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1.0 Introduction. MRTeam (UTM) was appointed by the Yayasan Tun Ismail Mohamed Ali Berdaftar Permodalan Nasional Berhad (PNB) on September 7, 2007 to conduct a study on The Psychographic and Demographic Segmentation of Malaysian Population in Expenditure and Investment Pattern.

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slide1

1.0 Introduction

MRTeam (UTM) was appointed by the Yayasan Tun Ismail Mohamed Ali Berdaftar Permodalan Nasional Berhad (PNB) on September 7, 2007 to conduct a study on The Psychographic and Demographic Segmentation of Malaysian Population in Expenditure and Investment Pattern.

The study was carried out nationwide and took 18 months from the inception until the delivery of the final report (December 2008).

The result of the study will be able to contribute to the understanding of the Malaysian attitude, interest, and opinion regarding investment products and more importantly reveal the newly developed segments for expenditure and investment pattern.

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To generate the psychographics dimensions and demographic impact of Malaysian population

To develop a typology of Malaysian population based on their expenditure and investment pattern

2.0 Main Objectives

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Developed Survey research tool

Identified Population and Sampling Size

Conducted survey and interviews

Analyzed Data

3.0 Research Approach

3 1 survey research tool
1. The survey Questionnaire (refer to Appendix A) consists of 77 items includes the following:

Psychographics (35 items): based on AIO (attitude, interest and opinion) measurement that were tailored to financial environment.

Demographic (12 items): Profile of the respondents.

Behaviouristic (30 items): Investment pattern of the respondents.

2. The team conducted a pilot study to test the validity of the items.

3. PNB endorsed the questionnaire on 21 September 2007.

3.1 Survey Research Tool
3 2 population and sampling technique
3.2 Population and Sampling Technique

The population of the study comprises of Malaysian citizen.

Samples were drawn from all states of Malaysia.

The sampling method employed were mall-intercept and omnibus survey.

Convenience sampling technique was utilized in selecting respondents for the study. However, quota sampling were observed to ensure that the sample were evenly distributed.

The sample size of the study was 1700, however only 89 % (1520) of the questionnaires were usable.

3 3 conducting survey interviews
3.3 Conducting Survey & Interviews

The research instrument was applied between early February to April 2008.

The locations of the survey were chosen (refer to Appendix B) based on the availability of volunteer respondent and ability to being able to accommodate surveyors without impinging on the respondents’ private time.

3 3 conducting survey interviews cont
3.3 Conducting Survey & Interviews (cont.)

Interviewers

The self completed surveys were distributed by the interviewers.

A group of trained marketing under graduate students from UTM were employed to carry out the interviews.

An induction program was provided which included: training in the administration of the surveys; data gathering; etiquette for approaching potential respondents; and etiquette when working within crowded commercial environments such as mall, hospital, banks, recreational park and other public areas.

3 4 limitations
3.4 Limitations

As with most research, this study was subject to some limitations. Due to budgetary constraints, random and representative face to face sampling of the entire population of Malaysia was not possible to be utilized for the survey. Rather, convenience sampling was conducted along with a self completed survey. Further research would be required to determine whether this sample was representative of visitation to the region over the entire year.

3 5 data analyses
3.5 Data Analyses

The tool used for analyses was SPSS (version 12) –licensed to UTM.

For Descriptive Analyses; mean, t-test & Anova were exploited to compare mean, standard deviation and variances between groups of respondents (Investors and non-investors).

For Multivariate Analyses; Factor Analysis was exploited to generate segments of consumer according to their psychographic dimensions.

Data were tested on its reliability by utilizing the Cronbach Alpha test, whilst validity was tested using Factor Analysis & KMO Bartlett tests.

Data of the study is attached: Refer to Appendix C

3 6 reliability validity
3.6 Reliability & Validity
  • Reliability of psychographic variables:
    • Overall Cronbach Alpha score (0.8365)
  • Validity of Psychographic Variables
    • KMO Bartlett score (0.876)
    • Explain Variance (0.577)
4 0 aio worldwide
4.0 AIO Worldwide

Psychographics research focuses on individual activities known as Attitude, interest and opinions (AIO).

This model is the most widely used approach to lifestyle measurement in many researches. The model has been tested worldwide and been endorsed as reliable model to be utilized in establishing the market segments.

Attempts to measure the quantitative dimensions of lifestyle were initially referred to as psychographics. (research on the application of AIO in segmentation studies is presented in Table 1).

Evidences of the adoption of AIO in industries world-wide are presented in the Table 2.

4 1 application of aio worldwide the conclusion
4.1 Application of AIO Worldwide: The Conclusion

Lifestyle patterns provide a broader, more three dimensional view of consumers that marketers and businessmen should not ignore.

The success of a marketing model inherently lies in the researchers’ ability to identify variables that can really distinguish people’s performance in the marketplace. Bojanic (2007)1 listed a few criteria that are normally used to evaluate the effectiveness of the market segmentation strategies such as substitutability, measurability, accessibility and actionability. Once the segmentation strategy satisfies these four criteria, the next step is to choose the segmentation variables that would work best at segmenting the market.

1 Bojanic, D.C., 2007, “Customer profile of the “carryout” segment for restaurants”,

International Journal of Contemporary Hospitality Management, Vol.19 No.1, pp. 21-31

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Cont.

Prominent findings from the psychographic and lifestyle research worldwide

indicate that psychographic segmentation is able to provide the essential

information that financial institutions are seeking, i.e. :

Who are the likely to be the profitable customers

Where they could be found?

The rationale of employing both, the demographic and psychographic dimensions is

that the segmentation strategy would be more holistic and provide greater

understanding of consumers’ profile and behavior.

5 0 scope of the study
5.0 Scope of the Study

Cross Sectional Study in nature.

Consumer sentiment may vary over time due to the dynamic change in the world and local economic environment.

Consumer Price Index is assumed to remain constant and not affect the outcome of the study.

Reluctance of the respondents to produce honest response on certain particular variable related to monetary figures.

The findings should not be deemed as the conclusive outcome of the overall Malaysian population attributes.

This research only focus on the development of Psychographic Segmentation in Malaysia and will not address any specific strategic implications on the part of the client.

6 0 main findings
6.0 Main Findings

The findings show that there is a strong dependency relationship between customers’ behaviours and lifestyle (on an AIO approach) is also evident in the Malaysian context.

Demographic segmentation seems to be less significant as the trend of the characteristics appear similar between investor and non-investor groups, and between investment zone (high, moderate and lower prospect of investment).

Behavioristic segmentation indicates some differences in the and conduct, nevertheless some actions are parallel.

The labels Pioneering Innovator, Cognizant Contemporary, Assertive Leader, Self-reliant Advocate, Conformist Excitement Hunter, Gizmo Eager, Civilized Persona and Solo Sustainer provide a general idea of lifestyle dimensions of each segment.

6 2 demographic segmentation
6.2 Demographic Segmentation

Investors Vs Non Investors

demographic segmentation cont
Demographic Segmentation (cont.)

Investors Vs Non Investors

zone profile cont
Zone Profile (cont.)

* Beside other portfolio investment, Investors are investing in other unit trust based investment.

6 7 unit trust market competitive scenario
6.7 Unit Trust Market: Competitive Scenario

Malaysian Unit Trust investors are also investing in other unit trust investment that are provided by private and government service providers. The market of unit trust is currently shared by other 33 providers (refer to Appendix D) with ranges of

offering prices. This group of service providers is regarded as direct competitors. In

term of price offers, 17 providers offer several portfolio at the price of above RM1.00.

Nevertheless, most service providers are offering lower than RM 1.00, therefore the

price is considered as competitive.

Besides direct competitors, market is also served by several other types of investment service providers, such as investment-linked fund (refer to Appendix E)

6 8 1 pioneering innovator
6.8.1 Pioneering Innovator

Traits & Features

Typology

Love challenges

Adventurous

Thrill seekers

Willing to learn new things

Fond of outrageous things and people

  • Mostly live in Zone 1
  • Age: < 45
  • Single & Married with 1 – 3 Kids
  • Majority Malay
  • Work mostly with private companies
  • Mostly hold managerial post
  • Graduates
  • Earn < RM 40K annually
  • Current investment < RM 10 K
  • Intend to invest RM 10K - 50 K in future
  • Other investment commitment: FD & Savings
  • Health conscious
  • Balanced Life (work & family)
  • Seek advice over investment matters
  • Prefer GLC investment products
6 8 2 cognizant contemporary
6.8.2 Cognizant Contemporary

Traits and Features

Typology

Fashionable

Trendy

Up to date

  • Mostly live in Zone 1
  • Age < 45
  • Mostly Male
  • Mostly Married with < 3 Kids
  • Majority Malay
  • Work mostly with government & private
  • Mostly hold managerial & technical post
  • School leaver & Graduates
  • Earn < RM 40K annually
  • Current investment < RM 10K
  • Intend to invest < RM 10 K - 50K in future
  • Other investment commitment: FD & Savings & Insurance
  • Health conscious
  • Prefer GLC investment products
  • Follow investment column
6 8 3 assertive leader
6.8.3 Assertive Leader

Traits & Features

Typology

Like being in-charge

Like to lead others

Believe have more ability than most people

Self proclaim intellectual

  • Mostly live in Zone 1 & Zone 2
  • Age 31 – 45
  • Mostly Male
  • Mostly Married with < 3 Kids
  • Majority Malay
  • Work mostly with government & private
  • Mostly hold managerial & technical post
  • School leaver & Graduates
  • Earn < RM 40K annually
  • Current investment < RM 10K
  • Intend to invest < RM 10 K - 50K in future
  • Other investment commitment: FD & Savings & Insurance
  • Health conscious
  • Prefer GLC investment products
  • Follow investment column
6 8 4 self reliant advocate
6.8.4 Self-reliant Advocate

Traits & Features

Typology

Prefer making thing than

buying

Creative

D I Y attitude

  • Mostly live in Zone 1, Age < 45, Mostly Male
  • Mostly Married with < 3 Kids, Majority Malay
  • Work mostly with government & private
  • Mostly hold managerial & technical post
  • School leaver & Graduates
  • Earn < RM 40K annually
  • Current investment < RM 10K
  • Intend to invest < 50K in future
  • Other investment commitment: FD & Savings & Insurance
  • Health conscious
  • Balanced Life (work & family)
  • Seek advice over investment matters
  • Prefer GLC investment products
  • Follow investment column
6 8 5 conformist
6.8.5 Conformist

Traits & Features

Typology

Conservative

Hold certain traditional and religious values

Concern on social environment

  • Mostly live in Zone 1 & Zone 2
  • Age < 45
  • Mostly Male
  • Mostly Married with < 3 Kids
  • Majority Malay
  • Work: Government, private & own business, as well as home makers.
  • School leaver & Graduates
  • Earn < RM 40K annually
  • Current investment < RM 10K
  • Intend to invest < RM 10 K - 50K in future
  • Other investment commitment: FD & Savings & Insurance, share and property
  • Prefer GLC investment products
  • Follow investment column
  • Switch product for better long term gain
6 8 6 excitement hunter
6.8.6 Excitement Hunter

Traits & Features

Typology

Crave exhilarating

experience

Joyful

Pleasure-seeking

Vacationer

Enjoy hedonistic lifestyle

  • Mostly live in Zone 1 & Zone 2, Age < 55
  • Mostly Male, female group is increasing
  • Mostly Married with < 3 Kids, segment Kids 4 – 6 is increasing
  • Majority Malay
  • Work mostly with government & private
  • Mostly hold managerial & technical post
  • School leaver & Graduates
  • Earn < RM 40K annually K
  • Prospect: Income level > 60 K annually
  • Current investment < RM 10K
  • Intend to invest < RM 10 K - 50K in future
  • Other investment commitment: FD & Savings & Insurance, Property
  • Health conscious
  • Prefer GLC investment products
  • Follow investment column
6 8 7 gizmo eager
6.8.7 Gizmo Eager

Traits & Features

Typology

Enjoy tools and equipment

Like hardware and automotive gadgets

Like to work on metal and woods

  • Mostly live in Zone 1 & Zone 2, Age < 45
  • Both genders, Single & Married with < 6 Kids
  • Majority Malay & Chinese
  • Work mostly with government , private & own business
  • Mostly hold managerial, technical & general worker post
  • School leaver & Graduates
  • Earn < RM 40K annually K
  • Current investment : Nil to < RM 50K
  • Intend to invest < RM 50 K in future
  • Other investment commitment: FD & Savings, Insurance & Property
  • Health conscious
  • Balanced life (work & family)
  • Prefer GLC investment products
  • Follow investment column
6 8 8 civilized persona
6.8.8 Civilized Persona

Traits & Features

Typology

Appreciate art and culture

Love knowledge

Deep person

Enjoy colorful life

The thinker

  • Mostly live in Zone 1 & Zone 2, Age < 45
  • Both genders, Single & Married with < 3 Kids
  • Majority Malay & Chinese
  • Work mostly with private & own business
  • Mostly hold managerial & technical post
  • School leaver & Graduates
  • Earn < RM 40K annually K
  • Prospect: Income level > 60 K annually
  • Current investment : Nil to < RM 10K
  • Intend to invest < RM 10 K in future
  • Other investment commitment: FD & Savings & Insurance
  • Health conscious
  • Prefer GLC investment products
  • Follow investment column
6 8 9 solo sustainer
6.8.9 Solo Sustainer

Traits & Features

Typology

Limited life pursuit

Restricted interest

Risk averse

Resist changes

  • Mostly live in Zone 1 & Zone 2
  • Age < 45, age group > 56 is catching up
  • Both genders
  • Single & Married with < 3 Kids, family with 6 kids is catching up.
  • Majority Malay & Chinese
  • Work mostly with private & own business
  • Mostly hold managerial & technical post
  • School leaver
  • Cross income groups
  • Current investment : cross investment group
  • Intend to invest < RM 10 K in future
  • Other investment commitment: FD & Savings & Insurance
  • Prefer GLC investment products
slide42

6.9 Psychographics Segmentation: Key Values

* ** T-test – significant at 0.5 and 1.0 df : TargetSegment to be avoided or redesign the strategy

6 10 target segment
6.10 Target Segment

Prime Target

CONFORMIST

Secondary Target

The rest 6 segments

Avoid or Innovate the product

SOLO SUSTAINER

&

SELF RELIANT ADVOCATE

slide45

6.11 The Position of Malaysian Psychographics Segments

On Unit Trust Product Based on Market Prospect

High

I

N

V

E

S

T

M

E

N

T

C

O

M

M

I

T

M

E

N

T

High Prospect Investors

CIVILIZED PERSONA

COGNIZANT CONTEMPORARY

ASSERTIVE LEADER

GIZMO EAGER

CONFORMIST

Moderate Prospect

Investors

GIZMO EAGER

Low Prospect Investors

Low

slide46

6.12 The Shared Value Among Existing Consumer Psychographics Segment

INTELLECTUAL

ASSERTIVE LEADER

COGNIZANT CONTEMPORARY

CIVILIZED PERSONA

CONSERVATIVES

FULFILLS

ACTIONS

CONFORMIST

SELF RELIANT ADVOCATE

PIONEERING INNOVATOR

GIZMO EAGER

EXCITEMENT HUNTER

SOLO SUSTAINER

7 0 managerial implications
7.0 Managerial Implications
  • Market segmentation as a means of establishing the right positioning for the product and enhance the brand’s real value and equity.
  • On the tactical level, psychographic variables can be applied to the design of the marketing communications tools. It will be able to provide an input to improved media selection or better advertising copy treatment.
  • Malaysian Unit Trust market is still not reaching maturity stage. It showed by the homogeneity characteristics of all the segments identified.
managerial implications cont
Managerial Implications (cont.)
  • Psychographic provides depth in understanding of consumer market.

- to develop a more effective segmentation strategy, a psychographic based segmentation should be applied.

- while demographic is necessary for effectively targeting the consumer, psychographic is indispensable for understanding the consumer. Hence the psychographic variable should be used as the main basis for segmenting the market and supported by the demographic variables.

references
References

Bone, P. F, 1991. “Identifying mature segments”, The Journal of Service Marketing, Vol. 5(Winter), pp.47-60.

Bojanic, D.C., 2007, “Customer profile of the “carryout” segment for restaurants”, International Journal of Contemporary Hospitality Management, Vol.19 No.1, pp. 21-31

Chin, F. L, 2002. “Segmenting customer brand preference: demographic or psychographic”, Journal of Product & Brand Management, Vol.11 No.4, pp. 249-268.

Engel, J.F.; Blackwell, R.D. and Miniard, P.W. 1996, “Customer Behaviour”, 7th ed., The Dryden Press, Hinsdale, IL.

Divine, R. L. and Lepisto, L., 2005. “Analysis of the healthy lifestyle consumer”, Journal of Consumer Marketing, Vol. 22 No. 5, pp. 275-283.

Fraj, E. and Martinez, E., 2006. “Environmental values and lifestyles as determining factors of ecological consumer behaviour: an empirical analysis, Journal of Consumer Marketing, Vol. 23 No.3, pp. 133-144.

Gonzalez, A.N. and Bello, L.,2002. “The construct “lifestyle” in market segmentation:The behaviour of tourist consumers”, European Journal of Marketing, Vol. 36 No.1/2, pp.51-85.

references1
References

Kesic, T. and Piri-Rajh, S., 2003. “Market segmentation on the basis of food-related lifestyles of Croatian families”, British Food Journal, Vol.105 No.3, pp.162-174.

Kotler, P. and Armstrong, G., 2007. Principles of Marketing, 11th ed., Prentice Hall International, Englewood Cliffs, NJ.

Kucukemiroglu, O.,1999. “Market segmentation by using consumer lifestyle dimensions and ethnocentrism: An empirical study”, European Journal of Marketing, Vol. 33 No. 5/6, pp.470-487.

Minhas, R.S. and Jacobs, E. M.,1996. “Benefit segmentation by factor analysis: an improved method of targeting customers for financial services”, International Journal of Bank Marketing, Vol. 14 No.3, pp.3-13.

Oates, B; Shufeldt, L. and Vaught, B.,1996. “A psychographic study of the elderly and retail store attributes”, Journal of Consumer Marketing, Vol. 13 No.6, pp.14-27.

Orth, U. R.; McDaniel, M.; Shellhammer, T. and Lopetcharat, K, 2004. “Promoting brand benefits: the role of consumer psychographics and lifestyle”, Journal of Consumer Marketing, Vol.21, No.3, pp.97-108.

Quinn, L; Hines, T. and Bennison, D., 2007. “Making sense of market segmentation: a fashion retailing case”, European Journal of Marketing, Vol. 41 No.5/6, pp.439-465.

references2
References

Reisenwitz, T. and Iyer, R.,2007. “A comparison of younger and older baby boomers: investigating the viability of cohort segmentation”, Journal of Consumer Marketing, Vol. 24 No.4, pp. 202-213.

Segal, M.N. and Giacobbe, R. W., 1994. “Market Segmentation and competitive analysis for supermarket retailing”, International Journal of Retail & Distribution Management, Vol.22 No.1, pp. 38-48.

Solomon, M.R.; Marshall, G.W. and Stuart, E. W., 2008. Marketing: real people, real choices, 5th ed., Prentice Hall International, Englewood Cliffs, NJ.

SRI Consulting 1997. Investor Styles: A Psychographic Segmentation, Consumer Financial Decisions, pp. 1-3.

Tam, J.L.M. and Tai, S.H.C., 1998. ‘The psychographic segmentation of the female market in Greater China”, International Marketing Review, Vol.15 No.1, pp.61-77.

Todd, S.; Lawson, R. and Faris, F.,1997. “A Lifestyle Analysis of New Zealand Consumers”, Asia Pacific Journal of Marketing and Logistics, pp.30-47.

Wall, G. and Mitchell, V., 2005. “Demographic characteristics of consumers who find it difficult to decide”, Marketing Intelligence & Planning, Vol. 23 No.3, pp.281-295.

appendix d
Appendix D

List of Unit Trusts Brands

investment linked funds
Investment-Linked Funds

1. Allianz life

2. AIA/AIA Takaful

3. TM Asia

4. AXA Affin

5. CIMB Aviva/Takaful

6. Great Eastern Ass.

7. Hong Leong Ass.

8. HSBC Amanah

9. HLTMT

10. ING Insurance

11. Takaful Ikhlas

12. Manulife

13. MAA/MAA International/ MAAIA/Takaful

14. Mayban Life

15. ETIQA/Takaful

16. MCIS Zurich

17. Prudential Assurance/ P-BSN

Takaful

18. Takaful Malaysia

19. UNI ASIA life Insurance

Appendix E

slide60
Assoc. Prof. Dr. Hj. Rohaizat Baharun (Leader)

Assoc. Prof. Dr. Abu Bakar Abdul Hamid

Ahmad Sharifuddin Shamsuddin

Norzaidahwati Zaidin

Norzafir Md. Salleh

Zuraidah Sulaiman (Currently attached to the Sydney University of Technology)

The Team

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