Impact85 Naira Redenomination Marketing Communications Proposal for CBN 2008

Impact Eight Five 2008 Page 1 of 20 Central Bank of Nigeria

Central Bank of Nigeria

Proposal for:

Strategic Communication Agenda for Naira Redenomination 2008


Content Introduction

Ground for redenomination

SWOT Analysis

Media Objective

Media Strategy & Rationale

Communication Strategy

Newspapers & Magazines

Audience Analysis

Media Plan

Action Plan

Action Details

National Media Planning

Television Media Plan

Radio Media Plan

Press Media Plan

Internet Media Plan

Outdoor Media Plan

I. Mobile Media Cost

II. Public Relations Cost

III. Promotional Activities Cost

Budget Summary

Global Media Plan

Television Global Media Plan

Press Global Media Plan

Budget Summary

Summary of Total Communication Cost

Payment Terms


Introduction

Currency Redenomination is a process by means of which zeros are eliminated

from the national currency of a country, so that starting from a specific date; all

amounts of money will be expressed in a new and smaller monetary scale.

For this financial policy to be effective its main conviction must go beyond

psychological and portability effect. Before and after the suspension of the policy

Nigerians have expressed different opinions with others having doubts and more

a thousand questions to ask.

But with the policy’s primary objective of stabilizing & enhancing global

integration, many Nigerians will not hesitate to embrace this reform with many

asking if redenomination should top our priority now.

The general purpose of the currency redenomination process is to contribute to

the consolidation of the currency and to reaffirm the objective of economic stability

as part of Nigeria’s policies aimed at fostering economic growth and socio-

economic development.

It is expected that such measures will achieve greater efficiency of the payment

system, facilitate the calculation of economic and business transactions and

simplify the country’s financial and accounting management. Likewise, this change

can reinforce the confidence in the currency and will reflect the strength of the

national economy.


In practical terms, by means of a currency redenomination, zeros are eliminated

from the national currency of a country, so starting from a specific date all

amounts will be expressed in a new and smaller monetary scale. In other words, it

is a measure that simplifies the understanding, use and handling of transactions

with national currency, while generating favourable expectations.

However the key to redenomination according to research from countries that

have successfully executed a redenomination programme is ‘timing and planning’,

‘clear-cut communication’ and ‘well informed education campaigns’. Therefore

informative and educational campaigns that will contribute to get the public ready

for this change and to easily assume it with confidence.

Embarking on certain measurement indicators besides the subjective indicators of

feel, neatness, portability, convertibility, etc. that are commonly recognizable by

the public. If one contrives to engage the larger public in the issues of cost

concerns, then one must also endeavour to educate the public about the technical

parameters that bear on cost assessment.

Evidence of redenomination

COUNTRIES BEFORE REDENOMINATION

AFTER REDENOMINATION

Indonesia 100.000 12,04

Cambodia 100.000 25,06

Lebanon 100.000 66,03

Mozambique 100.000 4,24

Paraguay 100.000 16,09

Romania 1.000.000 31,01

Ghana

Vietnam 100.000 6,39

**Source: MRI Bankers’ Guide to Foreign Currency: Financial Times, FX Rates. (Currency in relation to the United States Dollar)


Grounds for Redenomination

Multiple zeros cause difficulties in;

Expressing monetary values,

Transactions at the cashier’s office

Book-keeping and statistical records

Data processing software

Payment systems

Price tagging

Challenges

Contrary to the belief that the re-denomination is a simple exercise, we believe

that the exercise poses significant challenges to businesses. There are enormous

cost implications for business organizations. A significant part of the cost will be

one off, but there are other costs, which will continue to be incurred until the

current currency is completely withdrawn.

The costs include:

Upgrade or re-configuration of business and accounting software

Staff training

Costs involved in changes to business processes and procedures

Cost of printing new stationery (invoices, receipt books, cheque books etc)

Time cost of ensuring accurate data capture when both currencies are in

circulation. With the proper planning and preparation, the re-denomination

exercise should not be too much of a burden for companies, but it is important

that action is taken now


SWOT Analysis

Strengths

Given Nigeria’s enhanced status in the international community it will help to restore credibility and confidence to the naira.

Will reduce the presence of foreign exchange especially dollars in the Nigerian economy. If the value of the new naira is maintained or improved, people will look to store their money in naira instead of dollars thereby reducing the demand for the dollar. The drop in demand of the dollar will further strengthen the naira.

Assist in taming inflation. For example. The average national newspaper is priced at =N=100 in present day Nigeria. If they decide to review pricing, they will most likely increase it by =N=50 which is a 50% increase. After the redenomination, some said paper will cost =N=1 and due to the presence of coins which hold more value, the increase could only be by 5 kobo making it =N=1.05k instead of =N=1.50k. This shows a 5% increase instead of a 50% increase. Keeping soaring inflation in the single digits and maintaining stable economic growth.

Weaknesses

Reconfiguration of computers, ATM machines, accounting and data processing software, staff training, cash registers etc. by companies and individuals will be time consuming and costly.

Cost of printing new stationary (invoices, receipt books, cheque books etc)

Printing and minting costs of new currency.

Opportunities

As with numerous cases of other countries (such as Ghana, Turkey, Venezuela) that have sought currency redenomination, low currency values will rapidly increase.

Redenomination would boost the gross domestic product (GDP) by at least 0.9%.

Threats

Psychological hurdle of the tendency of people to think their money has been devalued. This could result in a decrease in spending in the early stages of the redenomination.


Objectives

Reaching the different strata of the society with appropriate media strategies.

Communicating with every group in the urban areas using all available means of

communication. Paying more attention to the people in the rural areas and also

traders, civil servants, farmers and other artisans in both urban and rural areas.

Creating total awareness and conviction highlighting the benefits of

redenomination to elicit favourable responses from the public with frequent

evaluation of the entire exercise.

To communicate effectively to Nigerians at home and in Diaspora by creating a

nationwide awareness and employing local and trans-national media channels

to reach the different demographics of the nation.

Taking advantage of the different target audience and creating simple and

understandable concepts that will introduce redenomination properly within 16

months.

To increase the awareness and enlightenment by 80% within the first three

months of introduction and keeping the people informed of recent developments

in the process.

To appropriately allocate assigned budget to achieve the desired result of the

aforementioned objectives.


Media Strategy & Rationale

Channel our communication to the target audience through all the mass media

and inter-personal communication levels at launch/introductory stage.

Electronic – Radio, TV, Internet, SMS (Text Messaging).

Print – Newspapers, Magazines, Posters and other below the line items.

Outdoor – Billboards, Banners, Signposts, Pop-up stands and Multi-media LCD

e

Allocate media spending to achieve the objectives of redenomination and

ensuring successful campaign from the introductory through the transitional

periods.

Reinforce communication at every point where the public needs to be informed

or educated on the exercise.

Maintain flexibility to be involved in further activities that will add vigour to the

success of the campaign.

Employ the right media vehicles in cognisance to the peculiarities of this

exercise. For example, using the stations that run programmes in local dialects

to reach a particular age group and class of people.

Utilise effective size and positions in newspapers and magazines to prominently

relay our messages.

Buy strategic spots in the print media and airtime adjacent to popular

programmes on television and radio to effectively reach our target audience.


Erect outdoors hoardings in strategic high traffic sites that can effectively reach

our targets e.g. Markets, Stores, Hotels, Airports, Businesses, Government

buildings, ministries, local government offices, Hospitals etc nationwide.

Provide handbills, pamphlets, portable conversion chart (that can be kept in

wallets) in banks, stores and other point of sales. Example of what will be

printed is a conversion chart with the aim of enlightening people on the

relationship of the new and old currency.

Radio

We intend to use radio as the lead media because of the increasing radio

listenership nationwide. The radio has been described, as a most effective of mass

communication in Africa owing to its affordability thus, there is a big need to exploit

the coverage of this medium to reach many Nigerians.

There is hardly a state in Nigeria without government owned and operated radio

stations, these stations run several programmes in their local dialects, and will

further educate the rural masses who make up a higher percentage of the

population.

The audience demographic of 18 – 45 years old are upwardly mobile and have

hectic lifestyles, but radio is one medium that is readily available at home, work,

schools, public transportation and cars.

It is the only electronic medium that still enjoys maximum listenership in spite of

power outages, because most individuals have battery-powered radios.


We recommend buying fixed time spots adjacent to programmes that command a

high followership amongst our various target audiences and also during peak rush

hour traffic (When most people are going to and returning from work). These

programmes include news, sports, drama, musical/talk shows, current affairs,

phone-in-programmes etc. Fixed times spots will enable us measure accurately

the reach of our message and give room for flexibility.

TV

Combining its audio-visual advantage, the television is a dependable medium of

mass communication and an indispensable tool of advertising. Most of the usage,

strategies and scheduling in radio are always applicable to TV.

Internet

Using the Internet is one of the most effective electronic media in modern day

business. The emergence of the computer and its application to daily transactions

has created room for its use as a medium of advertising.

Although majority of Nigerians do not have access to the Internet, a good number

of youth and a particular set of adults (Both at home and abroad) can be reached

through the Internet.

Our research shows that some websites are updated on a daily basis with display

advertising, interactive and email marketing. These sites are Yahoo, Hotmail,

Google and Facebook.


These websites now target consumers via IP address recognition. Therefore the

campaign will be viewed by those connected to the website from Nigeria and those

linked to certain keywords related to Nigeria or words like redenomination, CBN,

money etc.

We also recommend that we build a website, solely dedicated to redenomination.

It will allow discussions, FAQ (Frequently Asked Questions), updates on the

exercise, press releases etc.

Newspaper & Magazines

At every point of media planning, the print media is selected based on circulation

and interest. In such a national exercise, all genres of print media must be

considered. Even the national newspapers like The Guardian, Punch, ThisDay and

others still do not cover all the geo-political zones in Nigeria and not all

newspapers and magazines cater for every human interests.

Thus, we will utilise national and regional newspapers, specialised

newspapers, and soft-sell magazines.

The new notes would be displayed on pages of the print media with its

features and securities clearly outlined.


Communication Strategy

Our strategy cuts across every medium and stages of implementation, we are

employing new communication systems like mobile marketing, interactive

marketing, and display adverting on the Internet.

We recommend ad-hoc officials/Promotional teams. These teams will be

instrumental to further enlightening the public (especially people in the rural areas

and traders) on redenomination.

Our promotional team will be available in financial institutions, stores, schools etc

to distribute promotional items to complement other communication efforts.

Advertising Strategy

We will adopt the affordable approach. In the affordable approach, the advertising

budget is set simply on the basis of an assessment of what CBN can afford to

spend within a 16-month period. It is therefore an extremely arbitrary method

which, although it has the advantage of been simple to operate and of ensuring

that the organisation does not over extend itself, suffer from several severe

limitations.

The two fundamental weaknesses of the affordable approach are first, it does not

encourage the development of long term planning of advertising expenditure and

second, that short term advertising opportunities are likely to be overlooked.

Despite these weaknesses many organisations use the affordable approach

seemingly without encountering problems.


Difficulties are likely to arise, however, if the organisation’s awareness begins to

decline. Any decrease in the amount of advertising may well lead to a further

decrease in awareness. The efforts of using the affordable approach in such a

situation are therefore likely to be cumulative.


Media Plan

We will utilize a pulsing schedule whereby a comprehensive level of campaign will

be in place throughout for the period of 16 months.

For television advertising, run-of-the-station 60-second spots will be purchased

(please refer to television advertising below). For example, all NTA news

broadcast will follow with an advert on redenomination. Several spots will run

Monday through Friday on daytime rotation basis. Weekend spots will run

alternatively too. Adverts would be creatively designed in different languages and

run in every state of the federation.

Radio

Radio will be used to target commuters because 74% of Nigerians spend 40% of

their time commuting to and from the city in private or commercial vehicles.

Therefore, many consumers will hear the radio campaign and respond positively

towards the process.

Radio is an important part of our media planning as it acts like information

reference point for most Nigerians. Furthermore, radio can reach many of the

smaller states where consumers do not have access to television or other

technological developments.


Newspaper Advertising

Only the press campaign and vital information will be used from the launch date

through to the end of the exercise. We will use the support of the radio to

effectively help

Promotional launches or announcing information relating to subsequent

developments.

However, new notes will be present in national papers across the country for the

First quarter. This is to simulate peoples’ interest and develop enquiry feedback

from the campaign.

Campaign Research

Bespoke pre and post monitoring programmes can be commissioned to measure

both the awareness and effectiveness of your advertising communication

campaign or PR campaign. This will enable to be objective and as well as

ensuring that your budget has been spent effectively.

Target Market

Target market refers to the amount of the people the media campaign needs to

reach before a response is made to either, acknowledge the product or services

and then act upon that interest to purchase or deepen curiosity. This media

planning has been divided into six-target market zones, to indicate penetration

spending according to the size of the implementation policy.


Audience Analysis

Nigerians Home and Abroad

Illiterates and Literates

Urban and Rural dwellers

The International Community

Advertising Efficiency

Monitoring people’s opinions on and after the campaign.

Implement before and after measures of usage attitude studies.

Hire agencies to carry out qualitative analysis of work produced by ad

Agency.

Ensuring that every Nigerian (including illiterates) understands the

relationship between the old and new notes.

On commissioning, client is required to pay 100% of all production costs before

the agency can develop, implement and execute your required tasks after the

pitching process. The 100% refers to the agency charges, VAT, creative concepts

and or pitching fee where included.


Budget

The budget for the complete communication, educational programme and media

campaign is estimated at N2.750 billion.

Breakdown as follows:

National media campaign N2 billion

Global media campaign N500 million

N250 million (Inclusive of agency fee plus VAT and contingencies).

N.B This is a speculative budget, which is based on our research from campaigns of this magnitude and what other countries that have implemented the policy in recent time have spent to achieve a successful communication campaign. We have little or no idea of the amount CBN intends to spend on this project.

It is worthy of note that several efforts must be put in place to achieve desired

result, thus, it is advised that government agencies (especially The National

Orientation & information Agency) play active and supportive roles throughout the

exercise.


Acceptable Payment Methods

Irrevocable Letter of Credit (Cash Covered) for the full 100%.

All pricing quoted is inclusive of V.A.T.

LPO (Letter Purchase Order)

Secure Bond where necessary

Cheque payment

Bank Transfer

Agency Fee

Agency fee is provisionally estimated on the basis that Impact Eight Five Limited

will be the appointed advertising agency for the full duration of 18 months.

Media Placement

Pre-payments for media insertions will be made at the beginning of the campaign

to facilitate the smooth running of the campaign and to further enable bulk

discount from the media houses. All media buying payment must be settled to the

agency a week before any media planning is executed.

Impact Eight Five will present tear sheets and certificates of broadcast for the

previous month no later than the end of the first week of the following month. For

all outdoor advertising we will commission the expertise of a company called

Media Track. Media Track will be responsible ensuring all advertising instalment

are implemented in accordance with our execution time requirements. The

company has offices around the country.


Pitching

You must issue a brief, specifying what your organisation wishes to achieve and

invite Impact Eight Five to present a communication strategy and creative concept

for the project. Finally, your organisation should specify a budget, since this would

have a major impact on the type of ideas we can recommend.

If after the pitch, Impact Eight Five is not the selected agency then a pitching fee

will be charged for service provided. The pitching fee is normally 7-10% of the

clients’ budget. However, if Impact Eight Five becomes the selected agency, that

will execute the campaign then the pitching fee becoming only 3.5% of the budget.

Refer to Media Plan for detailed financial spending of the proposed budget

(Media Plan/Global Media Plan).


Proposal produced by:

Impact85 Marketing & Communications Nigeria Limited

Lagos

w. www.impact85.com.ng e. [email protected]

t. 018509141 m. 08088500000

Economy & Finance

Impact85 Naira Redenomination Marketing Communications Proposal for CBN 2008