Baileys in a Bottle – Baileys in a Sachet

Sometime in November last year, news broke out that a premium Irish cream liqueur brand – Baileys, had taken to selling their products in sachets to Nigerian consumers. The development implicated Nigeria’s dwindling economy which led a couple people to weigh in on the economic state of the country. Oloruntade begins the article titled The Sachetisation of The Nigerian Market with “If anyone ever said Baileys—a revered global cream liqueur—will be sold in sachets, many of us would argue. Well, welcome to Nigeria where the unexpected happens.” The unexpected sure happens in Nigeria. For many like myself, the news was definitely a shocker, but was also a harsh validation of the sorry state of Nigeria’s economy. Among other unexciting stories, it told an implicit tale of Nigeria’s shrinking middle class. I mean, if there are that few people who could afford Baileys in a bottle… For context, Baileys in a bottle costs anything from $5.

I was training to be a business analyst at the consulting firm where I was required to write an article on sachetisation. Sachetisation. Hadn’t heard of the word, even though it was the kind of word that defined itself. I loved researching sachetisation, because it was then that I concerned myself with a perspective about Baileys’ branding that I hadn’t as little as thought about. It was then that I wondered what the perception of the brand would be after that cheapening effort at commoditizing. Can sachetisation hurt premiumisation? But first, what are sachetisation and premiumisation?

Also known as micro-packaging or sachet marketing, sachetisation is a marketing strategy that entails designing and selling products in smaller units to attract the lower segment market, especially in developing countries like Nigeria where this market segment constitutes most of the population. While the concept of micro-branding originated in America, the origin of the term, “sachetisation” is claimed by Niti Bhan, and can be traced to his 2008 article. On the other hand, premiumisation is a marketing strategy to make a brand or product appeal to certain market segments by emphasizing its superior quality and exclusivity. Consequently, sachetisation promotes inclusivity, while premiumisation promotes exclusivity.

The sachetisation of consumer goods is gaining momentum with Nigeria’s economy on a steady decline. According to a report by the National Bureau of Statistics, the Gross Domestic Product contracted for second consecutive quarter by -3.62 in the third quarter of 2020. Since then, inflation rate has increased from 13.71% in October, 2020 to the present high of 17.01%. There has also been low sales of crude oil , a major export product which accounts for 90% of the country’s foreign exchange earnings. The devaluation of the naira, COVID-19 lockdown, land-border closure, electricity tariff, Value Added Tax (VAT), cost of fuel, and herdsmen attack on farmers which has affected optimal productivity in the Agricultural Sector; have all contributed to high production cost that is the major reason for the increase in the cost of goods and services. Under these unfavourable circumstances would the purchasing power of Nigerians be expected to dip. In 2018, Nigeria overtook India to become the poverty capital of the world, with around half of the country’s population estimated to be living in abject poverty, on less than $1.90 a day.

These facts say one thing, and one thing only: A vast majority of Nigerians lack the financial capacity to buy products in bulk or in larger packs, so that it’s necessary and even effective for many FMCGs in the country to gravitate towards sachet marketing in order to provide greater inclusive access to products. However, whether they should, and what brands should, starts an important conversation about brand perception. Is there a likelihood that Baileys’ brand image and reputation are negatively affected by its sales-driven decision to go the sachet route? Do premium brands enjoy as much liberty as mass brands to adapt their marketing efforts to the state of the economy?

I would say yes and No. Bailey’s brand perception as premium could have been negatively hit by their sachet marketing, nevertheless, the more important question would be if this translated to any tangible loss for the brand, and I would doubt that it did. Nigerians – and this is totally my opinion – are simple consumers. What I mean by this is that most Nigerians cannot afford to abandon a brand for commoditizing. The opposite is more likely the case. Going by the facts, most Nigerians would gravitate towards a brand for commoditizing. The sophistication of impacting the perception of a brand is the privilege of people who do not live in the poverty capital of the world. Affordability, more than anything else, informs the purchasing choice of more than half of Nigeria’s population. For the average Nigerian, a product is either affordable or it is not. Only few Nigerians, and I daresay less than 5% would concern themselves with a brand’s premium image, and that’s because only few Nigerians could. In essence, Premium Baileys did not cheapen its image by marketing to Nigerians in sachets. Most Nigerians do not have the purchasing power to influence the perception of a brand in that way.

Speaking generally though, premium brands would not adjust their marketing efforts the same way that mass brands would. A brand that targets the big spenders of society would hold out from selling cheap even in recession. You could not rip off the exclusive appeal of a product because the economy is bad, or deny wealthy people looking to splurge money; their investment in items they could brag are not accessible to anyone and everyone. Micro-packaging, an effective marketing strategy for mass brands, might give a premium brand access to lower segments of the market, but it can also hurt the perception of the brand since it had always catered to the upper segments.

Marketing is psychology and economics, and depending on who you ask, it can be more of either the two. If I am who you ask, psychology it is. Marketing and selling rely foremostly on understanding consumer behaviour and the behaviour of target markets. Wealthy people often desire exclusive access to products and services, and as such, inclusivity would cause any brand to lose their appeal. Although I hear that this is not always the case, as content marketing could mitigate the consequences of commoditizing a premium brand. With the right story, any brand can sell anything to any customer segment, and I think Baileys knows this. Content marketing is king. Well, it is the sort of thing that Animalz would tell you. If they were Nigerian, they’d say instead that there’s nothing content marketing cannot do!

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