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Time and again, Filipinos have proven to all and sundry of their ability and capability
to weather any storm that hit the country. While others suffer a lot even from a
small pinch brought about by political, social and more so economic upheavals,
Pinoys have been able to cope and adapt to the ever changing environment they
live in.
But will the more than 90 Million Filipinos be able to shrug off the financial crisis that
is currently being experienced around the world? Will they be able to cope with the
rising unemployment; dwindling savings; and the constant adjustments in the prices
of basic goods and services? Will the Pinoy consumers hit rock bottom this time and
grovel at the sight of the rampaging difficulties now and ahead?
The crisis is here all right. It is felt by all indeed, but even prophets of doom and
local pundits are one in saying the resiliency of Filipinos remain intact and cannot be
easily shattered. Filipinos have stared at the eyes of the 1997 Asian financial crisis
and survived, they will do the same this time around.
In his presentation titled “Storm clouds over us: Understanding the Filipino
consumer in times of Crisis”, R. Esteban of the PSRC stressed that Filipinos will once
again overcome the on-going crisis given their innate ability to evolve and adapt to
any crisis before them. “It’s not that bad actually As Pinoys seem to be coping
forever”, Esteban said.
He, however, disclosed that there are a number of changes in consumer attitudes
and behavior during crisis periods that advertisers need to know and consider in the
development of their campaign plans and media mixes.
“The rules of the marketing landscape maybe changing. There is a need for more
careful market segmentation strategies. In the short term, behavioral dimensions
may be more important than lifestyle or brand attitudes or even consumer needs,”
Esteban said.
He quickly pointed out though that brands remain important. “Don’t forget to invest
in them. Do not starve your brands. Brands can maintain even build trust by
showing sympathy and engaging emotionally with consumers,”
Pinoys do more over time work to earn an extra buck. They get side jobs, multiple
jobs and start small businesses on the side. They also borrow money from friends,
relatives and other sources such as SSS, Pag-Ibig etc.
Along with these changes, Pinoy’s taste also adjusts and adapt to the changing
environment. Esteban says brands are now more scrutinized as consumers want
value for their little money. He discloses that there seems to be a shift from
premium brands to less premium; look at performance rather than image of the
brand; from imported to local; and from branded to unbranded.
During crisis situations, Pinoy consumers also become “wiser” when they buy
products. They give priority to basic goods; express more interest and preference to
product promotions; and are less impulsive in their purchases.
Even behaviour in using products and services are also affected. “Dun tayo sa
makakatipid” is the prevailing sentiment. There is an observed decrease in usage/
consumption, product substitution, and declining in the usage of “not so important”
products like mouthwash, moisturizers and the like.
Esteban also disclosed that lifestyle activities are being sacrificed during crisis
periods. Going-outs are being reduced as gimmicks are now being carefully
planned. Instead of high-priced bar and restaurants, they are “downgrading”
themselves to mid-priced establishments even as they look for cheaper
alternatives. Some consumers have also dropped other “indulgences” previously
availed regularly when times are a lot better. People are cutting expenses on
parlors and salons, gyms and massages. There seems to be an apparent shift to
simpler activities – ala “back to home” fun activities.
The PSRC survey also tracked changes in consumers’ behavior across product
categories revealing important insights to evolving preferences during less-than-
ideal environment.
During crisis periods, Pinoys are kicking the habit of “going-solo” in paying for beer
sessions with friends. Instead, sharing and dividing the costs of beer consumption
are becoming the order of the day. Even the choice of the place where they enjoy
their favorite beer brand changes as they drink more at home or in cheaper places –
forgetting for a while the flashy beer gardens they used to go to for night-outs.
PSRC said 38% of consumers are likely to switch brands while 37% reduces the
number of beer bottles they consume.
Pinoy smokers also feel the pinch as they reduce “puffs” of their favorite brands.
They buy by the stick than by packs. They also are now more considerate of prices
among outlets with some going out of their way just to get cheaper cigarette sticks.
The PSRC survey discloses that, in times of crisis, 28% of smokers switch brands
while a staggering 57% reduces quantity.
As regards home care products, more and more Pinoys are showing very
discriminating tastes scouring the market for more efficient and multi-purpose
products that are suited for their basic needs. In times of crisis, some are products
and being considered unnecessary and a number of consumers are aggressively
looking for promos. Some 42% of those surveyed says they switch brands while
43% reduce number of home care products in difficult times.
Expectedly, behavior around food and beverage and personal care products are
changing. Pinoys cut their consumption of soft drinks; eat less or in cheaper places;
pay attention to amount purchase and are now likely to bring home “doggy” bags”.
Unlike before, people bring home unfinished food when eating out. While 36%
switch brands, 51% reduce quantity of purchases in food and beverage category.
As to preference and purchases towards personal care products, Pinoys are more
prudent in product purchase and consumption. ”Bottoms up” i.e. finishing all the
contents before throwing out is becoming the norm among consumers. Shockingly,
Pinoys are using products less frequently to save on purchases. The “tipid”
mentality is all over the place even as they pursue products that offer good promos.
In crisis periods, 39% switches brands while 47% reduces the number of personal
care products.
Esteban believes the key lesson that advertisers should learn from these is very
basic- knowing their consumers really, really really well.
“Immersion with your consumers is a quick and insightful way of understanding the
coping behavior of your consumers. In times like this, there is a need to redefine
value in your category: absolute amount in relation to pack size, cash poor vs. cash
rich segments, “Esteban said, even as he reminded PANA members that
recessionary periods are rich in innovations. “Consumers are willing to adapt new
products, and companies are and will be forced to innovate to survive,” he added.