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Sunday, April 24, 2011

Tapping the Buying Power of Indonesia’s Young Professionals

December 22, 2010
As with other developing countries, Indonesia’s economy is strong, and that development has propelled a growing middle class eager to spend.  In Indonesia, retailers and manufacturers should focus their attention on the nation’s young, married, urban-dwelling professionals, according to Yudi Suryanata, Executive Director, Consumer Research, Nielsen Indonesia, who spoke at the company’s Marketing & Media Presentation in Jakarta earlier this month.

“Yuppie couples are educated, well-employed and represent the next generation of Indonesia’s affluent consumers,” said Suryanata.  “But retailers and consumer products manufacturers need to know how to specifically appeal to them if they want a greater share of their Rupiah.”

So what exactly makes a “yuppie couple?” They are young – below 30 – and have university or higher education.  
They reside in an apartment or a middle-up housing complex located in the city or suburbs.  They work as professionals, typically at the managerial level, in fields such as banking and finance, energy, consulting or marketing, and are focused on their careers.

They live by the motto “work hard, play hard,” and like to socialize with colleagues in cafes, restaurants, bars or at mall.  They also like to reward themselves with expensive fashion brands or with trendy electronic gadgets as a way to compensate themselves for their hard work, their career achievement and their busy life.

In short, yuppie couples believe hard work to be personally meaningful, emotionally satisfying, and a vehicle for self-expression. Nicknamed “DINKs” (Dual Incomes, No Kids) in the West, yuppie couples have postponed having children for the sake of their careers, and have discretionary income which they can use for future investment.

The role of women is important within yuppie couples: the female spouse has the right to express her opinion and her own preferences. In the long run each spouse will develop a mutual taste since they influence each other.

The following facts illustrate the economic power of the yuppie couple:
  • 19 percent read newspapers and 67 percent access news online.
  • 15 percent traveled overseas in the past two years and most go to Bali at least once every two years for vacation.
  • Visit a mall twice a week and spend an average of Rp. 120,000 for food during their visit.
  • 88 percent own microwaves.
  • 100 percent own refrigerators, air conditioners and washing machines.
  • 63 percent own cars, with penetration even higher among those living in suburbia.
  • 100 percent cellular phone penetration, with 50 percent using more than one handset; monthly spending for each phone averages Rp. 127,000.
  • 84 percent own a PC.
“When deciding what to buy, yuppie couples place the greatest importance on the quality of the product, recommendations of friends, online reviews, as well as influencing each other,” noted Suryanata.
Various Nielsen studies have yielded critical insight in how to market to this segment:
  1. Quality is paramount
    Yuppie consumers appreciate hard-work and they have a high expectation on quality of a product or a service. However, the real challenge is their sensitivity to the image of a product or a service. If a product or service fails to deliver or perform well, the yuppie couple will never use those products or services again – and they do not hesitate to let their friends, colleagues and family know about their disappointing experiences.
  2. Willing to pay a bit extra for convenience
    Yuppie couples tend to value their time since they have a busy lifestyle.  As a result, they are willing to pay a bit extra for conveniences such as valet parking services, online reservations and special VIP counters at a service center, to name a few examples.
  3. Are modern and liberal
    Yuppie Couples are not conservative. They like the concept of a modern family where each spouse still has privacy for “Me Time” where he or she can do his or her hobbies, activities or vacation with friends or colleagues without the presence of their spouse. However, they are expected to conduct their “Me Time” responsibly.
  4. Like brands with “his & her” designs
    They love to be seen as a perfect couple and sometimes have a need to convey this message to the world.  One way they can do this is by wearing a matching fashion items.  Or they use gadgets from one brand only with a different color and design (his & her design).
  5. Online marketing is effective in reaching them
    They have such a desire to succeed, hence spend much of their life at work which often requires a lot of time online and exposure to advertising there.
  6. They are business savvy, and require credible, convincing communications
    Communicate your product or service message with realistic explanations. Do not over promise and under deliver.  Establish a professional customer service center that is tactful and focused on problem solving. Give consumers the freedom to decide and choose. Listen and understand them, but don’t teach them.
  7. They stay atop contemporary trends
    Stay tuned to the latest trends such as healthy living, organic food, generosity, dynamic discounts, exotic destinations, smartphones, and the concept of sharing and staying connected.
“The yuppie couple is in many ways the consumer product industry’s ideal customer.  They have discretionary income to spend, and they are eager to do so.  But they are discerning consumers, and marketers need to know precisely how to reach them.  These seven principles provide a solid framework around which marketing campaigns towards yuppie couples can succeed,” concluded Suryanata.