Insight into Social Franchising in South Africa

Lessons Learned through the Consumer

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In this ‘Backstory’ we investigate social franchising with Taurai Nyakunu the entrepreneurship coordinator at Sizanani Mzanzi, a social microfranchising business that supports quality life and empowers people for social good in South Africa. Taurai is supported by Monique Tredoux, Market Development Manager for DSM Nutritional Products South Africa (Pty) Ltd. Together, Taurai and Monique co-authored ‘Research to Microfrancising in South Africa’, which is published in the Sight and Life magazine, Focus on Food Culture edition.

Set up in 2016, Sizanani Mzanzi’s aim is to improve access to quality, affordable social goods for South Africans. It co-creates income-generating opportunities, and builds capacity in communities that need these most in South Africa. The mission of the organization is to ensure economic sustainability by generating surpluses from sales, reinvesting these into the business to the ultimate benefit of those it serves. It aspires to increase awareness of the importance of good nutrition by training micro-franchisees on this topic, but also focuses on improving equality by empowering women in communities with high unemployment levels.

Ms Tredoux told Sight and Life that establishing Sizanani Mzanzi in South Africa has provided rich lessons in how to set up social micro-franchising communities.

Sight and Life magazine (SAL): What inspired you to choose this topic?

Monique Tredoux (MT): Sizanani Mzanzi is a directive of DSM and Sight and Life, and now has a strong team including two full-time colleagues working to make it successful. Sight and Life was keen for us to tell this story as it’s something really novel. Currently, Dr Klaus Kraemer and Kalpana Beesabathuni of Sight and Life our important members of the Szanani Mzanzi board. It’s inspiring and empowering a community for social good. There are lots of lessons to be learned. We definitely hope that Sizanani becomes successful … But, along the way, there are lessons to be learnt for organizations who are looking to initiate a similar business model in other countries. The intention is for Sizanani Mzanzi to provide insights into a franchising business model and ultimately become a learning lab.

SAL: What lessons have you learned?

Taurai Nyakunu (TN): A key overall value we take out from our journey thus is that the impact you’d like to achieve should not be removed from the requirements of the business. A social mission and business principles must integrate and be seamless in a way that enables the creation of a viable service or product in a market that is competitive. The value of the goods within a commercial market needs to be reached by applying business principles and key evidence. So you need to be in touch with and know the consumer market, and your competitors within the market. You need to find space within that, as your product or service is not exempt from market forces at play.

MT: We have learnt that having a wonderful, nutritionally complete product, that falls into the same category of foods consumed by South Africans on a daily basis, does not ensure sales. Micro franchisees are recruited to Sizanani Mzanzi and undergo five days of nutrition and sales training. They are taught about the specifications of the MixMe® flavoured powdered drink as well as the MixMe® instant maize meal porridge. We expected to see an immediate rise in sales subsequent to the micro franchisees completing this training; however, that was not the case! It is unlikely that you will turn someone into a sales person in five days. Our belief that an individual who is currently unemployed, or even looking to supplement their income, will jump at the opportunity to sell goods for a profit is incorrect. It is not as simple as providing some training, a starter pack of product, and a Sizanani Mzanzi t-shirt and sending them into the community. We’ve learned that we need to be very robust in terms of the selection criteria of our micro-franchisees and we continue to brainstorm as to how to retain our micro franchisees as well as further nurture and mentor the sales force. People need to feel supported, in terms of consumer awareness and marketing awareness, as how can they sell products if nobody is aware of them?

SAL: In your article you discuss various demand-side/consumer challenges that prompted the need for this type of consumer research. Now that you have the research data, how useful was it for addressing the demand-generation challenges that prompted this research?

TN: We identified three suitable methods of collecting data that ensured consistent results. Activities included an accompanied shopping tour, a food diary, and interviews.

First, the food diary places you in the consumer’s house, where you get to see what the decision-maker is thinking, depending on the family member. They might be a single mother or a family. Other insights include discovering people’s eating style and or habits. For instance, do families sit together or do they eat different meals in different places? From a business point of view, this speaks to type of product you need to have, whether it’s a family-type meal or different products targeting individuals of the same family. Therefore, if you want your seller to be successful, you have to have a product that speaks to their customers. Take for example, a mother who prepares everyone else’s meal but has no breakfast, as there’s no time, and she has to pack everything to eat at work. She might need a meal option, or a product which she can consume on the on the go or prepare quickly. These very valuable insights help us now understand why the communities we serve decide whether or not to buy a product and how we can to refine our offering to become a preferred solution.

Second, from a demand-generation point of view, the shopping tour is where we needed a good idea of the customers journey. It looks at the process; where consumers check information on where to get products, such as catalogues which spell out which retail shop offers what, and the price or discounts offered.  This highlights where we need to be present, where the marketing message needs to be, and where the brand must be within the vicinity for people to consider Sizanani Mzanzi or a micro franchisee as an option for sourcing a product to meet their needs. If people like going through catalogues, Sizanani Mzanzi needs to be in catalogues, too. We need to know about ‘specials’, too, as shoppers are very price-sensitive. Budgets were identified as the highest-ranking factor influencing decision for low income communities. Consequently, other commodity prices force us to reconsider our pricing strategies.  

Third, interviews make us aware of who eats what and where, but also how the decision-maker rationalizes what product fits that context. People start looking for food that satisfies a specific need, such as what’s realistic from a time point of view, or what’s good for the family. These interviews help us garner how people make decisions on products. Some products might not be the preferred or best choice, but in low-income communities’ people don’t want to waste money, so they make trade-offs. Sometimes these are for the good, but sometimes they are not really beneficial. This research helps us speak people’s language, so that we can encourage them to make healthy choices through our marketing messages and improved access.

MT: The market research has also put into perspective the reality and enormity of what we are trying to achieve. Consumers in South Africa are VERY brand-loyal. and normally don’t have a large repertoire in either category – instant porridge and instant beverages. There are three large maize meals brands in South Africa which have a history of trust and heritage. The purchasing choice within this category is thus underpinned by tradition and heritage of a brand  – this naturally builds trust in the product, especially when used by the family for many years. Our research showed us that we really need to have a strong marketing strategy and focus on the category benefits that the consumer considers the most important i.e. Taste, quality, and price.

Other learnings? Loyalty programmes are widely used. These are mainly considered meaningful when resulting in product discount or accumulation of points that can be used as payment for food products.

In addition, our research showed how people perceive door-to-door sales.. People have negative sentiments around door-to-door sales as a distribution mechanism. Their biggest barriers are concerns for safety and skepticism around product quality and authenticity. It was also communicated that the door-to-door channel is not appropriate for food products and we are currently looking at alternative route to market options such as retail or institutional sales.

TN: Instead, people probably prefer to sell to family friends, or an existing network, to whom they can recommend the product and who will value this recommendation.

SAL: If you had to do it again, what would you do differently? Would the timing of this research have been different? 

MT: We would most certainly have performed that market research earlier. The market research is required to inform our marketing strategy. The delay in an appropriate and targeted marketing strategy is a challenge.

In addition, due to the urgent nature of our market research we had to recruit respondents for the research in December and conduct the market research in January. This is a difficult time for most people as finances are low following the festive season. Shopping tours – and reflections of what people are purchasing – might be slightly warped in January.

TN: We’ve also learnt from other projects that providing information to the consumer market about just nutrition will not translate automatically into successful product adoption. You have to meet consumers at their point of preference – including price, taste and, maybe, convenience. Once that’s ticked, you can add on nutrition as an added benefit. This method, rather than promoting nutrition alone, increases the probability of success, ultimately achieving Sizanni Mzanzi’s goals of nutrition awareness and eagerness to delve into nutrition-related products.

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