Food prices in Japan have surged since 2022, shifting consumer habits in ways that brands cannot afford to ignore. A nationwide study by our sister company, CMG Inc., reveals the extent of this shift, showing how inflation influences where, what, and how often people buy groceries.
Japanese consumers have long prioritized quality and brand loyalty, often paying a premium for fresh, locally sourced ingredients. However, inflation is shifting these behaviors. Our study shows that more shoppers seek discounts, adjust grocery lists, and change stores to cope with rising costs.
Our study of Japanese consumers aged 20 to 69 found that 90% feel the strain of rising food costs, with 70% experiencing it intensely. Prices for essential staples like rice, leafy greens, and eggs have surged, pushing shoppers toward lower-cost alternatives, bulk buying, and store-switching strategies.
Households are adjusting by choosing cheaper alternatives, relying on discounts, and carefully planning purchases to minimize costs. The findings reveal how inflation shapes the Japanese food market today and how brands must adapt to meet shifting consumer priorities.
Japanese consumers feel the weight of rising food prices
Inflation is hitting middle-aged consumers the hardest. Women and those aged 40 to 60 report the most strain as they juggle rising grocery bills alongside housing, childcare, and utility costs.
Rice tops the list, with three-quarters of respondents saying its cost has risen. Leafy vegetables, eggs, and fruits are among the most frequently cited items experiencing price hikes. The rising costs of these essentials are pushing consumers to reconsider their grocery lists, with many shifting to more affordable alternatives or cutting back on certain items altogether.
Consumer sentiment suggests inflation is not just a financial strain but an ongoing source of anxiety. Many households are adjusting broader spending patterns, cutting back on dining out and non-essential purchases as they prioritize their grocery budgets. This heightened sense of caution underscores the urgency for brands to meet evolving needs with adaptable solutions.
Implications for Brands
As inflation shapes consumer habits, brands operating in the food industry must rethink their strategies. Price sensitivity is now a dominant force in purchasing decisions, making affordability and value essential selling points. Companies that rely on staple food products may need to introduce smaller pack sizes, bulk discounts, or subscription-based models to maintain customer loyalty.
This shift presents an opportunity for brands that offer alternatives to high-cost staples. The surge in demand for lower-cost items like bean sprouts and tofu suggests that consumers are willing to make substitutions. Positioning these products as smart, affordable choices through targeted marketing and in-store promotions could help brands capture market share.
Retailers and food manufacturers must also recognize that Japanese consumers actively seek ways to save. Loyalty programs, digital coupons, and promotional bundles could play a more significant role in purchasing decisions as shoppers become more selective about where they spend their money. Companies that can balance pricing strategies with perceived value will be best positioned to navigate the evolving food market in Japan.
How Consumers Are Changing Their Shopping Habits
As prices climb, Japanese consumers are becoming more strategic. Nearly 30% are actively hunting for clearance deals, while an equal share is switching supermarkets in search of lower prices. Discount chains and bulk retailers see increased foot traffic as shoppers shift from premium stores to budget-friendly alternatives.
Beyond price-driven decisions, shoppers are becoming more disciplined in their purchasing habits. Many are researching deals in advance, planning their shopping lists, and buying only what is necessary. This shift suggests that impulse buying is declining, making it harder for brands to capture spontaneous purchases. Instead, consumers approach grocery shopping with a calculated mindset, weighing every purchase against cost and necessity.
Digital engagement is also playing an increasing role in consumer decisions. More shoppers use online price comparison tools, retailer apps, and e-commerce platforms to track discounts and find the best deals. Brands that integrate their promotions seamlessly into these digital channels will have a greater chance of influencing purchase decisions early on.
However, in-store promotions and point-based rewards in Japan remain highly influential, offering brands an alternative way to engage cost-conscious consumers. Brands that integrate their promotions seamlessly into digital and physical retail channels will have a greater chance of influencing purchase decisions before consumers even enter a store.
Implications for Brands
With price-conscious behavior shaping the market, brands must adapt their pricing and promotional strategies. Offering flexible discounts and personalized promotions could help retain customers who might otherwise trade down to lower-cost alternatives. Brands traditionally relying on premium positioning may need to consider budget-friendly variations or value packs to stay competitive.
A prime example of a brand adapting to shifting consumer behavior is Nissin Foods, the maker of Cup Noodles. The company has introduced new flavors and healthier options for health-conscious consumers while maintaining affordability. Its focus on sustainability through eco-friendly packaging and responsible sourcing has also helped sustain consumer loyalty despite economic challenges.
Retailers also need to rethink in-store and digital promotions. Placing high-demand items in visible areas, bundling products at competitive prices, and integrating discount offers into mobile shopping apps can help maintain customer engagement. As shoppers become more deliberate, brands must ensure they are part of the decision-making process before consumers reach the checkout counter.
What are people buying less and more often?
Rice, snacks, and cabbage are the top three foods that people buy less of due to price increases.
Rising prices are forcing consumers to rethink where they shop and what they buy. The survey reveals a clear pattern – high-cost staples are being purchased less frequently, while affordable alternatives are gaining traction. Since 2021, Japan has experienced a significant surge in rice prices. In 2023, the average selling price for a 60-kilogram bag of rice was approximately ¥15,310 (about $139 USD). By January 2025, this price escalated to ¥25,927, a 69% increase from the previous year. This equates to roughly $171 USD.
Additionally, the retail price for a 5-kilogram bag of rice rose from ¥2,023 (approximately $13 USD) in 2024 to ¥3,688 (about $24 USD) in early 2025. This sharp rise is attributed to extreme weather conditions, increased demand from tourism, and distribution challenges. Snacks and cabbage follow closely, signaling a shift away from discretionary and fresh produce items that have become more expensive.
At the same time, lower-cost and versatile food items are seeing an uptick in sales. Bean sprouts and tofu, known for their affordability and adaptability in Japanese cuisine, are among the top foods people buy more often. Bread, another relatively inexpensive staple, has also gained popularity. The trend suggests consumers prioritize foods that offer more servings, opting for ingredients that stretch further and provide better value.
Implications for Brands
Understanding these shifts is critical for food manufacturers and retailers. Brands in high-cost categories need to rethink how they position their products. Offering smaller portion sizes, value packs, or price promotions could help retain consumers considering cutting back. For brands selling products that are growing in demand, this is a moment to strengthen their market position. Highlighting the versatility, nutritional benefits, and affordability of products like tofu and bean sprouts can reinforce their appeal in price-sensitive times.
Retailers should also adapt by ensuring budget-friendly items are well-stocked and prominently displayed. Promotional strategies should focus on cost-effective meal solutions, helping consumers maximize their grocery budgets. As inflation influences purchasing decisions, brands that align their offerings with consumer priorities will be best positioned to maintain loyalty and sales.
How Japan’s food inflation compares to the West
Rice isn’t just a staple in Japan—it’s a cultural cornerstone and an economic indicator. Unlike many Western nations where grains are heavily imported, Japan produces most of its rice domestically, meaning price fluctuations reflect deeper economic shifts. This inflation trend mirrors similar surges in other staple foods worldwide, such as wheat in the U.S. and soybeans in China.
Food prices are rising worldwide, but the impact varies from country to country. While Japan is seeing sharp increases in staples like rice, vegetables, and eggs, the US and the UK markets are grappling with their inflation-driven shifts in consumer behavior. In Western markets, dairy products, meat, and processed foods have been among the most affected categories, driving consumers toward discount grocery chains, bulk buying, and private-label alternatives.
In the US, shoppers increasingly turn to wholesale retailers and discount supermarkets to cut costs. Many are switching from brand-name products to store-brand alternatives, with major retailers reporting a surge in private-label sales. Coupon usage once thought to be in decline, has made a strong comeback, mainly through digital platforms and loyalty apps. In the UK, where food inflation and the cost of living have been a persistent challenge, many households are scaling back on meat purchases and opting for frozen or tinned foods as a cost-saving measure.
Despite regional differences, the global trend is clear – consumers are becoming more intentional about how and where they spend their grocery budgets. The shift toward discount-driven shopping, meal planning, and strategic purchasing decisions redefines how food brands and retailers operate across markets.
While Japan sees a shift toward staples like tofu and bean sprouts, the US and UK consumer shifts lean toward private labels and bulk buying, highlighting different approaches to cost savings.
Implications for Brands
Brands must recognize that price sensitivity is no longer confined to specific regions. Inflation-driven purchasing habits are reshaping consumer expectations on a global scale. Affordability and value have become key decision-making factors, making it essential for brands to rethink their pricing and promotional strategies.
Companies that traditionally cater to premium or discretionary food categories may need to introduce flexible pricing structures, offering economy-sized packaging or subscription models to retain budget-conscious shoppers. Meanwhile, brands positioned in lower-cost categories have a unique opportunity to strengthen their appeal, emphasizing the affordability and versatility of their products.
Japan’s beef bowl industry thrives despite multiple price hikes due to rising costs. Zensho Holdings, the parent company of Sukiya, a Japanese restaurant chain that serves gyudon (beef bowls), curry, and other dishes, has reported strong profit growth and increased customer numbers, highlighting how strategic pricing and strong brand equity can sustain demand even in inflationary times. This resilience reflects Japan’s unique consumer behavior, where quality and convenience often precede purely cost-cutting measures.
Retailers, particularly those in markets where discount shopping is on the rise, should focus on making savings more accessible. Digital loyalty programs, targeted promotions, and clear communication around price advantages will be critical in maintaining consumer trust and engagement in a price-sensitive environment.
How brands can adapt to a cost-conscious market
Food inflation is not just reshaping consumer habits but redefining how brands must approach pricing, marketing, and product development. As shoppers prioritize affordability and shift toward lower-cost alternatives, companies must take a proactive approach to remain relevant in a rapidly changing market.
One of the most immediate strategies for brands is pricing flexibility. Offering a range of product sizes at different price points can help cater to varying consumer budgets. Smaller packaging options can attract shoppers looking to control their spending, while bulk discounts can appeal to those who prefer to stock up when prices are favorable. Subscription models that provide cost savings over time may also help retain customer loyalty, particularly for staple goods.
Product positioning is equally important. Brands that once relied on premium pricing must now justify their value through differentiation. Messaging focusing on nutritional benefits, sustainability, or versatility can encourage consumers to keep buying products even if prices increase. For brands in high-growth categories like tofu and bean sprouts, reinforcing affordability and multiple-use meal applications can strengthen market share.
Retailers have a crucial role to play in guiding purchasing decisions. Strategic in-store placements, meal-planning promotions, and digital tools that showcase the best value options can help shoppers navigate rising prices. Supermarkets that integrate personalized discounts, loyalty rewards, and digital coupons into their customer experience will be better positioned to retain price-sensitive consumers.
The brands that succeed in an inflationary market will listen to consumers, adapt to shifting priorities, and offer tangible value beyond price alone. As economic conditions continue to shape spending behavior, remaining flexible and responsive will define long-term brand resilience.
Turning Challenges Into Opportunities
Rising food prices are forcing consumers to rethink their purchasing decisions, but they are also creating new opportunities for brands willing to adapt. The shift toward cost-conscious shopping is not a temporary adjustment; it reflects a more profound change in consumer behavior likely to persist even if inflation stabilizes. Brands that recognize these shifts and respond strategically will retain their customer base and strengthen their market position in the long run.
Innovation will be key for companies in high-cost categories. Reformulating products to be cost-effective without compromising quality, offering flexible portion sizes, and introducing alternative ingredients can help brands navigate price sensitivity. For companies in growing categories, reinforcing the value of their products through effective messaging and promotions will be essential to sustaining momentum.
Digital engagement is also becoming more critical. Consumers increasingly rely on price-comparison tools, e-commerce discounts, and loyalty programs to make informed purchasing decisions. Brands that invest in personalized marketing, mobile-based promotions, and transparent pricing strategies will be better positioned to build long-term trust with their audience.
Food inflation is reshaping the competitive landscape, but it must not be a setback. Companies that approach this challenge with flexibility, creativity, and consumer-first thinking can turn market uncertainty into a moment of strategic growth.
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Margin of Error Calculator.
How precise are your survey results? Use our Margin of Error Calculator to see how reliable your data is and understand how much your results could vary.
What is a Margin of Error Calculator?
A Margin of Error Calculator helps you understand how much your survey results might change if you surveyed more people. It shows the possible difference between the results you got and what the true answer might be for the whole population.
Example: If 60% of people say they like a product with a ±5% margin of error, the actual percentage could be anywhere between 55% and 65%. A smaller margin of error means more precise results, but it usually requires a larger sample size.
This tool helps businesses, researchers, and marketers measure the reliability of their data before making important decisions.
Calculate your margin of error
What Does the Result Mean?
The margin of error tells you how much your survey results might change if you surveyed more people.
✔ Smaller margin of error (e.g., ±3%) → More accuracy, but requires more responses.
✔ Larger margin of error (e.g., ±5% or more) → Less precision but needs fewer responses.
Need to determine how many responses you need? Use our Sample Size Calculator to find out.
How to Use the Margin of Error Calculator
- Step 1: Enter your Sample Size—The number of people who completed your survey. More responses = better accuracy. For example, if 250 people answered your survey, enter 250 as your sample size.
- Step 2: Enter your Population Size – This is not the population of a place. It is the total number of people in the group you want to study. If unsure, use an estimate. For example, if you’re surveying employees at a company with 5,000 staff members, your population size is 5,000.
- Step 3: Pick your Confidence Level – How sure do you want to be about your results? Common choices are 90%, 95%, or 99%. A higher confidence level means more accuracy but requires more responses. For example, a 95% confidence level means that if you repeated the survey 100 times, you’d get similar results 95 times.
- Step 4: View your Margin of Error—The tool will show your Margin of Error, the possible range by which your results may vary. For example, if 60% of people in your survey like a product and your margin of error is ±4%, the actual percentage could be anywhere between 56% and 64% in the full population.
Why Is It Important to Calculate the Margin of Error?
✔ Ensures Accuracy – Helps you understand how close your survey results are to the true population data.
✔ Builds Confidence – A lower margin of error means you can trust your findings when making important decisions.
✔ Guides Sample Size – Shows whether you need more responses to improve precision.
✔ Detects Meaningful Differences – Helps determine whether small survey result changes are real or just random variations.
✔ Essential for Business and Research – Used in market research, healthcare studies, polling, and decision-making to ensure reliable insights.
Want to create better surveys? Learn how to ask the right questions and get reliable answers in our market research survey guide.
Who Can Use This Calculator?
✔ Market Research and Businesses – Check customer surveys’ reliability before making decisions.
✔ Academic and Social Research – Ensure studies accurately represent populations for research and policy analysis.
✔ Healthcare and Clinical Trials – Determine how many patients are needed for valid medical research.
✔ Employee and Workplace Surveys – Gather reliable employee insights for engagement and policy decisions.
✔ Government and Public Policy – Calculate how many people are needed for voter research and census studies.
✔ Media and Advertising – Measure public opinion and ad effectiveness with accurate sample sizes.
Now that you know your margin of error, get expert insights to maximize your research!
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Sample Size Calculator.
How precise are your survey results? Use our Margin of Error Calculator to see how reliable your data is and understand how much your results could vary.
What is a Sample Size Calculator?
A Sample Size Calculator helps you determine the number of people you need to survey for reliable results. By entering key details like population size, confidence level, and margin of error, you can calculate the ideal sample size for accurate research findings. For example, If you’re surveying 10,000 customers and want 95% confidence with a 5% margin of error, the calculator will tell you how many responses you need to ensure trustworthy insights.
Calculate your sample size
What Does the Result Mean?
The sample size calculation tells you how many people you must survey to get reliable results. If the calculator suggests 400 respondents, that means surveying at least 400 people will give you statistically reliable results within your chosen margin of error. A larger sample size increases accuracy, while a smaller one may produce less precise results. Use this number to plan your survey with confidence!
Tips:
Want more precision? Lower the margin of error, but this will increase the required sample size.
Not sure how many people to survey? Try different confidence levels and margin of error settings to see how they affect sample size.
Now that you have your sample size, what’s next?
Need to check how precise your results are? Use our Margin of Error Calculator to measure the accuracy of your survey.
How to Use the Sample Size Calculator
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Step 1: Enter your Population Size – This is not the total population of a country or city. It’s the specific group you want to study (e.g. school students between the ages of 10 to 16 in the U.S.). If you’re surveying customers of a particular store, the population size is the total number of customers who shop there, not the entire city.
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Step 2: Choose your Confidence Level – Select how sure you want to be about your results (90%, 95%, or 99%). A higher confidence means greater certainty but requires more responses to reduce errors. For example, a 95% confidence level is the standard for most surveys, but if you choose 99%, you’ll need a larger sample size for higher accuracy.
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Step 3: Select your Margin of Error – The range within which the true result may vary. Choose how much your results might vary from the true answer.
✔ Smaller margin (±3%) → More accurate results but requires more responses.
✔ Larger margin (±5% or more) → Less precise but needs fewer responses.
For example, If 60% of people like a product and your margin of error is ±3%, the real number could be between 57% and 63%. A ±5% margin means it could be between 55% and 65%. -
Step 4: View Your Sample Size – The tool will tell you how many responses you need for reliable data.
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Step 5: Plan your survey: Use this number to ensure your research is accurate and meaningful before launching your survey.
Why Does Sample Size Matter?
Getting the right sample size is key to accurate and reliable results. Here’s why it’s important:
✔ Accuracy – Reduces errors and makes your survey results more reliable.
✔ Efficiency – Saves time and resources by collecting just the right amount of data.
✔ Trustworthy Insights – Ensures your findings reflect the whole population, not just random chance.
Want to ensure your qualitative research captures the right insights?
Explore how different approaches impact your study and discover best practices for gathering meaningful data in our expert guide on sampling methods.
Who Can Use This Calculator?
✔ Market Research and Businesses – Find the right number of customers to survey for product feedback and market trends.
✔ Academic & Social Research – Ensure studies accurately represent populations for research and policy analysis.
✔ Healthcare & Clinical Trials – Determine how many patients are needed for valid medical research.
✔ Employee & Workplace Surveys – Gather reliable employee insights for engagement and policy decisions.
✔ Government & Public Policy – Calculate voter research and census study respondents.
✔ Media & Advertising – Measure audience opinions and ad effectiveness with accurate sample sizes.
Now that you have your sample size get expert insights to maximize your survey’s design.
We provide in-depth insights to drive better decisions as a leading market research agency.
Contact us today to discuss your research needs!
What’s more critical in international marketing—relevance or consistency?
For global brands, this question defines the core of strategic decision-making. Consistency safeguards a unified brand identity across all markets, while relevance allows a brand to adapt its message to local cultures and consumer behaviors. As global markets become increasingly interconnected, brands must navigate the delicate balance between the two.
Striking this balance is among the most complex challenges facing global marketing leaders. While consistency helps reinforce brand trust and recognition, relevance ensures a brand connects deeply with the local audience. So, how do relevance and consistency coexist to drive global growth?
Defining Relevance in International Marketing
Relevance in international marketing requires more than surface-level localization or simple translation. It involves understanding the local culture, values, language, and consumer behaviors deeply enough to ensure your brand message resonates.
This understanding can make the difference between success and failure in highly fragmented and competitive markets. Brands that tailor their strategies to fit regional preferences and cultural norms create stronger consumer connections.
Today, relevance is not a choice—it’s a necessity. Consumers aren’t just seeking products; they want brands that understand and align with their cultural contexts. Brands that successfully adapt their message while maintaining core values tend to outperform those that adopt a uniform, one-size-fits-all approach across regions.
L’Oréal is agreat example. The brand faced this challenge when entering Japan’s beauty market. Their traditional messaging, which worked well in Western markets, wasn’t resonating with Japanese consumers, who prioritize skincare over makeup. To connect with this audience, L’Oréal shifted focus from makeup to skincare, positioning it as foundational to beauty, in line with Japanese cultural values. A highly successful localized campaign strengthened L’Oréal’s market position without compromising its global brand identity.
The Importance of Consistency in Global Branding
Consistency is essential to maintaining a recognizable and trustworthy brand identity across multiple markets. While relevance allows adaptation, consistency ensures the brand’s core message remains intact, helping build long-term loyalty and trust. Consumers increasingly expect a stable brand experience—whether they interact with the brand in New York, Shanghai, or Jakarta.
Consistency is particularly critical in sectors like luxury goods or technology, where consumers seek assurance of high quality and reliability. A fragmented brand identity can confuse consumers, erode trust, and ultimately weaken brand equity. Consistency creates a stable foundation upon which localized adaptations can be built without compromising the brand’s essence.
Apple’s Global Consistency
Apple has mastered the balance between consistency and relevance. Across all its markets, Apple’s brand identity remains focused on innovation, premium design, and simplicity. However, it still adapts to local market preferences when necessary. For example, in China, Apple introduced larger screen sizes and enhanced camera functions for mobile gaming and selfies—key preferences among Chinese consumers—without diluting its global brand message of quality and innovation. This approach has allowed Apple to grow its market share in China without sacrificing the consistency of its brand identity.
The Global Challenge: Relevance versus Consistency
Balancing relevance and consistency is one of the most significant challenges for global brands. Too much emphasis on relevance risks diluting brand identity, while rigid consistency can alienate local consumers. The key is to view relevance and consistency not as opposing forces but as complementary strategies that, when effectively managed, can drive both local and global success.
A recent Nielsen survey highlights this balancing act: 72% of global consumers expect brands to understand local preferences, but 68% still want a consistent global experience. This demonstrates consumers expect brands to adapt where necessary but without compromising the unified message that defines the brand.
Dove’s #RambutAkuKataAku Campaign in Indonesia
Image Source: INMOBI
Unilever’s Dove brand provides a perfect example of balancing relevance and consistency in Indonesia. Dove is globally recognized for its messaging around real beauty and body positivity, resonating with women worldwide. However, when Dove entered Indonesia, it realized that local cultural values and modesty required a more nuanced approach.
Campaign Idea:
In celebration of Kartini Day, Dove launched the #RambutAkuKataAku (My Hair My Say) campaign to empower Indonesian women to embrace their authentic selves through personal expression, particularly with their hair choices. Recognizing the cultural significance of modesty in Indonesia, Dove tailored the campaign to respect traditional values while promoting self-confidence and real beauty. The campaign optimized nano influencers to submit their content in Kartini’s day and divided them into three main categories, Hijab, Normal hair and Unique Hair.
Approach:
The campaign encouraged women across Indonesia to share stories about embracing their natural beauty, specifically through their choice of hairstyle and color. Dove partnered with InMobi to amplify this message, using mobile platforms as the primary engagement channel. This strategy allowed women to easily participate by sharing their experiences, reinforcing Dove’s message of empowerment in a culturally sensitive way. The campaign resulted in 254 tweets, 400 photos submitted, 4,996,154 followers, and a 5.06% engagement rate.
Strategies for Achieving Both Relevance and Consistency
Balancing relevance and consistency requires a strategic framework for flexibility within defined boundaries. Brands must develop a strong global identity while enabling local teams to make data-driven adaptations that resonate with their market.
Here are some effective strategies for achieving this balance:
- Establish a Clear Global Brand Identity: Define your brand’s non-negotiable elements—values, tone, and visual brand identity. These should remain consistent across all markets.
- Empower Local Teams: Local marketing teams have critical insights into regional preferences, trends, and consumer behaviors. Empowering them to tailor campaigns within the global brand framework ensures relevance without fragmenting the brand.
- Leverage Data for Smart Localization: Predictive analytics and consumer sentiment analysis can guide brands on when to adapt versus stay consistent. Data can inform strategic decisions on how far to localize while keeping the core brand message intact.
- Create Tiered Campaigns: Develop tiered marketing strategies, allowing for varying degrees of localization. Global campaigns maintain consistency, regionally adapted campaigns reflect cultural differences and highly localized campaigns address unique market needs.
Case Study: The “Thanda Matlab Coca-Cola” Campaign
Campaign Idea:
Coca-Cola sought to maintain its global message of happiness and unity while adapting to the unique cultural contexts of India and China. In India, the brand launched the “Thanda Matlab Coca-Cola” campaign, positioning Coca-Cola as a refreshing drink shared with loved ones, aligning with the country’s strong cultural emphasis on family and togetherness. In China, Coca-Cola adapted its messaging to reflect the significance of the Lunar New Year, associating the drink with celebrations and family reunions.
Approach:
In both markets, Coca-Cola localized its marketing to resonate with cultural norms while maintaining the consistency of its global brand message. In India, Coca-Cola used colloquial language and imagery to make the brand feel familiar and deeply connected to local traditions. In China, the brand aligned with the national celebration of the Lunar New Year, a major cultural event, by emphasizing joy and family gatherings, key pillars of the holiday.
When to Prioritize Relevance and When to Prioritize Consistency
Knowing when to prioritize relevance or consistency is key for international brand marketing. In emerging or culturally distinct markets, local relevance should take precedence. For example, launching new products in markets like Vietnam or Thailand requires an understanding of local values, such as ethical consumption or family-oriented themes.
However, in industries like luxury goods or technology, where global recognition is paramount, consistency should be prioritized. Consumers in markets like the US and UK expect the same high standards of quality and experience. During global crises or product recalls, consistent messaging is essential to preserve brand integrity and prevent confusion.
In the Philippines, for instance, brands that align with local values of family and community, such as food brands emphasizing communal dining, outperform those that don’t.
However, in Thailand, where luxury consumers expect the same quality experience from brands like BMW or Mercedes-Benz, consistency in messaging and product experience is key to maintaining perceived value. The ability to recognize when to lean into relevance or consistency is critical to success.
In international marketing, success doesn’t come from choosing relevance over consistency or vice versa. The most successful global brands strategically integrate both. Relevance allows brands to connect with local consumers by aligning with cultural preferences, while consistency ensures the brand remains recognizable and trustworthy across all markets.
For senior marketing leaders, the actionable takeaway is clear: define your core brand elements that should remain consistent globally and empower local teams to tailor campaigns for cultural relevance where they make the most impact. Use data-driven insights to guide these decisions, ensuring your brand stays relevant in diverse markets without losing its global identity.
As global consumers grow more connected, brands that master the balance between relevance and consistency will continue to thrive. It’s not about choosing one over the other, but about finding that equilibrium that creates a cohesive, trusted, and culturally resonant brand.
As a global market research agency with offices in ten countries, Kadence International is well-equipped to help you navigate the complexities of international expansion. Whether you need insights into local consumer behavior, guidance on maintaining brand consistency, or support in crafting culturally relevant campaigns, we have the expertise to ensure your brand’s success. With our deep understanding of Western and Asian markets, we can provide the strategic insights you need to grow your brand globally.
Commemorating more than Three Decades of Global Impact with Fresh Programs and Celebrations
Kadence International, a leading international market research agency, is celebrating its 33rd anniversary. Founded in London in September 1991, Kadence International has since expanded its global footprint. Today, the agency helps brands make data-driven decisions across the world.
Over the past 33 years, Kadence International has grown from a single office in London to a network of ten offices across Asia, the United Kingdom, and the United States. Today, the company serves international brands from its offices in the U.S., U.K., Singapore, Japan, Indonesia, India, Thailand, Vietnam, the Philippines, and China.
Kadence’s success is built on its commitment to uncovering insights from even the most difficult-to-reach audiences. This approach is driven by a deep curiosity about why audiences think and behave the way they do. This approach has not only differentiated Kadence in the market research industry but has also fueled the company’s growth and impact for over three decades.
To mark this milestone, all Kadence offices worldwide are joining in the celebrations, fostering a spirit of unity and collaboration. One of the key initiatives launched for the anniversary is the “Kaddie Konnect” program. Through this program, selected delegates, known as “Kaddies,” from various country offices will visit another Kadence office globally. These exceptional team members were chosen for their significant contributions to the company and their commitment to fostering international collaboration and sharing best practices.
Reflecting on this achievement, Ramsey Yomen, Global Managing Director, stated: “Reaching this incredible milestone of 33 years is a testament to the dedication and ingenuity of our people and the strength of our culture. Our success has always been built on the passion and commitment of our team, who continue to push the boundaries of what market research can achieve. As we look forward, we remain steadfast in our mission to raise the impact of market research for our clients and the industry worldwide. We are excited about the journey ahead and the opportunities to enhance our global reach and deliver transformative insights for many years to come.”
Miki Igarashi, Chairman, reflected on the company’s journey, saying: “As we celebrate 33 years of Kadence International, it’s inspiring to see how far we’ve come. Our ability to adapt and innovate has been key to our success, allowing us to meet the evolving needs of our clients and the industry. Looking ahead, my vision for Kadence is one of continued growth, stronger global connections, and an unwavering commitment to excellence. As we mark this 33-year milestone, I encourage everyone to take pride in our collective achievements and to embrace the exciting opportunities that lie ahead.”
Kadence’s 33rd-anniversary celebrations exemplify the company’s commitment to continuous innovation and global collaboration. Through programs like “Kaddie Konnect”, Kadence aims to strengthen its global connections and enhance its ability to deliver world-class market research insights.
About Kadence International
Kadence International is an award-winning global market research agency with a radically personal approach. With offices spanning Asia, the United Kingdom, and the U.S., the company is all about one-to-one connections. From real-time data collection to sharing powerful insights, great research starts with a deep understanding of people and ends with discovering game-changing opportunities. Kadence is about people, progress, and passion.
Learn more about our services here.
Conducting online research in the Philippines presents unique opportunities and challenges. The country has one of the highest rates of internet and social media usage globally. According to the Digital 2023 report by We Are Social and Hootsuite, Filipinos spend an average of 9 hours and 14 minutes online daily, maintaining their position among the most active internet users worldwide.
Furthermore, 82.4% of the population, or about 92.05 million Filipinos, are internet users, and social media usage is widespread, with 88.7% of internet users actively engaging on these platforms.
Despite this high level of digital engagement, the Philippines faces distinct challenges in adopting online research methodologies. Issues such as relatively slow internet speeds, frequent online scams, and a cultural preference for face-to-face communication create significant barriers. However, these challenges also open the door to innovative research approaches that effectively engage the Filipino audience through tailored and technologically advanced solutions.
Overview of Internet Usage in the Philippines
The latest findings highlight that Filipinos continue to lead globally in terms of internet and social media usage. Filipinos spend an average of 9 hours and 14 minutes online daily, maintaining their position as some of the most active internet users worldwide. The report also shows that internet penetration in the Philippines has reached 82.4%, with approximately 92.05 million Filipinos active internet users. Moreover, social media engagement is remarkably high, with 88.7% of internet users actively participating on social platforms.
Demographics of Online Users
The digital landscape in the Philippines showcases a diverse range of online users across different demographics. While the most prominent social media user group is 18-24, there are distinct patterns and preferences among other age groups.
Young Adults (18-24)
- This group is the most active on social media, driven by college students and young professionals. They frequently use platforms like Facebook, Instagram, and TikTok for personal, academic, and professional purposes. Their mobile-first approach is evident, with a significant 69% accessing Facebook exclusively through mobile devices.
Millennials
- Millennials also have a strong online presence, engaging in social media, e-commerce, and professional networking. They use platforms like LinkedIn, Instagram, Twitter, and Facebook. This group values mobile accessibility, but many still utilize desktops for work-related activities.
Generation X
- Gen X users are active on social media, but their usage patterns differ slightly. They prefer Facebook and YouTube, often to stay connected with family and consume video content. Mobile usage is prevalent, but desktops are still commonly used, especially for work and news consumption.
Boomers
- Baby Boomers are the least represented on social media but are increasingly adopting platforms like Facebook to stay connected with friends and family. Their internet usage is more balanced between mobile and desktop, reflecting a gradual adaptation to new technologies.
Gender Differences
- Regarding gender, Filipino women are slightly more active on social media than men. For example, Facebook’s ad audience data shows that 53.4% of users are female, while 46.6% are male. This trend is consistent across other social platforms, with women engaging more frequently in social networking and online shopping.
Rural vs. Urban
- Urban users in the Philippines have better access to high-speed internet and are likelier to use various online services, including e-commerce, online banking, and streaming services. In contrast, rural users face challenges such as slower internet speeds and limited digital infrastructure access, which affect their online activity. However, mobile phones are a common denominator, bridging the gap and providing rural populations with access to social media and basic online services.
How the Philippines compares to other Asian countries
| Aspect | Philippines | Singapore | Indonesia | Malaysia | China |
| Internet Usage | High daily usage (9 hours 14 minutes) | Moderate usage (7 hours 2 minutes) | High daily usage (8 hours 36 minutes) | High daily usage (8 hours 5 minutes) | High daily usage (6 hours 59 minutes) |
| Internet Penetration | 82.4% | 92% | 73.7% | 89.6% | 70.1% |
| Mobile Penetration | High, mobile-first internet users | Very high, extensive smartphone penetration | Very high, dominant mobile users | Very high, strong mobile usage | Extremely high, mobile-first society |
| E-commerce Behavior | Rapid growth, driven by mobile platforms | Mature market, high trust in online payments | Growing rapidly, mobile-driven | Growing steadily, high mobile transactions | Highly advanced, dominant global player |
| Popular Platforms | Facebook, YouTube, Instagram, TikTok | WhatsApp, Facebook, Instagram, LinkedIn | WhatsApp, Instagram, Facebook, Tokopedia | WhatsApp, Facebook, Instagram, Lazada | WeChat, Douyin (TikTok), Weibo, Taobao |
| Payment Preferences | Mobile wallets (GCash, PayMaya) | Credit cards, e-wallets (GrabPay, PayNow) | Mobile wallets (GoPay, OVO) | E-wallets (Touch ‘n Go, Boost) | Mobile payments (Alipay, WeChat Pay) |
| Cultural Preferences | High value on face-to-face interaction | Efficiency and privacy valued | Community-oriented, face-to-face preferred | Balance of traditional and modern practices | High trust in digital ecosystems |
Current Research Methodologies in the Philippines
The adoption of online research methodologies in the Philippines has been relatively slow compared to other countries. Despite the high level of internet and social media usage, several factors contribute to this hesitation.
Preference for Offline Face-to-Face Recruitment and Interviews
Filipinos prefer offline, face-to-face recruitment and interviews for market research. This preference is rooted in cultural and practical reasons, making traditional methods more popular despite the potential benefits of online alternatives.
Concerns Over Online Scams, Identity Theft, and Bank Fraud
One of the main reasons for the slow adoption of online research methodologies is the widespread concern over online scams, identity theft, and bank fraud. The Philippines has seen a significant number of cybercrime cases, leading to a general mistrust of online transactions and interactions. This apprehension makes respondents hesitant to participate in online surveys or interviews, fearing their personal information might be compromised.
Importance of Personal Face-to-Face Communication in Filipino Culture
Filipino culture places a high value on personal, face-to-face communication. The ability to gauge the sincerity and trustworthiness of the person you speak with is crucial. Face-to-face interactions allow for better rapport-building and more genuine responses, which is essential in qualitative research. This cultural trait makes offline in-person interviews and focus groups more effective and preferred in capturing accurate and honest feedback.
While there are clear benefits to adopting online research methodologies, such as efficiency and broader reach, the Philippines’ unique challenges and cultural preferences have maintained the dominance of traditional offline methods. Researchers must navigate these factors carefully to design effective studies that respect local concerns and cultural values.
Bridging the Gap: Kadence Philippines’ Approach
Kadence Philippines has proactively addressed the challenges of online research methodologies by adopting various technology-based solutions. These innovations aim to enhance data collection accuracy and improve respondent engagement while respecting local preferences and concerns.
Use of Online Panels and Tablets for Face-to-Face Interviews
Kadence Philippines leverages online panels to reach a broad and diverse audience. Online panels allow researchers to conduct surveys with pre-recruited respondents who have agreed to participate in research studies.
This approach ensures higher response rates and reliable data from targeted demographics. Additionally, during face-to-face interviews, the use of tablets enables real-time data uploads. This technology allows for instant data collection and processing, ensuring the accuracy and timeliness of the information gathered. Incorporating GPS tracking and recording audio or video enhances the quality and credibility of the data collected.
Instant Messaging Apps for Low to mid-economic-class respondents
Recognizing the widespread use of mobile phones in the Philippines, Kadence Philippines suggests using instant messaging apps such as Facebook Messenger, Viber, Skype, and WeChat to engage respondents from low to mid-income classes. These platforms are familiar and easily accessible to many Filipinos, making them ideal for conducting surveys and interviews. Instant messaging apps provide a convenient and non-intrusive way for respondents to participate in research, ensuring higher engagement and more accurate responses.
By embracing these technology-based solutions, Kadence Philippines effectively bridges the gap between traditional and online research methodologies. These innovative approaches address the challenges of online research in the country and align with the Filipino market’s cultural and technological landscape.
The Potential of Online Communities for Research
Online communities are valuable for connecting younger demographics, particularly millennials and Gen Z, in the Philippines. These age groups are highly active online and comfortable sharing their opinions and experiences on digital platforms. Online communities can facilitate in-depth engagement, allowing researchers to gather rich, qualitative data.
Suitability for Connecting with Millennials and Gen Z
Millennials and Gen Z are digital natives who spend a significant amount of their time online. They are accustomed to using social media and other online platforms to communicate, share, and engage with content. This makes them ideal participants for online communities, where they can interact in a familiar and comfortable environment. Research shows that these age groups are more likely to participate in online discussions and share their views openly than older generations.
Using Facebook Groups for Straightforward Projects
For straightforward customer understanding projects, Facebook Groups can be a practical and effective solution. Facebook remains one of the most popular social media platforms in the Philippines, with a high penetration rate among internet users. Creating a private Facebook Group for research purposes allows participants to engage in discussions, respond to surveys, and provide feedback in a familiar setting. This method is cost-effective and can yield valuable insights quickly.
Sophisticated Platforms for Complex Projects
More sophisticated platforms are necessary for more complex projects, such as ad or concept testing. Tools like Recollective, Qualtrics, and Vision Critical offer advanced features designed specifically for research. These platforms provide better security, data analysis tools, and capabilities to handle larger and more diverse participant groups. They are beneficial for projects that require detailed tracking of responses, multimedia interactions, and higher levels of participant engagement.
Online Depth Interviews and Focus Group Discussions
Conducting online in-depth interviews and focus group discussions in the Philippines is feasible but requires careful consideration of the technological and cultural context.
Feasibility of Online Interviews and Focus Groups
Online interviews and focus groups are increasingly viable in the Philippines, especially given the high internet penetration and widespread use of social media and communication platforms. These methods allow researchers to reach participants across different geographic locations, reducing the need for travel and logistics. However, the success of these methods depends on the availability of reliable internet connections and participants’ comfort with technology.
Recommendation for Video Chats
Video chats are highly recommended to bridge the lack of personal presence inherent in online methods. Video calls can replicate the face-to-face interaction that is culturally significant in the Philippines. Platforms like Zoom, Microsoft Teams, and Google Meet are practical tools for conducting these sessions. They allow for real-time interaction, enabling researchers to observe non-verbal cues and build rapport with participants, which is crucial for obtaining honest and detailed responses.
Need for Stable Internet Connections
Stable internet connections are essential for smoothly executing online in-depth interviews and focus group discussions. This is particularly important for B2B projects and high socio-economic class (SEC) individuals, who often have access to better internet infrastructure. For participants with less reliable connectivity, contingency plans such as recording responses for asynchronous review or using text-based methods can be considered to ensure data quality and completeness.
Embracing the New Normal
The COVID-19 pandemic has profoundly impacted the digital landscape in the Philippines, accelerating digital transformation across various sectors. As a result, there has been a significant shift from a predominantly cash-based, face-to-face economy to one that increasingly relies on digital finance, messaging platforms, and telecommuting.
Impact of COVID-19 on Digital Transformation
The pandemic forced many businesses and consumers to adopt digital solutions out of necessity. Lockdowns and social distancing measures led to a surge in online transactions, with digital finance platforms experiencing unprecedented growth. For instance, GCash and PayMaya, two of the leading mobile wallet providers in the Philippines, reported substantial increases in user adoption and transaction volumes during the pandemic.
Shift to Digital Finance, Messaging Platforms, and Telecommuting
With the need to minimize physical contact, Filipinos turned to digital finance solutions for everyday transactions. This shift was facilitated by the rapid adoption of mobile wallets and online banking services, enabling users to pay bills, transfer money, and shop online securely. Messaging platforms like Facebook Messenger, Viber, and WhatsApp increased usage as people sought to stay connected while adhering to social distancing guidelines.
The pandemic accelerated the trend toward telecommuting. Many companies adopted remote work policies, leveraging tools like Zoom, Microsoft Teams, and Google Workspace to maintain productivity and communication. This shift ensured business continuity and highlighted the potential for more flexible work arrangements.
Increased Feasibility of Online Research Methodologies
The necessity of a stable internet connection for work, education, and daily activities has increased the feasibility of online research methodologies in the Philippines. As more households invest in better internet infrastructure, the reliability of online surveys, interviews, and focus groups has improved. Researchers can now reach a broader audience and gather data more efficiently than before.
Potential Long-Term Shift in Research Methodologies Post-Pandemic
The changes brought about by the pandemic will likely have a lasting impact on research methodologies in the Philippines. While traditional face-to-face methods will remain important, the success of online approaches during the pandemic has demonstrated their viability and benefits. Researchers can now integrate a hybrid model that combines online and offline methods, leveraging the strengths of each to obtain comprehensive and accurate data.
As digital literacy continues to improve and internet access becomes more widespread, the acceptance and effectiveness of online research methodologies are expected to grow. This shift could lead to more innovative and adaptive research practices that better reflect the evolving digital landscape of the Philippines.
Final Thoughts
Conducting online research in the Philippines offers immense potential due to the high internet and social media usage among its population. Despite challenges such as slow internet speeds, concerns over online scams, and a cultural preference for face-to-face communication, the adoption of online methodologies is growing. Kadence Philippines has successfully implemented technology-based solutions, utilizing online panels, tablets, and instant messaging apps to bridge the gap. The impact of COVID-19 has further accelerated digital transformation, making online research more feasible and effective.
The Philippines is ready to embrace changes in research methodologies, integrating both traditional and online approaches to achieve comprehensive and accurate data. As digital literacy and internet access continue to improve, the acceptance and effectiveness of online research methodologies are expected to grow, paving the way for more innovative and adaptive research practices.
A comprehensive guide on conducting online market research in Asia is available for those interested in exploring research methodologies in other Asian countries. It provides valuable insights and practical advice.
Download our detailed guide here to gain a deeper understanding of online market research approaches in various Asian countries. This resource offers essential insights and strategies to help you navigate the diverse digital landscapes of Asia.
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China’s retail sector emerged as a key driver of economic recovery post-Covid and has surpassed even the most optimistic forecasts. Based on the latest news, retail sales, which is an indicator of consumption, increased by 5.5%. Although it slowed down from a 7.4% rise in December, it still beat the expected 5.2% gain.
During the eight-day Lunar New Year holiday in February 2024, there was a significant increase in travel, which supported the revenue of the tourism and hospitality sectors. As a result, there was a 3% growth in oil refinery throughput to meet the high demand for transport fuels.
Amidst this economic surge, China’s Gen Z—born between 1995 and 2009—are reshaping retail and consumerism in the country. Representing 19% of the national population, this demographic is significant in size and profound in influence. They effortlessly bridge the digital and physical worlds, champion a new wave of ethical consumerism, and exhibit spending behaviors that set them apart from prior generations. As revealed by a joint study from the Tsinghua-Nikkei Institute of Media Studies, their impact on the economy and culture is multifaceted.
Gen Z in China experiences unique challenges, including economic uncertainty and pressures from an aging society. Although the year’s first quarter saw a better-than-expected growth of 5.3% in GDP, experts predict a slowdown in the coming years. The jobless rate among those aged between 16 and 24 is 15.3%, significantly higher than the national average. This economic environment shapes their consumption habits and lifestyle choices, leading to trends such as “reverse consumption” and the “stingy economy” in 2024. In these times, value for money and prudent spending are paramount.
Understanding and engaging with China’s Gen Z is imperative for brands looking to thrive in this dynamic market. Their unique consumer habits and technological savvy fuel China’s retail growth and are poised to redefine global market trends. Gen Z is essential for any forward-looking strategy, especially for brands aiming to secure a foothold in the world’s largest consumer economy.
Understanding Gen Z in China
Demographic Overview
- Size and Economic Influence: China’s Generation Z comprises individuals born between 1995 and 2009, making up about 19% of the nation’s population. This translates to roughly 265 million people, forming a significant consumer force within the world’s second-largest economy.
- Key Statistics:
- Age Range: Currently, ages 14 to 28.
- Urban vs. Rural Distribution: A significant majority reside in urban areas, mirroring China’s overall urbanization trends. Urban Gen Zers are likelier to have higher disposable incomes and access to digital technologies than their rural counterparts.
Cultural Characteristics
- Core Values and Attitudes:
- Individualism and Self-expression: Unlike the collectivist orientation of previous generations, Chinese Gen Z values individuality and self-expression, influenced by global cultural exchanges via the internet.
- Sustainability and Ethics: They show a heightened responsibility toward the environment and social issues, favoring eco-friendly and ethical brands.
- Influence of Cultural, Socio-Economic, and Technological Factors:
- Global Influence: Exposure to global cultures through digital platforms has cultivated a more cosmopolitan outlook among Gen Z.
- Economic Context: Growing up during China’s rapid economic growth has fostered high expectations for living standards and personal wealth.
- Educational Opportunities: Improved education systems and resources have led to a more informed and competitive generation.
Technological Integration
- Role of Digital Technology in Daily Lives:
- Connectivity: Nearly ubiquitous smartphone usage facilitates constant connectivity to social networks and e-commerce platforms.
- E-commerce Habits: Gen Z in China is highly comfortable with online shopping, and they often prefer online retail platforms to traditional stores for both research and purchasing.
- Popular Platforms Among Chinese Gen Z:
- WeChat: A multi-purpose platform used for messaging, social media, marketing, and payments.
- Douyin (TikTok): The leading platform for short video content, highly popular for its entertainment value and as a source of trends and products.
- Bilibili: Known for its focus on anime, comics, and games (ACG) content, it’s a hub for niche communities and deeper fan engagement.
- Impact on Consumer Behavior: These platforms shape how Gen Z spends their time and influence their consumption patterns, from fashion and entertainment to food and technology.
Case Study: Soul – A Digital Ecosystem Tailored to Gen Z
Background:
Soul, a social media platform with about 80% of its user base from Gen Z, has become a barometer for the shifting preferences and lifestyles of this demographic in China. The platform’s data provides insights into how these young consumers navigate their economic realities with innovative social and shopping behaviors.
Image credit: Soul app website
Key Insights:
- Strategic Shopping: During major shopping festivals like Singles Day, a significant portion of Gen Z users on Soul meticulously plan their purchases, prioritizing value and quality over impulsive buying.
- Engagement Trends: The platform has noted a rise in “narcissism” among its users, which is seen not as selfishness but as a form of positive self-care and acceptance. This reflects a broader trend in which mental and personal well-being are as important as physical health.
These insights underscore how digital platforms are retail channels and communities where Gen Z finds support and affirmation for their values and choices. It highlights the critical role of digital ecosystems in shaping young consumers’ purchasing habits and lifestyle choices in today’s economy.
Marketing and Product Strategies for Engaging Gen Z
Product Innovation and Adaptation
Importance of Innovation and Customization:
- Adapting to Preferences: Gen Z in China values products that serve functional purposes and reflect their personal identity and ethos. Innovation and customization are crucial for products to resonate with this demographic, which prizes uniqueness and personalization.
- Speed to Market: Rapid prototyping and quick iteration are essential to keep pace with Gen Z’s changing tastes and trends.
Examples of Successful Products Tailored for Gen Z in China:
- Tech Gadgets: Smartphones and wearables with customizable features (e.g., skins, interfaces) that allow personal expression.
- Fashion and Beauty: Brands like Perfect Diary offer cosmetics that appeal through limited-edition collaborations with pop culture icons and localized trends, driving online and in-store engagement.
- Food and Beverage: Snack brands offering exotic flavors or health-oriented products tailored to young consumers’ desire for novelty and wellness.
Branding and Communication
Strategies for Building a Brand That Resonates:
- Authenticity: Transparency in production processes and business practices, as Gen Z consumers are more likely to scrutinize the authenticity and ethics behind a brand.
- Sustainability: Emphasizing eco-friendly practices and products, supporting social causes, and engaging in community initiatives that reflect their values and desire for ethical consumption.
- Community Building: To foster a sense of community, creating spaces for engagement and dialogue, whether through brand-sponsored events or online forums.
Effective Communication Strategies:
- Language and Tone: Utilizing a relatable and conversational tone in marketing communications that speaks directly to Gen Z’s values and lifestyle.
- Aesthetics and Design: Visually appealing, bold, and distinctive styles that stand out in the crowded digital landscape.
- Media Channels: Focusing on digital-first platforms like social media, influencer collaborations, and content marketing on platforms popular among Gen Z, such as Douyin and Bilibili.
Leveraging Technology
Using AI, AR, VR, and Other Technologies:
- AI: Personalized shopping experiences through AI recommendations based on browsing and purchase history, enhancing user engagement and satisfaction.
- AR and VR: Offering virtual try-ons for items like clothing and makeup or immersive experiences that allow consumers to engage with a brand or product in innovative ways.
- Gamification: Integrating game mechanics into apps and campaigns to increase participation and loyalty.
Importance of Mobile-First and Omnichannel Experiences:
- Mobile-First: Designing campaigns and content with a mobile-first approach, considering most of Gen Z’s interactions and transactions occur on smartphones.
- Seamless Omnichannel Experiences: Ensuring a consistent brand experience across various online, mobile, and in-store channels to meet Gen Z’s expectations for a fluid shopping experience.
Case Studies and Examples
Success Stories
Case Study 1: Perfect Diary
Background: Perfect Diary is a Chinese cosmetics brand that has skyrocketed in popularity among Gen Z consumers through savvy digital marketing strategies and collaborations with pop culture phenomena.
Image Credit: YouTube
Strategies:
- Influencer Partnerships: Leveraging partnerships with major celebrities and micro-influencers to build trust and authenticity.
- Limited Edition Releases: Creating time-limited products in collaboration with popular TV shows, celebrities, and even national museums, sparking buying frenzies.
Analysis: Perfect Diary’s success reveals Gen Z’s affinity for brands that offer unique, personalized experiences and demonstrate a deep understanding of cultural trends. The brand’s approach illustrates the power of community-driven marketing and the importance of adapting quickly to emerging trends.
Case Study 2: HeyTea
Background: HeyTea, initially founded in 2012 in the second-tier cities of Guangdong, has emerged as a trailblazer in the tea industry by introducing cheese tea, a novel beverage that combines freshly brewed tea with a creamy cheese topping. Originally a small tea shop, HeyTea gained national fame by reinventing traditional Chinese tea culture for a younger audience with new flavors and an Instagram-worthy aesthetic. This innovation has revolutionized the way young consumers in China enjoy tea, particularly in affluent eastern cities.
Image Credit: The Economist
Strategies:
- Product Innovation: HeyTea redefined traditional tea by introducing cheese tea, served at a 45-degree tilt as recommended by the brand’s ‘tea-ristas’ to perfectly blend the bitter tang of tea with the salty cream cheese cap. This unique product offering captured the imagination and taste buds of a young, urban clientele.
- Exclusivity and Demand Generation: In its early days, HeyTea created a buzz by limiting purchases and maintaining exclusivity. The long queues at their outlets, sometimes extending up to three hours, were managed by security guards, and the brand had to impose a limit of two cups per person to deter scalpers. This strategy, often referred to as “thirst marketing,” although contested by HeyTea, effectively built a sense of urgency and exclusivity around the brand.
- Selective Distribution: Initially, HeyTea chose to stay off major food-delivery apps to focus on crafting a high-quality experience that couldn’t be rushed or commoditized. This approach emphasized the artisanal aspect of their offerings, differentiating them from other tea chains that relied on pre-made or powdered ingredients.
The phenomenon of HeyTea speaks volumes about modern consumer behavior in China. The willingness of customers to hire others to stand in line or the implementation of purchase limits illustrates the high value placed on trendy and exclusive products. By offering a product that needed careful preparation and was served in a specific way, HeyTea not only set a new trend but also raised the bar for quality and customer experience in the beverage industry.
HeyTea’s strategy also reveals several crucial insights into broader market trends and consumer preferences:
- Experience over Convenience: Despite the convenience culture prevalent among Gen Z, the success of HeyTea underscores a contrasting willingness to seek out and wait for unique, quality experiences.
- Quality as a Differentiator: In a market saturated with quick-service options, HeyTea’s focus on high-quality, freshly brewed, and uniquely presented products helped it stand out, demonstrating that consumers are ready to prioritize quality over speed.
- Cultural Resonance and Innovation: The introduction of cheese tea not only leveraged traditional Chinese tea culture but also innovated upon it, showcasing that blending tradition with creative modern twists can resonate deeply with young consumers.
HeyTea’s journey from a small tea shop to a national phenomenon encapsulates the dynamic interplay of innovation, marketing savvy, and a deep understanding of consumer desires, setting a benchmark for others in the beverage industry and beyond.
Lessons from Failures
Case Study: Dolce & Gabbana’s PR Crisis
Background: In 2018, Dolce & Gabbana planned a major fashion show in Shanghai. However, promotional videos and comments made by the founders were perceived as racially insensitive by many in China, including Gen Z, leading to a massive backlash and cancellation of the event.
Image Credit: The New York Times
This failure highlights the critical importance of cultural sensitivity and awareness. Brands targeting Gen Z must understand and respect their audience’s cultural contexts and values, as Gen Z consumers are particularly attuned to social issues and brand ethics.
Future Trends and Predictions
Emerging Trends
- Sustainability and Eco-Friendliness: Gen Z’s preference for sustainable and eco-friendly brands will deepen as environmental concerns continue to rise. Brands that invest in sustainable practices and transparently communicate their environmental impact will gain favor.
- Enhanced Personalization through AI: Artificial intelligence will play an increasingly significant role in offering personalized shopping experiences. From AI-curated shopping lists to virtual fitting rooms, these tools will tailor the consumer journey to individual preferences and behaviors.
- Virtual and Augmented Reality Shopping: With advancements in VR and AR, immersive shopping experiences will become more mainstream, allowing Gen Z to explore products and environments virtually before making purchases.
- The Rise of Social Commerce: Social media platforms will evolve beyond branding channels to become integral shopping venues, leveraging live streams, social storefronts, and peer recommendations.
- Health and Wellness: Health-conscious products, including wellness apps, fitness gear, and healthy food options, will see increased demand as Gen Z continues to prioritize mental and physical well-being.
Economic Influences on Gen Z Consumer Behavior
As we look to the future, the economic landscape will continue influencing Gen Z’s consumer behavior significantly. The rise of what has been termed the “stingy economy” reflects a shift toward more economically cautious spending habits. This trend is not merely about spending less but seeking greater value and efficiency in expenditures. Platforms like Xiaohongshu and Douyin have become crucial in this shift, allowing Gen Z consumers to meticulously research and compare prices before purchasing.
Emerging Lifestyle Trends:
- Value-for-Money Lifestyle: Increasingly popular among Gen Z, this trend focuses on maximizing the value received from purchases and experiences, driven by a pragmatic approach to spending.
- Lazy Health: This trend signifies a growing preference for low-effort, high-impact health and wellness activities, such as ensuring adequate sleep and engaging in stress-free physical activities.
- City Walks and Special Forces Travel: These trends reflect a desire for experiences that require minimal investment but offer maximum enjoyment and relaxation, aligning with the broader shift toward economic leisure activities.
Predictions on how these trends will shape future marketing and product strategies:
- Brands must integrate sustainability into their core operations to attract eco-conscious consumers.
- Marketing strategies must increasingly rely on data analytics and AI to deliver hyper-personalized communications.
- Companies should invest in AR and VR to create compelling, interactive marketing campaigns and shopping experiences.
- Social commerce will necessitate strategies that effectively engage influencers and leverage user-generated content to drive sales.
Adapting to Change
Strategies for Staying Relevant:
- Continuous Innovation: Regularly updating product lines and experimenting with new marketing tactics to keep pace with Gen Z’s evolving tastes.
- Feedback Loops: Implementing real-time feedback mechanisms to gather insights directly from Gen Z consumers and quickly adapt products and campaigns.
- Collaborative Engagements: Partnering with Gen Z influencers and thought leaders to co-create content and products that resonate authentically with the demographic.
Importance of Agility and Continuous Learning:
- Agility in Business Practices: Being agile means more than reacting to trends; it’s about anticipating changes and being prepared to pivot strategies swiftly and efficiently.
- Emphasis on Continuous Learning: Staying informed about technological advancements, cultural shifts, and consumer behavior patterns is crucial. This includes ongoing education and training for teams to remain adept and responsive.
Understanding and adapting to emerging trends is vital in a world where change is the only constant. For marketers and product managers targeting Gen Z in China, staying ahead means embracing a culture of innovation, maintaining agility in strategic planning, and committing to continuous learning. By doing so, they can ensure their brands remain relevant and appealing to this dynamic and influential consumer segment.
The Imperative of Understanding and Adapting to Gen Z Consumers in China
Gen Z consumers’ dynamic and ever-evolving characteristics in China underscore a pivotal challenge and opportunity for brands aiming to thrive in the modern marketplace. This demographic defines their consumption patterns and setting trends that influence the global economy.
For brands, understanding and engaging with Gen Z is not merely about tapping into a new customer base but about aligning with the future of commerce itself.
Gen Z’s unique blend of digital savviness, ethical consumerism, and preference for personalized and immersive experiences demands a rethinking of traditional marketing and product strategies. The brands that successfully captivate this audience demonstrate authenticity, innovate continually, and leverage the latest technologies to create engaging and meaningful interactions. Moreover, the responsiveness to environmental concerns and the integration of sustainability into core business operations are becoming non-negotiable aspects that can significantly sway Gen Z’s loyalty and advocacy.
Therefore, brands that anticipate and adapt to Gen Z’s needs position themselves for increased market share in the present and set the groundwork for sustained relevance and success as this demographic matures.
The stakes are high, and the brands that effectively decode the preferences and values of Gen Z will likely lead the charge in shaping the future economic terrain.
To deepen your understanding of Gen Z’s impact on global markets and to refine your strategies accordingly, we invite you to download our exhaustive global Gen Z report. Gain detailed insights and practical guidance to harness the potential of this crucial demographic.
Access the report now at The Definitive Guide to Gen Z.
This comprehensive report is invaluable for any business leader or marketer aiming to make informed decisions that resonate with Gen Z and propel their company toward long-term success.
The poignant memory of her grandmother reluctantly pushing away her favorite meals stayed with Shen Yiru long after her grandmother passed. Suffering from dementia, her grandmother was forced onto a pureed diet to manage her difficulty with swallowing. Despite the family’s efforts to blend various dishes into a palatable form, the unappealing appearance often led her grandmother to refuse meals.
This personal experience deeply impacted Shen, driving her to start SilverConnect, a medical nutrition company. SilverConnect focuses on creating specialized, appealing meals for those with swallowing difficulties, ensuring that food safety and dietary needs are met without compromising the enjoyment of eating.
Shen’s venture into this niche market is particularly timely, given the growing silver economy in Singapore. With the sector projected to reach US$72.4 billion by 2025, the government is actively investing in services and innovations that enhance the lives of the elderly.
SilverConnect exemplifies the potential for tailored solutions within this demographic and highlights the broader opportunities for brands ready to serve an aging population with specific, evolving needs.
The Implications of an Aging Population for the Singaporean Economy
Singapore’s population is aging rapidly, reflecting broader demographic shifts occurring globally. According to the Department of Statistics in Singapore, the proportion of residents aged 65 years and above has significantly increased, rising from 9.0% in 2010 to 15.2% in 2020.
Projections suggest that by 2030, one in four Singaporeans will be over 65.
This demographic shift is largely due to higher life expectancy and lower birth rates, a trend that presents challenges and opportunities for the nation.
The aging population in Singapore poses unique challenges for the economy and local companies. Economically, the increase in the elderly population can lead to a higher dependency ratio, with fewer working-age individuals supporting more retirees, which could strain public resources and social security systems. Companies, particularly in healthcare, real estate, and financial services, must adapt to meet the changing demands. The silver economy is not just an emerging market segment but a significant economic force, driving innovation and service development across various sectors.
For brands, this demographic shift necessitates reevaluating marketing strategies, product development, and customer service to cater to an older customer base. Brands must consider this age group’s specific needs and preferences, which may differ significantly from younger demographics, particularly regarding product usability, accessibility, and customer engagement strategies.
Needs of the Senior Singaporeans
Healthcare: Senior consumers are increasingly looking for healthcare solutions that allow them to maintain their independence and manage chronic conditions effectively. There is a growing demand for telemedicine, home care services, and wellness programs tailored to older adults. There are many opportunities to innovate with devices like smart pill dispensers that remind seniors when to take medication and telehealth services that allow them to consult with healthcare providers from the comfort of their homes.
Also read – A Brand’s Guide to Singapore’s Consumer Landscape.
Case Study: Homage – Integrating Healthcare and Technology to Serve Singapore’s Seniors
Image Credit: Homage
Background:
Homage, a Singapore-based startup founded in 2016, initially focused on providing long-term assisted living and rehabilitation care. Recognizing the complex healthcare needs of the elderly, particularly those with chronic conditions or who are at heightened risk during health crises like the COVID-19 pandemic, Homage sought to expand its services to offer comprehensive, integrated care solutions and is a prime example of healthcare innovation tailored specifically for seniors.
Challenge:
Many of Homage’s care recipients are elderly individuals with long-term health conditions, making them particularly vulnerable during the COVID-19 pandemic. The challenge was to provide continuous, holistic healthcare that could accommodate their needs safely at home, minimizing the risk of exposure to the virus and addressing the limitations of traditional healthcare access during lockdowns.
Solution:
Homage launched Homage Health, an extension of its services, to include home medical visits, telehealth consultations, and medication delivery. This new service was strategically accelerated in response to the pandemic to ensure that high-risk populations could receive uninterrupted care. The platform leverages a network of prescreened healthcare professionals registered with the Singapore Medical Council and with extensive experience in medicine.
Key features of Homage Health include:
- Telehealth Consultations: Facilitates remote consultations with doctors for routine check-ups, therapy sessions, and follow-up care for chronic conditions.
- Home Medical Services: Offers in-home services such as blood tests, doctor visits, and minor surgeries like wound care tailored to the patient’s needs.
- Integrated Care: Caregivers and nurses provide in-person support to complement online consultations, assist with medical procedures at home, and ensure adherence to prescribed healthcare regimens.
Results:
Homage Health has significantly improved access to healthcare for Singapore’s seniors, enabling them to receive personalized medical care within the safety and comfort of their homes. The service has proven essential for patients managing ongoing conditions like stroke recovery, Parkinson’s disease, and hypertension, among others. By integrating various healthcare services on a single platform, Homage has simplified long-term health care management, improving outcomes and enhancing patient satisfaction.
Future Outlook:
Homage plans to expand its services into more specialized rehabilitation and therapy areas. The pricing structure, with basic teleconsultations starting at SGD $20 and more comprehensive home services at higher fees, remains competitive and accessible. This expansion is set to continue Homage’s commitment to providing innovative and integrated healthcare solutions to meet the evolving needs of Singapore’s aging population.
Technology: Despite common stereotypes, many seniors are becoming increasingly tech-savvy. Products and services that enhance connectivity, such as simplified smartphones and user-friendly apps for health monitoring and social interaction, are gaining popularity. However, there is still a need for technology designed with the elderly in mind, focusing on ease of use and accessibility. Smart home devices enable seniors to control lighting, temperature, and security systems remotely, reducing the need for physical exertion and enhancing their living environment.
Finance: Financial security is a major concern for seniors, who seek financial products that offer stability and security for their retirement years. There is a noticeable trend toward products that offer long-term income support, such as annuities, and services that provide personalized financial advice for managing savings in retirement. Apps that use large text and voice commands to help seniors navigate their banking needs online and financial services that offer advice on retirement planning with a focus on accessibility and ease of use.
Case Study: POSB Active Neighbours – Bridging the Digital Divide for Singapore’s Seniors
Image Credit: DBS Bank
Background:
POSB, a prominent bank in Singapore, recognized a significant challenge in the digital transformation of banking services: the digital divide affecting elderly customers. As digital platforms became increasingly integral to banking, many seniors struggled with the new technology, exacerbated by the social distancing measures during the COVID-19 pandemic.
Challenge:
Singapore’s elderly population often faces difficulties adapting to digital banking due to physical limitations, lack of familiarity with technology, and fear of online fraud. The pandemic highlighted the urgent need for support as seniors were encouraged to minimize physical interactions and switch to digital channels for their banking needs.
Solution:
In response to these challenges, POSB strengthened its Active Neighbours program, initially launched in 2009. The program employs seniors trained as digital ambassadors to assist their peers in navigating the digital aspects of banking. These ambassadors, including key personnel like Florence Ang, offer face-to-face assistance and workshops to teach digital banking skills at POSB branches and community centers.
Key components of the program include:
- Direct Assistance: Ambassadors like Florence provide one-on-one support, helping seniors with tasks ranging from setting up online banking to conducting transactions.
- Educational Workshops: In collaboration with community partners such as the People’s Association and IMDA, these workshops cover essential digital skills and promote confidence among seniors in using digital banking tools.
- Emotional and Social Support: By fostering a peer-to-peer support system, the program also addresses the social isolation many seniors feel, turning banking into an opportunity for community interaction and learning.
Impact:
The POSB Active Neighbours program has shown remarkable success in empowering seniors to embrace digital banking confidently. The approach has reduced the fear and anxiety associated with technology and enhanced the inclusivity of digital transformation efforts by making them accessible to all age groups. Over 5,000 seniors have benefited from the program, gaining both digital literacy and a support network.
Future Outlook:
With the ongoing digital evolution of the banking sector, POSB plans to expand the Active Neighbours program to include more ambassadors and extend its outreach through more sophisticated digital platforms. The program aims to continue adapting to the changing needs of the senior community, ensuring that no one is left behind in the digital age.
Leisure: The leisure needs of seniors are diverse, with many seeking travel, education, and cultural experiences tailored to their interests and mobility levels. Brands in the travel and leisure industries are increasingly offering packages designed for older travelers, including specialized tours and less physically demanding activities. Travel agencies can offer senior-friendly tours that include accessible accommodations, transport services, and leisure activities suitable for those with limited mobility.
Chan Brothers Travel has successfully tapped into the senior market by offering travel packages that cater specifically to the needs of older adults. These packages often include slower-paced itineraries, accessible accommodations, and special assistance services such as wheelchairs and medical care. To make travel less daunting and more enjoyable for seniors, Chan Brothers provides escorts and guides trained to assist elderly travelers. This thoughtful customization ensures that seniors can experience travel safely and comfortably, catering to their desire for leisure and exploration without the stress of planning and logistics.
The Importance of Inclusive Design and Accessibility in Product/Service Development
Inclusive design and accessibility are critical when developing products and services for the senior market. This approach ensures that solutions are usable by people of all ages and abilities without needing adaptation or specialized design.
Imagine the difference it makes when seniors use a product seamlessly, feeling included and considered. This enriches their user experience and opens up the brand’s offerings to a wider audience, including those who may be temporarily or permanently disabled. By prioritizing inclusive design, companies can better serve the aging population, increasing customer satisfaction and loyalty.
Key principles include:
- Simplicity: Products and services should be easy to use and understand, regardless of the user’s experience or cognitive abilities. Clear instructions, intuitive interfaces, and straightforward navigation are essential.
- Flexibility: Offering adjustable features, such as text size or volume control on devices, allows seniors to customize products to meet their needs.
- Visibility: Good design enhances visibility and readability. Using high-contrast colors and large fonts can make interfaces and physical products easier for seniors.
- Ergonomics: Considering the physical limitations of age, products should be designed for comfort and ease of use without strain.
Marketing to Senior Consumers
Effective Marketing Strategies and Channels for Reaching the Senior Demographic
Marketing to seniors requires understanding their preferences and the channels they are most comfortable with.
Effective strategies include:
- Personalization: Tailoring marketing messages to reflect the specific needs and interests of the senior demographic can increase engagement. Using data to understand their preferences and past behaviors helps craft more relevant communications.
- Community Engagement: Seniors value community and trust. Hosting events, workshops, or seminars that cater to their interests can be an effective way to engage this demographic. Partnerships with community centers and senior clubs can also amplify reach and credibility.
- Influencer Partnerships: Collaborating with influencers who are seniors themselves or who resonate well with the older generation can lend authenticity to the brand messages.
- Direct Mail: Despite the digital revolution, direct mail remains a powerful tool for reaching seniors, many of whom still appreciate the tangibility and personal touch of physical mail.
The Importance of Trust, Clarity, and Value in Messaging
Trust is paramount when marketing to seniors, who often rely on a brand’s reputation and the recommendations from their peers before making purchasing decisions:
- Clear and Honest Communication: Avoid jargon and ensure all marketing materials are clear and easy to understand. Transparency about costs, benefits, and any potential risks is crucial.
- Value Proposition: Highlight how the product or service improves their quality of life. Seniors are often more interested in the functional benefits and the value for money rather than just the features.
- Consistency: Consistent messaging across all channels helps build and maintain trust. Ensure that the brand voice is uniform, whether the interaction is online or in-person.
The Role of Traditional versus Digital Media in Reaching Older Consumers
While seniors are increasingly becoming more digital-savvy, a combination of traditional and digital media often works best:
- Traditional Media: Television, radio, and newspapers are still popular among the older demographic and can be highly effective for reaching this group. These mediums are trusted sources of information for many seniors.
- Digital Media: An increasing number of seniors use the internet, social media, and smartphones. Platforms like Facebook and YouTube are popular among the older demographic. Digital advertising can be targeted and adjusted based on the response, making it a flexible tool for engagement.
- Hybrid Approaches: Integrating digital with traditional media, such as using QR codes in print advertising that leads to online platforms, can help bridge the gap between the two worlds.
Current and Future Trends in Singapore’s Senior Market
There are many trends in fitness and medtech industries for this aging population.
Here are some upcoming innovations in technology and services that could influence the senior market:
- Advancements in AI and Robotics: Innovations such as AI-powered health assistants and robotic caregivers could significantly change how seniors receive care, offering more personalized and autonomous solutions.
- Wearable Health Technology: Devices that monitor vital signs and predict potential health issues will become more prevalent, providing seniors and their caregivers with real-time data to manage health proactively.
- Smart Homes: Expanding smart home technologies that assist daily living, such as voice-activated systems for controlling home environments, could enhance safety and comfort for seniors living independently.
- Virtual Reality (VR) and Augmented Reality (AR): These technologies can be used for cognitive therapy, physical rehabilitation, and even socialization, providing immersive experiences that can improve mental and physical health.
Potential policy changes and their impacts on the market dynamics:
- Healthcare Reforms: Anticipate policies that could extend more support for home healthcare services, making it financially easier for seniors to choose to age in place over institutional care.
- Pension and Retirement Age Adjustments: Changes in pension schemes and the official retirement age could influence seniors’ financial decisions and their purchasing power, potentially increasing their demand for various services.
- Data Protection Laws: Stricter data protection regulations could be implemented to safeguard the increasing amount of personal health data generated by senior-focused technology.
- Incentives for Senior-Friendly Products: Government incentives for companies that invest in R&D for senior-friendly products can stimulate innovation targeted at the aging population.
The needs and behaviors of senior consumers might evolve in the coming years. Here’s how:
- Increased Demand for Customization: Seniors will likely demand more personalized products and services that cater to their needs and preferences.
- Greater Environmental Consciousness: Older consumers may become more environmentally aware, preferring sustainable and eco-friendly products.
- Health as a Priority: With an increasing emphasis on wellness, seniors are expected to prioritize products and services that promote health and longevity.
- Rise in Tech-Savviness: Future seniors, having been exposed to technology throughout their lives, will be more adept at using digital tools and platforms, influencing how businesses market and offer services to them.
The senior consumer market in Singapore represents a significant and growing segment. As the demographic landscape continues to evolve, with a substantial increase in the population aged 65 and above, the economic potential of this “silver economy” cannot be understated.
Brands must adopt thoughtful, research-based strategies to engage with this demographic effectively. Understanding the diversity within the senior market, acknowledging their preferences, and addressing their specific needs will be key to tapping into this lucrative market. Brands should prioritize inclusivity, accessibility, and the ethical implications of their marketing and product development strategies to build trust and loyalty among senior consumers.
There is also a critical need for continued market research and innovation, as seniors today are very different from a few decades ago.
As we look to the future, integrating emerging technologies, anticipating policy changes, and evolving senior consumer behaviors will influence market dynamics significantly. Brands that stay ahead of these trends by investing in research and development and fostering innovative thinking will be well-positioned to lead in the silver economy.
A tech company buzzes with anticipation over a groundbreaking product idea promising to redefine its market. Behind the scenes, excitement unites teams across departments, from engineering drafting the first blueprints to marketing strategizing the big reveal. There’s a palpable energy as developers discuss potential features, designers brainstorm aesthetics, and sales teams forecast demand.
Nothing energizes organizations more than launching a new product. This exciting phase boosts team morale and shareholder confidence and sharpens the competitive edge of brands, setting them apart in a crowded marketplace.
However, this initial euphoria can be short-lived as the journey from concept to market often encounters hurdles, like products losing focus, teams grappling with burnout, and innovations arriving too late.
So, why do products often miss the mark?
Here are some common pitfalls of New Product Development:
- Lack of Product Uniqueness: A product might lack the distinctiveness to stand out without exploring a comprehensive range of solutions. This risk magnifies when an organization rushes to lock down a concept without considering various perspectives or potential market shifts.
- Shifting Market Realities: A common pitfall is failing to account for market changes or making assumptions about distribution channels. This can lead to a project that starts with a simple concept but ends up burdened with unnecessary features, prolonging development and leading the product astray from its original mission. For instance, a start-up in the sustainable energy sector might begin designing a basic solar panel solution but end up integrating smart technology features that delay the project and dilute its core value proposition.
- Technical Hurdles Overlooked: Overestimating a company’s technical prowess or underestimating the project’s complexity can lead to significant delays. A tech firm developing an advanced AI-driven analytics platform might be stalled by unforeseen technical challenges, lacking the necessary expertise or innovations to proceed as planned.
- Function Misalignment: Discrepancies between different departments’ expectations and capabilities can derail a product’s development. An example is a company designing a revolutionary health tracker that requires cutting-edge manufacturing techniques, which the company’s factories cannot produce at scale or within cost targets.
- Underestimating User Experience Design: Failing to prioritize user experience design can result in a product that’s technically sound but difficult or unpleasant to use. Consider a software company developing a powerful new project management tool that is too complex for the average user, leading to low adoption rates despite its advanced features.
- Neglecting Regulatory Compliance: Overlooking the regulatory requirements specific to the industry can cause significant setbacks or even halt a product launch. A pharmaceutical company developing a new drug might encounter delays if it fails to align its development process with stringent regulatory standards.
Countless new products go nowhere, and all have one root cause: inadequate Market Research.
Launching a product without understanding the target market’s needs and preferences can lead to misaligned product features. For instance, a food and beverage company might launch a new energy drink without realizing its target demographic prefers natural ingredients over synthetic supplements, resulting in poor sales.
While no strategy can eliminate product development uncertainties, thorough planning, grounded in comprehensive market research and cross-functional collaboration, can navigate these complexities more effectively.
Market Research: The Compass of New Product Development
So, amid this whirlwind of new product development activity, one tool ready to guide the brand’s efforts toward success is undoubtedly market research —the unsung hero poised to turn their vision into a market-ready reality.
Market research provides a foundation for decision-making that can mean the difference between a product’s success and failure. It offers insights into what consumers truly want, not just what a company thinks they need. This intelligence informs product design, positioning, and marketing strategies to introduce the product to the market.
It also identifies the size of the opportunity, helping to forecast demand and potential revenue, thereby shaping investment decisions and prioritizing features based on what will deliver the most value to the target audience.
Consider the development of the first smartwatches. Early entries into the market focused primarily on technology enthusiasts, offering features like message notifications, app integrations, and Bluetooth connectivity.
However, market research conducted by a leading technology company revealed a broader potential audience: the health-conscious consumer.
This insight led to a pivotal shift in product development strategies. The next generation of smartwatches incorporated advanced health monitoring features such as heart rate sensors, sleep trackers, and even electrocardiogram (EKG) capabilities.
The result?
A product that resonated deeply with consumers, transcending its original tech-savvy base to reach a broader audience that valued health and wellness. This expanded market appeal led to increased sales, higher market penetration, and the establishment of the smartwatch as a must-have accessory for the health-conscious individual.
When brands understand the consumer’s voice, they can tailor their innovations to meet real, sometimes unarticulated, needs.
The Scope of Market Research throughout the product lifecycle
Market research permeates every facet of the product development process, from the initial conception of an idea to its launch and market entry.
Critical components of market research in this context include:
- Market Analysis: Understanding the market size, growth, and trends to identify opportunities and challenges.
- Customer Insights: Gathering data on customer demographics, preferences, needs, and buying behaviors to tailor the product accordingly.
- Competitive Intelligence: Analyzing the competitors’ strengths, weaknesses, market positions, and strategies to identify differentiators and market gaps.
- Concept Testing: Evaluating consumer responses to the product concept to validate its appeal and refine its features.
- Pricing Strategy: Assessing the market to set a competitive price that aligns with customer expectations and value perceptions.
- Distribution Channels: Identifying the most effective ways to reach the target market, considering both traditional and digital channels.
- Promotional Strategy: Developing marketing strategies based on insights into customer preferences and behaviors.
Types of Market Research Methodologies Used in New Product Development.
Quantitative and Qualitative Research are two primary market research methodologies in informing new product development. These approaches, distinct in their methods and insights, work in tandem to provide a comprehensive understanding of the market, consumer preferences, and potential product impact.
Quantitative Research is characterized by its ability to gather data that can be quantified and subjected to statistical analysis.
This type of research excels in answering “how many?” and “how much?” questions, providing hard numbers that can inform decisions on market size, consumer demographics, and measurable customer behaviors.
Surveys with closed-ended questions, structured interviews, and secondary data analysis are common methods used to collect quantitative data. The strength of quantitative research lies in its objectivity and the ability to generalize findings across larger populations, making it invaluable for assessing market potential and forecasting demand.
Qualitative Research, on the other hand, delves into the “why” and “how” behind consumer choices and behaviors. It seeks to understand motivations, attitudes, and feelings through in-depth interviews, focus groups, and observation. This type of research is interpretive, providing rich insights into consumer needs, experiences, and preferences that might not be evident through numbers alone.
Qualitative research shines in exploring new concepts, testing product ideas, and uncovering underlying consumer sentiments that can shape product development and positioning.
The role of market research in segmenting customers
Market research helps in identifying various bases for segmenting a market, such as demographics (age, gender, income level), psychographics (lifestyle, values, attitudes), geographic locations, and behavior (purchase habits, usage rates). Companies can uncover patterns and trends that inform how the market can be segmented by analyzing data collected through surveys, focus groups, and other research methods.
For example, a company launching a new fitness app might use market research to discover that its primary audience segments include busy professionals looking for quick workouts, fitness enthusiasts seeking advanced training programs, and beginners needing guidance and motivation. Each of these segments has distinct needs, preferences, and pain points, guiding the app’s feature set, user experience design, and marketing messages.
The role of market research in identifying potential customers
Market research helps not only segment the market but also identify the potential customers within those segments. It provides insights into the characteristics of consumers most likely to purchase the product, their decision-making processes, and the channels through which they can be reached most effectively.
For instance, knowing that busy professionals value efficiency and flexibility, the fitness app company might highlight features such as short, customizable workouts and on-the-go accessibility in its marketing efforts targeting this segment.
The role of market research in analyzing the competition
Market research aids in the identification of direct and indirect competitors, providing a clear picture of the market ecosystem. It involves collecting data on competitors’ product offerings, pricing strategies, distribution channels, marketing tactics, and customer service practices. This information can be gathered through various means, including public records, customer surveys, competitor websites, and social media analysis.
Beyond identifying competitors, market research delves into their performance and strategies. It evaluates their market share, growth trajectories, and the factors driving their success or failure. This analysis helps uncover gaps in the market that the new product can fill, identify areas where competitors are underperforming, and spot emerging trends that could affect competitive dynamics.
Equipped with a thorough understanding of the competitive landscape, companies can strategically position their product to capitalize on market opportunities. Market research informs the development of a unique value proposition (UVP) that differentiates the product from competitors. This differentiation could be based on features, quality, price, customer service, or any combination of factors that resonate with the target audience.
For example, if market research reveals that consumers are dissatisfied with the complexity and user-unfriendliness of existing products in a category, a company could position its new offering as a simpler, more intuitive solution. This positioning directly addresses a gap in the market, appealing to consumers seeking an alternative to the status quo.
How insights from Market Research can inform product differentiation and positioning strategies
Informing Product Differentiation:
Insights from market research pinpoint the areas most valued by consumers and those underserved by current market offerings. For example, suppose research indicates that customers in a particular market seek more environmentally friendly options in a product category dominated by less sustainable choices. In that case, a company can focus on developing a product that uses sustainable materials or practices, addressing a specific consumer need, and differentiating its product from competitors.
Guiding Positioning Strategies:
Market research insights help identify the most compelling way to position a product by understanding the target audience’s values, needs, and perceptions. This can involve emphasizing specific product attributes, benefits, or values that align with the target market’s desires or gaps in the category. For example, if market research reveals a gap in the market for a tech product that combines high performance with user-friendly design for non-tech-savvy users, a company can position its product as the ideal solution for this unmet need, leveraging simplicity and ease of use as key selling points.
Enhancing Competitive Strategy:
Insights from competitive analysis clearly show competitors’ positions and how consumers perceive them. This knowledge allows brands to identify areas of opportunity for differentiation and to develop strategies that leverage their strengths against competitors’ weaknesses. It can also inform decisions on whether to adopt a head-to-head positioning against direct competitors or to find a niche market where the company can dominate.
Tailoring Marketing Communications:
With insights into consumer preferences and competitive positioning, companies can craft targeted marketing messages highlighting their product’s unique benefits and features. This ensures that communications resonate with the intended audience and clearly articulate the product’s unique value proposition, setting it apart from competitors.
How does market research help identify potential risks and challenges in the market?
Market research plays a crucial role in risk mitigation by identifying potential risks and challenges that could impact a new product’s success in the market.
Identifying Market Risks:
Market research helps identify a broad range of risks, including shifts in consumer behavior, emerging competitive threats, regulatory changes, and technological advancements. By keeping a pulse on the market, brands can anticipate changes that might affect the demand for their product or its competitive position. For example, a detailed analysis of market trends might reveal consumers’ growing preference for sustainable products, indicating a risk for products that do not align with environmental values.
Understanding Consumer Sentiments:
Through surveys, social media listening, and other feedback mechanisms, market research gauges consumer sentiments and identifies potential backlash or negative perceptions of a product or brand. This early warning system allows companies to adjust their strategies, messaging, or product features to better align with consumer expectations and avoid potential reputational damage.
Evaluating Competitive Dynamics:
Competitive analysis, a key component of market research, sheds light on the strategies and performance of competitors, helping companies identify risks related to competitive actions. Understanding the competition enables brands to foresee potential market entries by competitors, changes in competitive pricing strategies, or the introduction of substitute products, allowing them to prepare defensive or counter-strategies.
Assessing Regulatory and Compliance Risks:
Market research also plays a vital role in identifying regulatory changes and compliance requirements that could threaten the product’s market entry or expansion. By staying informed about the regulatory environment, companies can ensure their products comply with relevant laws and standards, avoiding costly legal issues and delays.
Testing Market Assumptions:
Concept testing and other research methodologies challenge and validate the assumptions underpinning a product’s development. This critical evaluation can reveal flaws in the product concept, unrealistic market expectations, or misalignments with consumer needs, allowing companies to address these issues before they escalate into more significant risks.
Forecasting Demand and Financial Risks:
Market research helps accurately forecast demand for a new product, a crucial factor in financial planning and risk management. Overestimation of demand can lead to overproduction, excess inventory, and financial strain, while underestimation can result in missed opportunities and an inability to meet market demand. Companies can mitigate financial risks and optimize their supply chain and production strategies through precise demand forecasting.
The role of market research in scenario planning and contingency strategies
Market research is integral to scenario planning and the development of contingency strategies, equipping brands with the foresight and flexibility to navigate future uncertainties and changes in the market landscape. This strategic approach allows organizations to prepare for multiple potential futures, ensuring they can respond swiftly and effectively to various challenges and opportunities that may arise.
Scenario Planning
Scenario planning involves creating detailed narratives about the future based on different assumptions about how current trends, uncertainties, and driving forces could evolve.
Market research provides the empirical foundation for these narratives by offering insights into current market conditions, consumer trends, technological advancements, regulatory environments, and competitive landscapes. By analyzing this data, companies can identify critical variables that might impact their business and construct a range of plausible future scenarios.
For instance, market research might reveal an emerging trend toward eco-conscious consumer behaviors, prompting a company to develop scenarios ranging from mild increases in demand for sustainable products to significant shifts in consumer purchasing patterns favoring green products exclusively. These scenarios enable the company to plan for product innovations, marketing strategies, and supply chain adjustments that align with varying degrees of market demand for sustainability.
Contingency Strategies
Contingency strategies are plans developed to address specific risks or opportunities that might emerge in the future. Market research plays a crucial role in identifying these potential risks and opportunities, allowing companies to devise informed strategies that mitigate threats and capitalize on emerging trends. This process involves understanding the current market, forecasting changes, and assessing their potential impact on the company’s operations, products, and financial health.
Market research can, for example, help a company anticipate potential regulatory changes affecting its industry. Suppose research indicates a likely increase in regulatory scrutiny over product safety standards. In that case, the company can develop contingency plans that include ramping compliance efforts, investing in product innovation to meet new standards, and preparing communication strategies to reassure customers and stakeholders.
Integrating scenario and contingency strategies with overall business planning ensures that market research insights are effectively translated into actionable plans. This integration allows companies to be proactive rather than reactive, setting mechanisms to adapt to market changes quickly. It also supports strategic decision-making by highlighting potential risks and opportunities to consider in the company’s long-term strategy.
The Impact of Market Research on Crafting Effective Marketing Messages and Campaigns
Market research uncovers the emotional and rational drivers behind consumer purchasing decisions, allowing marketers to craft messages that appeal to these motivations.
How Insights into Consumer Behavior and Preferences Guide Marketing Channel Selection and Promotional Tactics
Insights from market research also play a crucial role in selecting the most effective marketing channels and promotional tactics. Understanding where the target audience spends their time, the types of media they consume, and how they prefer to receive information about new products enables companies to allocate their marketing resources more efficiently, choosing channels to reach their audience effectively.
For example, suppose market research indicates that the target demographic for a new fitness app heavily uses social media platforms and engages with influencer content. In that case, the company might prioritize social media marketing and influencer partnerships over traditional advertising channels like TV or print. This strategy ensures that marketing efforts are concentrated where they will have the most impact, increasing visibility and engagement with the target audience.
Additionally, insights into consumer behavior can inform the timing and nature of promotional tactics. For instance, if research shows that potential customers are most receptive to new products at the beginning of the year, a company might time a significant promotional campaign to coincide with New Year’s resolutions, using special offers or trials to encourage adoption.
Feedback Loops and the Role of Market Research in Product Improvement
After a product is launched, the journey of market research does not end but instead enters a new, critical phase. Ongoing market research post-launch is vital for the continuous improvement of the product, ensuring it remains relevant and competitive. This constant research process helps companies capture real-time feedback on how consumers receive the product, identify areas for enhancement, and detect emerging trends that could influence future product iterations.
Integrating customer feedback into product updates and future development cycles is a systematic process that involves several steps. Initially, companies collect feedback through various channels, including direct customer inquiries, online reviews, social media, feedback forms within the product, and user testing sessions. This feedback is then analyzed to identify common themes, patterns, and specific areas for improvement or innovation.
The insights gained from this analysis inform the prioritization of product updates. Critical issues affecting user experience or satisfaction are addressed promptly, while suggestions for new features or enhancements are evaluated for alignment with the product’s strategic direction and market demand. This prioritization ensures that resources are allocated efficiently, focusing on changes impacting customer satisfaction and business objectives.
Integrating customer feedback into the development process often involves cross-functional collaboration between product management, engineering, design, and marketing teams. Regular meetings and feedback loops ensure that customer insights are shared across the organization and that decisions regarding product updates are made with a comprehensive understanding of customer needs.
Once updates are implemented, the cycle continues, with companies seeking feedback on the changes to ensure they have positively impacted the user experience. This iterative process allows constant refinement and adaptation, making the product more robust and competitive.
Example: Software Application Updates
Consider a software company that has launched a project management tool. After launch, ongoing market research and user feedback indicate that while the tool is well-received, users are experiencing difficulties with the mobile app version, particularly its notification system. The company uses this feedback to prioritize an update that improves mobile app notifications, making them more customizable and less intrusive.
The company also identified a request for a new feature that allows integration with third-party calendar apps, a suggestion that came up frequently in user feedback. After evaluating this against the product roadmap and market demand, the company develops this integration, further enhancing the tool’s utility and user satisfaction.
By continually engaging in market research and integrating customer feedback into product updates, the company not only improves its current offering but also lays a solid foundation for future development cycles, ensuring the product remains relevant and continues to meet the evolving needs of its users.
Picking up from where we left off with our tech company’s new product development journey, the initial excitement around their groundbreaking product idea has now been channeled into a series of strategic, informed steps toward realization. The enthusiasm within the company has evolved into a dedicated focus driven by the rich insights gained from their market research. As the product moved from concept to launch, every decision—design tweaks or marketing messages—was backed by data and consumer feedback, ensuring that the final offering met and exceeded customer expectations.
The product launch was just the beginning. Embracing the ethos of continuous improvement, the company remained committed to gathering and acting on customer feedback post-launch. This cycle of feedback and improvement fostered a strong connection with users, who saw their needs and preferences reflected in the product’s evolution.
The tech company’s new product development story shows the power of market research. It demonstrates that success in product development is not just about having a groundbreaking idea but about bringing it to market in a way that resonates with consumers.
Market research is the thread that connects every stage of bringing a new product to market. It ensures that every decision, from conception to launch, is informed, strategic, and aligned with meeting consumer needs and achieving market success.
Senior Marketing Executive
Sales & Marketing
General Manager PR -Internal Communications & Government Affairs
Vital Strategies
Customer Intelligence Director