WE SEE the signs around us: more stores putting up “Sale” signs to entice more shoppers to come in, and less people eating out and buying clothes. Just how do Pinoys behave in a financial crisis like the current one?

“Some people ask, ‘With all our economic problems, why aren’t people out on the streets? Where are the riots?’ Coping is an uphill battle that has left consumers frustrated and overextended, and this is even more true for those at the bottom of the pyramid, which is the biggest chunk of our population,” says Emil Avenido, research director of the Philippine Survey and Research Center-Research International (PSRC-RI).

The reaction, says Avenido, is not aggression but of withdrawal: focusing on oneself and family. Family is very important to the Filipino.

In times like these, the Filipino consumer will most likely respond in the following ways, says Avenido:

1. Explore all possible sources of income. Rather than mount or join protests, he would rather continue finding ways to provide for the family’s needs. He might, for instance, look for rakets or sidelines like direct selling; extend working hours to earn overtime pay; seek out loans via formal and informal channels; and start a small business.

2. Change lifestyle. This means cutting down on going out, eating out, and having gimiks. “This cuts across all socio-economic classes,” adds Avenido.

3. Change buying behavior. The lower classes downsize to using smaller SKUs like sachets (thus the popularity of shampoos, conditioners, and detergent powders in sachet packs). The upper class on the other hand, upsize to a bigger SKU since they can save more by buying bigger or in bulk, and they’ll need to buy less frequently.

4. Change consumption pattern. The consumer may substitute one product for another, decrease consumption of a product, or totally drop or exclude an item from his shopping basket, especially if it’s a non-essential item.

5. Change brand attitude. The consumer may start to weigh performance vs. brand equity. Choices become more practical where product performance becomes more important than the brand.

6. Decide based on price. For those at the bottom of the pyramid, price is everything. The cheaper the better. “This is like a desperate act,” says Avenido.

7. Become more prayerful. “People pray more and go to church more. This is not really surprising. Malakas pa rin ang pananampalataya ng Pinoy,” adds Avenido.

The high end market, on the other hand, may still continue their lifestyle and shopping habits, and this jives with what high end retailers have reported in recent months—sales are up. Avenido explains, “In a crisis, it’s always the middle and lower classes that are most affected. Luxury is a relative term. In the world of marketing, it’s all about being relevant—catering to a need. Luxury goods fulfill the needs of the upper crust. And if they can afford it, what would stop them from buying luxury items?”

So how can companies adjust to consumer behavior during this time? “Stay relevant to your target,” advises Avenido. “The company’s survival lies on its ability to respond to this seemingly uncertain times. In the past, we’ve seen how brands can suffer by ignoring changes in the marketing landscape, and how some survive and flourish through these challenges, even during crisis. Marketers cannot ignore the voice of the consumer. Listen to the market. Consumers are searching for products and services that meet their current circumstances. People can grow away from friends and loved ones, so it’s no surprise if they can part with their regular or favorite brands.”