Presentation Silver Marketing: The State of Play in Asia Prepared for:  SICEX 2008 Date:   11 January 2008
Table of Contents 5 Key Survey Findings i. 15 Case Studies of Silver Marketing in Asia iii. 21 Key Take-aways iv. 12 Issue...
B2B Customer  Decision Dynamics Market Sizing & Segmentation Competitor Analysis Channel Research &  Value-chain Analysis ...
The Rising Silver Hair Segment Aging populations are tomorrow’s business opportunity <ul><li>~20% of Asia is >50 years now...
Research Methodology <ul><li>Survey conducted in May 2007 as part of Spire Research and Consulting published research prog...
Existence of Silver-Hair Marketing Strategy in Asia 77% of MNCs interviewed currently do not have a marketing strategy tar...
Plans to Strengthen Silver-Hair Marketing Strategy Among the MNCs that currently have a silver-hair marketing strategy, 79...
Intention to develop Silver-Hair marketing strategy  within the next 5 years (overall) 35% of MNCs that currently do not p...
Breakdown of Industries by Existence of  Silver Marketing Strategy Most MNCs in the ICT industry have no Silver strategy. ...
Industries with Greatest Benefit from Growth of  Silver Market  The healthcare industry is perceived to be the greatest be...
Country Markets with Greatest Potential for Silver Strategies Japan and China are perceived to offer the greatest opportun...
Issues in  Silver Marketing
<ul><ul><li>Among international companies in Asia there is little excitement and urgency about the silver segment </li></u...
<ul><ul><li>Too explicit positioning around age may alienate boomers? </li></ul></ul><ul><ul><ul><li>Examples from the Wes...
Case Studies of  Silver Marketing in Asia  Insert relevant picture
Healthcare Best World <ul><ul><li>Best World is a publicly-listed, Singapore-based manufacturers of nutritional supplement...
High-Calcium Milk Powder Fonterra <ul><ul><li>Anlene series of milk powder launched in 1995 </li></ul></ul><ul><ul><ul><li...
Special Mobile Phones NTT DoCoMo <ul><ul><li>Raku-Raku mobile phone launched in Tokyo, Japan </li></ul></ul><ul><ul><li>Ge...
<ul><ul><li>Top spots for Silver holiday-makers are Asian countries like Taiwan, Japan, South Korea and China </li></ul></...
<ul><li>Research, research, research! </li></ul><ul><li>In the short-term: avoid too much product redesign and leverage co...
Key Take-aways  Insert relevant picture
How will Asia’s Silver segment be served in future? <ul><li>Companies need to act fast on Silver marketing because it take...
 
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Silver Marketing: The State of Play in Asia

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  • 1. Levels of market segmentation Buyers have unique needs and wants =&gt; each is potentially a market segment. Some companies serve customers/clients individually (e.g. in the aerospace industry, insurance industry), some serve larger number of smaller buyers =&gt; complete segmentation is practical.  Market can the segmented at different levels. Mass marketing Very popular in the past century. Henry Ford: We could have the car in any color as long as it is black. Today, Coca-Cola still maintains this approach (“For everyone”) Creates the largest potential market =&gt; economies of scale =&gt; lower costs =&gt; lower selling prices Today the world mass market has changed, making it more difficult for mass marketing (working women, single parents, baby boomers, etc)  hard to create a single product or program that appeals to every one. Also the proliferation of distribution channels and ad. Media (super markets, hyper markets, online shopping, specialty shops, etc) + bombard of messages of various media (TV, radio, press, tel, internet, etc)  mass marketing is dying!? (ii) Segment marketing Better meet customer needs: GM designs specific models for different income groups. Can market more efficiently: targeting its products/services, channels and communications programs toward only consumers that it can serve best and most profitably. Can market more effectively: fine tuning products, prices and programs to the needs of carefully designed segments. (iii) Niche marketing A niche is a more narrowly defined groups, usually identified by a segment into sub segments or by defining a group with a distinctive set of traits that might seek a special combinations of benefits. E.g.: the utility vehicles segment = light-duty pick up trucks + sport utility vehicles + … Niches are smaller and attract only a few competitors. Customers are willing to pay for a price premium because niche marketers know their market so well. Niching offers smaller companies an opportunity to compete by focusing their limited resources on serving niches that are not attractive to larger competitors. Niching is the trend !  Quotes: Companies will have to niche or be niched/ there is no market today for products that every body likes a little, only for products that somebody likes a lot. (iv) Micro marketing Local marketing: tailoring brands and promotions to the needs and wants of local customer groups (cities, neighborhood, even specific stores). Can drive up production costs because of reduced economy of scale Can create logistic problems The brand image might be diluted Good when different regions have profound differences in demographics and lifestyles. Meet retailers’ need more because they want fine-tuned product assortments for their neighborhood to increase the originality of the shop.
  • Long-term implications – slower growth as less labor and somewhat less consumption, government deficits (since they’re slashing taxes) and higher interest rates…. 21-24% of the population are aged &gt;50 in China, Korea, Taiwan, Thailand &amp; Singapore (30% in Australia &amp; Hong Kong) But big business opportunity
  • Explore most important reason for each segment – see whether there are any difference or are they all similar?
  • Silver Marketing: The State of Play in Asia

    1. 1. Presentation Silver Marketing: The State of Play in Asia Prepared for: SICEX 2008 Date: 11 January 2008
    2. 2. Table of Contents 5 Key Survey Findings i. 15 Case Studies of Silver Marketing in Asia iii. 21 Key Take-aways iv. 12 Issues in Silver Marketing ii. Page Topic
    3. 3. B2B Customer Decision Dynamics Market Sizing & Segmentation Competitor Analysis Channel Research & Value-chain Analysis Country Research Price Analysis Holistic Market Environment Research (MER) Business Partner Selection Spire Research and Consulting <ul><li>Channel Research and Value Chain Analysis </li></ul><ul><ul><li>Channel analysis – channel mapping, identities of key channels & their vendor alignments, drivers of channel loyalty and satisfaction, brand perceptions, satisfaction levels with principals, current competitor-channel relationship analysis </li></ul></ul><ul><li>Competitor analysis and competitive environment analysis </li></ul><ul><ul><li>Competitive environment: </li></ul></ul><ul><ul><li>Competitor strategy, targets and tactical plans </li></ul></ul><ul><ul><li>Competitor infrastructure </li></ul></ul><ul><ul><li>Competitor operations </li></ul></ul><ul><ul><li>Analysis & forecast of competitor financials </li></ul></ul><ul><ul><li>Recommendations on competitor threat response </li></ul></ul><ul><ul><li>Benchmarking from competitor best practices </li></ul></ul><ul><li>Company investigation for partnerships and M&A </li></ul><ul><ul><li>Profiling & SWOT analysis of potential partners </li></ul></ul><ul><ul><li>Evaluation and recommendation for business partnership negotiations </li></ul></ul><ul><li>Market sizing and segmentation </li></ul><ul><ul><li>Market sizing and forecasting </li></ul></ul><ul><ul><li>Market segmentation by geographic region, by channel type, by price band & by customer segment </li></ul></ul><ul><ul><li>Market trend analysis, future price inflexion points </li></ul></ul><ul><li>Price Analysis </li></ul><ul><ul><li>Price trend analysis </li></ul></ul><ul><ul><li>Product price gap analysis </li></ul></ul><ul><ul><li>Product price positioning </li></ul></ul><ul><ul><li>Product price & specification database </li></ul></ul><ul><li>Country economic, political and social analysis </li></ul><ul><ul><li>Development of country plans, including legal/regulatory issues analysis, government relations strategy formulation & scenario forecasting </li></ul></ul><ul><li>B2B Customer decision dynamics </li></ul><ul><ul><li>Customer base analysis </li></ul></ul><ul><ul><li>Customer usage & brand perception </li></ul></ul><ul><ul><li>Customer decision-making process & key decision makers/influencers </li></ul></ul><ul><ul><li>Drivers of customer loyalty </li></ul></ul><ul><ul><li>Database of customer procurement </li></ul></ul><ul><ul><li>Research on specific customers </li></ul></ul><ul><ul><li>Recommended best practice in marketing, sales & post-sales support </li></ul></ul>
    4. 4. The Rising Silver Hair Segment Aging populations are tomorrow’s business opportunity <ul><li>~20% of Asia is >50 years now, rising to ~40% by 2030 </li></ul><ul><li>Big exceptions – India & Indonesia </li></ul>Source: US Census Bureau
    5. 5. Research Methodology <ul><li>Survey conducted in May 2007 as part of Spire Research and Consulting published research program. </li></ul><ul><li>“ Silver-hair” defined as aged over 50 </li></ul><ul><li>Extension of Spire’s “Silver-Hair” survey with Singapore-based companies in 2006 </li></ul><ul><li>Telephone interviews across seven Asia-Pacific countries – China, Hong Kong, India, Indonesia, South Korea, Malaysia, Singapore </li></ul><ul><li>Total sample size = 105 firms </li></ul><ul><li>Profile of respondents: </li></ul>
    6. 6. Existence of Silver-Hair Marketing Strategy in Asia 77% of MNCs interviewed currently do not have a marketing strategy targeted at the Asian silver-hair segment * The silver-hair market refers to senior citizen consumers aged 50 and above.
    7. 7. Plans to Strengthen Silver-Hair Marketing Strategy Among the MNCs that currently have a silver-hair marketing strategy, 79% plan to strengthen these marketing efforts in the future
    8. 8. Intention to develop Silver-Hair marketing strategy within the next 5 years (overall) 35% of MNCs that currently do not possess a silver-hair marketing strategy recognise a greater need for such a strategy in the medium-term (next 3 to 5 years). 35% 65% 7% 93%
    9. 9. Breakdown of Industries by Existence of Silver Marketing Strategy Most MNCs in the ICT industry have no Silver strategy. * The ‘Others’ category includes MNCs providing security services, advertising, and education & training services.
    10. 10. Industries with Greatest Benefit from Growth of Silver Market The healthcare industry is perceived to be the greatest beneficiary of Silver market growth
    11. 11. Country Markets with Greatest Potential for Silver Strategies Japan and China are perceived to offer the greatest opportunities for Silver strategies
    12. 12. Issues in Silver Marketing
    13. 13. <ul><ul><li>Among international companies in Asia there is little excitement and urgency about the silver segment </li></ul></ul><ul><ul><ul><li>There is a relative dearth of publishing & events, compared to eg PMEB and youth marketing </li></ul></ul></ul><ul><ul><ul><li>Most of the interest is shown by only a handful of industries </li></ul></ul></ul>Why so little interest in Asia’s Silver segment? <ul><ul><li>Why? </li></ul></ul><ul><ul><li>Other factors: </li></ul></ul><ul><ul><ul><li>Ageing trend is seen as long-term…no need to act now! </li></ul></ul></ul><ul><ul><ul><li>Perception: Silver segment has less disposable incomes & spending, less well educated </li></ul></ul></ul><ul><ul><ul><li>Marketers have less experience and expertise about this segment </li></ul></ul></ul><ul><ul><ul><ul><li>Accomplished Silver marketers will soon be highly sought after! </li></ul></ul></ul></ul><ul><ul><ul><li>Dearth of media to run targeted campaigns </li></ul></ul></ul>
    14. 14. <ul><ul><li>Too explicit positioning around age may alienate boomers? </li></ul></ul><ul><ul><ul><li>Examples from the West: Heinz pureed food for seniors, Gap’s Forth & Towne chain… yet Sony’s “zoomer” cam-corder ads were well-received </li></ul></ul></ul>Issues in Silver marketing <ul><ul><li>Concerns that Silver campaigns may alienate younger consumers </li></ul></ul><ul><ul><ul><li>Not enough Silver-focused channels to enable targeted campaigns, implying need for programs like road-shows </li></ul></ul></ul><ul><ul><li>Costs of redesigning products and testing/research </li></ul></ul><ul><ul><li>Lack of economies of scale </li></ul></ul><ul><ul><li>Possible need for more high-touch pre- and post-sales service, as boomers may be less time-pressured </li></ul></ul>
    15. 15. Case Studies of Silver Marketing in Asia Insert relevant picture
    16. 16. Healthcare Best World <ul><ul><li>Best World is a publicly-listed, Singapore-based manufacturers of nutritional supplements, personal care products and healthcare-related consumer devices </li></ul></ul>Source: Spire Research and Consulting analysis of primary interview with Best World, secondary research <ul><ul><li>Most of its consumers are in their 40s, with those aged >55 making up <25% of revenue </li></ul></ul><ul><ul><ul><li>Keenly aware that its brand loyal customers are moving into the >50 group </li></ul></ul></ul><ul><ul><li>Recruits network marketers from the pool of older consumers of its products, to sell to Silver segment (aged >40) </li></ul></ul><ul><ul><li>Most marketing investment goes to direct selling infrastructure, with mass media advertising playing a supplemental role </li></ul></ul>
    17. 17. High-Calcium Milk Powder Fonterra <ul><ul><li>Anlene series of milk powder launched in 1995 </li></ul></ul><ul><ul><ul><li>Contains 500mg of calcium per 6-ounce serving, about twice as much as regular milk </li></ul></ul></ul><ul><ul><ul><li>Targeted at women </li></ul></ul></ul><ul><ul><ul><li>The line now generates US$75 million in sales worldwide </li></ul></ul></ul><ul><ul><li>Anlene Gold milk powder launched in 2005 in Asia </li></ul></ul>Source: Fonterra and US Dairy Export Council, 2000 <ul><ul><ul><li>Dietary supplement that helps protect against osteoporosis with an additive that locks calcium into the bones </li></ul></ul></ul><ul><ul><ul><li>Targeted at elderly women </li></ul></ul></ul><ul><ul><li>Anlene Bone Health check program rolled out in 2006 – over 1.2 million people scanned in 9 Asian countries </li></ul></ul><ul><ul><ul><li>Free bone scans for elderly women using portable ultrasound devices, to raise awareness of osteoporosis </li></ul></ul></ul><ul><ul><li>Public figures appointed Anlene Bone Health ambassadors </li></ul></ul>
    18. 18. Special Mobile Phones NTT DoCoMo <ul><ul><li>Raku-Raku mobile phone launched in Tokyo, Japan </li></ul></ul><ul><ul><li>Generation III in 2006, with Fujitsu and Fortemedia technology </li></ul></ul>Source: NTT Docomo, 2003 <ul><ul><li>Features: </li></ul></ul><ul><ul><ul><li>‘ Slow Voice’ – slows down the spoken words coming through the earpiece for easy listening </li></ul></ul></ul><ul><ul><ul><li>‘ Clear Voice’ noise detection – takes into account surrounding noise levels and adjusts the earpiece and ringtone volume accordingly </li></ul></ul></ul><ul><ul><ul><li>Automated voice – reads out text from email or web pages and announces incoming caller identities </li></ul></ul></ul><ul><ul><ul><li>Pedometer – works out daily calorie consumption </li></ul></ul></ul>
    19. 19. <ul><ul><li>Top spots for Silver holiday-makers are Asian countries like Taiwan, Japan, South Korea and China </li></ul></ul><ul><ul><ul><li>>50% of China-bound bookings taken up by senior citizens </li></ul></ul></ul>Tailored Tours Dynasty Travel <ul><ul><li>Dynasty launched several elder-friendly tour packages to China and South Korea in 2007 </li></ul></ul><ul><ul><ul><li>Itinerary includes more time allocated for rest stops and toilet breaks </li></ul></ul></ul><ul><ul><ul><li>Special meals provided </li></ul></ul></ul>Source: Secondary data Commonwealth Travel Services Corporation (CTC) <ul><ul><li>CTC introduced family-friendly tours four years ago and gives special discounts for senior citizens traveling with their families </li></ul></ul><ul><ul><li>CTC currently has five such packages and at least 80% of the seats are filled each time. </li></ul></ul>
    20. 20. <ul><li>Research, research, research! </li></ul><ul><li>In the short-term: avoid too much product redesign and leverage common platforms </li></ul>Best Practices for winning in Asia’s Silver arena <ul><ul><li>Example of Sony which spent US$25m on advertising CE gadgets to the elderly </li></ul></ul><ul><li>Try to target Silver segment by choice of media rather than developing new brand messages, to manage impact on the brand </li></ul><ul><ul><li>There is a dearth of Silver-focused media but this will change </li></ul></ul><ul><li>When making product adaptations for Silver consumers: </li></ul><ul><ul><li>Pay attention to their physical attributes in designing not only product functionality and packaging but also waiting rooms, retail spaces, print-outs </li></ul></ul><ul><li>Consider hiring boomers to sell to boomers </li></ul><ul><li>Manage value – an inflationary environment will challenge the Silver segment </li></ul><ul><li>Consider cross-industry alliances with other companies, eg nutrition and personal care </li></ul>
    21. 21. Key Take-aways Insert relevant picture
    22. 22. How will Asia’s Silver segment be served in future? <ul><li>Companies need to act fast on Silver marketing because it takes time to build knowledge, tweak products, rethink go-to-market processes and build brand loyalty </li></ul><ul><li>Some industries are in the fore-front of this effort (healthcare, lifestyle, financial) while others (eg ICT, automotive) need to catch up </li></ul><ul><li>China will be a major arena for Silver marketing, but other countries in Asia should not be neglected – “old”/aging countries like Korea & Singapore, as well as “young” countries with large populations like India and Indonesia </li></ul><ul><li>There is a lack of focal points for outreach to the Silver segment </li></ul><ul><ul><li>Do Asian countries need an AARP equivalent? </li></ul></ul><ul><ul><li>E-communities and web portals will become more important: Asian versions of Eon and grandparents.com will spring up </li></ul></ul>

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