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In the Philippines, almost 40% of the population belongs to the middle-income class. Currently, the Duterte administration is targeting to eventually achieve a predominantly middle class society where there are no families in the poverty line in its Ambisyon Natin 2040 Program. A recent study by Euromonitor International has projected that by 2030, the emerging middle class (EMC) will grow by almost 42%. Government officials have also claimed that within 2019 the country will be in the ranks of the upper middle income countries.
What this data means is that middle class households are starting to gain greater spending power. And this presents a positive outlook for the economy specifically for businesses. However, understanding the middle income market segment is important to provide insights on how businesses can cope with this potential growth in its consumer base.
Basic Profile of a Middle Income Family
Middle income families, or the middle class, are a socioeconomic group in between the rich and the poor. This socioeconomic standing (SES) is determined primarily by household income, and the Philippine Institute for Development Studies (PIDS) has set this income to be in the range of PHP19,040 to PHP 114,240 per month for a household of five.
Expenditure is also an indicator of SES—and the bigger the family, the higher the income needed to fit in the middle income category. Those who belong to this group have the resources that allow them to choose their lifestyle without sacrificing their basic needs. Most of these groups also choose to reside in urban areas which are closer to their work. They are mostly in the working class with some members employed as OFWs, and are dependent on salary as a source of income. This income dictates their spending power, and is easily affected by the state of the country’s economy. Most of those in the middle class have generally higher educational attainment as well.
Establishing Effective Connections
With the continuing growth of middle income Filipino families, it is important to know how you can reach out to this market as a source of your potential customers. Aside from the basic profile of this group as previously discussed, you have to take into consideration other aspects that affect their choices, such as their values and social or cultural trends that influence them.
1. Value for Money
While consumer spending and upgrade is on the rise for middle-class urbanites, value-for-money remains to be the ultimate consideration. It is important therefore that the product and the content of your advertising message should focus on this value to be able to capture the interest of the middle income families.
2. Reliance on the Internet
A survey by the Social Weather Station (SWS) in December 2018 revealed that internet usage was at 61% high for the ABC or upper to middle class segment. In the same study, it was found that 47% of adult Filipinos access the internet. With such a consumer reach, the use of digital advertising should be considered instead of traditional advertising methods.
With Filipinos as one of the largest users of social media platforms spending an average of 4.3 hours a day on it, this means that social media has a wider reach among the Filipino audience. As more Filipinos consume social media, there is also the tendency to be open and be influenced by opinions they see in social media.
3. Understanding their Lifestyle Preferences
If you visit the numerous malls in the country, you will note that it is always full of people. For the middle-class Filipinos, shopping and dining out is equated to a metropolitan lifestyle and it is done as a cherished family activity. Business advertisers take this opportunity to create promotional activities such as product showrooms, product samplings, signage and displays, discount promos, and other point-of-purchase strategies.
4. TV, Print, and Radio
Tagged as traditional means to reach out to consumers, these media forms are still widely used, especially by the middle income Filipinos. After a stressful work day, family members come home and watch TV together. TV reaches about 45% of households, and most middle income families have more than one TV sets in their homes. Radio, on the other hand, is on 80% of households, and print media grew by 48% in 2016.
Connecting to middle income Filipino families takes more than just the process of unloading to them the information you want to give. You have to take into account what shapes them—what they are, and how they think and behave. This way, you are set for a more effective way to get your message across.
