New Business Opportunities Under The Differentiation Of Consumer Groups

During the inflation period, the differentiation of consumer groups is more and more obvious, and the performance of consumption motivation is more complex.

How can enterprises discover new business opportunities hidden under these changes?

In January 2011, the economic performance data showed that the total consumer price (CPI) level increased by 4.9% compared to the same period last year. Although CPI has dropped, the rise in food prices has increased the inflation expectations of the people.

At present, many economists agree that China is or is entering a new era of inflation, but the degree of inflation is still controversial.

To be sure, inflation expectations have a greater impact on consumers' short-term consumption behavior.

How should we spend in the era of inflation? Everyone's heart is full of confusion!

Insight into differentiated consumer groups

In the face of rising prices, China's consumer confidence survey released by the National Bureau of statistics and China economic monitoring center and Nielsen Co in February 23rd showed that China's consumer confidence index was 100 in the fourth quarter of 2010, 4 points lower than that in the third quarter, while only 30% of consumers thought it was a good time to buy the items they needed, and 11 percentage points lower than the third quarter.

Inflationary pressures continue to increase, especially the rise in food prices, which has increased many consumers' concerns about the diminished real purchasing power of their incomes, and also inhibited their real consumption intentions.

Same inflation, opposite consumption

On the one hand, more and more consumers are becoming more sensitive to price. Some people are trying to win the CPI in order to fully implement the "eight quit actions" and make a "reckless" person. On the other hand, new accounts such as "accounts and customers", "spelling people", "copy numbers", "try on people" and "coupons" have sprung up.

At present, with the interaction of external factors such as inflation, RMB appreciation, negative real interest rate, real estate policy regulation and so on, the worry and judgment of "future inflation" of uncertain period will affect consumer behavior.

At the same time, because of different occupations, economic conditions, market knowledge, financial pressure and consumer mindset, the motives of consumption of different consumers tend to be complicated, and some new consumption trends will arise.

We see that many people expect that in the era of inflation, putting money in the bank is certainly a very worthless thing. We should spend the money as soon as possible, and there are not many people holding this kind of knowledge, so some people will spend money ahead of time.

Taking into account the early inflation, the raw materials needed by enterprises are still purchased before the price rises, the cost of enterprises is low, the profit margins are large, and the prices of products will not rise substantially. During this period, it is the most cost-effective option to purchase large commodities, so some consumers tend to spend their time in a balanced way, and use interest free installment loans to offset the impact of some inflation by spending the money in the future.

A consumer segmentation method

In fact, from the perspective of income, Chinese urban consumers can be broadly classified into three categories:

First, people with relatively high income (family income of more than 100 thousand yuan) or those who have stable jobs will not seriously consider the consumption problem caused by inflation for the time being.

Two, white-collar and general income consumers, mainly urban working-class, will carefully analyze the current market situation and carefully plan their family income and expenditure.

Such consumers start to return to reality, pay attention to product cost performance, on the contrary, brand consumption and brand premium will be reduced to varying degrees.

In order to reduce the pressure brought by lower income, the proportion of people going out for meals, entertainment and tourism will also decrease, thus affecting the income of these industries.

The three is low income groups, who are more influenced by inflation expectations.

Such consumer groups are mainly concentrated in low-income urban areas, low income families, migrant workers and so on.

As the main income of the low-income group is consumed in the purchase of daily necessities, the increase in the prices of basic life products also has a greater impact on them. Some consumers feel insecure and lack of confidence in future consumption, which restricts the realization of their potential consumption, and makes the immediate consumption crunting. Holding cash tightly will be their outstanding performance, though holding cash is not necessarily the best policy.

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Another consumer segmentation

Sometimes it is not always effective to divide people by income. The same income level consumers may hold completely different consumption behavior and consumption values.

After watching the 70 main consumer groups, they are very different from their parents. Consumption is the most important and happiness is the mainstream choice. At the same time, there is the awakening of social responsibility.

The above mentioned consumption behavior does not depend on the level of income.

From this we can see that enterprises need to seriously analyze what type of target consumer groups belong to, and which people are their mainstream consumer groups.

Understanding consumers, enhancing consumer insight, focusing on product usage and price sensitivity to divide customers and formulate corresponding product strategies are the strategic directions to cope with changes in consumer behavior in an inflationary environment.

One example is that some car dealers believe that this is a good opportunity to buy large cars, because the price reduction offered by car companies is enough to offset the extra fuel costs of consumers in the next four or five years.

A retailer said: "retailers should now make elaborate advertising campaigns to show them the most substantial benefits on the consumer side."

Grasp new business opportunities in New Trends

In view of the market behavior of consumers' stress in inflation period, the business opportunities brought by policy guidance and the increasingly mature consumption trend, enterprises need to actively innovate and maintain keen market sense, and make some selective changes in inventory management and product positioning.

Online shopping and group buying are in fashion.

Nowadays, online shopping and group buying have become the consumption norm of many consumers.

With the increase of the cost of life, people pay more attention to the purchase cost of goods, and e-commerce provides a new and low cost mode of consumption by means of IT technology and advanced logistics and electronic payment.

In addition, consumers are increasingly proficient in online social networking and information sharing, and they hope to find products with higher cost performance through the Internet.

Faced with this trend, a large number of traditional enterprises have to think about how to expand network sales channels to meet people's consumption needs.

It can be seen that the large discount of group buying websites has attracted many consumers who are good at using the Internet and careful calculation, plus the influence of social networks. For small and medium enterprises, group buying is a very effective way - without the need to advance the marketing expenses on newspapers, television and radio, and has won a very high exposure and popularity for them.

However, the key question that companies must take into consideration when expanding the popularity of group buying websites is: why do not the market know how good your products are? Why do consumers like your products after a promotion? If you want to continue to succeed, the goods of enterprises must be better than what the market thinks they are.

It is worth noting that some expensive and durable necessities, such as automobiles and household appliances, may be popular if they are sold at a lower price in the secondary market.

For the younger generation after 80 and after 90, if this stage just needs these products, they will choose second-hand products as the pition of consumption.

Industrial pfer policy and rural policy

The potential of three or four line cities.

Since twenty-first Century, the proportion of investment and consumption in China has been showing an opposite trend, that is, the investment rate has been rising for a long time, the consumption rate has continued to decline, and the contribution rate of consumption to economic growth is relatively low.

Data show that from 2001 to 2009, China's investment rate rose from 36.5% to 47.7%, while the consumption rate dropped from 61.4% to 48%, of which the consumption rate of residents dropped from 45.3% to 35.1%.

The "12th Five-Year plan" has laid an important index for improving the consumption rate of residents. The relevant departments will build a batch of projects that are conducive to improving the consumption environment, actively promote urbanization, further improve the social security system, and solve the worries of residents' consumption, so that the people will have money to spend and dare to spend.

Needless to say, a large part of the power to start domestic demand comes from the three or four line cities. The acceleration of the current industrial pfer has enhanced the confidence of consumers in the central and western regions, and has met the needs of their consumption upgrading.

The report from Boston consulting firm shows that "in the next ten years, China's middle class and affluent consumers will increase two times, of which 2/3 will live in small cities".

In the context of inflation, the three or four tier cities will become the main concern of enterprises, especially for some fast moving consumer goods industries.

Facing the broad market prospect, enterprises need to really sink down, but the low disposable income of residents is still an obstacle to the start of consumption.

How to solve such a business problem will be discussed in conjunction with the rural consumer market in China. That is to say, how to excavate business opportunities in the BOP market so as to enable enterprises to get profits and maximize the core value.

The development of rural market.

Prahalad, the founder and master strategist of the core competitiveness theory, put forward in the "consumer Dynasty: creating value with consumers" that enterprises can no longer think unilaterally and take unilateral actions as they used to do, because value is not only created by enterprises and then exchanged with consumers, but is a product created jointly by consumers and enterprises.

The core idea of the theory is how to make consumers a peer problem solver and make it a collective to create value and acquire value, which is especially suitable for the relatively poor market, especially the rural market.

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China's rural market has huge potential and obvious growth opportunities, but there are still some barriers to entry and development: low income level, inflow of passenger flow, and ineffective distribution channels.

In fact, once an enterprise decides to enter such a market, as long as they have certain market size and management know-how, they can bring efficiency to themselves and potential consumers.

The India's niche project is a good example. It creates a direct distribution network where the traditional distributors and agents are hard to reach, selects women with entrepreneurial spirit from the local villages, and trains them as distributors to provide education, consultation and access services for their villages.

These women distributors are very clear about what the country needs and what products they have in the market. Their work not only creates new consumption power for themselves and their families, but more importantly, for other consumers in their area, they are increasingly becoming educators and contacts of enterprises.

The pformation of rural consumers into the market is a market development activity, rather than how to serve the existing market more effectively.

The whole process of developing rural market innovatively must start with respect for individual consumers, which is also a process of creating active participation consumers.

To participate in these markets, traditional products, services and management processes will not work. Enterprises must learn to innovate, namely, new product development and positioning, cost-effective performance, consumers can afford to buy, innovative procurement arrangements and distribution services.

The coming of mature consumption trend

Fast fashion vs slow fashion.

In recent years, the society has appeared "fast food" phenomenon in economy and humanities.

According to the Research Report of the Chinese urban residents fashion index, 39.2% of the middle and high income residents in 10 large and medium-sized cities in China will buy clothes every other month or so, and the utilization rate of the fashionable clothes purchased in the next year will be reduced to about 10%. Of course, winter clothing is an exception.

Consumer goods, long considered to be long-term, have long been a fast changing consumer goods. For example, 16.5% of consumers will change their phones in less than a year. In addition, durable consumer goods such as digital cameras, laptops and private cars have also been rapidly updated, and the frequency of replacement is much higher than that of other countries.

Such consumption characteristics and state only reflect the consumption characteristics of an economic stage, and it is not static.

A typical phenomenon in the fashion world can be explained.

The fast fashion brands represented by ZARA and H&M always follow the trend of the season. The speed of new products to shops is very fast, and the frequency of display is even more than two times a week.

These fast fashion brands are holding fair and fast javelin. They are sweeping the globe. However, with the gradual maturity of consumption concept, the slow fashion with classic, lasting and unique features has become a mature understanding of fashion at the present stage in Europe and America, and slow life is quietly returning.

At this point, ZARA, H&M, Topshop and other fast fashion brands have just become steady feet in the Chinese market and become the brands that people are competing for. Slow fashion has not yet become a booming trend in China.

However, the important meaning of slow fashion is that consumers should think about the source and the long-term value of the product before paying.

It can be said that in the period of inflation, thrift became the main melody of life again, and made consumers return to the ranks of "slow fashion".

Of course, this also needs a certain stage of fast fashion development. Consumers are more mature in thinking about money and material. When buying goods, they should consider their value more than just being left in the fashion and trend of fashion.

At the same time, "slow fashion" also implies a healthy and happy way of life, striving to make people savor and enjoy life in detail and calm their mind. Of course, consumers will become more rational or critical.

Therefore, on the one hand, enterprises should make themselves savor and have connotations. On the other hand, they should enhance their product quality and cultivate a hundred years' brand with greater perseverance and patience.

After all, once we occupy the "slow" consumer market, we may not be able to achieve rapid expansion in size.

"Low carbon consumption is also a rational attitude towards life".

On the one hand, it is chasing fashion shows. On the one hand, more people are choosing rational consumption. This consumption phenomenon occupies an important position in the current market.

This kind of market is mainly composed of middle-income class, whose income is stable, and the basic consumption demand has been satisfied. At the same time, it has a strong bearing capacity for the fluctuation of prices. After the impetuous period of consumption, the blind rush buying and consumption comparisons are fading away.

Many consumers, on the premise of limited income, rely on their own consumption experience and analysis and judgment of various consumer information to make rational choices in many commodities and services.

Whether it is slow fashion or rational consumption, the consumption mode that does not pursue luxury, do not seek quantity, reason and convergence is conducive to the sustainable utilization of resources. This is in line with the trend of energy conservation and emission reduction advocated by China and even the whole world.

To this end, the market needs a new product to meet the needs of more healthy, environmental protection and low cost. "Low carbon" becomes a synonym for them.

According to the survey, 73% of consumers are willing to take action to support low carbon life. 82% of consumers are willing to buy environmentally friendly and energy-saving products even if they are more expensive.

Inflation will change people's bad habits.

The low carbon family that holds the concept of energy conservation and environmental protection is already in the minority. They refuse to "over pack", "fast consume" and "disposable consumption". At the same time, they also abandon the "convenience hobby", "luxury and face consumption", and link low carbon environmental protection with daily consumption, lead a economical and fine life.

For example, choosing low priced food to meet basic "survival needs" to replace expensive food to meet a higher level of "spiritual needs"; the rise in oil prices has increased the number of people taking public pport; the rise in the price of dishes in restaurants may reduce people's wasteful behavior at the table; the rise in electricity price and water price has made people develop the habit of turning off lights and saving water.

Combined with such changes in consumer behavior, enterprises will be favored by consumers if they can develop new products from a low carbon perspective.

Compared with the parents, consumption first and happiness first are the mainstream choices of these 70 main consumer groups after 80, and at the same time, there is the awakening of social responsibility.

This shows that consumers with the same income level may have totally different consumption behaviors and consumption values.

Prahalad, the founder and strategist of the core competitiveness theory, points out that value is not only created by enterprises and then exchanged with consumers, but is a product created jointly by consumers and enterprises.

This theory is particularly applicable to relatively less prosperous markets, especially rural markets.