By Ajayi Joel
If you are an entrepreneur and you have a product that people need to achieve a crucial goal in life, count yourself lucky. Let’s throw a big party over it. When I mean products people need, I’m talking about basic necessities just like food, clothes, transportation and shelter.
Let me break it down a little further, there are basic things we all need to survive. Guys, I’m talking Nigeria here. So let’s be practical, we have rice, beans, garri, vegetables, fish, etc. Let’s divert to clothes as well; if you sell cheap clothes especially for the ladies (no offense), you have a life’s necessity product for Nigeria.
You have a market and I rejoice with you my dear friends. I have not said you’ll automatically succeed as an entrepreneur, or as a business person doing this, but let’s say you’d still have some little cash daily to buy your family meals.
The reason is simple: people need them to stay alive or exist. They need food to stay alive; they need clothes to stay sane. You have no problem to worry about.
Okay, let me not confuse you, you have a few problems to worry about which could be fluctuating prices of products, competitors, and losses. But you can never have the problem of lack of customers; only if you have a huge supermarket on a mountain.
If it’s where humans live, then customers will come to you anyway and anytime. All you need to do to stay alive as a business is to learn how to solve your little problems, and they are not so huge if you learn from a professional. Problems like competitors, getting attention and all. I can teach you if you want. But let’s leave that light issue. All I’m saying is that you have a reason to wake up every day to go to work!
You are in the Need-Economy
The need-economy is a nice place to build a business, when even if you are not a core professional, you can still survive. A country like Nigeria thrives on need-economy. Our purchasing power is so weak that we can only afford what we need. I didn’t study economics but I will analyze some things right here.
A need is a want that has 3 out of 5-level of urgency and necessity in survival.
What I simply mean is this: everything in this world is a want. But when it gets to 3 out of 5 in the level of urgency for human survival, then it’s a need.
This may actually bore you if you are not into business, and this might be long but it will help your business. So let’s proceed…
A house is a want; it becomes a need when
- It saves people from harsh weather.
- It is also affordable that they can also cater for feeding.
- They have a lifetime assurance of it.
Now, let’s look at the flip side of the coin.
A 50 million naira house is not a need. It is a want because it doesn’t meet all three basic requirements for survival by implicitly over-exceeding it! Don’t forget we are confined to Nigeria and this applies to other countries but I am talking specifically about Nigeria since about 80 percentage of Nigerians are living below expensive lifestyles daily (hey, poverty line).
Under this construct, we have the following”
- A 10,000 naira plate of food isn’t a need. It is a want. [$1 = N350 naira]
- A 1,000 naira jeans and 500 naira shirt are all needs. A 2,000 naira skirt is a need.
- A 50,000 naira suit is a want; a 12,000 naira shoe is a want.
Remember we are talking based on the 80 percent of average people in Nigeria. For the remaining 20 percent, you can still extract a need but you require a new game strategy. Yes, you have to cover the 3 essential things for living.
- It solves a problem
- It is affordable
- It has an assurance.
Making Products for the Rich in Society
Now, let’s move to people who are building products that are wants to a percentage of Nigerians. Let’s say you sell 50,000 naira shoes, you sell 10 million naira houses, etc.
The first question to consider is if you will make money focusing on the remaining 20 percent. If you will, well there are still so many problems that you will face among which is Building a Tribe.
Your attention must be focused on them alone. But what if there are so many competitors as well? Do you guys begin to fight over small portions of that market? Is the idea scalable that way? That’s a very huge problem. If you are in this shoe: the need-economy can rock.
Indomie built a business and turned many consumers to customers, and then to fans. That is how it is; you get many believers in the need-economy. To build your own noodle business, you must master the three elements (solves problem, it’s affordable and offers assurance) and find how noodle can play a role in your strategy.
The Want-Economy
This is a battle ground and those who really understand business can play the cards well here. Present an ace or go home paying your debts. I have a very golden secret I will share. It is on – How to move your product from being a want to a need!
In explaining this, I will simply refer you to an excellent piece on Tekedia. What you need is to create a perception demand where magically the want becomes a need in your life. Once you accomplish that, you can get people to spend money on that product because you have percepted something that would have been want into a need. Now, you can relax, and the revenue will be increasing.
All Together
Business is a big game: you must have capacities to play your positions well to find success. If you want to play in the need-economy league, you need to know how to score goals in the minds of the customers. If you prefer the want-economy, it is critical you rewire the mindset to have a shift through perception. When you do those, excellently, you can attack any market including a noodle market, and improve your odds of becoming a category-king. Yes, I mean, winning in the sector.
