Survey show – Crisis changes consumer priorities

Published by rudy Date posted on April 23, 2009

MANILA, Philippines — The economic crisis has forced Filipinos to become more conservative with their spending habits, pushing many consumer products lower down their hierarchy of needs and requiring many firms to rethink their marketing strategies.

According to market research expert Ned Roberto, a nationwide survey conducted under his supervision showed that many consumer products and services previously rated by respondents as “staple” items, or those deemed absolutely necessary, had been demoted to anywhere from “near staple” to “definitely dispensable” status.

Results of the survey, dubbed “Consumer Coping Behavior Research Study,” were presented to businessmen in Makati City yesterday.

“These are really hard times,” he said, pointing out that the present economic environment presented greater challenges for consumer-oriented firms since the crisis was on a global scale.

“In the late 1990s, it was just a regional crisis,” he added.

Roberto, who is also a professor at the Asian Institute of Management, cited the case of “quick service restaurants” or fast-food outlets as a case in point. In 2001, fast-food restaurants were rated by respondents as “near staple” items.

When the country experienced sluggish growth in 2001, he said fast-food customers migrated to having their meals at food courts, while those who used to eat at food courts migrated to eateries of carinderias. The carinderia customers migrated to buying their meals from street vendors.

The results of the survey showed that 50 percent of the 200 consumer and service product categories included would be affected “severely and negatively.”

According to Roberto, the only product category that maintained its hold as a “staple” across the country—in Mega Manila, the rest of Luzon, Visayas and Mindanao—is laundry detergent.

Surprisingly, rice and instant noodles that used to be classified as staple items have been relegated by consumers to “near staple” status. This, he said, was because consumers could opt for cheaper alternative products.

“They are now considered necessary but not absolutely necessary,” he said.

Other staple items that “will not be touched at all” in Manila, Luzon and Visayas markets are cooking oil, toilet soap and toothpaste. In Mindanao, detergent is the only staple.

To survive and prosper under these difficult conditions, Roberto said companies should no longer rely on overarching “national marketing plans,” but instead tailor-fit their selling strategies to conditions of each geographic locale.

“What companies need now are market managers, and no longer just product managers,” he said. “They will be managing market segments and not only products.”

This change of mindset, he said, was necessary for companies to be able to exploit every single market segment and not just the traditional buyers of consumer goods and services.

He said the survey revealed that there were anywhere between 1.0 and 3.0 percent of the population in each area that have never tried products that were included in the surveys.–Daxim Lucas, Philippine Daily Inquirer

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