ISSUE NO. 1
JAN - MARCH 2005
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by Avigail Olarte and Yvonne T. Chua
"It's better this way," says the 36-year-old housewife. "It's cheaper and it saves us money. If you haven't much money, you pick whatever is cheaper." For Candelaria and millions of other Filipinos, size does matter these days the smaller, the better, because then they can afford to buy it. With the disposable income of Filipinos shrinking almost daily, many families now find buying in large quantities simply out of the question, and consumer-goods manufacturers seem to have introduced micro-marketing, also known as the make-it-small-and-snappy selling tactic, just in the nick of time. Actually, this package-downsizing trend began in the 1990s with nonfood items. But it was only in the last three years that processed food started to be sold in ever-smaller quantities. Explains Jonathan Chua, unit manager of the multinational Procter & Gamble: "Downsizing is in response to consumer coping behavior. With harder times, income is flat and the cost of goods is rising. The budget remains the same, say P1,000. So families try to buy the same items, but in smaller quantities." Micro-marketing has also left cash-strapped consumers feeling less oppressed. Chito Macapagal, general manager for corporate development of Unilever Philippines, says, "We have such low salaries. You feel deprived if you can't buy things that you really need. (Micro-marketing) is a way of (satisfying) that need." Even if it means just having a taste of what you want. Vicky Abad of Taylor Nelson Sofres (TNS), a global market information group, says, "If you wanna try ice cream and you can't afford (a big one), a pint would allow you that experience for something less." At the same time, mini-sizing has meant big business for manufacturers who are now able to tap a segment of consumers they had previously been unable to reach when they were selling items in larger portions. Abad says manufacturers cannot ignore the sizable number of the population that belongs to the D and E socioeconomic classes, which account for 80 percent of the population. Obviously, manufacturers are going to lose out in the end if they cater only to the perfumed classes. Nearly 90 percent of Filipinos, most of them from the D and E classes, now buy products in sachets and mini-sizes, according to the Global Omnibus Survey of Synovate, a marketing research firm. But even many among those who belong to the A, B, and C classes have turned to mini-sizes. Coffee, creamer, juice, chocolate and milk powder, soy sauce, and vinegar topped the list of the 30 percent in those segments who said they bought food items in smaller sizes. Top 10 Food Items Bought in Sachet/Mini Size and Tingi
Source: Asiabus April 2004, Synovate Philippines Mini-sizes also rule in the canned meat category. TNS saw that since 2003, more and more people have been buying canned food in 100- to 200-gram size, which now eat up more than half the market-volume share. But it is the flexible or sachet phenomenon that is perhaps one of the most visible aspects of micro-marketing. Macapagal says it was the use of composite materials or flexibles that enabled Unilever to downsize its products. In fact, Unilever Philippines claims to be the first in the country to package shampoos in flexibles. That was back in the late 1970s when it commissioned the very first British sacheting machine. The simple technology of coupling polyethylene or PE, with plastic, and topping that with another layer of PE allowed Unilever to produce Clinic shampoo in pillow pack, the forerunner of today's sachets. Toothpaste in aluminum packs followed, skin products came next, and food in sachets just recently. "When I saw our Mayo, Say Cheez coming out in sachets, I was pretty excited," says Macapagal. "If you can find value in doing it in sachets for personal care, there's value doing it for the food side." Email us your comments about this article, or post them in our blog.
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