The term stokvel originated from local stock fairs in the Eastern Cape in which five to 50 members of colleagues, family and friends pooled resources to trade livestock with English settlers.
Today, the stokvel acts as a saving society where money is collectively shared in agreed amounts among members belonging to the same shopping basket. A weekly, bi-weekly or monthly contribution makes up a joint investment ‘kitty’ where savings are generated for the benefit of the group. The money is used to pay for everything from burials and celebrations to school fees and groceries.
This method has a very effective way of ensuring that low-income consumers are getting bang for their buck and that their hard-earned cash is buying them quality and quantity at the best possible price.
A stokvel can be started by anyone from the community but members are usually carefully selected by invitation and based on honesty, openness and trust. The underlying thread is conviction that all selected members will reinvest their monies once they have received their pay out. The accumulated money/savings are drawn by members in rotation or in time of need.
Stokvels can also act as an informal ‘banking industry’ where members deposit money into a savings brokerage while still being able to take out loans at an affordable interest rate.
Reaching the stokvel market
The stokvel market represents a place in which all purchases are made under great scrutiny by opinion leaders who have the buying power and influence to sway the purchasing choices of a larger group of consumers. To get opinion leaders to buy in, marketers need to use (create if necessary) communication channels that respect and incorporate traditional South African thinking and values, reaching consumers on a more personal level.
A method that has proven to be very effective to this segment of the market is experiential marketing and/or brand activation; the consumer’s real experience of a brand, product or service which drives sales and increases brand image and awareness. Gaining a large share of voice through consumer-based outlets in targeted communities can help create a sense that the brand is at the forefront. This is a valuable tool for building brand loyalty and can persuade customers to follow through on an intended purchase.
Stokvel Open Days or Store Parties at wholesalers take place nationwide from September to December each year and are effective ways of reaching thousands of stokvel members. These days are set aside to inform, educate and entertain members in a fun and easy-going manner; sampling opportunities are vast as well as competitions and giveaways which create ‘talkability’ and hype about brands and the companies that manufacture them.
For more information about stokvel activations visit www.zinto.co.za
By Miguel Correia of The Zinto Marketing Group