What do the rich buy and do amid COVID-19?
The rich and middle-income Filipinos have different reasons and motivations for buying during a pandemic. They have different preferences, too. Knowing these can help brands craft a compelling story to convince their target market to prefer them over others.
To date, there is no singular metric to identify the middle income and wealthy Filipino household. Two government agencies, however, have identified income clusters that define who are middle-income Filipinos are who are wealthy. Both metrics assume a family household of five and use household income as basis.
The 2018 Family Income and Expenditure Survey (FIES) by the Philippine Statistics Authority based on 180,000 household respondents follows 10 income deciles or clusters.
The Philippine Institute for Developments Studies (PIDS), on the other hand, came up with seven clusters in a discussion paper released in 2018.
Then there’s Marketing and Opinion Research Society of the Philippines, a professional organization of marketing and opinion research agencies and professional market research practitioners in the Philippines, which aims to have one singular socioeconomic classification to be used by private and government sectors that focuses on household spending.
The MKS Behavioral Affluence Report
The MKS Behavioral Affluence Report, meanwhile, zeroes in on two household monthly income clusters—the P50,000 and the P100,000 clusters.
These fall under categories 4 and 7 of the PIDS classification and the highest income decile of the 2018 FIES Report.
The MKS report defines the upper middle income group as a family of five with a monthly income between P50,000 and P99,000. Those earning at least P100,000 are considered wealthy. The study conducted in National Capital Region in April and May this year has a 95-percent confidence level for each cluster. It must be noted though, that there are still subsegments within the wealthy cluster.
Going to church or attending church services emerged as the foremost activity among those in the upper income segment. After fulfilling church or prayer services, the wealthy intend to visit a hair salon before going to work while the upper middle income prioritize going to work before going to the hair salon. The restaurant and the mall are go-to destinations for both upper income segments.
Medicines are main category consumption drivers for the upper middle income, not so for the wealthy. When it comes to consumption, the upper middle income and the wealthy prioritize basic necessities above anything else. However, the spa, personal hygiene, skincare products and services as well as home appliances are far more important than medicines for the wealthy.
The wealthy are the most avid users of online and in-home shopping followed by live streaming and video on demand. Not surprising, since the wealthy can afford the extra costs of personal shopping fee and delivery fees that come with online and in-home shopping as well as the substantive post paid, internet and VOD subscription fees.
However, the third ranked activity, unique among the wealthy is to exercise at home with live streaming videos along with adequate equipment and some with personal trainers. However, both the upper middle and rich segment seem to enjoy listening to news and watching regular TV and cable programs.
While online shopping is foremost among the wealthy, live streaming and video on demand is the foremost activity among the upper middle income followed by work from home, listening to news and watching regular TV and cable entertainment channels.
Cash remains the preferred mode of payment for both the upper middle income and wealthy. Both upper income segments prefer to pay in cash. Both complement their cash with credit cards and online payments and debit card.
Importance of branding
The COVID-19 pandemic has adversely affected almost all sectors of the country’s economy. Still it should be a short-lived disruption once a vaccine has been clinically approved and commercialized and despite the damage caused by the health crisis, marketing opportunities remain and brand-oriented CEO should be able to recognize these.
Here are some tips on how to overcome the pandemic challenge and win over a brand opportunity.
1. Understand the new pandemic consumer. The COVID-19 pandemic will likely have a lasting influence on the buying habits of consumers. Revisit your target market. Understand their buying motivations. Pandemic consumers have become purposive buyers and they may sustain this habit postpandemic.
2. Know your value proposition and story to tell. Identify the brand’s identity. If you haven’t yet, now is the best time to do so when category competition may be slacking for a number of reasons—fear of the unknown future macroenvironment, diminishing liquidity, adopting a wait and see mentality, etc.
3. Make your brand’s presence felt even during hard times. Brands help bring normalcy to a pandemic consumer’s buying habits and motivations. Out of sight, out of mind is a most suitable branding adage at this time. If a category challenger is more aggressive at this pandemic time while your brand has been slacking off, it is likely that this challenger will captured your market postpandemic. —CONTRIBUTED
The author is chief brand strategist of MKS Marketing Consulting, a MAP and MORES member. Contact her at [email protected]
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