Philippines Market Segmentation Essay Example

Philippines while the tobacco segment provides a brief description of the tobacco industry in the country.

Key Findings of the Report - Consumer expenditure on food, beverages and tobacco has increased strongly during 2001-2006 at a CAGR of 9. 8% and it is expected to rise at a CAGR of 7. 5% from 2007 to 2011. - Rise in the number of working women, longer working hours and more diverse eating habit has resulted in high consumption of ready-to-eat meals. With the growing middle class population and changing lifestyle, the demand for organic food has increased considerably over the past few years and the annual growth rate is estimated at 10-20%. - Surging disposable incomes, demand for imported alcoholic beverages along with flavored alcoholic beverages is increasing.

- Inadequate water supply along with healthy drink concerns have led to the growth in bottled water industry. It is predicted that the industry will move ahead at a CAGR of 15-18% in the coming few years. Fast FoodThe study tried to develop a product-market structure of the fast-food restaurants in the Philippines. Using the concept of hierarchical clustering based on substitution-in-use, the influence of three categories of situational influence were used to modify the original choice-market mix relationship at every clustering stage. Changes in the importance of the individual components of the product-service mix served as the basis of the link-up among competing fast-food restaurants. Alcohol The liquor industry in the Philippines consists of the indigenous and commercially manufactured beverages.

The production of beer and other liquors is one of the most profitable industries in the Philippines. In fact, the country's biggest beer company, San Miguel Corporation (SMC),

ranked number nine in the Philippine's Top Corporations of 1999 with a total sale of $766 million. SMC sold a total of 327. 6 million bottles of beer in 1998.

Liquor companies are partly owned by transnational corporations or wealthy Fil-Chinese industrialists whose businesses have been established since the Spanish colonization period in the eighteenth century. Alcoholic drinks are also widely sold at duty free shops.For the many returning overseas Filipino workers, expensive alcoholic drinks, such as Chivas Regal whisky, are good presents for their relatives and friends. However, because of the influx and supremacy of commercial drinks, native drinks have been confined to small-scale production Information Technology The Philippine information technology market is primarily being driven by extraordinary growth in outsourced ICT services. The Philippines’ strongest market niche is in IT-enabled services or call centers.

More and more companies are making infrastructure investments to support the demand for call center facilities.In fact, the Philippine call center/outsourcing industry is projected to be among the largest sectors in the country for the next five years. Automotive The Philippine automotive aftermarket industry represents a significant portion of economic activity in the Philippines, with extensive upstream and downstream linkages to diverse industries. The industry contributes in a significant way to the country’s employment, investments and exports. Moreover, strong links exist between motor vehicle assemblers, motor vehicle parts and components manufacturers and importers.

The off-brand replacement aftermarket for automotive parts is bigger than the OEM (Original Equipment Manufacturer) replacement market, since the country has a large inventory of old (more than 10 years old) motor vehicles and imported second-hand refurbished commercial vehicles. Based on Land Transportation Records (LTO), the total

number of motor vehicles registered in 2004 was 7. 0m. It is estimated that Filipinos spend a substantial amount for spare parts, accessories, maintenance and repairs. Garments The local garments and textile industry is the country's consistent second top performer in terms of export revenue.

It is no wonder why branded garments such as JC Penney, Marks & Spencer, Otto Versand, Esprit, and many other famous lines of international clothing apparel have gone through the intricate knitting and embroidering hands of Filipino sewers. The Philippines is also one of the main product suppliers for high-end clothing brands such as GAP, Old Navy, Ann Taylor, Liz Claiborne, and Polo Ralph Lauren. Tobacco The market for Tobacco in the Philippines increased between 2001-2006, growing at an average annual rate of 4. 3%.The leading company in the market in 2006 was Fortune Tobacco International Crop.

The second-largest player was Altria Group, Inc. with British American Tobacco plc in third place. Philippine tobacco manufacturers operate under some of the world’s most laissez faire advertising conditions. In 2000, Fortune Tobacco alone spent $17. 9 million to promote its cigarettes across all media, making the company the country’s eighth largest advertiser. This advertising expenditure was more than 300 times the size of the public information and education budget of the Philippine Department of Health.

The Philippines has seen some of the world’s most extreme and controversial forms of tobacco promotion flourish in this climate. In recent times, to capitalize on the religious faith of the Filipino population, the Virgin Mary has featured on promotional calendars for Fortune Tobacco, and one brand was named "Lord 100s". Near naked women and those in sexually provocative

poses have featured in advertising. Many promotions targeted the widespread poor by giving away expensive prizes such as cars, electrical goods, and cash.Fortune Tobacco even has a brand called "Hope". Flagrant Americanization of smoking has abounded.

US military bases were supplied with imported US cigarettes. These rapidly infiltrated the community, laden with inspirational appeal as westernization became juxtaposed with wealth. The industry capitalized on this appeal. In the early 1970s, it was noted that manufacturers refrained from printing "Made in the Philippines" on packs as required by law, and instead stated: "These cigarettes are made from the finest tobacco flavor imported from the U.

S. A. ".A Brown & Williamson (B) report claimed that Lucio Tan was exporting locally made Champion and smuggling it back in as "blue seal" (local term for imported cigarettes from the USA), selling it at a higher price and giving it an imported image.

In the early 1980s more women, especially college and university students, were starting to smoke. The proportion of young women who tried smoking doubled from 17% in 1994 to 30% in 2002. As has been their practice throughout the world, companies interested in expanding their market have sought to target promotions at women.Campaigns particularly emphasized the notion of slimness, resulting in the utilization of cigarettes as a putative hunger suppressant. The Virginia Slims concept was used to appeal to young women, and projected a slim, "modern, contemporary, International, American image". Virginia Slims, "the slimmer cigarette with natural menthol women like" entered the Philippine market during a fashion show at the Manila Polo Club in 1976.

Ads for the brand carried a picture of a "smiling, slender

girl in a slimming dress, holding a cigarette".