Demographic_Developments

(1) Identify and examine the key social-cultural trends, including demographic and lifestyle developments that have taken place in Singapore over the past decade. Consider how this change has affected demand for the existing product / service in Singapore Airlines Ltd and Philips Singapore. (2) (3) How these 2 organisation have reacted to this change in demand (for example, adapting its marketing mix for existing products / services, developing new product / service offerings, moving into new markets, etc) Singapore is a small island with a population of about 5.07 million. The last few decades of economic development has transformed Singapore into a more affluent country. The population enjoys a higher standard of living, is better educated, and is able to afford more recreational and leisure activities. On the other hand, certain demographic and social-cultural changes are also taking place, affecting the demands of several industries. Both the changes to demographic trends and social-cultural trends are evident in the past ten years in Singapore which can be briefly described as below. A) Changes in Demographic Trends The population of Singapore grew from 2.07 million in 1970 to 2.41 million in 1980, and the latest census as reported by the Department of Statistics (2010) is 5.077million as compare to 4.988 million in 2009. The rate of population growth was very low over the last 10 years with with a registered rate of 1.79 percent. There were 3.77 million residents, of which 3.23 million were Singapore citizens and 0.54 million were permanent residents. 1 Table 1 Total Population Singapore Residents 4 Total Singapore Singapore Citizens Permanent Residents Total Population Year 2,4 NonResidents Number (Thousand) as at June 1990 (Census) 2000 (Census) 2004 2005 2006 2007 2008 2009 2010 (Census) 3,047.1 4,027.9 4,166.7 4,265.8 4,401.4 4,588.6 4,839.4 4,987.6 5,076.7 2,735.9 3,273.4 3,413.3 3,467.8 3,525.9 3,583.1 3,642.7 3,733.9 3,771.7 2,623.7 2,985.9 3,057.1 3,081.0 3,107.9 3,133.8 3,164.4 3,200.7 3,230.7 112.1 287.5 356.2 386.8 418.0 449.2 478.2 533.2 541.0 311.3 754.5 753.4 797.9 875.5 1,005.5 1,196.7 1,253.7 1,305.0 Average Annual Growth 1 (Per Cent) 1990 (Census) 2000 (Census) 2004 2005 2006 2.3 3 2.8 1.3 2.4 3.2 1.7 3 1.8 1.4 1.6 1.7 1.7 3 1.3 0.8 0.8 0.9 2.3 3 9.9 6.5 8.6 8.1 9.0 9.3 0.7 5.9 9.7 2 2007 2008 2009 2010 (Census) 4.3 5.5 3.1 1.8 1.6 1.7 2.5 1.0 0.8 1.0 1.1 0.9 7.5 6.5 11.5 1.5 14.9 19.0 4.8 4.1 1) Changes in Age Structure Table 2 shows the distribution of the population by age groups in 2000 and 2010. It is noted that the population was maturing with substantial increase over the last 10 years. This population structure necessitates a segmented approach in meeting the needs of these individuals. Table: 2 Population Age Pyramid 2) More Remaining Singles It was reported that in 1990, per 1,000 unmarried residents, 52.6 males and 60.9 females got married as compared to 48.1 males and 49.9 females in 2000. These numbers continue to decline in 2008 with 43.9 males and 41.9 females respectively. 3 Table: 3 2008 1970 1980 1990 2000 3) Rising Income of Individuals As shown in Table 4 , the monthly incomes for all workers has increased quite substantially during the past decade. The average monthly income increased by 1.2 times from S$2813 to S$3872. As a whole, those earning at least S$1,500 increased from 6.5 percent in 1980 to slightly more than 28 percent in 1990 which reveals a substantial improvement in the earning power of the people. 4 Table: 4 Average (Mean) Monthly Nominal Earnings 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Singapore $ Per Employee Annual Growth Rate (%) Annual 2,813 3,063 3,134 3,158 3,213 3,329 3,444 3,554 3,773 3,977 3,872 2.7 8.9 2.3 0.8 1.7 3.6 3.5 3.2 6.2 5.4 -2.6 Last updated: 15 Jun 2010 | Source: Derived based on data from Central Provident Fund Board 5) Change in Household Income During the last decade, the social-economic changes in Singapore have been quite evident with substantial decrease in household size, resulting in an increase in household income. According to the Singapore Census 2000 advanced release 7, average household income from work increased by 60% during the decade from S$3076 in 1990 to S$4943 in 2000, thus signaling that the population possessed a higher level of disposable income. Table: 5 AVERAGE HOUSEHOLD INCOME FROM WORK (S$) YEAR TOTAL 1980 1,228 1990 3,076 2000 4,943 Source: DOS – Singapore Census 2000 advanced data release 7 5 6) More Married Couples Who Are Working As shown in Table 6, there were about 540, 900 married couples in 1990. Of these, in almost 40 percent of the cases were both the husband and the wife were working to support the family. About 45 percent of the families reported to have only the husbands working, while just three percent of them had only the wife working. This indicates that there were more double income households in Singapore, that they earned substantially more, and that they possessed a greater buying power. Table: 6 Married Couples by Working Status and Monthly Income 1990Table 6: Married Couples by Working Status and Monthly Income 1990 Working Status Both persons working Only Husband working Only Wife working Both not working Total Number ('000) Percent 39.8 45.2 3.3 11.7 540.9 Average Income S$3,557 S$1,778 S$1.171 NA S$2,257 Source: Census of the Population 1990, Department of Statistics, Singapore 7) Higher Educational Attainment An analysis of the non-student population among residents aged ten years old and older found that the level of educational attainment had improved quite perceptibly. This trend was most noticeable among those who had completed secondary education. Advancement in education among the female population of Singapore has also increased during this period. This is especially pronounced among the younger adults in the 25-29 year old age group. 6 Table: 7 Educational Attainment (among resident non-students aged 25yrs & over) Mean Years of Schooling (among resident non-students aged 2539 years) 8) Rising Economic Status of Women High growth in average monthly household income between 1980 and 1990 is attributed to females joining the labour force which lead to almost doubling of the household income (S$1228 in 1980 to S$3076 in 1990 or 2.5 times) The level of income earned is a big improvement also, which allow them to afford more of the finer things in life. B) Changes In Social Cultural Trends Singapore's social and ethnic fabric is a unique blend of cultures and people - Malays, Chinese, Indians and now the expatriates. With the influx of foreigners, changes in social cultural trends are evident in the last decade such as :- 1) Family Orientation For instance, there is an annual family day where various activities are organized to encourage family members to get out and enjoy themselves as a family unit. 7 2) Prioritization of Education In a survey, more than three-quarters of the respondents believe that advancement in education is important to one's future. Only a tiny 2.8 percent of those surveyed believe otherwise. 3) Growing Interest in Outdoor Adventure In the study conducted by Kau, Yeong, and Richmond (1993), it was noted that there was a growing trend towards participating in water sports, overseas camping, taking holiday cruises, and general outings. This trend is supported by a newspaper report (Straits Times, 30 January 1995), whereby some 24,000 Singaporeans visited New Zealand in 1994 to experience life in a farm. As already described above, both demographic and social-cultural trends shape the way people do things which in turn has an effect on the marketing activities of several organizations. Many companies including service providers and manufacturers are affected by such changes. We will examine how such changes have affected two organizations:1) Singapore Airlines Ltd, a service provider and 2) Philips Singapore, a manufacturer. 1) Singapore Airlines Ltd The change in household income over the last decade signals that the population possessed a higher level of disposable income. The last few decades of economic development has transformed Singapore into a more affluent country. The population enjoys a higher standard of living and is able to afford more recreational and leisure activities. Increased levels of income have enabled a greater proportion of the population to undertake tours previously reserved for the wealthy. People with average levels of disposable income can now travel to nearby countries such as Malaysia, Indonesia, and Thailand relatively 8 easily. Those with greater financial ability can look forward to tours to faraway places such as the USA and Europe, not to mention countries such as China, Australia, and New Zealand. The growth in the number of Singaporeans traveling overseas has been quite remarkable. In 1994, Singaporeans made over 2.4 million overseas trips. Several types of new tours are suggested for a tourism industry to meet the demands of a new breed of consumers. Singapore Airlines Ltd. (SIA), the national airline of Singapore and a major carrier in the Pacific region with routes to Europe and North America, is known for its unparalleled customer service as well as for its continuing efforts to upgrade its aircraft and technology. SIA, with its branding identity, the "Singapore Girl" flies to 90 cities in 40 countries. SIA fly the most modern fleet in the industry and are the world's largest operator of Boeing 747-400s (MEGATOPs). Singapore Airlines was the pioneer of inflight services such as free drinks and complimentary headsets. Recognizing the need to satisfy the demands of a new breed of customers, innovations like the revolutionary KrisWorld interactive entertainment system are installed. Today, such services have made the name of Singapore Airlines synonymous with impeccable service around the globe. As part of its international strategy, in April 2000, SIA joins the Star Alliance, one of the three major alliances (the other two being Oneworld and Skyteam) In the meantime several divisions of the SIA Group have been investing in China and India through strategic alliances with other local organizations. 9 Consistent external communication through advertisement on new destinations, new airplanes, new cuisine on board or brand new seats and video services, the legendary ”SIA Girl”, the brand identity in which the public personification of that service is always featured in all advertisements. Singapore Airlines Ltd. reported traffic results for the month of July 2010. For the month, the company reported capacity of 1,859.3 million tonne-km compared with 1,789.8 million tonnekm for the same period a year ago. For the month, the company reported, load carried of 1,316.9 million tonne-km and overall load factor 70.8% compared with load carried of 1,248.3 million tonne-km and overall load factor 69.7% for the same period a year ago. In July 2010, Singapore Airlines achieved 3.6% year-on-year growth in system wide passenger carriage (measured in revenue passenger kilometres), against a slight increase in capacity (measured in available seat kilometres) of 0.3%. This led to an improvement in the passenger load factor of 2.7 percentage points to 82.4%. The number of passengers carried rose by 1.2% over the same month last year to 1.5 million. The year-on-year increase in capacity arose from the injection of additional frequencies to Americas (Newark and Houston), South West Pacific (Brisbane), North Asia (Hong Kong, Beijing and Incheon), West Asia and Africa (Mumbai, Delhi, Dhaka, Male and Colombo) and the introduction of new services to Munich. Overall cargo traffic (measured in freight tonne kilometres) improved by 8.2% while cargo capacity increased by 7.6%. Consequently, cargo load factor improved by 0.4 percentage point. A general improvement in the economic environment continued to contribute to the higher passenger load factor. 2) Philips Singapore 10 One of the biggest challenges facing society is its aging demographic. People are living longer in aging bodies. It is a common phenomenon worldwide with forecast that the world’s population will surpass the 6 billion mark before the new millennium, with 2 billion expected to be aged 60 or over by 2050. The aging population of Singapore is continuing to rise as the population getting older and will require more care as we age. This indicates increase demands on healthcare systems. The healthcare market has grown faster than the GDP in the Western world for the past three decades, and at high rates in emerging markets such as China and India. This pattern is expected to continue given an aging global population, increasing life spans, and growing demand for more advanced healthcare in developing markets. As healthcare costs continue to spiral out of control, there is a growing fear that costs will be too high, that there will not be enough healthcare workers to meet increasing demand, and that the diagnosis and treatment of patients will become more and more complex. Yet these challenges create a unique opportunity for an innovative company like Philips. Recognizing the potentials in healthcare industry, in 2006, Philips set up its Healthcare sector’s first and largest dedicated facility for advanced medical equipment training in Asia Pacific - the Singapore Learning Center. Occupying 37,000 sq ft, the Euro 12 million facility is the first-of-its-kind in the region, featuring Philips’ latest sophisticated medical diagnostics equipment, including cardio vascular X-ray, general X-ray, computer tomography (CT) scanner, Magnetic Resonance Imaging (MRI), Ultrasound systems and Patient Monitoring. 11 In 2007, Philips officially opened its high-power LED production facility in Singapore, its first such facility outside Silicon Valley. This is a high volume production facility for Philips Lumileds’ LUXEON® range of LEDs and currently employs more than 450 staff. As a world leader in healthcare, lifestyle and lighting, Philips integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of “sense and simplicity”. With growing presence in cardiology, oncology, and women’s health, Philip focus on the fundamental health problems with which people are confronted, such as congestive heart failure, lung and breast cancers, and coronary artery disease. Philips simplifies healthcare by focusing on the people in the care cycle – patients and care providers. Through combining human insights and clinical expertise, Philips aim to improve patient outcomes while lowering the burden on the healthcare system. Advanced healthcare solutions are a fundamental part of the portfolio for both healthcare professionals and consumers, to meet the needs of patients in hospitals and at home. Today, due to the demographic change in aging population, Philips has become a global leader across its healthcare portfolio:- • World’s largest home healthcare company, being number one in: Monitoring systems, Automated External Defibrillators, Cardiac Ultrasound, Cardiovascular X-ray. 12