Samsung’s appliances for the African market frequently have built-in surge protection. Its refrigerators frequently have extra insulation, and its washing machines are energy efficient. “We have a vision of developing technology that is built in Africa, for Africa, by Africa,” said George Ferreira, the chief operating officer of Samsung Electronics. “We will over the next few years be allocating more local R&D investment for further local product planning, design and development.”

Build and leverage brands

The relatively short list of pan-African brands has enabled several multinationals to move into Africa and build up their own. OMO, Gillette, Colgate, Pepsi and Nike are all well-known and well-liked brands on the continent. In Morocco, detergent is commonly referred to as Tide, while in Ethiopia, training shoes are called adidas. In fact, according to BCG’s Africa Consumer Sentiment Survey, brands seem more important to consumers in Africa than to those in developed nations or in other emerging markets, such as China and India.

The challenge is to figure out how to strengthen brands in ways that are economical and measurable. The continent’s diversity will require companies to deploy several channels and platforms. Ideally, they can leverage their global brand to fight through some of the local media clutter. Finally, companies will need to work with local governments to combat counterfeiting, which can quickly dilute the brand equity that companies spend years building.

Pepsi used the 2010 World Cup football championship in Africa to promote its products. The company created a viral music video campaign featuring a number of famous football players, Senegalese-American singer Akon, American singer-songwriter Keri Hilson, and the Soweto Gospel Choir. Proceeds from the song were donated to charity. The campaign garnered so much media attention that many Africans believed that Pepsi was the official sponsor of the World Cup, when in fact it was sponsored by Coca-Cola.

Control distribution

Many companies have historically relied on local distributors to deliver their goods to consumers who do not live in a port city or in one of a few other locations that they serve directly. These companies have not wanted to go to the trouble of understanding the local conditions and practices that would enable them to extend their footprint deep into the continent. It is an approach that exemplifies the trading post mentality.

By delegating distribution, companies have often ceded control of pricing, branding, channel management, inventory—and, ultimately, profitability and competitive advantage. In our work in Africa with manufacturers of consumer goods, construction materials and even fertiliser, distribution consistently emerges as a critical part of the puzzle. Companies cannot be successful in Africa unless they control distribution. They do not necessarily need to do it themselves. But they need to do it right, and doing it right will often require novel approaches.

About one-third of Nestlé’s sales in Africa occur through informal channels, and in order to facilitate these sales, the company has turned to a small army of distributors who travel by foot, bicycle and car. In 2011, Nestlé was able to double its number of sales outlets in South Africa by relying on these unconventional distributors. Similarly, Vodacom has created more than 100,000 points of sale in Africa through wholesalers and independent contractors. Its Gimme That! programme recruits and trains young people to sell prepaid vouchers on commission. Top performers are awarded distributor franchises. Diageo, meanwhile, trains its distributors in basic financial and sales-demand analysis and health and safety issues. The training programme, called Platform for Growth, has helped increase revenues for both Diageo and its distributors.

This is an excerpt from Winning in Africa: From Trading Posts to Ecosystems written by Patrick Dupoux, Tenbite Ermias, Stéphane Heuzé, Stefano Niavas and Mia von Koschitzky Kimani and published by Boston Consulting Group.