How market research can really help the Asean integration

Question:  We liked your MRx column last July 3 about how market research can help in the Asean integration.  But there’s something that’s not that clear about the market segments you proposed for participation by our companies in the Asean integration.  How can the market segments that your consumer survey identified be superior versus the 12 market sectors that our development economists just as carefully identified for participation by our businesses in the Asean integration.

Just because your identified target market segments came out of a survey does not necessarily make them better.  Those 12 market sectors from economists came out of actual past experience and trend analysis.  At the very least, these two analysis techniques are at par in terms of insights about the markets to prioritize for our companies to enter into in this Asean integration.  So please clarify how your market survey research can help our companies in this call for integration versus the economists’ analysis.

Answer: It’s regrettable that you got the impression that last Friday’s MRx column was about an issue of rivalry.  The column was actually more about how to support and be more specific where in our economists’ 12 priority market sectors to participate.  It’s supportive in that the market survey research intended to make specific which consumer-defined market segments in each of the economists’ 12 priority market sectors are more competitively advantageous for our companies to enter and in any of the 10 Asean member-countries including the Philippines.

To clarify and explain, it’s important to start by re-acquainting ourselves about those 12 priority market sectors.  The “road map” of the AEC (Asean Economic Community) identified these “priority” market sectors as: (1) the market for agro-based products and services, (2) the air travel product and services market, (3) the automotive product and services market, (4) the products and services for “e-Asean,” (5) electronic product and services market, (6) the product and services for the fisheries market, (7) the healthcare products and services market, (8) the rubber-based product and services market, (9) the product and services in the textiles and apparel market, (10) the tourism product and services market, (11) the market for wood-based products and services, and (12) the products and services for the logistics market.

Last Friday’s MRx column talked about the market segments for the specific product category of the “canned meat.”  Let’s ask: “In what priority market sector does canned meat belong?”  It should be clear that canned meat falls under the #1 priority market sector of “agro-based products.”

Now, how did the consumer budgeting behavior survey identify in what consumer behavioral segments of the market for canned meat is it more revenue- productive to enter?  According to its analyzed data, those are the behavioral market segments of the non-users of canned meat and the lapsed users.

Here are the population sizes of those behavioral market segments and in what geographical markets they are the largest:

Regions where there’s more unserved non-user consumers:  62 percent canned meat non-users in Balance Luzon and 58 percent canned meat non-users in the Visayas.

Regions where there’s more under-served lapsed consumers: 49 percent canned meat lapsed users in Mindanao and 30 percent canned meat lapsed users in Balance Luzon.

What revenue productivity or business growing opportunities are the above statistics implying?  For the unserved non-user market segments, there’s 62 percent of the housewives in Balance Luzon and 58 percent in  the Visayas who can be persuaded to transform from canned meat non-users into users.  What market transforming strategy to employ is detailed in the full report of this survey research available at SWS.  But just imagine being able to do that in even only half of those percentages, these translate to how much market share those geographical markets can be for the canned meat product category.

For the under-served lapsed market segments, the analyzed data says that there’s 49 percent canned meat lapsed users in Mindanao and 30 percent in Balance Luzon.  Those are the two geographical markets where it’s more competitively advantageous to participate as against going into Metro Manila or the Visayas.  The consumer behavior change to target is a consumer product category return or on the part of the canned meat companies, to undertake a consumer reacquisition initiative.  This is a relatively less difficult strategy to launch than the new consumer acquisition campaign for the unserved non-user market segment.  Lapsed consumers have been users before.  They can be made users again if we uncover the reason for their leaving the product category.

Since it became a nationwide survey in 2008, there have been a few of the survey sponsors who have taken advantage of the above kind of insights into where to take advantage of business growing.  These sponsors have reported a 3-digit incremental revenue growth in the unserved non-user geographical market segments and a more than 50 percent incremental revenue productivity in the under-served lapse geographical market segments.  But almost all of my clients celebrate how revenue productive a new positioning has been to them.  However, the figure to celebrate has been a low of 18 percent and a high of 27 percent.  That is dwarfed by the 54-71 percent figures from segment targeting in an under-served lapsed market segment, and dramatically overwhelmed by successfully tapping into the business growing promise in an unserved non-user market segment.

Here’s a simple exercise for the cynic and skeptic to do.  Replace those four geographical market segments of NCR, Balance Luzon, Visayas and Mindanao of my survey with the 4 Asean member- countries cited in last Friday’s MRx column, namely, Malaysia, Thailand, Indonesia and Vietnam.  Then read the statistics as now applied to those four Asean member- countries and you can see what MRx’s logically follow.

So my consumer budgeting behavior survey is a practical partner of the economists’ 12 priority market sectors.  It’s not its replacement.  We are both the means, two different but co-working means to the same end and goal.  That’s the goal of making the Asean integration happen now and not later.

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