14/04/2015
I just come back to the UK from a short break in my home country (Italy). While I was there, I couldn't stop thinking about market operations and comparing the differences in lifestyle and economic systems I used to live (italian) and I'm currently living into (United Kingdom). So I decided to draw a comparison between these two countries, widening it to the most representative countries of two other continents for a more complete view. I picked up USA and Japan as these nations are both part of G8's forum, as Italy and UK are.
Let's observe each country separately (Euromonitor International, 2015).
United Kingdom
Areas: 244,755 km2
Population: 64,707,000
Demographic and economic indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Real GDP Growth (% growth) | 1.6 | 0.7 | 1.7 | 2.6 | 2.7 |
| Inflation (% growth) | 4.5 | 2.8 | 2.6 | 1.5 | 0.7 |
| Population Aged 65+: January 1st ('000) | 10,360.5 | 10,649.6 | 10,987.3 | 11,223.5 | 11,490.0 |
| Population Density (persons per sq km) | 260.5 | 262.5 | 264.1 | 265.8 | 267.5 |
| GDP Measured at Purchasing Power Parity (international dollar million) | 2,201,439.0 | 2,247,189.0 | 2,320,192.2 | 2,421,170.0 | 2,565,412.7 |
| Consumer Expenditure (USD million) | 1,567,009.6 | 1,608,269.8 | 1,648,569.8 | 1,799,672.4 | 1,856,036.9 |
| Annual Gross Income (USD million) | 2,422,223.1 | 2,454,648.1 | 2,471,795.4 | 2,705,064.6 | 2,787,227.5 |
| Annual Disposable Income (USD million) | 1,645,091.1 | 1,688,621.3 | 1,693,724.7 | 1,848,214.9 | 1,903,510.8 |
Lifestyle indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Internet Users ('000) | 50,479.9 | 52,080.0 | 53,820.2 | 54,843.1 | 55,968.8 |
| New Registrations of Passenger Cars ('000) | 1,941.3 | 2,044.6 | 2,264.7 | 2,476.4 | 0.0 |
| Consumer Expenditure on Food (USD million) | 121,629.8 | 126,878.7 | 132,431.1 | 138,112.9 | 140,888.2 |
The health status of UK system is evident. A GDP constantly growing means that the economy is continuously producing new value and a decreasing, but always positive, inflation is a symptom that the market is running smoothly, the purchasing power is not affected in any way by the tiny (but constant) increase of prices and the currency is never losing its strenght. As a result, income and expenditure are rising as well.
Italy
Areas: 301,245 km2
Population: 60,842,000
Population: 60,842,000
Demographic and economic indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Real GDP Growth (% growth) | 0.6 | -2.8 | -1.7 | -0.4 | 0.5 |
| Inflation (% growth) | 2.7 | 3.0 | 1.2 | 0.2 | -0.2 |
| Population Aged 65+: January 1st ('000) | 12,171.3 | 12,370.8 | 12,639.8 | 13,014.9 | 13,129.5 |
| Population Density (persons per sq km) | 201.8 | 201.9 | 202.9 | 206.6 | 206.8 |
| GDP Measured at Purchasing Power Parity (international dollar million) | 2,056,086.0 | 2,027,288.3 | 2,023,569.2 | 2,059,930.4 | 2,106,637.6 |
| Consumer Expenditure (USD million) | 1,413,855.2 | 1,291,092.1 | 1,312,686.0 | 1,319,824.4 | 1,333,394.5 |
| Annual Gross Income (USD million) | 2,233,547.9 | 2,052,833.1 | 2,119,571.1 | 2,120,292.4 | 2,141,586.9 |
| Annual Disposable Income (USD million) | 1,555,987.7 | 1,415,331.4 | 1,461,402.2 | 1,460,173.8 | 1,472,080.7 |
Lifestyle indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Internet Users ('000) | 30,772.9 | 31,623.3 | 33,291.5 | 35,493.4 | 36,984.1 |
| New Registrations of Passenger Cars ('000) | 1,749.1 | 1,403.0 | 1,303.5 | 1,359.6 | 0.0 |
| Consumer Expenditure on Food (USD million) | 188,532.6 | 173,786.0 | 177,659.1 | 177,497.3 | 179,348.8 |
There are two relevant points in this chart. The first one is the deep crisis occurred in 2012, when GDP, purchasing power, income and expenditure dramatically fell, while inflation steadily increased. The second one is the impressive growth of population density occurred between 2013 and 2014, with almost 4 people more per sq km, that means an increasing of more than one million inhabitants, mostly due to elevated immigration flows noticed. 2015 is seen as a year of slight recovery, but are still to be decoded the consequences, not necessarily positive, of the light deflation expected.
USA
Areas: 9,363,130 km2
Population: 321,606,000
Population: 321,606,000
Demographic and economic indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Real GDP Growth (% growth) | 1.6 | 2.3 | 2.2 | 2.4 | 3.3 |
| Inflation (% growth) | 3.2 | 2.1 | 1.5 | 1.6 | 0.4 |
| Population Aged 65+: January 1st ('000) | 41,388.0 | 43,176.5 | 44,756.2 | 46,212.4 | 47,829.9 |
| Population Density (persons per sq km) | 34.1 | 34.3 | 34.6 | 34.9 | 35.2 |
| GDP Measured at Purchasing Power Parity (international dollar million) | 15,517,925.0 | 16,163,150.0 | 16,768,050.0 | 17,418,325.0 | 18,259,767.0 |
| Consumer Expenditure (USD million) | 10,448,095.7 | 10,827,173.5 | 11,219,325.7 | 11,655,059.8 | 12,077,722.0 |
| Annual Gross Income (USD million) | 14,596,263.6 | 15,166,008.0 | 15,641,078.7 | 16,172,866.0 | 16,729,767.0 |
| Annual Disposable Income (USD million) | 11,776,900.0 | 12,233,300.0 | 12,628,679.8 | 13,058,047.4 | 13,508,864.2 |
Lifestyle indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Internet Users ('000) | 203,324.5 | 233,227.0 | 249,742.5 | 255,218.9 | 262,797.0 |
| New Registrations of Passenger Cars ('000) | 6,089.4 | 7,241.9 | 7,585.3 | 7,687.6 | 0.0 |
| Consumer Expenditure on Food (USD million) | 627,989.2 | 646,738.2 | 663,050.2 | 676,075.9 | 693,438.0 |
The general trend is definitely positive as in the UK, so the health status of the economy is similar but the real turning point is 2015. Here is when the GDP grows the most and the inflation increases the least. All the relevant economic variables grew at constant ratio during the five years under analysis, but it is reasonable to expect further enhancements by next year.
Japan
Areas: 369,700 km2
Population: 126,807,000
Population: 126,807,000
Demographic and economic indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Real GDP Growth (% growth) | -0.5 | 1.8 | 1.6 | 0.0 | 0.6 |
| Inflation (% growth) | -0.3 | 0.0 | 0.4 | 2.7 | 1.1 |
| Population Aged 65+: January 1st ('000) | 29,750.5 | 30,790.5 | 31,900.4 | 32,992.0 | 33,888.4 |
| Population Density (persons per sq km) | 350.6 | 349.8 | 349.2 | 348.6 | 347.8 |
| GDP Measured at Purchasing Power Parity (international dollar million) | 4,386,152.0 | 4,530,286.0 | 4,667,550.0 | 4,766,333.0 | 4,867,042.2 |
| Consumer Expenditure (USD million) | 3,465,238.1 | 3,511,490.9 | 2,921,023.8 | 2,710,012.6 | 2,710,900.2 |
| Annual Gross Income (USD million) | 5,267,137.4 | 5,291,259.6 | 4,358,003.3 | 4,022,844.4 | 4,022,635.0 |
| Annual Disposable Income (USD million) | 3,843,686.0 | 3,833,286.2 | 3,156,231.2 | 2,912,476.1 | 2,911,693.1 |
Lifestyle indicators
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| Internet Users ('000) | 105,657.0 | 105,434.5 | 105,276.7 | 106,883.8 | 107,801.0 |
| New Registrations of Passenger Cars ('000) | 3,524.8 | 4,572.3 | 4,562.3 | 4,699.6 | 0.0 |
| Consumer Expenditure on Food (USD million) | 436,328.9 | 441,996.1 | 364,967.4 | 335,481.6 | 333,853.2 |
Japan reality is worth to be observed. Unfortunately the whole economy is still suffering from the devastating earthquake and tsunami that hit Fukushima and the East Coast of Japan in 2011. Signs of a gradual stabilisation come from the high GDP and low inflation in the two years immediately after the catastrophe and the exact opposite, with low GDP and high inflation, in the last two years. Noticeable is the dramatic fall of income and expenditure levels between 2012 and 2013, still slightly ongoing, while on the opposite the purchasing power is constanlty increasing.
Of extreme relevance here we should consider the demographic factor. The alarming tendency is for a constant decrease in population density, while the share of population aged 65 of more increases regularly by almost one million units per year.
Market Research consequences
4 countries, 4 currencies, 3 continents, and many different cultural and historical backgrounds are all elements that have deep influence on market operations. This research is teaching us that maybe the similarities between the UK and the USA run beyond history and language. Since these two economies show the same progress, operations here could be similar, interaction could be profitable and results could be valuable.Italy is a representative of the difficulties that the Euro-zone is facing, because of economic and austerity policies that can hardly deal with the needs of countries that are completely different among each other, but hopefully the tiny recovery forecasted for 2015 can be the definitive reverse to a better economy for the future.
Japanese market is delicate, not only for the drawbacks caused by the earthquake, but even because of the demographic changes which may mean that the market operations should be addressed in a different way, as the population is changing.
A good market researcher, guided in the right way by what a company needs, has to weight as much factors as possible to find how a product or a service could be a winning hit in a particular environment. Is there any better and more effective start than contextualise the very basis to begin?
That's the Importance of Being a Market Researcher.
That's this blog.
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GIANLUCA NOCENT
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