1.

List at least 2 demographic trends of interest to marketers in the Philippines and

explain exhaustively why they pose opportunities or threats for marketers.
(10pts)

Despite the decrease of population growth rate from 1.73 percent

(2010-2015) to 1.41 percent (2020-2025). The Philippines is still expecting a
projection in population increase from 2015-2025. It is projected that by 2025 the
population will increase to 115 million from 100 million as of 2015 (Chapter-03 -
Overlay of Economic Growth, Demographic Trends, and Physical Characteristics,
n.d.). A growing population can result in higher demand and an expansion of the
market (Packer, 1966). Even though this may sound positive due to an increase
in demand, marketers should take into account the increase in competitiveness in
the market and if their target market will continue to grow together with the
population or should consider cultural shifts and aging populations. Marketers
should take into account population rates in order to create strategies on how
they can address these current population growths. The projected slowdown in
average annual population growth rate can actually be an opportunity for
marketers because while population changes are slow, the same goes with the
consumption of the market. Marketers should take advantage of this relaxed
pace to adjust in production and distribution in order to achieve stability in market
supply. In addition, as population growth increases marketers should explore the
untapped markets. As the population increases, the diversity of markets
increases(Eghbal, 2016). Marketers in the Philippines should look for an
opportunity in different markets through market expansion.

The Philippines is considered to have a young demographic

(Demographics of the Philippines - Statistics & Facts, 2022). According to
statistics & facts 2022, 65% of Filipinos are aging from 15-64 years old while 30%
covered ages from 0-14 years old. In fact in 2019 the mean age of male
household members was 37.68 years old while females had a mean age of 44.2
years old. In connection to this, the young generation had a significant
contribution in the country’s economic recovery after experiencing the effect of
the pandemic. Marketers can make use of this opportunity by exploring
E-commerce and consider strengthening their online presence. The data implies
that the average age of males and females in the philippines belong to the
millennial generation and generation X. Being aware of this, marketers can focus
on how to easily tap these generations. In a research study made by woo brand
research, they saw that millennials have low brand loyalty and are explorative
when it comes to trying different brands or products (Woo & Brand Research,
2018). While Generation X, are more loyal to brands they trust and brands seen
as reliable. In addition, Millennials are the generation wherein they grew up with
technology. Thus, millennials are exposed digitally and prefer to discover brands
and purchase products on the internet or via social media(Iskiev, 2022).While
Generation X actually also discovers products via the internet and social media
 but does not prefer to make a purchase digitally. This can be explained by the
fact that 90% of Generation X uses social media. However, They still prefer to
make a purchase in store(Iskiev, 2022). These are some examples how
marketers can identify which are the opportunities and which are the threats.

2. Discuss at least 2 economic trends that marketers must be aware of and provide
examples how companies are responding to them. (10pts)

In the first quarter of 2022, the Philippine economy has shown strong
momentum with the GDP growth by 8.3% y-o-y (Philippines Economy Resilient
Despite Global Headwinds, 2022). With the easing restriction brought about by
the pandemic, household consumption spending bounced back which drove
strong economic growth. Moreover, together with the increase in GDP, household
consumption expenditure also grew by 10.1% y-o-y, as well as the gross capital
formation by 20% y-o-y. Marketers must be aware of the country’s GDP because
this gives information of how the economy is performing, especially that the
country is still recovering from the effects of the pandemic. Most private sectors
are now expanding their operations which contributes to the decrease of
unemployment rate in the country (ADB Raises 2022 Growth Forecast for the
Philippines, 2022). This explains the growth in household consumption, as more
jobs are made, more Filipinos have the buying power to purchase their needs.
Therefore, explains why private sectors are slowly having the confidence to
resume operations.

According to the Philippine Statistics Authority, the inflation rate increased

to 6.1% in June 2022 from 5.4% in May 2022(Ph Gov't Strengthens Policy
Interventions on Supply Sufficiency, Agri Productivity and Targeted Relief to Curb
Inflation—Neda, 2022). Marketers should take note of significant increases in
inflation rates so that they can create strategic ways to capture the market even
through these times of high inflation rates. An increase in inflation can result in
lower levels of consumer spending which leads to decrease in sales. Marketers
should be able to identify how and where consumers spend their money.
Similarly In 2018, inflation rate made a significant increase by 6.9% (Caraballo,
2022). During those times, Jollibee Foods reported that the impact of the rising
inflation rate and an increase in cost due to peso depreciation affected Jollibee's
gross profit margin negatively for the second quarter of 2018. To offset inflation,
the company had to raise its prices at its restaurant chains, including Jollibee,
Greenwich Pizza, and its Burger King Franchise(VENZON, 2018). Moreover, the
high inflation rate in June 2022 urged five major garment companies at the
mactan economic processing zone in lapu-lapu city to retrench 4,000 workers on
september 29, 2022 (Sitchon, 2022). They explained that the effects of global
financial conditions with higher-than-expected inflation and global conditions
brought about the ongoing conflict between russia and ukraine, typhoon odette's
 aftermath etc. resulted in supply chain issues and increasing gas prices which led
them to lay-off workers(Sitchon, 2022).

3. Explain and provide 2 examples how companies can take a proactive approach
toward the marketing environment. (10pts)

In order for companies to have a proactive approach towards the

marketing environment, the company should have a deep understanding of their
current market and situation by developing customer-oriented,
competition-oriented, and innovation oriented activities (Brege & Kindström,
2019). A company should go beyond the expressed needs of their customers,
companies should also explore and estimate how those needs will evolve over
time and anticipate future needs. The customer-oriented strategy has the
objective to find the best way to serve customers not only at the present but also
in the future. In addition, companies should acknowledge their competitors. They
should focus on finding ways to improve their competitiveness in the market by
studying their competitors' products. With this, companies can make critical
changes to their strategies that may benefit them in the long-run. Lastly,
companies should be innovation-oriented because globalization and
modernization is rapidly changing the world. Companies should be able to adapt
quickly and easily in order to be stable even when unexpected events may occur.
With the uncertainty of the marketing environment, it is important for companies
to be aware, prepared, and flexible in order to quickly respond to unexpected
events. Being aware of your company's current situation can serve as a guide to
making proactive decisions that can benefit your business in the future.

A company should also be future-oriented with the help of research and

development. In order to be well-positioned to either limit potential risks or take
advantage of opportunities, a company should have a strong understanding of
their current position in order to foresee trends and events before they are fully
visible. However, this should not be backed up by guesses or assumptions rather
by data and statistics from research. In addition, businesses should not always
focus on responding to their customers' needs but rather have a better
understanding of their customers' needs and wants. From here, they will be able
to spot unexpressed needs and future demands to take appropriate actions.
However, if business won’t take initiative to make changes in the present,
business won’t be able to take advantage of their present finding or research in
the future.
4. The pandemic has expedited the long-term structural trend from cash to
electronic payments. In the Philippines, digital payments have been widely
adopted due to the proliferation of e-commerce, mostly supportive regulation
(until recently), and a large target market. Research trends related to digital
payments and its impact on marketers in the Philippines. Write a brief report,
supporting your discussion of these trends with statistics. (20pts)

Across Southeast Asia, the Philippines has one of the highest numbers of
social network users; approximately 67% as of January 2020, and on top of that,
Filipinos spend around 4 hours online on social media platforms (Sanchez,
2020). Being aware that Filipinos are all over the internet and are engaging
digitally through social media, marketers should take this into consideration in
order to come up with new strategies focused on capturing markets digitally,
especially here in the philippines. Social media enables content creators to share
information through digital media, this enables marketers to grasp a broader
reach of proportional marketing through online ads. This can also explain the rise
of digital payments since more and more people are present on the internet. In
connection to this, according to Visa’s Consumer Payment Attitudes Study there
is an increase of cashless payments in the Philippines (Filipinos' Cashless
Payments Increasing—Visa Study | SEADS, 2022). They saw that 60% of
Filipinos are carrying less cash in their wallets and 84% are trying to go cashless.
There are two factors that affected this sudden pivot to cashless payments:
Safety and Pandemic Impact. According to the study, Filipinos see that going
cashless means being safe, having convenience, and having the ability to track
financial records easily. As a result, 64% of Filipinos prefer to use mobile wallets,
52% in online card payments, 44% in card payment at physical merchants, and
31% in QR payments. Besides the convenines it provides, the study gave
emphasis on how the pandemic significantly influenced cashless payments. In
2021, the main drive of online shopping growth was the pandemic, especially
digital purchases made via e-commerce apps. As a result, more and more people
are fond of scrolling through online shopping platforms and purchasing using
apps and websites. It is evident that the pandemic influenced the country in
transitioning to cashless transactions.

In addition, according to data compiled by Bangko Sentral ng Pilipinas

(BSP), the Philippines' Central Bank, the Philippines is continuously adopting
digital payments as part of a state-led drive to boost financial inclusion. In the
country, active e-wallet accounts rose to 22% annually in 2018. In connection to
high smartphone penetration, consumers’ willingness to bank digitally is in
demand. As digital payments arise, Paymaya and GCash are one of the most
popular mobile banking apps in the Philippines (Kapronasia, 2019). Another
online payment trend continues to capture consumers, especially the younger
generation: Buy now, pay later or known as BNPL (Bedell, 2022). According to
insider intelligence this industry will reach $680 billion in transaction volume
worldwide in 2025. The popularity of buy now, pay later (BNPL) solutions, which
let customers pay in interest-free installments, is on the rise as more individuals
look for alternate forms of financing. While certain BNPL solutions are accessible
in-store, they are more familiar to ecommerce checkout, making them more
broadly available when purchasing online. And, with online sales expected to rise
44.4% year on year (YoY) in Q2 2020, more customers may choose to utilize
BNPL solutions more frequently (Buy Now Pay Later: Ecommerce Financing &
Consumer Credit, n.d.). Taking shopee as an example, shopee provides a feature
called, SPayLater, this enables qualifying purchasers to apply for an installment
loan for up to a 12-month period or buy now and pay later on their shopee
purchases. ([SPayLater] What Is SPayLater?, n.d.). Different Online payments
options have grown far beyond credit and debit cards. Consumers today prefer
flexible payment options and seamless transactions which marketers should take
into account because this can reflect how consumers think, act and say when
purchasing a certain product.
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