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How do we know where in Asean to market products?

Question:   We’re the same marketing major students who wrote you last Friday.  May we please request for a clearer explanation?

Last Friday’s column told us that the data analysis of your consumer coping survey has shown that the ultimate source of growing the business of any product or service category are the coping market segments of category maintainers, category lapsers and category non-users.  Then for our question on where in Asean to grow the business, you simply said “the analysis by region” should answer that question.  That was not clear.

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Will you please explain?  We like your explanation whenever you use a specific example.

Answer: Thank you for your follow-up question.  I forgot to consider that for students without or with little actual business experience, it’s not enough to simply give the marketing Rx of doing a survey data analysis by region.  I must admit that my MRx was no explanation at all to answer your question of in what member-country of the Association of Southeast Asian Nations to market a product category.

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I will explain with the use of two examples.  One is a consumer product category, canned fish.  The other is a consumer service category, food court.

Along the way, I will focus on each of these categories’ coping market segments as the true sources of business-growing.  Among the three segments of maintainers, lapsers and non-users, I will concentrate on the last two segments.

Here’s my reason for doing this.  Over the years of conducting consumer coping surveys, for entering a new market, I’ve learned that it’s in the market segments of lapsers and non-users where revenue productivity and business-growing opportunities are aplenty.

The lapser segment of a product category has consumers with an underserved need.  The more underserved or dissatisfied consumers there are, the larger a segment market size there is in the product category.  Something similar can be said about unserved consumers.

Here’s the market segment data by region for the canned fish category.

As a percent of consumers, lapsers or the underserved consumers were largest in Mindanao at 53 percent.

They were 27 percent in Balance Luzon, 26 percent in NCR and 24 percent in Visayas.  So if you’re after the lapser segment for canned fish, you should start with Mindanao.  After, you should target Balance Luzon and NCR.  Visayas should be your last target market area.

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On the other hand, if you’re after the non-user or unserved consumers, it’s Visayas where there’s 70 percent canned fish non-users that becomes your primary target market area.   Next would be Balance Luzon (with 64 percent non-users) and NCR (with 61 percent non-users).  Your last target market area would be Mindanao with only 34 percent non-users.

Your next issue is: “In any given target market area, between the lapser segment and the non-user segment, which should be your priority?”  The quick answer is the segment with the larger segment market size.  For the pertinent survey data for canned fish, that would be the 70 percent Visayas non-users versus the 53 percent Mindanao lapsers.  But my 2010 best-selling Segmenting book presents evidence that another more critical consideration should be taken.  That’s how difficult it is to break into a lapser market segment versus a non-user segment.

If you’re after a lapsed canned fish category consumer, you need to re-acquire her or bring her back as a canned fish consumer.  Experience with this consumer re-acquisition and research on it have shown that in most cases, success is a matter of product improvement or a next generation product development like adding a product feature that was missing before and led to the lapsing behavior.  On the other hand, if you’re after a canned fish non-user, you have to find out what can make a non-user a user.  Successful experience with and research on this consumer conversion behavior have shown that it takes a break-through product innovation to accomplish this.  It’s fairly obvious that it’s much more difficult to go after the unserved (non-user) than the underserved (lapsed) segment.  So it’s up to you and your priorities to make the choice.

How do all the preceding provide you with a good answer to your question about where in Asean to market a product category?  Let’s say that your commercial bank has a client into canned fish manufacturing who is interested in entering Vietnam, Malaysia, Indonesia and Thailand.   If this bank will commission a consumer coping survey and analyze as we did above, then the bank can correctly advise this corporate client about its question regarding the country to effectively market first.

Here’s a data analysis exercise for you to play with on the consumer coping survey data by region for the consumer service category of food court.

As a percent of consumers, lapsers or the underserved consumers were: 25 percent in NCR, 39 percent in Balance Luzon, 34 percent in Visayas, and 28 percent in Mindanao.  Non-users or the unserved consumers were: 60 percent in NCR, 46 percent in Balance Luzon, 48 percent in Visayas, and 60 percent in Mindanao.

When you analyze these survey data to answer the “where” question, be sure to also answer these related questions:

  1. What will drive a canned fish lapser to return to canned fish usage?
  1. What will drive a canned fish non-user to become a user?

Keep your questions coming.  Send them to me at ned.roberto@gmail.com.

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