How can market research help in the age of integration?

QUESTION: We can see that you’re so hyped up about market research that you probably exaggerate its potential to help business. Here’s our challenge to market research. We’re now at the start of the Asean integration process, how can market research help Philippine businesses grow in the face of competition from the larger companies in Malaysia, Thailand, Indonesia or even Vietnam?

We’re not saying that the Philippine business community can’t grow its business in the larger Asean Economic Community market and effectively compete against our business brothers and sisters from the other Asean member-countries. But we’re realistic. Even MVP was outspoken about his doubts and so was BDO president, Nestor Tan.

So if marketers are not that optimistic, how can market researchers see things differently?

Answer: The two business leaders you cited answered the question when they were in their pessimistic mood. What’s that mood like? When asked how he looked at his closest competitor, the pessimist will say: “Be careful, someone out there is out to put one over us.” Asked the same question, an optimist will answer: “He’s a worthy rival. He draws out the best in both of us.”

And consider how Finance Secretary Cesar Purisima answered. Remember MVP, Tan and Purisima are all finance types. Secretary Purisima said: “This game-changing union will happen. The integration of Asean is not preordained. The member-countries will have to make it happen.” That’s the doer and the optimist speaking. Both MVP and Nestor Tan were comparing two things.

MVP compared our farmers’ productivity with that of the Thai farmers. Nestor Tan compared our banks against the Thai banks.

Let’s ask: “What’s the better stated Asean integration issue?” MVP and Tan defined the issue as “small-us-versus-big-them.” Purisima redefined it from the “are we ready” issue to: “How can we make it happen? How can we make ourselves ready?”

I share Purisima’s optimism and issue redefinition: “How can good, correct and moral marketing make Philippine businesses ready for an effective and successful participation in the AEC market?”

And with respect to market research, how can market research help in making our marketers ready to make it happen? I now tackle your specific question on the role of market research.

Our development economists crafted an AEC road map. This road map identified “12 priority sectors” or markets for participation by our businesses. If we regard our economists as our development change agents, these 12 “sectors” or markets are the change-agents-defined opportunities that local companies can take advantage of.

In social marketing, we say there’s the other side to consider, the consumer-defined, the intended-beneficiary-defined opportunities. After all, they are the buyers and users of the products and services in those 12 market segments or sectors. If they do not have a need for any of those products and services, there will be no buying, no revenues for the Asean integration to happen. It is on this side of the Asean integration equation where market research can help.

Asia Society’s “Business of Asean” conference series invited me last Oct. 21, 2014 to present my consumer budgeting behavior survey.

This is an annual nationwide survey of housewives regarding their budgeting behavior toward top products and services that are “recurring expenditure items” in their budget.

Since the survey started in 1984, Philippine businesses, both large and small, have made many uses of its analyzed survey data and prescriptions.

The most appreciated application has been in determining areas for growth.

Here’s an example presented at the Asia Society conference.

It concerns a question on which part of the country presents great opportunities for business growth.

The survey analysis prescribed that business growth should come from areas where there are unserved and underserved needs for a product category.

Unserved need comes from a product category’s non-users while it is the lapsed users who have an underserved need.

Here’s the analyzed data for the product category of canned meat:

Where there are significant unserved markets: 62 percent canned meat non-users in Balance Luzon and 58 percent canned meat non-users in Visayas.

Where there are noteworthy underserved markets: 49 percent canned meat lapsed users in Mindanao and 30 percent canned meat lapsed users in Balance Luzon.

Most of the survey sponsors took it for granted that the Metro Manila market will beat all other market locations in terms of business growth.

The analyzed consumer budgeting behavior survey challenged with concrete market evidence this assumption as you see from the sample analyzed data above.

Just project how a replication of this consumer budgeting behavior survey in just those Asean countries you cited (Malaysia, Thailand, Indonesia and Vietnam) can help our companies decide on where and in which product and service categories they can participate.

These are just some of the practical insights and recommendations that you can benefit from.

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