that rural farmers can easily use to stay. touch.
The fact that mass markets continue to thrive despite the existence of formal markets supported by policy and banks shows that market linkages are more than just connecting farmers and buyers. .
Although the concept of market linkages is also an integral part of cartels, there are several examples of how and why formal market linkage agreements have failed to solve the challenges for the majority of smallholder farmers. If anything, market linkages tend to benefit formal firms. Across Africa, there have been some noble attempts by development agencies and government departments to link grain buyers with producer cooperatives.
Riding the proliferation of mobile phones, these interventions established an easy text messaging system that allowed cooperatives and commodity associations to broadcast to all registered buyers with a single text. This text describes the quantity and quality and, if necessary, the expected price. Similarly, buyers can send one text with their requirements that will be distributed to all registered cooperatives trained in post-harvest quality control and marketing.
Despite high expectations that such systems would overcome some marketing-related constraints, implementers have found that individual farmers have long-standing personal relationships with a variety of traders in the mass market. It does not address marketing challenges because it does not take into account the market ecosystem.
An even more surprising lesson is that marketing managers at legitimate companies have exploited a lack of market information to gain favor with large buyers, who in turn have granted that favor and eliminated competition. .
The same thing happens in formal situations, where formal companies apply to the government for permission to import some food products. Information asymmetry is exploited to issue import permits for goods that are abundant in some parts of the country. On the contrary, long before policymakers and regulators know what’s going on, the mass market, through hearsay and convenient information, knows who is going to know what will be in short supply or oversupply next week. Often the first thing you’ll know is if you’re importing. Using evidence to correct assumptions about digital marketing in African markets.
Among other organizations, eMKambo (www.emkambo.co.zw) has been working with the African mass market for over a decade. eMKambo introduced voice and radio as part of its knowledge exchange platform after learning that most farmers associate authentic information with voice and have less trust in text messages. Another initial assumption was that mobile apps would solve challenges related to information asymmetry, but the reality is that mobile apps create information overload and that busy farmers and traders don’t have the time. had. In fact, the speed of transactions in Africa’s mass food markets is such that traders cannot spend time on mobile apps.
Mixed results have also been reported in Rwanda through efforts to connect farmers and buyers on a platform called Viamo. A similar system was established in Rwanda, based on a successful trial in Nepal that linked farmers and buyers of their produce through basic mobile channels, but the experience in Rwanda is very different. Ta. A toll-free service was established with MTN, with all his MTN subscribers receiving 10 free calls each month. The service included content on health, education, agriculture, and other topics. All written in Rwandan language and accessible in both USSD and audio (interactive voice response). On average, the service receives about 900,000 unique callers each month, more than Facebook, X, and Instagram combined.
A toll-free service option has been introduced for farmers and buyers, allowing farmers to register their location and the crops they sell, and buyers to register their desired crops and desired locations. The system then matches farmers and buyers, and each receives an SMS with the other’s phone number. However, the results were not very encouraging, with few buyers or farmers following up and staying in touch. Among the key lessons learned was the need to invest heavily in marketing digital services among farmers to increase enrollment.
Another learning was that most buyers rely heavily on personal/professional networks based on relationships built over time. But the most important learning is that trust between farmers and buyers cannot be easily established through simple mobile connectivity or mobile conversations, so we need to provide new ways to engage digitally without making a personal connection. was said to be extremely difficult. To be appreciably successful, such a solution needs to be located within an existing ecosystem, where the key players already know and trust each other through gossip and the grapevine, and this It is typical of the way African markets function over time. That is why any attempt to formalize the informal sector without understanding all these dynamics is, to a large extent, a very foolish move.
- Charles Dhewa is an active knowledge broker and management specialist.
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