How can a Visayan company succeed in Metro Manila?

Q: Last month, my company’s top management team missed your AIM Alumni Association (Cebu Chapter) seminar on business-growing for homegrown companies.  I have a question that I understand from those friends of mine who attended, you were not asked.

We’re a medium, almost large sized manufacturing company of canned goods.

We’d like to come and do business in the Metro Manila market.  Please give us some tips on how we can succeed.

A: I’ll answer with the survey data that I use for this kind of question.  This is the survey data from my nationwide “Consumer Coping Behavior of Housewives.”

This survey covers more than 150 product categories that are these housewives’ recurring daily or weekly expenditure items.

In the Cebu seminar, I actually showed some of the results of 2012 survey data analysis.  However, I showed those analyzed data for answering a different question.  Let me now use them to answer your question.  But first some necessary backgrounder on that survey’s analyzed data.

Of the 159 product categories that the survey included, 66 percent to 80 percent were to the housewives, “near-dispensable” and “definitely dispensable” product categories.  To the housewife, a definitely dispensable product category is an expenditure item she believes she “can certainly do without and live without.”  There’s definitely more dispensables than near-dispensables.

Out of these 66-80 percent dispensables, 46 percent to 52 percent are definitely dispensables.  We focus on those definitely dispensables in answering your question because that’s where to mine the larger business-growing opportunities.

Here’s the Marketing Rx that my analysis of the survey data on the definitely dispensables uncovered:  “Learn how to do market segment targeting of the NON-USER and LAPSED USER segments that are in so many product categories particularly in the definitely dispensables.  Today, it is the lapsed user and non-user segments who are your sources of ‘far-out revenue growth’ in the 100 percent to 200 percent.”

The more than 50 percent up to less than 100 percent are with the lapsed user segments while it is with the non-user segments where your 100 percent and 200 percent sales growth is to be found.

It’s also good to remember that non-users generally have unserved need for your product category.  They can be a large population size and therefore in the 100 percent to 200 percent source of revenue gain.  On the other hand, because they have incompletely satisfied needs, lapsed users are a source of 50 percent or more revenue increase.

Let me take just one product category that the  space of this column will allow and which relates to your “canned goods” business.  This is “canned meat.”

Instead of going directly to your question of how you can succeed in Metro Manila, I’ll tackle the more pertinent precedent question:   “Among Metro Manila, Balance Luzon, Visayas and Mindanao, from where can an easier and larger source for growing your business come?”  Keep in mind that what’s easy often is not large, and what’s large is not easy.

We start with the easy.  That’s where there’s more lapsed users.  For the canned meat product category, there’s a 49 percent Mindanao lapsers and a 30 percent Balance Luzon lapsers with UNDERSERVED need for canned meat.  Just think how much revenue and market share increase your brand can get if it’s able to convince even just half of those 2 percentages to retry and stay with your canned meat brand!  So if you’re a canned meat company, where to go to from where you are in Visayas is first Mindanao and second, Balance Luzon.  Go to Metro Manila after or much later.

The key and practical question of course in sourcing the lapsed user segment for business-growing is this:  “How do you find out what will drive a canned meat lapser to return to buying and eating it again?”   This is where I use my MADI questions to uncover that “driver.”   Some previous MRx columns have explained this insighting technique.  Just to recall.  It’s basically asking, in this case, the lapser what’s missing (kulang), annoying (nakakabuwisit), disappointing (nakakadismaya) or irritating (nakakainis) about the product category the lapser is now into.  Then used the uncovered “gap” to get the lapser back to your product category as long as a product test proves its improved form fills that uncovered gap.

We now move on to where the larger business source is.  That’s where there’s more product category non-users with UNSERVED need for canned meat.  Here’s the analyzed survey data on this.  There’s a 64 percent Balance Luzon non-users and a 58 percent Visayan non-users.  Compared to the lapsed user segment with underserved need, as you can see, here is a much larger source for canned meat business and market share growing.   And the survey data says that your second priority area to go to is where you already are, Visayas.

For the task of business-growing, we have to ask the same key and practical question: “How do you find out what will drive a canned meat non-user to become a user?”  For this, you have to ask first what the non-user is buying and eating in place of canned meat.  To those who will answer and therefore have something they buy and eat in place of canned meat, you then ask the MADI questions and analyze for the “consumer gap” to fill in order to get the non-user to become a user.  For a concrete example, please read the MRx column on what was found that feminine wash non-users were using in its place and how product development formulated to get those non-users to replace what they were using in its place.

So instead of asking how you as a Cebu homegrown company can succeed in Metro Manila, learn first which market among Metro Manila, Balance Luzon, Visayas and Mindanao is the easier market and the larger market.  Identify the easier market as where there are more lapsed product category user segment with the greater underserved need for your product category.  For identifying the larger market, find out where there are more non-user market segments with the greater unserved need for your product category.  This way, you get a win-win solution to your business growing target: more than 50 percent revenue growth from where there’s more lapsed user segment, and more than 100 percent sales increase from where there’s more non-user segment.

Keep your questions coming.  Send them to me at [email protected].