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TRADE AND INDUSTRY PORTFOLIO COMMITTEE; ECONOMIC AFFAIRS SELECT COMMITTEE: JOINT MEETING MINUTES
12 September 2001
PROUDLY SOUTH AFRICAN CAMPAIGN: BRIEFING
Chairpersons: Dr R Davies and Mr M Moosa
Documents handed out
Nedlac Media Releases of 3 July & 3 August 2001 (See Appendix)
Proudly South African representatives and members of Nedlac comprising its Executive Director and four key constituency members made presentations to the joint committees, which was also attended by the Speaker. The Proudly South African campaign is intended to promote economic growth by inculcating in consumers the importance of buying South African products to create and save jobs.
He pointed out that the Proudly South African Campaign was one of the most important initiatives to come out of this country. Its aim was to generate economic growth by promoting South African products both locally and overseas. He thanked the Speaker for making herself available and asked her to say a few words.
The Speaker, Ms F Ginwala (ANC), told the two committees that democracy would be fertilized by economic growth and the Proudly South African Campaign was one such fertilizing instrument. She pointed out that this country faced critical issues like unemployment and hoped that such initiatives would go a long way in alleviating such problems.
The Speaker said the Proudly South African Campaign did not suggest that the country was against imports. The campaign was aimed at empowering South African products so that "we could compete globally". The Speaker wished all those involved in the campaign every success.
Input by Executive Director of Nedlac
Mr P Dexter (Executive Director - NEDLAC) noted that the Proudly South African Campaign had emerged from the 1998 Presidential Job Summit and that it would provide greater opportunities for those citizens involved in the manufacturing sphere and other economic activities.
He urged all those that are involved in the manufacturing of goods and services to take advantage of this opportunity and build on it. The campaign aims to promote entrepreneurship and economic development in the country and everyone - from micro enterprises to big business - could become part of it.
Input by Chairperson of Proudly South African
Mr Tim Modise (Chairperson) thanked the DTI as a stakeholder for "putting their money where their mouths are." He said they were the first stakeholders to give Proudly South Africa funding to kick-start the whole process.
Proudly South Africa aims to harness the energy that exists in the country in order "to make this nation work." Over the past seven years the country had witnessed the capacity within "us" to create new things - such as the new political system and the current transformation of the country that is creating opportunities for those left outside the economy's mainstream for many decades.
Since being appointed Chairperson of Proudly South Africa, he told the committees, he and the CEO of Proudly South Africa, Mr M Feinstein, have attended several media briefings to tell South Africans what this campaign was all about.
One of the disturbing things currently happening in the country was that much time was spent "mudslinging" one another and standing on the sidelines complaining. He hoped that would not be the case with Proudly South Africa and that everyone would be united behind it.
The transformation that was taking place in South Africa "economically speaking" was not happening in isolation but was happening in a global economy that was itself undergoing some restructuring.
As companies strive to improve, some have been hampered by the opening of the South African economy. However they have to strive to be as competitive as other companies from abroad.
He hoped the campaign would help to educate the public and inspire emerging businesses to aspire for the same benchmarks used by successful companies in South Africa.
Mr Modise said he was glad that large numbers of South African businesses already meet these requirements. He noted that BMW has export orders of about 20 000 cars to the US, Daimler-Chrysler was exporting cars to Australia, New Zealand and Japan and VW was exporting to China.
He pointed out that many employees are not aware of the role they are playing for the benefit of the country. He believed that this campaign would engender amongst workers the spirit that they were on the right course and that this was a nation with the potential to achieve its goals of creating opportunities for businesses to grow and for many people to acquire employment. The campaign aimed at getting people to think afresh of themselves as South Africans - not viewing the country as 'this' country but rather as 'our' country - and inspiring ordinary South Africans.
Input by CEO of Proudly South African
Mr Martin Feinstein noted that it was his job to make Proudly South African work. The Proudly South African logo - the symbol of the campaign - would come to carry much meaning for South African consumers.
The genesis of Proudly South African stems from the Presidential Job Summit meeting where key stakeholders took a decision that South Africa needed a coherent programme to promote South African products and services in order to create jobs and increase economic growth.
Nedlac has facilitated this process and the four key constituencies - called the "Task Team" - had done an enormous amount of research and development to take "us to where we are today". A number of countries were looked at in terms of international benchmarking and many lessons were learnt from their successes and mistakes.
Proudly South African has been set up as an independent entity accountable to the four social partners at Nedlac. However it is independnet and as such was not housed within government or business. This gives them a wide operational mandate "to do what is it we have to do".
The process of promoting the country's goods and services in such a way as to persuade people to buy into the process as part of a nation-building exercise was not a simple task. "It involves planning, legal policy issues, protection of the Proudly South African Campaign trademark, the financing of the campaign, infrastructure, logistics and communication."
This campaign was more than a 'Buy South African Products' or 'Made in South Africa'. It is not about labels but rather symbols. "It is not just about buying South African products, but it engenders a whole different sense of feeling of who we are and what we are capable of and what we have accomplished and intend to accomplish."
They had felt that a 'Buy South African Products' or 'Made in South Africa' slant was not particularly inclusive and what they wanted was that every individual and organisation that subscribes to the principles of this campaign should be able to be involved one way or another.
The programme was structured in such a way that it was not something 'for business by business' but it was for everyone - educational institutions, NGOs, CBOs, voluntary organisations, sports bodies, government structures and so on. The underlining philosophy is one of inclusiveness and this includes the working class - the people who actually make the products.
The real business of Proudly South African was to promote South African products and services in order to create jobs and retain jobs. If local demand could be stimulated, those jobs could be created.
They also need to stimulate the competitiveness of South African companies and to raise the awareness of the active roles South Africans could play in helping to grow the economy and reawaken South African pride.
He gave an example of how demand could be stimulated: for every R1 million increased sales, it could create directly or indirectly just over 22 jobs in Agriculture, 16 jobs in Food, 19 in Apparel, 20 in Wood, 10 in Electrical, 14 in Footwear, and 9 in Rubber.
He said South Africans are not particularly positive about the quality of products that they make and tend to believe that foreign, imported products are much better than "ours". This campaign sets out to change such a mindset.
Mr Feinstein noted the importance of branding. One of the key currencies for success are brands. For instance, "a person doesn't just buy jeans, he buys Levi's. A person doesn't just buy a car, he buys a BMW" The commercial environment is brand-driven. To play in that playing field, one has to create a brand. A brand is not created by just designing a logo. Brand requires equity in order to occupy a share of mind in the consumer's head which then influences behaviour. One has to invest in creating the values of the brand and what it denotes which is an expensive marketing business. If they were successful in building brand equity, then they could have a significant influence on consumer behaviour. When consumers see a brand that has meaning and credibility, they would identify that product, service or company as being inherently South African. The purchase of that product would be an individual act of helping this economy to grow and of creating jobs in this country rather than creating those jobs in other countries.
For business, the Proudly South African brand would provide the opportunity to differentiate their products from competitors as the superior offer. In particular, they will be working with SMMEs who were the future engines of real job creation in this country. They will offer referral services to those agents which they believed could offer substantial, practical, and deliverable support to SMMEs. Proudly South African would facilitate that forum.
The real proposition to the consumer was to identify, choose to deal with or buy from, companies or products, which would contribute to the creation of "much needed jobs in South Africa in order to help build a better country."
Mr Feinstein said they cannot assume that consumers would not automatically respond to a patriotic proposition since their "purchasing drivers" have conditioned them to purchase goods and services they are accustomed to. Therefore, Proudly South African's emphasis would be quality. Proudly South African would focus on ensuring that the products of its member companies on which the logo would appear are fine quality products.
For business membership in the campaign, the proposition would be: "You can now identify your company and products for the consumer." The investment in membership would have a spin-off on the sales of their products. The advertisements Proudly South African would run in the media would have to benefit member companies.
Proudly South African has set up a Section 21 Company whose board members would be made up of two directors from each of the four key constituencies. They are currently recruiting a small, tightly-knit team of seven people with marketing expertise and a passionate commitment.
This model suits South Africa best. Mr Feinstein noted that about 60 percent of Australian consumers have confidence in the Australian-made brand and 93 percent of Australian consumers recognise the Australian-made brand and what that means in terms of country and quality. He said that brand clearly involves a consumer's pride.
After the launch, six months would be spent on recruiting business to join the campaign and get the logo on their products. Thereafter, they will market it to consumers.
Criteria for products to be endorsed
The products have to be 50 percent South African product value, there has to be a commitment to quality, environmentally friendly and be produced under fair labour practices.
Founder members who sign up within six months, marketing partners who assist Proudly South African with the requirements of advertising, design, PR and the media, media sponsors that assist Proudly South African, affiliate members who have similar objectives of promoting South African Brands, plus paid up members.
How Proudly South African will spend its money
Mr Feinstein distinguished between operational costs and communication costs. They want to spend as much money as possible on communication and as little as possible on operational costs. The future of this project lies in effective communication, which will influence companies to join Proudly South African and to change the behaviour of consumers.
Mr Feinstein told the committees that for this year they have enough funding for operational purposes but not for communication and hope to generate additional revenues from a number of sources especially membership fees from companies. Companies will pay one tenth of one percent of their sales up to a ceiling of R500 000. Thus the campaign is affordable to all businesses.
The bulk of their communication would be taking place in 2002. "It will be the year where the Proudly South African Brand will be making a substantial impact in the market and in the consumer's mind" he said.
How the campaign will be measured
The success of the campaign will be measured in four areas: sustainable membership recruitment, brand awareness and support by consumers, total gross sales value of products branded as Proudly South African, and incremental sales attributable to Proudly South African.
Mr K Wakeford (Business representative) firstly congratulated Labour for originating this idea. He said that business was committed to this process. He noted that South Africa tends to have low self-esteem and does not recognise its natural competitive advantage. Fifty percent of the Gross Domestic Product was now foreign-trade based and exports far exceed imports. However, it would take a lot of hard work and commitment to do even better than this and he wished Proudly South African all the success.
Mr C Ngcukana (Labour representative) explained that the origins of this idea started around 1995/96 when union representatives noticed that in America, no member of a trade union bought foreign-made products such as cars and they thought about how to duplicate this and encourage the South African public especially union members to buy South African products. This idea was then taken to the Presidential Job Summit.
Ms W Dobson (Government representative) said the DTI as well as government were firmly committed to this campaign and were giving Proudly South African R7 million for this year.
Mr K Mbongo (Community representative) said the Proudly South African campaign should be seen as one of the successes of social dialogue in South Africa. As the Community constituency, they support this campaign and would encourage people to buy South African Brand products that carry the Proudly South African logo in order to create jobs and to make this economy a success.
Dr R Davies (ANC) asked how Parliament can become part of this campaign. Can assurance be given that what the consumer would buy, would conform to minimum standards of quality and labour? Would the Proudly South African label be used to assure overseas consumers on products? He asked what mechanisms have been put in place to ensure compliance.
Mr Feinstein responded that an expression of support from Parliament would be a good idea. Parliament can join the campaign as an entity or MPs can become individual members.
The Proudly South African symbol would be used on South African products overseas and it is also their intention to get the South African public fully behind the Proudly South African programme. Their communication overseas would use 'guerilla marketing' which is to market smart in order to achieve intended objectives.
He said they would be conducting spot compliance checks in relevant sectors to see whether companies were following procedures as set done by the programme.
Dr E Conroy (NNP) asked what type of products would carry the logo and whether products that compromise the environment or health such as plastics and tobacco products, would be allowed to carry the logo. What would happen to a company that uses the logo without being a member of Proudly South African and what part of the budget would be earmarked for inspection services?
Mr Feinstein replied that where there is a clear compromise to environmental standards, the company in question would have to do something to change this. However if the company contests the Proudly South African decision, there are procedures in place to resolve these matters. As for tobacco products, no decision has been taken on the matter and he was not at liberty to say whether they will endorse the logo on such products or not.
Legal steps would be taken to stop companies not registered with Proudly South African from using the logo so as not to compromise the integrity of the logo.
Mr Feinstein said that they have not been allocated a specific budget for inspection per se but do have funding from the budget for a compliance manager.
Ms Ntuli (ANC) asked how would Proudly South African quantify the creation of jobs through its programme and how many SMME companies are expected to register with Proudly South African in its first year of operations? She asked how committed is the media to this campaign and how are they going to guard against foreign companies using the Proudly South African logo?
Mr Feinstein responded:
- Proudly South African has engaged an economist to work on an econometric model to link the effects of the campaign on consumer trends, companies and job creation. As soon as the findings were made available, this information would be communicated to the parliamentary committees.
- They are bending over backwards to assist and support SMMEs. They have also been referring them to appropriate institutions to improve the quality of their products and competitiveness.
- The media are in principle committed to the campaign but there is no such thing as 'free ads'. They are certainly negotiating with the media for mileage of some sort in their newspapers.
- Overseas companies could carry the Proudly South African symbol just as it was possible for Daimler-Chrysler to qualify as a Proudly South African member.
Mr K Durr (ACDP) wondered what the budget of Proudly South African would be - how much would be spent on administration and salaries, for example?
Mr Feinstein replied that the DTI has allocated R7 million to Proudly South African this year. Next year he understands it would increase to R14 million. Budgets for these amounts have been submitted to the Department for consideration so they are unable to disclose the contents now. As soon as there is an agreement, this information would be made available.
The remuneration to the Proudly South African team is market related - they are not working on a voluntary basis but as committed professionals from the private sector.
Ms S Sithole (NCOP-ANC) asked whether Proudly South Africa would reach out to rural areas and whether board members would be paid salaries?
Mr Feinstein replied that they will have regional representatives to ensure that communities are engaged. Board members would not be remunerated as this is done purely on a voluntary basis.
3 July 2001
Nedlac, the National Economic Development and Labour Council, announced today that Martin Feinstein, former ad agency chairperson, has been appointed as CEO of the Proudly South African Campaign. Tim Modise, well-known journalist, has been appointed Chairperson of the Board.
"Proudly South African" emanates from a Presidential Jobs Summit Agreement in 1998. Its aim is to increase demand for South African goods and services, thereby stimulating growth and helping to create jobs.
Nedlac also announced the Proudly South African Board members. These have been appointed by the four Nedlac constituencies. They are:
for Labour, Willie Madisha, President of Cosatu, and Cunningham Ngcukana, General Secretary of Nactu,
for Business, Kevin Wakeford, CEO of SACOB and Neil van Heerden, Executive Director of the South Africa Foundation;
for Government, Alistair Ruiters, Director-General of the Department of Trade and Industry and Bahle Sibisi Deputy-General of the Enterprise and Industry Development Division of the DTI
for Community Khulu Mbongo, Secretary-general of the South African Youth Council and Maria Rantho former Chairperson of the Disabled People of South Africa
Feinstein will head up a Section 21 company, which is currently being established. When the posts for the 8 permanent positions were advertised in March, over 1000 applications were received. Feinstein will now be pulling together the team, which will initially operate from Nedlac's offices in Johannesburg.
The new CEO will be approaching a group of high-level patrons, as well as PSA "ambassadors" in key commercial sectors. A lot of ground work has already been done in terms of ensuring that the campaign is inter-linked with all other South African branding initiatives, such as those spearheaded by South African Tourism, the International Marketing Council and Trade and Investment South Africa.
Announcing the appointments, Executive Director of Nedlac, Phillip Dexter, said that it was important that the CEO had extensive marketing experience. "Proudly South African will include a massive public awareness campaign, competitions in schools, promotions in retail chains, getting tourists who have enjoyed their time here to pledge to buy South African products when they get home, and many, many other activities. Martin Feinstein comes with a wealth of experience in running big campaigns."
More than R50 million will be allocated to promoting awareness of the Proudly South African brand via television, print advertising, radio, outdoor and public relations in the first year. The funding for the campaign will come initially from government and business, with revenue from fee-paying members gradually replacing this.
Feinstein said that he was excited about the new job. ""Proudly South African will make a real difference to our economy. When they see the Proudly South African logo on a product, consumers will know that it comes from a company committed to quality and service, and that it satisfies our criteria for local content, environment and labour practices. People who buy Proudly South African products or use Proudly South African services will be creating jobs, putting money back into the country and supporting South African companies."
The Proudly South African infrastructure will now be put in place - offices will be set up in Cape Town and Johannesburg. Company membership criteria and procedures are being finalised as Proudly South African prepares to invite companies for membership. The symbol, or logo, which will underpin the campaign is in its final stages of development and will be unveiled shortly.
Background info on Martin Feinstein, new CEO of Proudly South African
Awarded Cape Times Scholarship in 1977. Graduated from Rhodes University in 1978 with a Bachelor of Journalism degree. At Rhodes University, became editor of Rhodeo, the student newspaper. Played an active role in the National Union of South African Students (Nusas) and the SA Student Press Union (Saspu). South African correspondent for the Times Higher Education Supplement, London.
Worked as a journalist and sub-editor on the Cape Times, Daily Dispatch and the Rand Daily Mail.
Co-founded Concept Marketing in 1982, which grew from a small marketing consultancy to become one of the largest and most successful promotional advertising agencies in SA. Clients included Shell, the Independent Electoral Commission, Sales House, the SABC, SA Breweries and many other leading brands and companies. Became chairman of the Concept Group in 1989.
Developed the Shell Road to Fame Talent Search, the continent's largest music promotion, which ran for more than 12 years, auditioned several hundred thousand amateur musicians and discovered artists such as Rebecca Malope and Sharon D. Advised Shell on the launch of its Shell Ultra Cities, Shell Ultra Service and numerous other new products and projects. Coined the name Shell Ultra City and "Spur -- a taste for life".
Merged with Ogilvy and Mather for a 2-year period to form O&M Promotional Campaigns and then again became an independent agency.
As MD and chairman of Concept Group for 20 years, maintained a 20-year relationship with Shell SA, one of the longest client-agency relationships in the country.
Worked with the SABC to develop the public broadcaster's viewer magazine, SABC Radio and TV Talk. Created the TV Talk brand and oversaw the launch and marketing of the magazine in 1998 -- within two years it became SA's largest magazine with the highest readership of any monthly magazine in the country.
Worked as a copywriter, creative director, client service director, marketing consultant and communication strategist for numerous brands, companies and special projects. Member of the Advertising Media Association of SA (AMASA).
Worked with Nehawu and the Nehawu Investment Company to market various union initiatives including new ventures and member share empowerment schemes.
In late 1998 was approached by Union Alliance Holdings to become one of the media companies acquired by this union-based empowerment group to form Union Alliance Media, which subsequently listed on the JSE in 1999. Played a key role in the growth of UAM.
On retiring from the Concept Group at the end of 2000, continued to work as a special strategic adviser to UAM.
Issued by Nedlac in Johannesburg
Proudly South African Looking For Success Stories 3 August 2001
Proudly South African is seeking South African success stories to highlight companies which are producing goods and services we can be proud of. It is investigating setting up a prestigious awards programme, and the right kind of stories could even be featured in Proudly South African advertising campaigns. Research behind the campaign showed that some sceptical South Africans might have to be convinced that South African companies are making quality goods and providing quality services. "South Africans are innovators and entrepreneurs. I believe there is a wealth of success stories in virtually every business sector, says CEO of Proudly South African, Martin Feinstein. "We want to hear about successful products, businesses which produce such exceptional quality that they are exporting to very discriminating markets overseas, services that are new and innovative. These could be in IT, agriculture or any area of the economy" One such success story is the sports equipment company, Bellingham & Smith, in the Eastern Cape, which makes cricket bats. They tell the story of West Indian cricketer, Carl Hooper, who, when in he was in South Africa, bought five of their locally-made bats. He uses them in all his international appearances. "Our bats sell from Kuala Lumpur to London," says Bellingham & Smith. "If these stories capture the essence of Proudly South African, we will look at using them in our national advertising campaign, " says Feinstein. "We would like success stories from small, medium and large businesses - a unique product or service doesn't have to be a multi-million rand venture to qualify as a success." In keeping with the Proudly South African focus on job creation and labour standards, success stories might even be found in business turnarounds, thus saving jobs, or workers and management finding new ways of working together. Companies or organisations who want to send in their success stories should contact: Martin Feinstein on tel 011 482 2511, fax 482 4650 or e-mail
TRADE AND INDUSTRY PORTFOLIO COMMITTEE; ECONOMIC AFFAIRS SELECT COMMITTEE: JOINT MEETING
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