Where and how do we do business in the Asean market?
Question: We’re marketing major students. We’ve been assigned a course project to answer the question: “Where and how can a Philippine commercial bank advise its corporate clients to do business in the Asean Economic Community (AEC)?” We’ve been gathering information and reports from several sources.
We got permission from our marketing professor to write to you about our assignment. When we visited the Asia Society website, we learned that you gave a talk last year related to our assignment. We will be most grateful if you can share with us the script of your talk and also let us know your latest analysis about our question.
Answer: I like the way your marketing professor defined the specific question for your project to answer. It’s from the perspective of a commercial bank. Your own information search must have shown you that among the top 20 listed Asean companies by revenues, four of them are banks. So commercial banks are asked your question by their corporate clients.
This is how I would make your question more specific: “In what product and service categories and in what market segments of an Asean country should your commercial bank advise its corporate clients to source revenue productivity and grow their business?”
An appropriately designed market research is one good way to get actionable answers to the question. Specifically, it’s the nationwide Social Weather Stations (SWS) consumer coping behavior survey series that I’ve designed and directed. It’s been in use nationwide for five years now. It’s frequent enough to depict trends.
The survey data are about how consumers budget 144 product and service categories as recurring expenditure items.
The budgeting behavioral data are analyzed to bring out two sets of insights. The first draws out from the budgeting data five classifications of the 144 product and service categories.
These are: (1) staple categories that consumers say they cannot do without and are absolutely necessary for them or their family; (2) near-staple categories that are expenditure items but which consumers regard as necessary but not absolutely; (3) nice-to-have categories, which are no longer necessary but nice to have; (4) near-dispensable categories, which consumers feel they generally can do without; and (5) definitely dispensable categories, which consumers say they can do without.
Further analysis of the budgeting behavioral data for each product or service category can identify three consumer coping segments: (1) category maintainers whose revenue productivity falls under the responsibility of the consumer retention manager; (2) category lapsers whose business growing contribution is the job of consumer re-acquisition manager; and (3) category non-users who can be sourced for business growing by the new customer acquisition manager.
It’s important to bear in mind that the budgeting behavior data are not at the level of the brands. They are about product and service categories. Several brands compose each of these categories.
Over the years, survey data analysis has shown that the ultimate source of growing the business from any product or service category are the coping market segments.
For the staple and near-staple categories, it’s the maintainer and lapser segments that matter most. For example, the staple category of toothpaste has all of its consumers maintaining it in their budget.
For the definitely and near dispensable categories, growth comes from the lapser and the non-user segments.
The survey data are also analyzed and presented by regions.
Over the years, most product category classifications remain stable. What’s a staple one year stays a staple in the next, as it is with dispensable categories.
There are, of course, exceptions.
For example, in the National Capital Region, the corned beef category was a “nice-to-have” in 2014 but in 2015, consumers treated it as a “near staple.”
The consumer re-acquisition manager or whoever was in charge of re-acquiring category lapsers did his or her job.
The analysis by region answers your question of where to grow the business. The “how” question is answered in the preceding.
So if your commercial bank will undertake or commission a consumer coping behavior survey and analyze appropriately, it can correctly and effectively advise its corporate clients “in what product and service categories and in what market segments of an Asean country” it can profitably do business.
Incidentally, I will be making an industry-wide presentation of the latest nationwide Consumer Coping Behavior survey results in the first half of April 2016. This is under the partnership of SWS and De La Salle University.
Keep your questions coming. Send them to me at firstname.lastname@example.org.
Check out our Asean 2017 special site for important information and latest news on the 31st Asean Summit to be held in Manila on Nov. 13-15, 2017. Visit http://inquirer.net/asean-2017.
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