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VOT NO: 68708

VOT NO: 68708. Acknowledgemen t. i. We would like to confer our appreciation for the financial award, co-operation and support we have received during the course of this study from Yayasan Tun Ismail Mohamed Ali Berdaftar, and Permodalan Nasional Berhad.

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VOT NO: 68708

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  1. VOT NO: 68708

  2. Acknowledgement i We would like to confer our appreciation for the financial award, co-operation and support we have received during the course of this study from Yayasan Tun Ismail Mohamed Ali Berdaftar, and Permodalan Nasional Berhad. We would also like to express our gratitude towards Research Management Centre, Universiti Teknologi Malaysia for the assistance in managing the research activities.

  3. Executive Summary Purpose The purpose of this study is to develop a new segmentation for investment expenditure and pattern based on psychographic variables in Malaysia. Approach This study employed survey method using questionnaire adopted from established international model. Survey data was gathered nationwide (1520 respondents). Findings The results of the study reveals nine segments for investment and pattern based on psychographic variables in Malaysia Managerial Implications Although demographic variables are crucial to a successful segmentation strategy, it is deemed to be insufficient on its own by various academic literature. The psychographic variables therefore can be used as the main basis to enhance segmentation and supported by the demographic variables. ii

  4. Acknowledgement i Executive Summary ii Table of Content 1.0 Introduction 1 2.0 Main Objectives 2 3.0 Research Approach 3 3.1 Survey Research Tool 4 3.2 Population and Sampling Technique 5 3.3 Survey & Interviews 6 3.4 Limitation 8 3.5 Data Analyses 9 3.6 Reliability & Validity 10 4.0 AIO Worldwide 11 4.1 Research on AIO 12 4.2 Application of AIO worldwide 13 4.3 Application Of AIO Worldwide: The Conclusion 17 5.0 Scope of the Study 19 Contents Pages Table of Contents

  5. 6.0 Main Findings 20 6.1 Application of AIO in Malaysia 21 6.2 Demographic Segmentation 22 6.3 Behavioral Profile 25 6.4 Current Investment by Zone & State 27 6.5 Zoning by Prospect & State 28 6.6 Zone Profile 29 6.7 Unit Trust Market: Competitive Analysis 31 6.8 The Findings: Malaysian Psychographics Segmentation 32 6.8.1 Pioneering Innovator 33 6.8.2 Cognizant Contemporary 34 6.8.3 Assertive Leader 35 6.8.4 Self-reliant Advocate 36 6.8.5 Conformist 37 6.8.6 Excitement Hunter 38 6.8.7 Gizmo Eager 39 6.8.8 Civilized Persona 40 6.8.9 Solo Sustainer 41 6.9 Psychographics Segmentation Key Values 42 6.10 Target Segment 43 6.11 Where to Market 44 6.12 The Position of Malaysian Psychographics Segments on 45 Unit Trust Product Based on Market Prospect 6.13 The Shared Value Among Existing Consumer Psychographics Segment 46 7.0 Managerial Implication 47 References Appendices

  6. 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.

  7. 1. To generate the psychographics dimensions and demographic impact of Malaysian population 2. To develop a typology of Malaysian population based on their expenditure and investment pattern 2.0 Main Objectives

  8. Developed Survey research tool Identified Population and Sampling Size Conducted survey and interviews Analyzed Data 3.0 Research Approach

  9. 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

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. 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

  15. 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)

  16. 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.

  17. Table 1: Research on the Application of AIO in segmentation studies

  18. Table 2: Application Of AIO in Industries Across the World

  19. Table 2: Application Of AIO in Industries Across the World

  20. Table 2: Application Of AIO in Industries Across the World

  21. Table 2: Application Of AIO in Industries Across the World

  22. 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

  23. Continue. 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.

  24. 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.

  25. 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.

  26. 6.1 Application of AIO in Malaysia

  27. 6.2 Demographic Segmentation Investors Vs Non Investors

  28. Demographic Segmentation (cont.) Investors Vs Non Investors

  29. Demographic Segmentation (cont.)

  30. 6.3 Behavioral Profile

  31. Behavioral Profile (cont.)

  32. 6.4 Current Investment by Zone & State

  33. 6.5 Zoning by Prospect & State

  34. 6.6 Zone Profile

  35. Zone Profile (cont.) * Beside other portfolio investment, Investors are investing in other unit trust based investment.

  36. 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)

  37. 6.8 The Findings: Malaysian Psychographics Segmentation

  38. 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

  39. 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

  40. 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

  41. 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

  42. 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

  43. 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

  44. 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

  45. 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

  46. 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

  47. 6.9 Psychographics Segmentation: Key Values * ** T-test – significant at 0.5 and 1.0 df : TargetSegment to be avoided or redesign the strategy

  48. 6.10 Target Segment Prime Target CONFORMIST Secondary Target The rest 6 segments Avoid or Innovate the product SOLO SUSTAINER & SELF RELIANT ADVOCATE

  49. 6.11 Where to Market

  50. 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

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