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20204 Steps to Outmaneuver Your CompetitionOutlook forSoutheast Asian MarketersCONTENTS1 Slowing growth, but not slowing ambitions2 How socio-economic changes shape consumer behaviour in Southeast Asia 3 Heading into 2020 - what do marketers feel about it?4 FOUR steps marketers can take to make it their yearThe thought leadership piece is based on 2 key sources of data:1. Xact ADAs proprietary Data Management Platform. Xact tracks 280 million unique devices across the region, and uses 20,000 monthly active apps per market, to capture a vast pool of anonymous mobile-first data.2. A survey of 200 decision makers, brands, marketers, and industry observers within the region who shared their expectations for growth next year.Slowing growth, but not slowing ambitionsAs a young girl I remember our then Prime Minister outlining a visionary plan to ensure Malaysias economy achieved fully developed status by the year 2020. This was aptly titled Vision 2020. So much has happened in the decades that passed progress, disruption, and transformation in all parts of the world. Much of it beyond our wildest imagination. But now 2020 is finally upon us and so it feels only right to take stock of where we are. On one hand, technology and leadership have brought about fantastic change. China is now a world superpower, we can get connected globally by the touch of a screen, Southeast Asia alone has produced 10 unicorn startups. Yet, the tensions around the US-China trade war, Brexit, political stress in various parts of the world are contributing to uncertainty. In October 2019, the IMF (International Monetary Fund) predicted a slowing growth across the Southeast Asian economies for the rest of 2019 and heading into 2020, mirroring many other forecasts. What does this mean for marketers and brands?Despite the negative sentiments, Im ready to bet that this will be the year of the Southeast Asian marketers. You see, time and time again, marketers have proved that they can turn just about any situation into a positive. Global recession in 2009? No problem said Air New Zealand. Were launching our “Nothing to Hide” campaign. Crew in their safety video were completely nude except for body paint to illustrate the point that unlike other airlines, which increasingly add hidden charges to fares in an effort to increase falling revenue, Air New Zealand had nothing to hide.These and other brands have turned tough times around by using a mixture of humour, nostalgia, nationalism and even optimism.2We looked at the data. We spoke to marketers in the region. And we are absolutely convinced that 2020 will be the Year of the Southeast Asian marketer.SOURCE1 todayonline/singapore/asian-economies-face-weakest-growth-2019-global-financial-crisis-imf2 brandingstrategyinsider/2019/08/6-ways-brands-can-respond-in-a-recession.html#.XZyOHm5uKUkHow socio-economic changes shape consumer behaviour in Southeast AsiaMalaysia May 2018 General ElectionsWhile the change in government was an achievement itself in Malaysias political history, the political situation affects its economic settings. Due to the potential changes in government policies, spending and taxes, we can see an overall decline pattern in the chart above, depicting a slowdown Thanks to Xact, ADAs proprietary Data Management Platform, we were able to gather vast amounts of data on consumption patterns, across the Southeast Asian region. We were able to consolidate this data by tracking 280 million unique devices across the region and gathering mobile-first anonymous data. Lets take a quick look at the monthly shifts in consumption patterns during times of major socio-economic changes in Malaysia, Indonesia and Philippines: across all consumer categories. If you look at the chart, you can see a gradual decrease in consumption patterns over a period of three months, across all categories beginning in election month. The following two months after the election, consumption keeps dipping across all categories.Indonesia April 2019 General ElectionsSimilarly in Indonesia, during the General Elections in 2019, there was a shift in consumption patterns.Despite the political climate and economic uncertainties, two specific categories: value retail shopping and leisure travelling continued to flourish, possibly because of the Lebaran season which shows that consumer patterns during festive periods remain unchanged. In general, Indonesians overall spending declines but more modestly.Peaking Inflation Rates in Philippines through September and October 2018In the Philippines, when the inflation rate peaked in September and October of 2018, the increase of prices in goods and services caused the significant dip in consumption patterns. The consumption patterns immediately trended upwards once inflation rates eased. If you look at the Based on the different scenarios in three different countries, we can see that there is a shift in consumer patterns during times of political change and economic downturns. But more importantly, we notice that in times of crisis, some categories continue to flourish even while others are negatively impacted. Just because theres an economic downturn, that doesnt necessarily mean that your brand is going to suffer. Especially if youre in the low-involvement product category, where the consumer doesnt need to think too much before purchasing your product. Another thing to consider is the fact that these downturns are not permanent. Product growth might be slow in times of socio-economic uncertainties, but things are bound to pick up eventually. Whereas other brands cut back on spending during times of crisis, you could use this as an opportunity to steal the spotlight, build trust and create a lasting impression in the minds of your consumers.So how do marketers feel about 2020?data points aggregated on a monthly level, consumption behaviour across all categories took a massive plunge in September and October 2019. In the following two months, things started to get better, and on the third month, after the inflation eased, consumption patterns soared across all categories. Just because theres an economic downturn, that doesnt necessarily mean that your brand is going to suffer.Especially if youre in the low-involvement product category.Heading into 2020 What do marketers feel about it?We spoke to marketers from all across the region, and over 200 respondents from a diverse mix of industries feel that both the economy and new customer growth are going to experience a slowdown. And while they arent worried about severe cutbacks on marketing budget, they still feel they will have just enough and may have to make cutbacks on some of their marketing activities. We asked if they were struggling to acquire customers in the current economic landscape. And heres how they answered:As seen in Fig 1, a staggering majority of marketers, about 46.1%, say that new customer growth is slow. And 30.1% of respondents report that new customer growth is stagnating. Only 20.4% report that new customer growth is maintaining at a rapid pace. Meanwhile, budget constraints are going to be another big challenge, according to our findings.As seen in Fig 2, a whopping 68.0% of you reported that theres only just enough budget for marketing in 2020, and sacrifices will need to be made.We suspect that most of these sacrifices will happen in regard to brand building activities. Seems like a no-brainer to cut spending in brand awareness when times are tough. Well explore the pros and cons of that strategy later in this report.Fig 1. More than 75% of Southeast Asian marketers say that new customer growth is slow or stagnant Fig 2. An overwhelming majority of Southeast Asian marketers believe that they barely have enough budget for marketing in 2020 and cuts need to be madeIs your marketing budget enough?More Than EnoughJust Enough, But Sacrifices NeededNot Enough8.2%68.0%23.8%New Customer Growth is MaintainedNew Customer Growth is StagnantNew Customer Growth is SlowOther20.4%30.1%46.1%3.4%Are you struggling to acquire more customers?Source: SainsburyFinally, we asked our respondents the people on the ground how they felt the economy would perform.As seen in Fig 3, over 46.1% of respondents believe that they are going to experience slow to modest growth, and over 35.4% believe that growth will remain moderate.But with challenges come opportunities, how can marketers still come up on top?Fig 3. Majority of Southeast Asian marketers believe that the economic growth in their country will be slow to modest. What do you think economic growth for your country will look like in 2020?Economic DownturnSlow to Modest GrowthModerate GrowthRapid Growth8.3%46.1%35.4%10.2%Marketers see the silver lining, alwaysThe economic situation going into 2020 may seem challenging, but as marketers the world over have always proven, they can get around just about anything.A great example of this is the 2008 Sainsburys Feed your Family for a Fiver campaign. To maintain sales during times of economic downturn they highlighted a curated set of family meals all under five pounds.Interestingly in our poll of marketers for 2020, the majority also say their marketing efforts will be positively affected by the economic landscape.This reinforces our theory that Southeast Asian marketers are poised to make the most of these challenging times.“2020 is set to be an interesting year. Brands who understand consumer trends during times like these, and are armed with the right data, insights and strategy, can use this opportunity to steal the spotlight. While some companies will tighten their belts, others will invest in cherry-picked efforts to surge ahead of their competition”Srinivas Gattemneni Chief Executive Officer, ADAFOUR steps marketers can take to make it their yearSTEP ONEData - Insights - Outcomes = IDEA ?Data-driven marketing may have been a buzzword for a while now, but its more than just hype. At ADA we think of it as much more than a passing fad because we live and breathe data. But data on its own is little better than random numbers on screen. To glean value from data, you need insights.A common mistake many marketers make is to assume that once they have the data, it will magically solve all problems and answer all pertinent questions. In reality, they need to gather insights from the data which then leads to action, which then turns into clear business outcomes. Easier said than done, of course. Which is why we coined a simple framework: IDEA We know that our marketers have got a positive mindset about approaching the new decade ahead, despite their uncertainty around the economy. So, if they couple that mindset with a carefully calculated strategy, were sure that nothing can stop Southeast Asias brands from coming out on top. Here is ADAs four-step strategic framework for marketers to make sure that 2020 is indeed their year:Take the example of a telco. A perennial problem is customer churn (customers who unsubscribe for another telco). During a slow growth period, its common sense that consumers will be even more sensitive to price changes and susceptible to short-term promos, hence increasing churn. Applying our IDEA framework to this situation would look like the following:I You IDENTIFY the problem statement here as: How do I prevent my subscribers from churning out, during a slow growth period? D What sort of DATA would you need? Perhaps you look at those who are already churning out against your entire database of subscribers. You suspect that the highest churners are young people, with limited budgets who are susceptible to promos. So as you map out your customer data, you zoom in on demographics, particularly around age and life stage. E What do you EXTRACT from this? Interesting: deeper analysis of your data reveals that one of the highest churn rates happens with men, aged 35-49, who have children! Thats not what you would expect but as you think upon this, it starts to make sense. Men in this lifestage will likely have a regular income thats higher than a young persons. But they also have more responsibility (a family), which makes them more sensitive to pricing. And in a period of slowing growth, the kind of pressures this persona grapples with will be exacerbated!A Finally, what sort of ACTIONABLE strategies would you devise? Perhaps youd think of life stage marketing i.e. introducing plans for those who are just married (a couple plan), families with kids (family shares everything including data), older families (take care of your parents). While were on the topic, why dont you take a crack at applying IDEA to your own business?
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