Toshiba bullish on Africa

Mergers, Acquisitions and Financial Results

Despite a general cash squeeze on the channel and difficult market conditions, Toshiba South Africa predicts 2008 sales will grow by 127%, with its South African market doubling in the year ahead.

Reon Coetzee, marketing manager for Toshiba SA, says this will be achieved by shifting focus from retail to the channel, with a current 60:40 mix in favour of retail to possibly shift to the exact opposite by the end of the year.

“The channel is a big pillar in our strategy – it has a lot of value to add,” he says.

The African portfolio was added to Toshiba South Africa's mandate from the first quarter of 2008, with a target of being operational by the second quarter. Portuguese-speaking countries in Africa will come on board in the third quarter.

Africa is expected to deliver the bulk of the targeted growth for Toshiba, with the South African market doubling its current growth rate of about 32%. To facilitate a boom in sales, the company will spend between 400% and 500% more on marketing in quarter one alone, with this figure set to increase even more in quarter two, says Coetzee. “We're here with a vengeance.”

A lot of the marketing-spend is to go into the small and medium enterprise market, as Coetzee says this is where the bulk of the company's growth comes from. Toshiba has also launched a programme for the channel, where partners will receive cash bonuses, discounts on demo materials, and access to a marketing fund, depending on how much they sell.

Channel partners are expected to deliver on Toshiba's service mandate, which Coetzee adds is in line with international market movements. “The trend is towards services – customers are no longer basing their buying decision purely on cost.”

The new partnership initiative will be reassessed every two months.