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What's next? Nielsen recommends to go premium

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A Nielsen executive urged to Philippine marketers that bridging the luxury world and the mass market is inevitable for brands to prosper in an ever-changing Asian market.Though luxury is still rarefied, Filipinos’ as well as the rest of Asia’s desire for it has become stronger than ever.From just aspirational, Matt Krepsik, executive director of pricing solutions for Nielsen across Southeast Asia, North Asia and Pacific, said that major economic improvements in the region has finally made luxury within reach for the average consumer.Krepsik shared with marketers and clients at Nielsen Philippines' first-ever breakfast forum that the Filipino's buying power is growing, resulting to a middle class that can now afford premium products - prompting a trend called premiumisation.“Asian expansion is not driving more consumption. It’s driving better consumption. Consumers aren’t buying more things. They are buying better things,” Krepsik said.He shared with Marketing that this presents a huge opportunity for brands to reach consumers at different higher price points as they seek and spend more on goods and services they perceive as higher quality or higher status, on everything from toothpaste to cars.According to Nielsen data, premium products holds 13% of the total product segment pie, which is bigger than the mainstream segment (11%) and value segment (8%).But not all premium products are made equal. The affordable premium segment takes 48% of the total premium pie, followed by the mid premium (23%), high premium (24%) and premium (5%).Krepsik said that brands are slowly paying attention to this trend.Multinationals currently hold the lion’s share of the premium market at 79% in 2012, but it actually registered a 6% decline for the last couple of years. In comparison, regional brands command 12% while local brands have 9%, which reflects a 41% and 16% increase in premiumisation efforts.He said that the opportunity is large “but it’s not easy growth. And as brands, it is our task to solve these challenges.”Among Krepik’s recommendations is to be engrossed on knowing the consumer to navigate well in the new consumer class. And while you are doing your market research and analytics, he reminds marketers that your competitor is as busy as you are."Life is not changing in small increments. It’s bold and in multiples. Everybody is also planning to seize this opportunity and this increase in competition is expected and it’s going to stay. Find what separates you from other brands."   

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