Fear of continuing outbreaks of violence over the April 27 election period has left marketers and agencies in a state of suspended animation as ad campaigns and deliveries halt and offices close. Already, bloody clashes between the African National Congress and the Zulu Inkatha Party have left nearly 400 dead as KwaZulu continues to insist on becoming a separate homeland.
Predictions of civil war, sent anonymously by fax, have cleared store shelves of candles and canned foods as panic buying descends over the nation.
Multinationals ready to flood South Africa after sanctions were lifted last year are now stalled until after the elections. "There have been some companies trickling into South Africa, but the real floodgates will open in May, after the election," said Peter Jackson, managing director of independent agency Pronam. "The companies are all positioning themselves, ready to storm back."
Immediately storming back is Reebok, but the sneaker maker is in the minority: Rival and newcomer Nike is waiting until after the election. Nike isn't alone in its reticence, with many veteran South African advertisers, such as Mars Inc.'s Uncle Ben's holding up planned ad campaigns until after the election.
Most companies are simply holding their breath. A survey of 176 companies conducted by Andrew Levy & Associates, Johannesburg, showed only 30% of the respondents will adopt a business-as-usual stance during election week. Another 13% will shut down for the entire week and another 12% will let employees take off three days to vote. The remaining 45% are working on a hodgepodge of arrangements but will give more than one day off that week.
Estimates of the cost of these business closures to the economy range from $1.4 million to $2.8 million.
Among the businesses closing for at least part of the week are ad agencies Lindsay Smithers-FCB, Grey Advertising, Young & Rubicam South Africa and Lintas South Africa. "It will also depend on our clients," said John Sinclair, Lindsay Smithers chairman. "If they need us to be open we certainly will but I am sure that many of our staff will be taking leave over the period in any event."
"We feel that South Africans must recognize that an election is a normal part of the democratic function and not something out of the ordinary," said Lintas Chairman Lew Slade.
The uncertainty has been a mixed blessing for supermarkets, which are ringing up record sales. Martin Rosen, marketing director of Pick 'n Pay, the country's largest supermarket chain, said sales were up 50% in March and were expected to continue to climb through April.
Retailers are busily trying to build up stock and closing for election week would cost them dearly. The supermarket chain's President Raymond Ackerman said the company would take "a cautious approach" to the election period, beefing up security, but that its stores would operate as usual for most of the week.
But staying open could also prove a problem considering anticipated delivery problems. John French, manager at SA Warehousing, a private warehouse and distribution company, said, "We have advised clients to increase their orders in the run-up period and if we are able to deliver during the last week in April, we certainly will."
Already a common practice, truck hijacking is expected to increase during the election to provide transportation for workers to reach polling stations.
All this has delayed, but not deterred, many companies already in or planning to enter South Africa, fearing that an investment in marketing will be wasted.
The one company not afraid is Reebok. "Our decision to re-enter South Africa prior to the April elections indicates our support of the democratic process and our desire to make a difference in the lives of the South African majority," said John Duerden, exec VP-global operations.
Reebook, which left the country in 1987, will establish a subsidiary 45% locally owned and plans to open its first concept store this month.
Eric Mafuna, chairman of Reebok SA, said he will use international creative work by the sneaker marketer's international agency, Leo Burnett Co.
In re-entering South Africa, Reebok will go up against more entrenched competitors, including Adidas, Asics as well as Nike, which has appointed Odyssey Sports exclusive distributor and manufacturer of its shoes. Odyssey Chairman Sam Noinyane and Managing Director David Hirschowitz have said they plan to make Nike the leading brand within a year, with the optimistic goal of a 35% to 40% share.
To achieve this, Nike is breaking a new campaign in May after the election, spending a whopping $725,000, the same amount as all sports shoe marketers together last year. Like Reebok, Nike will use creative by its agency Wieden & Kennedy but has named Media Graphics here to adapt creative and place media.
Mars Inc.'s Uncle Ben's is also waiting until after the election to introduce its new line of Uncle Ben's jarred sauces for rice, holding back ads from Grey Advertising until May.