Most Pinoys go for trusted brands, not cheap alternatives

ABS-CBN News

Posted at Jul 12 2012 10:01 AM | Updated as of Jul 12 2012 06:01 PM

MANILA, Philippines - Colgate, Kleenex, Coke and Pampers are just some of the world's most popular brands. But for most Filipinos, these names have become synonymous with the product - Colgate means toothpaste, while Kleenex means tissue.

It comes as no surprise that a consumer survey by Kantar Worldpanel showed that most Filipino households are willing to spend on well-known branded products, rather than cheaper alternatives.

Kantar Worldpanel conducted a study of 3,000 urban and rural households nationwide to determine Filipinos' shopping preferences. Around 17 million Filipino households belong to the DE market, with their fast-moving consumer goods (FMCG) purchases amounting to P434 billion.

Based on the latest "Philippine Households’ FMCG Spending" study, 62% of the respondents equated higher prices with higher quality. Around 84% said they buy well-known and trusted brands.

"Based on the results of the study, it is clear that Filipino consumers choose products that offer the best value for their hard-earned money," said Luz Barra, commercial director of Kantar Worldpanel.

"Convenience, quality and brand name and other perceived benefits are important factors for the purchasing decisions of consumers more than the price itself," she added.

In order to cater to the low-income DE households, companies are also trying to offer innovative packaging options such as sachets.

"On the other hand, packaging innovations such as sachets come into play in order for the low-income market to be able to purchase the more premium brands, which they equate with quality," Barra said.

The Kantar Worldpanel study showed "value for money" is driven by making products more affordable through sachets.

The study showed single (40%), dual (12%), tri (17%) and even quad (16%) sachets dominated the total shampoo value contribution of sales for the category.

Consumers are also going for the low-priced bath soaps in "pillow packs". The share of pillow packs grew from 41% in 2010 to 47% in 2011, while the share of soaps in carton boxes fell from 59% in 2010 to 54% in 2011.

Even in powdered beverages, consumers are going for sachets. Most of the sales of powdered tea (91%), powdered juice (82%) and coffee (42%) come from sachets.

Even liquid condiments such as soy sauce, ketchup and fish sauce are now more affordable in stand-up pouches or refill packages and fast gaining popularity, with its share rising from 40% in 2010 to 44% in 2011.

Leading ice cream brands are also offering premium flavors in smaller stock-keeping units (SKUs).
 
The Kantar Worldpanel study showed Filipinos spend their money wisely.

"Though majority of consumers belong to the lower-income households, they prefer brands that offer the best value and not necessarily the cheapest ones, because they only want the best for their families," the study said.