Singapore: Macro Trends and Their Implications For Consumer Marketing

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Singapore: Macro Trends and their Implications for Consumer Marketing
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DOI: 10.1007/978-3-319-17320-7_118
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Chapter 15
Singapore: Marketing, Macro Trends, and Their Implications for Marketing Management
for 2005 and the Years Beyond
Jochen Wirtz and Cindy M.Y. Chung
Citation: Jochen Wirtz and Cindy M. Y. Chung (2005), “Singapore: Marketing, Macro Trends
and Their Implications for Marketing Management for 2005 and the Years Beyond,” in
Handbook of Markets and Economies: East Asia, Southeast Asia, Australia, New Zealand, edited
by A. Pecotich and C. J. Shultz II, 2nd edition, Armonk, New York: M.E. Sharpe, 536-581.
Overview
Trends in Singapore’s marketing environment are analyzed from economic, demographic, and
cultural, as well as a consumer behavior and marketing mix perspectives. The analysis shows a
fairly wealthy society with good future prospects. The main demographic trends follow those of
more developed nations. Singapore has an interesting mix of cultures with distinct languages,
religions, and customs. Macro trends are reflected in consumption behavior with increasing
overall consumption, an increasing share of higher-level goods, such as recreational, education,
and health services, as well as changing consumer values and lifestyles, which show that
Singaporeans have become more brand and status conscious, more discerning, quality oriented,
technologically savvy, and health conscious. Trends in the marketing mix are a direct reflection
of the macro environment. The chapter concludes with implications for marketing strategies.
Introduction
Singapore is a small city-state of approximately 648 square kilometers in area, consisting of the
main island of Singapore and some sixty islets within its territorial waters. Singapore has a
tropical climate, which is warm and humid. The temperature is uniform throughout the year,
ranging between 24C and 32C, moderated by sea breezes.
Singapore was founded in 1819 by Sir Stamford Raffles as a trading post for the East
India Company, and it became a British colony in 1867. It was an important British trading post
and military center in 1900, with a population of about 220,000. At the end of World War II, its
population was still less than one million. The economy showed little development from the end
of the war until the early 1960s under British rule, and in 1970, its GDP per capita was still only
US$950.
In 1963, Singapore joined Malaya as one of the constituent states of a new Federation of
Malaysia, with virtual freedom from colonial rule. In 1965, Singapore was separated from
Malaysia by mutual agreement and became a fully independent republic (Ministry of
Information, Communications, and the Arts 1994). Its astonishing transformation into a modern
industrial society began in the early 1970s. Since then, Singapore has enjoyed impressive rates of
economic growth and achieved higher GDP per capita (e.g., US$21,220 by 2001) than some
developed countries such as Canada, England, and Australia. In fact, the World Bank ranked
Singapore number nine in its list of the world’s richest countries measured in purchasing power
parity (1995). This has been achieved with full employment, budget surpluses, low pollution, and
by standards of most industrial countries, with few social problems. In May 1997, Singapore was
reclassified by the International Monetary Fund (IMF) in its semiannual publication, World
Economic Outlook, as an “advanced economy” (Ministry of Information, Communications, and
the Arts 1998, 10). IMF’s reclassification of Singapore was recognition of how far Singapore has
traveled since its independence.
Political and Historical Background Information
Singapore’s political structure, its position in the Association of Southeast Asian Nations
(ASEAN) and the region, and an analysis for the reasons behind Singapore’s success are
discussed in the subsequent sections to provide a platform for a more detailed analysis of trends
in the economic, demographic, and cultural environments.
Political Structure
Singapore is a parliamentary democracy. The executive branch, which consists of the prime
minister, at present, Goh Chok Tong, and fourteen ministers, is appointed by the president and is
responsible to the parliament. The head of state, the incumbent President S. R. Nathan, is elected
directly by the citizens of Singapore for a five-year term. The president has certain veto powers
primarily related to appointments of senior civil servants, protection of reserves, internal security
detentions, investigations into corruption, and restraint orders connected with the maintenance of
religious harmony.
The national legislature is a unicameral parliament consisting of nine members who are
directly elected from single-member constituencies, and seventy-four who are elected in teams of
four to six to represent the fifteen-group representation constituencies (GRCs). At least one
member of any GRC must be from an ethnic minority, usually Malay or Indian. The ruling
People’s Action Party (PAP), which has been in power since the separation from Malaysia, won
75.3 percent of the 2001 valid votes and presently holds eighty-two of eighty-four seats in
parliament (The Sunday Times 2001). The parliamentary opposition consists of the Worker’s
Party (WP), which holds one seat, and The Singapore Democratic Alliance (SDA), with another
seat in parliament.
The judicial power is vested in the supreme court and the subordinate courts. The
judiciary administers the law independently from the executive. The chief justice and the other
judges of the supreme court are appointed by the president, acting on the advice of the prime
minister, who, in turn, consults the chief justice for appointments of judges other than the chief
justice.
Some Explanations for Singapore’s Rapid Economic Development
The reasons for Singapore’s rapid economic development are manifold and closely related. At
least four factors have to be considered. They are (1) good governance and political stability,
including efficient and effective institutions and a policy of export orientation; (2) favorable
starting conditions in comparison to other developing economies; (3) external factors, such as
world market developments and geopolitical constellations; and finally, (4) cultural values
(Wirtz and Menkhoff 1998).
First, good governance and a high level of political stability are important factors for
Singapore’s success. Singapore has managed to achieve political stability and macroeconomic
management, which can effectively and efficiently implement policy changes and address
problems. These are probably made easier by Singapore’s small size. This stability has enabled
Singapore to pursue an export- and growth-oriented development strategy, and as the World
Bank formulated it, “getting the basics right” (1993, 5). The World Bank concluded that the
success of high-performing Asian economies is largely due to private investment financed by
high levels of savings (both initiated and fostered by various government policies, such as
opening the economy to attract FDI, integrating into world trade, high savings via the Central
Provident Fund [CPF]) and a rapidly growing human capital (mainly via substantial investment
into housing, health, and education).
Good governance is also reflected in the low level of corruption. In contrast to other
developing countries, corruption, which is vigorously policed, is not a concern in Singapore.
Civil servants receive competitive salaries, which are pegged and automatically adjusted to those
in the private sector (Lee 2000). The level of corruption in Singapore is lower than in most
American and European countries, including in the United States, the United Kingdom, and
Germany, as shown by a joint research report by Transparency International and the University
of Göttingen (Sim 1995). Berlin-based Transparency International, a nongovernmental agency
dedicated to fighting graft, has also rated Singapore among the top ten in its list of the world’s
least corrupt nations (Ministry of Information, Communications, and the Arts 1998, 7).
McRae suggests that the level of efficiency of an economy as a whole has to be
considered when looking at its long-term international competitiveness (1995, 3). One important
factor, of course, is the efficiency and effectiveness of public services. In recent years,
Singapore’s civil service has been a forerunner to local firms in terms of service quality. Here,
Singapore seems to be at the same level as, if not higher than, many developed countries. The
latest knowledge and technologies in quality management are applied, ranging from overall
quality programs such as the Public Service 21st Century (PS 21) initiative, to micro issues such
as advanced queue management systems in hospitals or the immigration office, and increasingly
to service provision via telecommunications and other electronic means, such as ATM-type
interfaces, services provided through the Internet, or services provided via dedicated networks
(e.g., Tradenet for import/export transactions). This dedication to public service quality has been
reflected by evaluations of international bodies, which awarded the number one position in
quality in their respective industries to a number of Singapore’s services. Examples include the
Singapore Port, Changi Airport, mass rapid transport system, and Singapore Airlines (which is
still more than 50 percent state owned). A poll conducted by a regional financial magazine,
FinanceAsia, has found that Singapore has the most competent government in Asia (The Straits
Times 2001a).
A discussion of the efficiency and effectiveness of the Singapore government would be
incomplete without mentioning its unceasing effort in taking “online” initiatives. The
government has received the accolade for being the most advanced in providing full online
services to its citizens (Holmes 2001). Its e-Citizen Centre that was started in 1997 organizes
public services by life events rather than by various ministries or departments. The Centre
demonstrates how a government can provide integrated and citizen-centric electronic services
with efficiency. By April 1999, the Centre included forty-nine life events with 150 transactions
(Holmes 2001). Also, government regulations on the whole are favorable for the development
and adoption of the Internet and e-commerce. Since October 1998, the IDA has led major efforts
in providing greater quality, availability, and more competitive prices for Internet access.
Singapore has been listed as a “wired” capital, along with San Francisco, London, Seoul,
Sydney, Hong Kong, and Amsterdam, by a global study undertaken by Euro RSCG, an
advertising-agency network (The Straits Times 2001b). To maintain and further enhance this
image, the government also drew up a ten-year master plan, Information and Communication
Technology 21 (ICT21), in August 2000 to position the country as a global capital of information
and communication technology by 2010. The government also provides subsidies to encourage
businesses to use IT and the Internet. One recent example is that the Singapore Productivity and
Standards Board offers subsidies of 50 percent, or a maximum of $20,000, to small and medium-
sized enterprises to initiate or improve their e-commerce capabilities (The Straits Times 2001c).
In conclusion, looking at past performance, it appears that the Singapore government has
been doing a good job in supporting and managing the astonishing transformation of the city-
state into a modern industrial economy (Wirtz and Menkhoff 1998). The country is therefore
deserving of its second position in global competitiveness in both 2000 and 2001 (The Global
Competitiveness Report 2000; The World Competitiveness Yearbook 2001).
A second reason for Singapore’s success has been its favorable geographic conditions,
such as being centrally located on world trade routes for shipping, air transport, and trade, as
well as its natural deep-sea port. These factors were the key reasons for British interest in
establishing Singapore as a trading post in 1819 in the first place. Other important favorable
conditions include the well-functioning public administration structures and the civil service,
which were left behind by the British and were developed further after independence, and the
traditional free trade status, including its ideology of a liberal economic order and free market
orientation. Furthermore, in contrast to many other Asian developing countries, Singapore as a
city-state has had no socioeconomic problems with rural populations pushing into its city. The
immigration of workers from Malaysia, Thailand, Indonesia, Bangladesh, and other countries has
been effectively controlled since independence. As a city-state, no economic conflicts of interest
between regions with different levels of development have existed. Another of Singapore’s
advantages has been its population of largely dynamic and achievement-oriented immigrants.
Third, external factors such as world market developments and geopolitical constellations
have also contributed to Singapore’s success. Singapore’s outward-oriented policies with respect
to trade and FDI attracted multinational corporations with tax concessions, good infrastructure,
and low wages. These were pursued at a favorable world historical time when world trade grew
rapidly. U.S. foreign policy and its interests in the region were additional factors. The United
States provided substantial support to the founding of ASEAN in 1967. Singapore, one of the
founding members of this alliance against communism, received much economic and military
support from the United States.
Finally, cultural values have to be considered when explaining Singapore’s advance. It is
easier for a government to successfully encourage savings and education, if these are already
ingrained in the value system of its people. Singaporeans show strong commitment to education,
high savings, and evident discipline and industriousness. These factors are considered important
drivers of economic development (World Bank 1993; McRae 1995, 70).
Singapore’s Position in the Region
Singapore’s foreign policy emphasizes the enhancing of security and prosperity through regional
cooperation, of which ASEAN remains a central pillar. The government also aims to consolidate
its relationship with other ASEAN countries, especially its immediate and by far larger
neighboring countries, Malaysia and Indonesia (Economist Intelligence Unit [EIU] 1994, 7–8).
In July 1995, the ASEAN Regional Forum (ARF) was inaugurated, which laid the groundwork
for regional security cooperation. In 1992, ASEAN countries also agreed to establish a free trade
area (FTA) for the purpose of increasing competitive advantage of the region as a product base.
This was to be achieved through elimination of tariff and nontariff barriers. In response to the
1997 Asian financial crisis, ASEAN countries agreed to speed up the completion of the FTA by
2002 (it was originally scheduled to complete by 2008), whereby more than 80 percent of goods
have 0 percent to 5 percent of tariffs (ASEAN Secretariat 1999). High on the agenda for ASEAN
countries is the creation of an ASEAN–China Free Trade Area within the next ten years, which
will open up a combined market of 1.7 billion people with a GDP of about $3.7 trillion (The
Straits Times 2001d). A FTA, as such, will also enhance peace and stability in the region. Other
ambitious schemes such as an ASEAN–South Korea Free Trade Area and ASEAN–India Free
Trade Area are also under conception.
On the backdrop of an increasingly import-oriented Asia-Pacific in the global economy, a
major objective of Singapore’s foreign policy will continue to be the strengthening of economic
relationships with those regional countries that Singapore sees as important future export markets
or investment locations. The emphasis is on regional direct investments, projects, and initiatives,
with the underlying objective of generating economic spin-offs in Singapore (Ministry of
Information, Communications, and the Arts 1995, 106). This is hoped to be achieved by
promoting Singapore as a regional gateway for mainly Western companies, by encouraging
private local firms to invest in the region, and by supporting relationships between multinational
corporations (MNCs) and leading local firms for regional investments (Menkhoff and Wirtz
1999).
Background Information: Summary and Conclusions
The background information presented here puts the recent economic developments described in
the next section into a wider perspective and also indicates future directions. Singapore’s stable
democracy is expected to continue providing a favorable political environment for further
economic growth. The success factors of the past will remain important drivers of growth in the
future. They include, first, good governance, political stability, and a public sector that works
vigorously toward efficiency and service quality; second, favorable base conditions such as its
natural deep-sea port, and its British-inherited free trade mentality with its liberal economic
attitude; third, a favorable timing of its development efforts during a period of rapidly increasing
world trade and, now, increasing focus on Asia; and finally, its cultural values, which emphasize
saving, education, and discipline and industriousness. Singapore’s recent significantly increased
efforts to use its expertise and capital to build an external wing of its own economy in the region
will also impact its economy. Low value-added jobs will be increasingly exported into low-cost
countries in the region, and more highly skilled jobs will be created in Singapore.
The next section describes key economic variables at a more micro level. Trends in
income, employment, and inflation, as well as trade policy and future developments are
discussed.
Economic Environment
The economic environment has been improving rapidly over the past two decades. Table 15.1
provides an overview of selected macroeconomic variables, such as GDP growth, GNP per
capita, unemployment rates, and the like. The first half of the 1990s has seen generally high
positive economic growth in Singapore. The advent of the Asian currency crisis has rendered
growth to a mere 0.1 percent in 1998. There was dramatic improvement in the following two
years, with the GDP growth rate rising to 9.9 percent in 2000. However, with the onset of
economic uncertainty and a recession in 2001, the growth slowed. The economy shrank by 2.1
percent. The worsening disruptions and slowdown in the U.S. economy aggravated by the
September 11, 2001, terrorist attacks on New York and Washington, D.C., could trigger
economic downturn worldwide.
<<TABLE 15.1 NEAR HERE>>
The Asian Economic Crisis and Recession in 2001
The Asian economic crisis began as a currency crisis in the middle of 1997, triggered by
Thailand’s inability to defend its baht against a sustained attack by speculators. The crisis soon
spread across the Asian region, with currencies from the Korean won to the Indonesian rupiah
plunging dramatically by as much as 70 percent. The impact of the crisis on Singapore was
initially muted, as Singapore had strong economic fundamentals, with the Singapore currency
losing only 26 percent of its original value against the U.S. dollar. However, Singapore soon felt
the impact of the crisis toward the end of 1997, as total trade with Southeast Asian neighbors
contributed to 27 percent of exports, and foreign investors started withdrawing their investments,
thinking that this was affected by the region’s crisis. GDP growth dropped from 6.2 percent in
the first quarter to –0.8 percent in the fourth quarter, clearly showing the economy’s recessionary
effects. After growing by 0.7 percent in the first half of 1998, the consumer price index for the
second half shrank by 1.2 percent, showing the deflationary pressures as a result of the economic
slowdown. To worsen the situation, the firm Singapore dollar dampened imported inflationary
pressures. As a result, the GDP growth for 1998 turned out to be a mere 0.1 percent. However,
Singapore showed a healthy rebound of 5.9 percent growth in 1999, despite general pessimism
and conservative forecasts, as evidenced by the IMF’s projection of a 0.2 percent GDP growth
for that year (IMF 1998, 172).
Singapore’s economy shrank by 2.1 percent in 2001 (see Table 15.2). This had been the
first contraction since the 1.8 percent shrinkage in 1985. The main causes were believed to be the
heavy downturns in the electronics cycle and the downturn in the U.S. economy.
The recession in 2001 resulted in widespread layoffs and pay cuts. The government had
taken several measures to ease the pain. The off-budget packages announced during the year that
amounted to $11.3 billion were expected to stimulate economic growth (The Straits Times
2001e). Various schemes and measures have been formulated to help the retrenched workers and
to ease the crisis. Along with these short-term measures, long-term policies are being chalked out
to strengthen the fundamentals, like educational standards and infrastructure. The government
intends to promote services like medical care, biotechnology, and education to attract new
investments. The authorities remain cautious, as other risk factors exist in the Asian region: the
weakening Japanese economy, the turmoil in Indonesia, and the recent reduction of FDI in
ASEAN. For instance, Singapore attracted $11.5 billion in FDI in 2000, down from $13 billion
in 1999 (The Straits Times 2001f).
Income
There was a significant improvement in the income of the workforce in the last decade (Table
15.3). The average household income increased from $3,076 in 1990 to $4,943 in 2000. The
percentage of households earning less than $3,000 continued to fall. Half of the households
earned at least $3,600 in 2000, compared to $2,300 in 1990. One in ten households earned
$10,000 or more and represented the greatest increase among all the income categories.
Incomes of skilled workers and professionals seemed to increase faster than did those of
unskilled workers. Abeysinghe (1994) showed that Singapore has a wider earnings gap between
department managers and workers in various occupational groups than cities in all other
countries examined, which included not only key Western cities, but also Asian cities, such as
Hong Kong, Seoul, and Taipei. Although hampered by a lack of data, the author argues that the
available evidence suggests that this wide gap may be explained by the fact that professionals
and executives in Singapore earn internationally competitive remuneration packages (Union
Bank of Switzerland 1991), whereas wages of low-skilled workers are held back by foreign
workers coming to Singapore from largely low income countries in Asia (Abeysinghe 1994). The
earning capacity of low-skill workers will have to be raised through the retraining and upgrading
of skills rather than salary growth over and above productivity increases.
During economic downturns, wage costs in Singapore can become considerably higher
relative to other ASEAN countries (see Table 15.4 for wage costs during the 1998 economic
crisis). This can hamper Singapore’s ability to attract new investments and to stay competitive in
the global market. As a result, the government has taken firm steps to address this issue by
having the public sector cut the variable component of wages and forgoing 1998 and 1999 pay
adjustments. The government has also introduced a 10 percent cut in the compulsory employer
contribution of employees’ pension funds, the Central Provident Fund (CPF), to help reduce
labor costs and save jobs. This cut in the CPF contribution rate from 20 percent to 10 percent
reduced payrolls without affecting the immediate disposable income, thereby avoiding any
economic aggravation by the crisis.
Employment
Singapore has one of the highest labor participation rates in the world, higher than in all Asian
newly industrialized economies (NIEs), and also higher than the three developed countries
(Japan, the United States, and the United Kingdom), which were included in a study by the
Ministry of Labor (The Straits Times 1995a). Despite its high level, the overall labor force
participation rate kept edging upwards until the currency crisis in 1998, when it dropped to 63.9
percent in that year (Table 15.5). It soon recovered and reached 68.6 percent in 2000. It had
dropped to 65.4 percent in 2001. The participation rate of females has been increasing steadily
throughout the last decade and was at 54.3 percent in 2001. Additionally, the labor force
participation rate of the fifteen- to nineteen-year age group decreased from 30.9 percent in 1990
to 17.6 percent in 2001 (Table 15.5). This decline could be mainly attributed to an increase in the
proportion of teenagers who remained in the educational system.
Unemployment has generally not been a problem in Singapore. The unemployment rate
of 3.4 percent in 2001 (and in other years) shown in Table 15.1, has been somewhat inflated by
university, polytechnic, and school-leavers who entered the labor market during May and June of
the year, which coincided with the annual survey period. With the current economic downturn,
however, the unemployment rate is expected to rise.
The Singaporean government has been supportive of its people in the face of rising
unemployment. It has taken steps to ensure that retrenched workers are given the opportunity to
retrain, and thus be able to be redeployed to other jobs. One of such steps introduced is a scheme
sponsored by the Chinese Development Assistance Council, in which retrenched and
unemployed workers are given a monthly allowance of $500 to sustain them as they are
completing a National Technical Certificate Grade 3 course (Koh 1998).
Inflation
Inflation has been below 3.5 percent per annum for the last decade (Table 15.1). With the
economic crisis of 1997, the consumer price index actually dropped to –0.3 percent in 1998,
suggesting that inflation would not pose a problem in Singapore in the short term. In the long
run, inflation is expected to remain low, supported by public budget surpluses and sustained,
high private saving rates.
Trends in Trade Policy
The movement of goods, services, and capital in and out of the country is not hampered by trade
or exchange controls. A few exceptions are restrictions on the import of goods mainly for health,
safety, or security reasons. Singapore is essentially a free port, and most goods can be imported
and exported freely. This situation is unlikely to change, because Singapore has derived
considerable benefits from its role as the regional trading center. Rather, continued efforts are
being made toward making trading in Singapore more efficient and cost-effective, for example,
by further simplifying trade documentation and rationalizing customs operations. Since January
1994, items from furniture to biscuits have been entering Singapore duty-free, bringing the total
number of duty-free goods to 5,736 items and representing 96 percent of all goods entering the
country. Import duties are mainly revenue duties on items such as alcoholic beverages and
tobacco to discourage their consumption, and motor vehicles to discourage car ownership and
control traffic congestion (Asia Business Network 1997).
As a result of the liberal trade policy, Singapore already enjoys a competitive market
environment in most consumer markets. An opening of the markets in its neighboring ASEAN
countries, particularly with the ASEAN Free Trade Area, will, therefore, not have much impact
on Singapore’s consumers, who already enjoy a full range of goods from all over the world at
competitive international market prices.
Long-Term Trends in the Economic Environment
Singapore recovered from the Asian economic crisis and achieved an amazing growth of 9.9
percent in 2000. The country is expected to recover from the current evolving recession.
Singapore still seems very competitive, with the cuts in wages and CPF (especially with the
measures taken to cope with the economic crisis), and as many companies place a high premium
on efficient air and sea transport, telecommunications, and other supporting services and
facilities, which Singapore adequately provides. In fact, U.S.-based Business Environment Risk
Intelligence (Beri) ranked Singapore as the world’s number two investment spot after
Switzerland, but before countries such as Japan, the United States, and Germany (Business
Environment Risk Intelligence S.A. 1999). Singapore was also ranked as the world’s most
competitive country since 1996, according to the World Economic Forum’s Global
Competitiveness Report (2000), even with the economic downturn.
High wages and other business-related costs relative to other countries in the region have
to be seen against a backdrop of Singapore working rigorously toward increasing the value-
added worth of its small workforce. The Singapore Government sets economic master plans
every year, into which a range of other plans fit. For instance, it launched a $7 billion Science
and Technology Plan for 2001–2005 and announced a long-term initiative to develop Life
Sciences as a pillar of Singapore industries (Ministry of Trade and Industry 2001). These plans
affect economic growth and international competitiveness and maximize the value-added
generated by Singapore’s labor, land, and capital resources.
To achieve the objective of adding value to Singapore’s various resources, investments
are made to upgrade skills and education levels of the country’s workforce and to add to and
improve its infrastructure. In its endeavor to become the information and communications hub in
the Asia Pacific, IDA is offering up to $2 million per year to sponsor information technology
(IT) students for academic exchanges that will provide them with overseas working experience
(The Straits Times Interactive 2001a). More broadly, in 2000, Singapore pumped in a record
$3.01 billion into research and development (R&D), representing a 13 percent increase from
1999, and 1.89 percent of the country’s GDP, which is close to the 2–3 percent of that of
developed nations (The Straits Times Interactive 2001b). Other strategies include attracting
skilled workers and professionals to Singapore to supplement its workforce. Minister for Trade
and Industry George Yeo emphasized the importance of foreign talent and the government’s
encouragement of their immigration (2001a). It will, therefore, remain easy to hire expatriates
and to obtain employment passes for professionals and skilled workers in Singapore.
The strategy toward higher value-added per employee can be seen in Singapore’s recent
effort to attract global companies and highly accomplished scientists to enter the life science
industry and business in Singapore. Senior Minister Lee Kuan Yew has pointed out that
partnering with global players to bring in new technology will be a way to deal with greater
economic competition (The Straits Times Interactive 2001c). New Scientist, a scientific
publication, has referred to Singapore as “every researcher’s dream,” with great career prospects
and state-of-the-art labs and equipment, and, in general, as a great place in which to live and
work (The Straits Times 2001g). Key initiatives such as the Singapore Genomics Programme and
the Bioinformatics Institute are expected to attract hundreds of local and foreign researchers to
the field. Long-term efforts to nurture talent have also been made. To 2005, US$500 million has
been set aside for Ph.D. scholarship and fellowship awards, and some local tertiary institutes are
geared toward training scientists and engineers that are high in demand in the field. Other grand
schemes are also planned for the near future. The Biopharmaceutical Manufacturing Technology
Centre that makes and tests drugs using living cells is up and running as of January 2003. A $300
million biomedical city in the heart of Singapore’s Science Hub at Buona Vista was launched in
2003. A national “bank,” the Singapore Tissue Network, which will store healthy and diseased
human tissues, was established in 2002 and subsequently was located to the Biopolis at Buona
Vista (The Straits Times Interactive 2001d, e, f).
To add value, another long-term strategy aims to take advantage of resources in Asia.
Singapore possesses capital and specialist management skills in some areas, where many other
Asian countries are capital-short but have the land and labor resources Singapore lacks.
Furthermore, they represent markets that are larger and will, in the longer term, grow faster than
Singapore’s. One example of government initiatives to take advantage of these factors is the use
of government-linked companies to develop flagship projects, which put in place the
infrastructures required by private-sector companies before moving to these countries. Examples
of such projects are the Batam Industrial Park in Indonesia, the industrial park being developed
in the Fujian Province in China, and the technology park under development in Bangalore in
India. One of the objectives of these projects is to move labor-intensive operations out of
Singapore, while retaining high-value-added, skill-intensive operations (EIU 1994).
The upgrading of Singapore’s workforce and value-added jobs coupled with the
outsourcing of low-end labor-intensive work to other countries should result in increased
competitiveness of Singapore as a whole.
Summary: Economic Environment
Singapore’s economic environment experienced a negative growth in 2001. However, recovery
is expected. The Singaporean government has launched many well-publicized and bold measures
to tackle the local downturn. Initiatives on various economic master plans, the development of
information technology, and life science research are expected to help the economy reduce its
reliance on the electronics sector. In addition, Singapore has the advantage of a well-trained and
equipped workforce (albeit leading to relatively higher labor costs), a high labor participation
rate, low unemployment, and an almost negligible inflation rate. These factors play an important
role in the country’s recovery from economic challenges and also in its long-term prosperity.
Demographic Environment
Long-term demographic developments are powerful change agents in any society. Changes in
size of population and age distribution have profound impacts on any economy and its
consumption patterns. Singapore seems to follow demographic trends of developed nations. The
population grows slowly and is aging fast. Both trends seem to be due partially to a tendency
toward delayed marriage and childbirth, as well as a sharply reduced fertility rate. An increasing
life expectancy contributes further to the aging of the population. These trends are discussed in
more detail below.
Population Size
Singapore is a small city-state with a population of only approximately 4 million (including
citizens, permanent residents, and foreigners who have lived in the country for a year or more).
Its population has been growing slowly at no higher than 4 percent per annum for the past
decade, mainly through immigration (Table 15.1). The government allows large numbers of
skilled workers, professionals, and their families to migrate to Singapore. In recent years, the
government, long concerned about a sluggish birthrate, put in place a number of incentives for
couples to have more children, earlier in life.
The expatriate population tends to increase faster than the resident population. In 1995,
the total population growth, including that of foreigners, was 3.1 percent. This was in direct
contrast to the growth of the resident population, which was only 1.8 percent (Yearbook of
Statistics 2001). In 2000, the total population growth was 2.8 percent, and the resident population
grew by only 1.7 percent. Singapore will continue to use such expatriates and foreign workers
for specialized skills not locally available and for unskilled work, such as work on construction
sites and basic assembly work in electronics factories.
Age Distribution
Singapore is one of the fastest-aging countries in the world. The proportion of elderly residents
aged sixty years and above increased from 9 percent in 1990 to 11.1 percent in mid-2002. A
slight drop was also observed for the fifteen- to fifty-nine-year age group in the same period. In
contrast, residents aged zero to fourteen years decreased from 23 percent to 21.2 percent (Table
15.6). These trends are reflected in an increase in the median age of the population from 29.8
years in 1990 to 34.6 years in 2001 (Table 15.7).
<<TABLES 15.6, 15.7 NEAR HERE>>
Some reasons for the aging of Singapore’s population are an increased life expectancy,
lower reproduction rates, as well as trends toward delaying marriage and childbirth. Life
expectancy of Singaporeans has increased dramatically from sixty-three years in 1957 to 78.4
years in 2001 (Yearbook of Statistics 1998, 2001), and the gross reproduction rate continued to
drop (from about 1.18 per female aged fifteen to forty-four years of age in 1990 to only 0.94 in
2000) (Trends in Singapore Resident Population 2000). Finally, mean marriage age increased
from 28.7 to 29.9 years for males from 1990 to 2001, and from 25.9 to 26.8 years for females
during the same period (Yearbook of Statistics 2001). Shantakumar projects that the aging
process will continue for at least the next forty years, peaking in the years 2020 to 2030, when
between 24 percent and 27 percent of the total population will be sixty years and older
(Fernandez 1995).
In summary, Singapore’s demographic environment resembles that of older industrialized
societies, with a stagnating or only slowly growing and rapidly aging population.
Cultural Environment
Singapore’s people are largely descendants of immigrants from China, the Malay Peninsula, the
Indian subcontinent, and Sri Lanka. They have gradually developed a Singaporean identity,
while, at the same time, retaining their cultural heritage (Ministry of Information,
Communications, and the Arts 1995, 29). As a result, Singapore has become a multicultural
society, dominated by Chinese, with Malays and Indians as its two other main ethnic groups.
Each ethnic group has its own cultural background that includes its languages and religions. The
main religions remain Buddhism, Chinese traditional beliefs/Taoism, Islam, and Christianity.
Other aspects of Singapore’s cultural developments resemble those of older industrialized
countries in the past forty years. In particular, there are rapidly improving education levels, with
more and more entrants into the workforce having university and postsecondary education;
reducing household sizes; and an increasing workforce participation rate to one of the highest in
the world. These cultural trends are detailed further in the sections below.
Ethnicity
The population in Singapore is predominantly Chinese, constituting some 76.5 percent of the
population, followed by 13.9 percent Malays and 7.9 percent Indians. The racial mix has been
relatively stable over the past decade (Table 15.8).
Singapore seems to show that the various groups have learned to be quite tolerant of one
another (Lai 1995; Chua 1995). An analysis of interethnic contacts during activities, such as
daily marketing, eating in the hawker centers, chatting, playing in public places, and other
similar activities, suggests a harmonious society. This interracial harmony in everyday life also
shows the tolerance for one another’s festivals and ritual practices, as well as in the preference
for multiracial living (although the main reason seems to be the wish to escape excessive, even
claustrophobic, closeness of one’s own community). However, Lai concludes that Singaporeans
have not achieved much depth of mutual cultural understanding, which was manifested in
interviewee statements on wedding customs: “We have our own way of doing ours, they have
theirs.”
Languages
The official languages are English, Chinese (Mandarin), Malay, and Tamil. English is the
language of administration, and Malay is the national language. Mandarin is being increasingly
used among Chinese in place of Chinese dialects such as Hokkien, Teochew, Cantonese, Hakka,
Hainanese, and Foochow. Most Malays speak Malay, while Indians speak mainly Tamil but also
other Indian dialects such as Telegu, Malayalam, Punjabi, Hindi, and Bengali.
Singaporeans are becoming increasingly multilingual. The proportion of people speaking
only their own language or dialect has decreased sharply. More and more people speak their own
dialect plus English and/or Mandarin (Table 15.9). In particular, the literacy in English (English
only, and English and another language) increased significantly, and English has become the
most widely spoken language. This was the result of wider usage of English in commerce and
the adoption of English as the main medium of instruction in schools and other educational
institutions. Also, English is used almost exclusively for communications across ethnic groups.
As Senior Minister Lee Kuan Yew pointed out:
<<Set as EXTRACT—Begin here>>
English as our working language has prevented conflicts arising between our different races and
given us a competitive advantage because it is the international language of business and
diplomacy, of science and technology. Without it, we would not have many of the world’s
multinationals and over 200 of the world’s top banks in Singapore. Nor would our people have
taken so readily to computers and the Internet. (Lee 2000, 181)
<<END EXTRACT>>
Greater usage of Mandarin instead of Chinese dialects reflects the success of the government’s
“speak Mandarin” campaign for a month every year, as well as the emphasis on Mandarin as the
second language among Chinese pupils (Lee 2000).
<<TABLES 15.9, 15.10 NEAR HERE>>
The household language refers to the language or dialect that is used most frequently
among family members. In general, the use of English has become more prevalent when
speaking to family members (Table 15.10). Among Chinese, there was a significant shift away
from the use of dialects toward English and Mandarin as the predominant household languages.
English-speaking households increased from 11.6 percent in 1980 to 23 percent in 2000, while
those using Mandarin increased from 10.2 percent to 35 percent. Consequently, the use of
Chinese dialects dropped from 59.5 percent in 1980 to 23.8 percent in 2000 (Singapore Census
of Population 2000c).
Religions
The religious backgrounds are closely related to the various ethnic groups. Many Chinese follow
Buddhism and, increasingly, Christianity. The vast majority of Malays are Muslims, and Indians
are predominantly Hindus but also Buddhists and Muslims. With Chinese comprising almost 77
percent of the resident population, Buddhism is the predominant religion in Singapore, followed
by Islam and Christianity (Table 15.11).
In the last two decades, a drastic shift has been seen toward Buddhism, mainly among the
Chinese population, wherein 54 percent identified themselves as Buddhists in 2000, and clearly
at the expense of traditional beliefs/Taoism, which are commonly perceived as superstitious and
antiquated (The Straits Times 1995b). In particular, the number of followers of Chinese
traditional beliefs/Taoism had reduced to less than one-third of its 1980 level. The increase in the
proportion of Christians has been gradual, from about 10 percent in 1980 to about 15 percent in
2000. The increase mainly comes from the better-educated Chinese.
Education
Current education levels in Singapore are still lagging behind those in developed countries. Only
about 12 percent of its residents aged fifteen years and above have tertiary education (Table
15.12; Singapore Census of Population 2000a). This is in contrast to about one-third of the
population with tertiary education in the United States or Japan, and 22 percent in Germany.
Nevertheless, education levels in Singapore are improving fast. For example, the proportion of
the workforce with primary education or less decreased 15.6 percentage points from 58.5 percent
in 1990 to 42.7 percent in 2000, whereas the proportion of the workforce with university degrees
increased more than twofold from 4.5 percent to 11.7 percent (Table 15.12). The rise in
educational levels indicates that new entrants to the workforce will continue to be better educated
and well skilled.
Households
Households in Singapore are getting smaller. The average number of persons per household
declined from 4.9 in 1980 to 3.7 in 2000 (Table 15.13). This is due to the decline in number of
children per family and the desire of young couples to set up homes of their own rather than to
stay with their parents (Department of Statistics 2001).
The participation rate of females in the labour force continues to increase gradually from
53.5 percentpercentpercent in 1990 to 54.3percentpercentpercent in 2001 (Table 15.5), indicating
the trend towards dual income households goes on. The participation rate of married females
continued to rise from 1990 to 2000, particularly for two age groups (Singapore Census of
Population 2001a). Married females in the first age group (twenty-five to twenty-nine years old)
tend to stay in the workforce and delay childbirth, at which time they may withdraw from their
work. More married women are also reentering the workforce at ages between forty-five and
forty-nine, when their children grow older. Furthermore, the availability of retired parents, other
relatives, a large number of foreign maids, and a wide variety of child care centers allow
Singaporean women to continue working after having children (Kau, Yeong, and Richmond
1993, 26).
Other Aspects of Singapore’s Cultural Environment
There are other aspects of Singapore’s cultural background that are less well documented in
statistical data but still have significant impact on values systems, consumer behavior, and
marketing management. Some of these features include the lifestyle of Singaporeans in a high-
density city-state with no hinterland. This means nearly all the population lives in high-rises
(more than 95 percent), and leisure activities are shaped by the urban environment and the
surrounding sea. The tropical weather is another aspect of life in Singapore, which discourages
strenuous outdoor activities but allows sitting outside at one of the many hawker centers all year
round. The confluence of rich and diverse cultural influences has endowed Singaporeans with an
outlook that is both traditional and contemporary, and this is reflected in many aspects of local
life, including the wide variety of food available at almost every street corner, the architectural
styles ranging from traditional Chinese to hypermodern skyscrapers, and the arts and cultural
scene encompassing both Singapore’s Asian heritage and Western plays and music. A flavor of
the diversity of Singapore’s cultural environment is presented to show some of the features of
life in this city-state. Where considered important, these features are elaborated in the following
sections on consumer behavior and marketing.
Cultural Environment: Summary and Conclusions
This section discussed the cultural environment of Singapore, which is characterized by its
population of descendants of immigrants mainly from Asia. Chinese constitutes the main ethnic
group, with Malays and Indians as its two other important groups. Singapore has managed to
create a social environment of racial harmony and mutual acceptance. The various groups have
kept their cultural heritage, which includes their languages and dialects, religions, and customs.
The main languages spoken are Mandarin and various Chinese dialects by the Chinese, Malay by
the Malays, Tamil and other Indian dialects by the Indians, and English across all ethnic groups.
The extent of cultural identity by the various groups is reflected in use of their own languages
and dialects at home, whereby only 23 percent use English as their household language.
Nevertheless, Singaporeans are becoming increasingly multilingual, with an increasing
proportion of people speaking English (71 percent), the language of administration and main
medium of instruction in educational institutions, and an increasing number of Chinese speaking
Mandarin (65 percent of total population) on top of their own dialects. The religious
backgrounds are also closely related to the various ethnic groups, with many Chinese following
Buddhism and, recently, Christianity; the vast majority of Malays practicing Islam; and Indians
following mainly Hinduism. Other developments in the cultural environment resemble those of
older industrialized countries over the past forty years. In particular, education levels show rapid
improvement, with more and more entrants into the workforce who have tertiary education
(although the proportion of the total population with tertiary education is still far below those of
older developed countries), household sizes getting smaller, and the workforce participation rate
edging up to one of the highest in the world.
Consumer Behavior
Singapore is becoming an increasingly affluent society. This is reflected in high real growth rates
of private consumption, as well as an increasing share of higher-level goods, such as
recreational, educational, and health services, and a declining share of basic goods, such as food
and beverages, on total consumption. The increasing affluence is also reflected in recent
consumer value and lifestyle studies that show that Singaporeans have become more brand and
status conscious and more discerning and health-conscious consumers. Increases in consumer
spending and the trends observed in values and lifestyles are expected to continue for the coming
years and are discussed in more detail in the sections below. Relative to its population, Singapore
welcomes a large number of visitors, many with substantial spending power. Therefore, key data
on Singapore’s visitors are also presented.
Consumption
Private consumption has been growing rapidly in real terms. Between 1990 and 2000, the annual
increase was between 6 percent and 10.7 percent (Table 15.1). It is expected that the
consumption growth will continue. There was negative growth in 1998 because of the Asian
economic crisis, but private consumption recovered and increased by 6.4 percent and 10.7
percent in 1999 and 2000, respectively, which was well in line with the EIU expectation of an
average annual rate of nearly 7 percent until the year 2000. The main driving force has likely
been the continuing rapidly rising income per capita (EIU 1994, 13), as discussed in the section
on the economic environment. Private consumption is expected to suffer from the current
recession, with more households taking a conservative outlook and putting more emphasis on
saving their incomes.
Tangible evidence for the increasing wealth is household penetration rates of consumer
durables, which have generally increased significantly during the years 1988 to 2000. The most
noticeable increases were in the proportion of households with washing machines, air
conditioners, microwave ovens, and PCs (Table 15.14). For example, the penetration rate for PCs
increased from 30.6 percent in 1995 to a stunning 57.1 percent in 2001.
Increasing affluence is also reflected in changing consumption patterns. The share of total
consumption of basic goods, such as food and beverages, furniture and household equipment,
and clothing and footwear has been declining from 1990 to 2000. For example, food and
beverages had a share of 25.1 percent of total consumption in 1983, which fell to 13.8 percent by
2000 (Table 15.15). In contrast, services such as rent and utilities and medical services showed
increases in their shares of total private consumption. As Singapore’s real wages are set to keep
rising, these trends can be expected to continue, and private consumption growth will tend to be
driven by spending on services rather than on goods.
The household penetration with cars is low in comparison with countries of similar GDP
per head. This is mainly due to an excellent public transport infrastructure but probably more due
to the world’s heaviest taxation of car ownership (a customs duty of 42 percent plus a so-called
additional registration fee of 150 percent of the value of the car) and car usage (relatively high
road and petrol taxes, high parking fees throughout the city, and the recent introduction of the
Electronic Road Pricing system). Furthermore, to avoid the heavy costs of traffic jams to the
economy as a whole, as can be observed in many other cities in the region, the Singapore
government controls the car population via a license system. Every month, a fixed number of
licenses for new car registrations are released. Prospective car owners then have to bid for such a
license, called the Certificate of Entitlement (to buy a car), in a monthly auction before being
able to purchase an automobile. The prices for these licenses vary by engine size. Though the
prices for these certificates have been dropping since June 2001, they are still expensive. For
instance, in December 2001, a certificate cost some $27,000 for cars with engines of 1,600 cc or
less (The Straits Times 2001h). The government policy of encouraging usage of public transport
and discouraging usage of private cars is unlikely to change in the foreseeable future.
Unlike in many Western industrialized countries, private consumption does not seem to
be driven much by credit availability and affordability. Rather, Singaporeans tend to save up
enough before making purchases. The saving rate in Singapore is high. For example, a study on
saving behavior in various Asian countries shows that in 1996, saving in Singapore was 35.2
percent of GDP (Rojthamrong 2000). On the whole, Singaporeans can be described as
financially sober, if not conservative. In the same study, the saving–investment gap (defined as
saving as a percentage of GDP minus investment as a percentage of GDP) was consistently at 0
percent. This conservatism is further supported by the government’s ideological promotion of so-
called Asian values as social ethos, with frugality being promoted as one of the highest virtues.
With the current economic downturn, short-term consumer expenditure is expected to
change. However, the above consumption trends are projected long-term trends that are expected
to continue after the downturn. With the downturn in place, consumers have less disposable
income, and therefore, consumption expenditure is expected to focus more on staple and
necessity goods. Few changes would be expected in consumer expenditure for the food and
beverage category, as this category, being a staple good, is resilient in an economic downturn.
Because the transport and communication category includes vehicles, consumer expenditure in
this category is expected to decrease, as consumers have less spending power and may switch to
public transport. This is reflected in the drop in private consumption on transport and
communications from a high of 19.9 percent in 1996 to 18.8 percent in 1997, and finally to only
18.1 percent in 1998 as a result of the Asian economic crisis in 1997. The expenditure has
increased in 1999 and 2000, but it is expected to again decrease with the downturn in 2001.
Expectations on Consumer Values and Lifestyles
Kau et al. (1993) conducted a Delphi study with 150 participants. The authors concluded that
future Singaporeans will:
<<BL>>
 become more individualistic. The increasing affluence and living in a highly urbanized
society is felt to make consumers want to differentiate themselves from the general society.
 remain very status conscious and materialistic. This is reflected in the infamous “5 Cs”
said to be aspired by all young professionals: career, cash, credit card (the issue of credit cards is
strictly regulated, and they are only issued to individuals with an annual income of S$30,000 or
more, an amount difficult to achieve for many nonuniversity graduates); condominium (instead
of the state-subsidized HDB flats in which more than 90 percent of the population lives); and a
car (see previous section on car population regulation to appreciate the costs of car ownership in
Singapore).
 become more brand conscious. Respondents believed that future consumers will be
increasingly concerned with buying well-known brands across a wide range of product
categories, from cosmetics and food to jewelry and cookware. It appears that brands associated
with high income, status, and sophistication will show the highest growth.
 become more discerning. For example, consumers are expected to increasingly value and
be willing to pay for higher-quality products, increasingly want detailed and accurate product
information (e.g., materials used in clothes, expiry dates, and ingredients in food), and will
increasingly appreciate art and culture.
 become more health conscious. As the population ages and affluence grows, consumers
are expected to pay more attention to their health. For example, this will show in an increased
demand for fitness and health clubs, as well as for health food with lower cholesterol, fat, salt,
and sugar content, but with more vitamins, fiber, and natural ingredients.
 put more emphasis on leisure activities, such as traveling, water sports, golfing, and
cultural activities.
 be more pressed for time. The continuous increase in the labor participation rate of
women will lead to more time pressures, particularly for working women. However, time
pressures will not reach levels such as in the United States, as Singaporeans frequently live
within an extended family, and maids and other household helpers are readily available.
<<END BL, INDENT>>

All the above trends would be affected by the economic downturn, as there is less
disposable income for spending in the short term. However, in the long run, Singaporeans are
expected to continue following these trends.
Lifestyle Structures
A large-scale lifestyle study conducted in 1998 identified the following seven major clusters of
Singaporeans based on lifestyle and value systems (Jung, Wirtz, Kau, and Tan 1999; Kau, Tan,
and Wirtz 1998). A more detailed description of the seven clusters is presented in Table 15.16.
<<INSERT TABLE 15.16 NEAR HERE>>
Traditional Family Oriented
This cluster characterizes those who are high on both family and traditional value orientations.
This group also shows nonmaterialistic tendencies. Demographically, it has relatively more
females (58.9 percent) and Malays (31.1 percent).
New Age Family Oriented
This cluster characterizes those who are high on family orientation, but low on traditional value
orientation. This group is somewhat status oriented and society conscious, but not too
materialistic. This group seems to pursue both status and societal harmony as well as family
values, but without much concern for traditional values. Demographically, this group has
relatively more teens (54.5 percent) and women (62.3 percent).
Entrepreneurs
This group represents those who have high entrepreneurial sprit and low traditional values and
status orientation. It has relatively more respondents in their twenties (40.3 percent) who are
better educated (32.7 percent have tertiary education), tend to have high income, do not seem
very religious (39.2 percent have no religion), and are mostly Chinese (93 percent).
Aspirers
This category represents those who have entrepreneurial spirit and want status but yet adhere to
traditional values. They are also somewhat materialistic and society conscious. This group
aspires to excel in every aspect possible. Demographically, this group has relatively more
Malays (27.1 percent) and Indians (17.1 percent) than other clusters.
Materialists
This cluster characterizes those who are high on materialism and low on society orientation. This
group is so named, because it tends to seek materialistic values in a selfish way. It does not
exhibit any distinct demographic characteristics.

Pragmatists
This group represents those who are high on materialistic and society orientations but low on
status orientation. This group tries to balance materialistic pursuit with societal considerations. It
has relatively more respondents in their thirties (40.1 percent), with the majority being Chinese
(92.4 percent). Most of them are married (76.3 percent) with children (72.4 percent).
Independents
This group characterizes those who are low on family orientation and about average on all other
aspects. People in this group do not care much about things around them. This group of people is
quite uniformly distributed across all age groups.
Tourism
Singapore has almost two visitors per annum for every resident (see Table 15.17). The number of
visitors increased steadily from 4.2 million in 1988 to 7.5 million in 2001. The majority of
visitors (69.2 percent) come from Asia, with ASEAN, Japan, and Taiwan being the most
important markets. The share of Asian visitors has increased significantly from 57.4 percent in
1988 to 69.4 percent in 2001, while the European share fell from 24.4 percent to 14.8 percent in
the same time frame. These data suggest a shift for businesses targeting at tourists to offer more
goods and services that meet the tastes and preferences of Asian tourists rather than Westerners.

The economic crisis in 1998 drove total visitor arrivals down to 6.2 million in 1998. This
decrease was likely attributable to the fall in visitor arrivals from Asia, as most Asian economies
were badly hit by the crisis. It is notable that the share of visitor arrivals from all other continents
showed an increase, with those from Europe and Oceania being the most significant. These
tourists might be taking the opportunity to obtain cheaper airfares and lower exchange rates to
travel to this region. The total arrivals have since increased back to the regular level. The
worldwide economic slowdown in 2001 coupled with the September 11, 2001, terrorist attacks
on New York and Washington, D.C., have taken their toll on tourism in Singapore. According to
statistics from the Singapore Tourism Board (STB), the total visitor arrivals in 2001 dropped by
2.2 percent compared to the previous year (2001a).
The majority of visitors (almost half) come for a holiday, and about 16 percent come
exclusively for business purposes. The average length of stay is relatively short, at around three
to four days, which indicates the stopover character of most visits (Yearbook of Statistics 2001).
Despite an increasing number of visitors since 1988, the importance of tourist spending to
Singaporean retailers has been declining. Singapore is no longer the shopping paradise that it
once was for Asian tourists, mainly because of a strengthening Singapore dollar. Taiwanese
tourists complain that Singapore has become just as expensive as Taipei, and Japanese save only
about 20 percent to 25 percent in comparison to prices back home rather than the usual 50
percent in the past. It seems that retailers will have to focus increasingly on local business and
less on tourist dollars.
Although there has been a slowdown in the tourism industry, the World Travel and
Tourism Council and the World Tourism Organization have both forecasted that tourist arrivals
in East Asia and the Pacific regions will increase from 84 million in 1995 to 190 million in 2010
(Enterprise 1996a), a compound annual growth rate in arrivals of slightly less than 6 percent.
Against this backdrop of a region with sustained growth in tourist numbers, STB has formulated
Tourism 21, a strategic plan that aims at creating new scope for growth of Singapore’s tourism
industry. The targets set by Tourism 21 include attracting 10 million visitors, bringing in $16
billion of revenue in the year 2000 (Enterprise 1996b). This target growth rate of slightly more
than 7 percent p.a. of arrivals is higher than the expected growth rate for the region as a whole.
To achieve this, Singapore has integrated nearby attractions and regional holiday destinations in
Malaysia, Indonesia, Thailand, and other countries in its tourism strategy (Brady 1996).
However, with the crisis, the number of tourists to Singapore, especially tourists from Asian
countries, has decreased considerably. To attract tourist dollars and to stem the fall in tourist
arrivals during these hard times, STB introduced a scheme that gave free gifts to Singaporeans
and expatriates who invited their friends or families to Singapore (The Straits Times 1998). In
addition, in 1999, the Board also launched “Live It Up!”—a campaign that aimed at telling
potential visitors to Singapore that the city would offer them the holiday of a lifetime (Singapore
Tourism Board 2001b). The postcrisis high tourist receipts of $11 billion and a record high of 7.7
million visitors in 2000 are indicators of the success of campaigns such as Live It Up! and other
marketing activities.
Consumer Behavior: Summary
Macroeconomic trends of increasing prosperity are reflected in the consumption behavior of
Singaporeans. Overall consumption has been increasing fast, with a declining share of basic
goods, such as food and clothing, and increasing shares of higher-level goods and services, such
as recreational as well as educational and health services. Increasing affluence is also reflected in
changing consumer values and lifestyles, which show that Singaporeans have become more
brand and status conscious, more discerning, quality oriented, and health conscious. However,
due to the economic downturn, these behaviors are partially affected, as there is a decrease in
consumers’ disposable income and higher unemployment rates. The number of Asian tourists has
been decreasing partially due to a lower price differential to their home countries and the higher
exchange rates of the Singapore dollar as compared to the rest of the currencies in the region. It
seems tourist shopping is becoming less important.
Changes in the Macromarketing Mix
This section examines past and anticipated changes in the macromarketing mix based on
statistical data and anecdotal evidence. Many of the trends identified are a direct reflection of and
are shaped by the macro environment discussed in previous sections. Long-term product and
service trends emphasize the upmarket shift identified in previous sections, reflecting the
increasing sophistication and educational levels of Singaporeans, as well as rising incomes.
Pricing strategies go hand-in-hand with the higher quality of goods and services offered.
Distribution becomes more competitive, with retail space increases far outpacing sales increases,
continuing concentration on retail outlets in supermarket and other retail store chains and
discount stores gaining share from a low level. The importance of advertising in the marketing
mix is set to increase further. With increasing competitiveness and sales volume, market research
will increase in importance and sophistication. These trends are presented below in more detail.
Products and Services
Trends identified in the previous sections have profound impacts on the types of products and
services gaining share and being launched in the Singapore market. It is expected that in the long
term, rising incomes and increasing status brought about by rising educational levels will bring
with them more discerning and informed consumers who ask for more information technology
oriented, healthy, and environmentally friendly products.
Consumer demand for and usage of such information and technology oriented
products/services as mobile phones, Internet dial-up services, and home computers, have
increased severalfold in the past few years. According to figures provided by the IDA (2001a),
the mobile phone penetration rate increased from 24 percent of the total population in 1997 to
75.8 percent by October 2002 (Table 15.18). Even more stunningly, the Internet dial-up
penetration rate increased from 7 percent to 48.3 percent in the same time period. These
technologies have been flourishing at the expense of more traditional means of communication,
as seen from the practically stagnant or even shrinking penetration rates of fixed phone lines
(55.4 percent in 1998 to 46.9 percent by October 2002) and pagers (42.3 percent in 1997 to 8
percent). Also, more than half of the households in Singapore now own at least one computer,
and almost one in four households owns at least two (IDA 2001b). In the 1,500 households
interviewed in 2000, 50 percent of them access the Internet regularly, compared to only 14
percent in 1997. This percentage is higher than households in places such as the United States,
Australia, and Hong Kong, where regular access is 42 percent, 37 percent, and 36 percent,
respectively, in the same time frame (IDA 2001b).

The health aspects of products will continue to receive greater consumer attention. In the
past, health food showed relatively low growth rates of around 10 percent per year. Taste seems
to be the main hindering factor, as a perception exists among consumers that health food does
not taste as good as less healthy food but is more expensive. The perceptions of health food
among Singaporeans, however, seem to be changing. Foods with reduced sugar, salt, fat, and
cholesterol content and increased natural and vitamin contents are expected to increase in market
shares. For example, hawker center stalls started displaying stickers reading “no monosodium
glutamate (MSG),” “no added meat fat” (which is being replaced by vegetable oils), and
“reduced sugar.” This program was promoted by the Ministry of Health and has been shown to
be popular with hawkers and customers. More organic food outlets are opening, as more
consumers are willing to spare 30–50 percent more in grocery expenditure for pesticide-free
food. Despite the lack of official figures, most of these retailers have reported an annual growth
of 5–20 percent (The Straits Times Interactive 2001g). As another example, the sales of bottled
water in Singapore continued to rise steadily over the last five years from an annual sale of $22.6
million in 1995 to 28.3 million in 2000 (Euromonitor International 2001). It is now considered
trendy among the young and more educated in the population to get knowledgeable with and
purchase health-related products. These trends are expected to accelerate further.
Although environmental consciousness is not yet strong in Singapore, the market for
environmentally friendly products is expected to grow from its existing small base. There is
increasing environmental awareness among Singaporeans, and there is immediate and growing
concern of the government about environmental issues translating into proenvironmental
legislation. The Green Labeling System, which sets specific guidelines pertaining to the
manufacture, distribution, usage, and disposal of products, and campaigns such as the Clean and
Green Week have been in effect since the early 1990s. The government also encourages
businesses to promote environmental protection through such awards as Singapore
Environmental Achievement Award and Green Leaf Award. Efforts from bodies like the
Environment Ministry and Singapore Retailers Association also help to increase consumer
awareness of green issues. Results from these efforts are remarkable. The Clean Green Week in
2001, for example, was the most successful so far, with 820 “green” activities and 240,000
participants, compared to 450 activities and 110,000 participants in 2000 (The Straits Times
2001i). Recycling activities among households in densely populated residential estates have been
introduced since July 1999, whereby household recyclables are collected every fortnight. It is
found that one in five households recycles garbage regularly, in response to the National
Recycling Program that was launched in April 2001 (The Straits Times 2001i). This rate is
expected to double within two years. Manufacturers of environmentally safe products and
packaging are expected to gain from this shift in consumer values.
Religious and ethnic background idiosyncrasies often have to be considered when
designing and marketing new products. For example, nonhalal food is not acceptable to the
Muslim community, which, for instance, led gourmet shops to offer halal fruitcakes that have no
brandy. Kau and Yang (1991) conducted a lifestyle analysis with 2,126 respondents and found
significant differences between the ethnic and religious backgrounds on nearly all aspects of
consumer behavior and the marketing mix, including need perceptions, leisure activities, media
exposure, and shopping center and department store patronage. It is not expected that cultural
and religious differences will assimilate much over the near future, and therefore they will
remain a key consideration in any marketing mix.

The region’s weakening currencies provide an opportunity for cash-rich firms to source
for new products, as currency fluctuations may result in vendors offering low wholesale prices.
Consumers are expected to buy good-quality products at reasonable prices; thus, highly priced,
branded products would not do well in the present situation.
Consumer Reactions to Price and Promotions
Low-income households and affluent households will coexist for the foreseeable future in
Singapore. This means we will continue to see highly priced, high-quality and expensive
products for high-income households alongside low-priced, low-quality products for low-income
households. However, it can be expected that the high-quality segment will grow significantly,
whereas the low-quality segment may actually see a decline due to the decreasing number of
low-income households. Education and skill upgrading will improve the earning power of many
currently low-income households.
However, even for high-quality brands such as top-end cars BMW and Mercedes-Benz or
five-star hotels Ritz Carlton and Shangri-La, consumers patronize them because they feel that
they are getting good value for their money (The Straits Times 2001j). Consumer price
consciousness has led to a large number of sales (after Christmas, Chinese New Year, The Great
Sale in August, and numerous store-wide sales) and promotional activities (ranging from lucky
draws, patronage rewards to tie-in promotions). Whether this perception of extreme price-
consciousness is right is somewhat questionable. A recent study comparing Singaporean with
U.S. shoppers showed that Singaporeans were less sensitive to price-related costs and more
sensitive to certain non-price-related costs (e.g., time, effort, and risk) than were U.S. shoppers
(Funkhouser, Parker, and Chatterjee 1994). Although the samples are not representative of the
two countries (a convenience sample of 315 undergraduates, MBA students, and their family
members and friends), it clearly contradicts the general perception of Singapore’s practitioners.
There are grounds to suggest that in the future, the focus should be shifted from sales and
promotions to reducing nonmonetary costs.
During the recession, price promotions are expected to be even more popular with
consumers. Consumers are expected to be more price conscious and will, therefore, be slightly
more sensitive to price-related costs. More promotional strategies may be needed to attract
customers. This may include promoting products by advertising over the Internet and through
mass e-mailings of promotions to customers.
Distribution
The Singapore retail market experienced a contraction due to the economic crisis in 1998, with
total sales falling by almost 11 percent from 1997 to 1998. Since then, there has been an
encouraging recovery. Retail sales growth in 1999 and 2000 was at 5.7 percent and 4.6 percent,
respectively (Euromonitor International 2001). Despite steady recovery for two consecutive
years, retailer profits will be under pressure because of the highly competitive nature of the
market, and the general caution that consumers take in the face of economic downturn in 2001.
The Singapore retail scene is experiencing a concentration of market share, with larger
supermarket and retail store chains growing at the expense of smaller independent shops. For
example, the number of provision shops fell from 2,438 in 1987 to only 1,528 in 1997 (The
Straits Times 1999), and the number of independent grocers has experienced a steady decrease
since 1997 (Table 15.19). Many of these are small independent shops with low efficiency and
productivity, and they offer a rather similar range of goods. On the other hand, the number of
supermarkets, most of which belong to chains, increased sharply from sixty stores in 1987 to 181
in 2000 (Euromonitor International 2001; The Straits Times 1999; see also Table 15.19). Apart
from supermarkets, there are also an increasing number of department stores and convenience
stores (e.g., 7-Eleven, Shell Select, and Esso Tigermarts). The number of electronic and
computer outlets have also increased by an impressive 20 percent (Table 15.19), indicating a
response to the surging demand from the techno-savvy population.
Shop rents in the downtown Orchard area and suburban areas have gone down
considerably in the late 1990s since the economic crisis. This is an opportunity for foreign
competitors, such as U.S. supermarket chains, to come into the Singapore retail scene. The
emergence of these competitors would hasten the demise of Asian retailers. For example, Tokyu
has already closed down its Funan Mall store. The shakeout during the 1998 economic crisis also
resulted in an almost 30 percent reduction in the number of department store outlets. More
foreigner-owned chain stores are expected to be set up during this period, as product sourcing is
much more focused on value for money.
It is expected that the more competitive environment as well as the availability of more
retail space will eventually lead to shops with a sharper merchandising mix, including an
increasing number of specialty shops. Loh of the Retail Promotion Board anticipates that more
specialized shops will show good growth potential in the future (Yap 1995). Even in the hard
times, niche marketing has proven to be successful. Borders Books and Music, which opened in
November 1997, managed to survive the retail slump in Singapore and even made profits. This
shows that retailers can still be profitable if they hit the right combination of novelty,
affordability, and smart marketing (Dolven 1998).
There are three trends that exist or are emerging in the retail market in Singapore. First
and foremost is the increasing popularity of one-stop suburban shopping malls, which are located
near mass regional transit (MRT) stations and close to densely populated residential estates. With
a relatively low car ownership and increasing demand for convenient locations decentralization
of shopping made possible by these malls will continue to increase in significance. Regional
centers have been developed in the east, north, northwest, and west of the island; and each has a
self-contained mini-downtown, which provides similar quality facilities to those available in the
central area. Year 2002 will see the establishment of yet another shopping mall, Compass Point
Mall, in Sengkang in the northeastern part of the island, with 27,900 square meters of floor space
(Retail Trade International 2001).
Another retail phenomenon in Singapore is the entry into the market of two
hypermarkets. French retailer Carrefour opened business in Suntec City in late 1997. Giant, a
Malaysian-based retailer owned by Dairy Farm International (DFI), established its first overseas
outlet in Singapore in June 2000. While both hypermarkets offer consumers a spacious
environment in which to select a whole range of products from grocery items to home
appliances, the two differ in both pricing and targeting strategies. Carrefour conveys a more
European taste; Giant’s goods are normally priced at about 10 percent to 30 percent below
competitors’ prices. The store caters to the masses and has a strong Asian bazaar-style appeal.
DFI has strong logistics and IT support due to its operation in Malaysia. Moreover, it possesses
rich local knowledge from its experience in operating the local Cold Storage supermarkets and 7-
Eleven convenience store chains. It is expected to have a strong edge over competitors and
foresees the potential of another two to three Giant hypermarkets in the city.
Finally, with the general increase in education level and extreme receptiveness toward
technology, many welcome the idea of electronic or even mobile shopping. These new forms of
shopping initially experienced slower growth than expected, despite the continuous increase in
computer ownership and Internet access, as seen in the previous sections, and a high awareness
of the available range of online transactions and activities (Table 15.20). This may be attributable
to various reasons, such as the leisurely elements of shopping in Singapore (Shamdasani and
Ong 1995), convenience, competitive prices, comprehensively stocked retail shops in most
housing estates, and the small size of the island combined with an excellent public transport
system. Additionally, security concerns relating to the release of credit card and other personal
information online negatively affect the willingness to shop via the Internet, especially for
consumers who have never used this channel.
Despite these initial inhibitions, consumers seem to be warming up to the idea of e-
commerce or m-commerce, partly due to retailers’ efforts in familiarizing consumers with the
necessary know-how and support. Some e-retailers are now perceived as being more
sophisticated, offering better services than those in shopping malls (The Straits Times 2001k).
The number of companies that use e-commerce increased by 30 percent from 1999 to 2000 (The
Straits Times 20011), and many also promote their products or offer discounts through SMS
(short message service). Online shopping increased from $200 million in 1999 to $1.17 billion in
2000 (The Straits Times 2001k). Many consumers access the Internet to retrieve information on
products and purchasing to facilitate decision making. Also, the use of SMS has become a part of
many mobile phone owners’ daily routine. The penetration rates of Teleview (videotex) and the
Internet are expected to grow rapidly, and more and more retailers, such as Cold Storage and
NTUC FairPrice supermarkets and Courts furniture store, are offering their products via these
electronic shopping facilities.
In summary, Singapore’s retail environment will become increasingly competitive, with
rapidly increasing retail space combined with only moderate sales volume growth, as well as
continuing concentration of the marketplace, with chains and supermarkets gaining share. The
increased competition and increasing demand for higher-end and more specialized goods will
induce smaller stores and chains to move toward sharper and deeper merchandise mixes. Low
levels of car ownership, demand for convenience, and retail saturation in the central business
district will move shopping from downtown areas to the densely populated housing estates. In-
house shopping via the phone, the Internet, and the like is expected to grow slowly from a low
level.
Advertising
Advertising has become an important variable in the marketing mix. Spending on advertising has
increased from $407.5 million in 1988 to $1,157.7 million in 1995 and to $1,460 million in 2001
(Table 15.21) (Euromonitor International 2002). This trend is set to continue.
No major shifts in the usage of media could be observed over the period from 1996 to
2001 (Table 15.21). The print category, which contains predominantly the newspaper, is the
biggest recipient of advertising dollars. The largest increase in share of total advertising
expenditure was achieved by television, which increased its share slightly from 32.1 percent in
1996 to 36.1 percent in 2001. This may be attributed to the introduction of cable TV, with an
increase in the number of channels available. The big increase in the number of households
subscribing to cable TV from 33,000 (about 5 percent of all households) in 1995 to 153,800
(21.3 percent) in 1999 indicates the popularity of this service among Singaporeans. The other
media that increased their shares were outdoor, which included posters and bus-back/taxi-top,
and cinema.
Two emerging trends in advertising are observed. First, there has been an advertising
boom for Singapore dot-com companies, despite the demise of many dot-com businesses
worldwide. In the first quarter in 2000 alone, for example, an ACNielsen advertising expenditure
report showed an astronomical leap of 6,500 percent in ad spending from around $1,800 to
almost $12 million for Singapore dot-com and Internet-related companies (ACNielsen 2000).
The interesting point to note here is that the traditional media, namely, newspaper, TV, and
radio, have been heavily used to advertise this new medium of conducting business. This trend is
expected to continue, with more dot-com companies penetrating the market.
The second trend relates to the full deregulation of the telecommunication market in
April 2000. The telecomm sector has since been the top advertising product category. In the first
nine months of 2000, the advertising expenditure in this sector increased by 132 percent to reach
$116 million (ACNielsen 2000). Singtel, Starhub, and MobileOne lead the pack in adspend.
According to Lennart Bengtsson, managing director, ACNielsen Singapore/Malaysia, the three
companies had provided the growth impetus in Singapore’s advertising industry. This sector will
continue to provide major spenders in advertising due to the fully deregulated, increasingly
competitive telecomm market.

The main languages for advertising in TV and newspapers are English and Mandarin
(Table 15.22). The role of English seems to be similar to that of Mandarin. The content of
advertisements will have to continue to incorporate cultural sensitivities. They include a general
sense of modesty with relation to using sexual stimuli; a wide variety of superstitious beliefs,
such as lucky and unlucky numbers; and the prohibition of consumption of alcoholic beverages
by Muslims. Although some of these sensitivities seem to be reducing (such as sexual
explicitness in advertisements), others such as showing alcoholic beverages when targeting
Muslims, or showing dogs (which are considered impure) to Malays, are still taboos.
Market Research
It is generally expected that scanner data will be more efficiently used in market research. With
available technology and the introduction of the Goods and Services Tax in 1994 (which
produced the need to keep track of tax due on various categories), scanning has become
widespread among all retailers. The majority of products sold in Singapore now have a bar code
affixed and are source-marked by manufacturers. The Singapore Article Numbering Council has
started trials using electronic data interchange (EDI) to retrieve bar code data at the point-of-sale
to predict demand, track stock levels, and order electronically. The rapid penetration of bar code
scanning and the introduction of advanced market research products and services will further
improve the availability and also reduce the price of market information, thereby increasing the
application of more formal and reliable market research tools.

This trend may have a positive impact on the utilization of market research data and tools
in Singapore. Currently, Singaporean firms tend to use informal market research, such as
feedback from the sales force and customers for identifying market opportunities, and hardly any
quantitative techniques (Shamdasani, Wirtz, and Chong 1995). Also, when monitoring the
performance of their products, many firms, probably the smaller and medium-sized ones, still
rely mainly on informal checks with their distributors rather than supplementing their current
data with more formalized and quantitative research.
Marketing Mix: Summary
Trends observed in the marketing mix are a direct reflection of and are shaped by the macro
environment. Product and service trends emphasize the upmarket shift identified in previous
sections on consumer behavior, the increasing sophistication and education of consumers, as well
as rising income levels. Pricing strategies will go hand-in-hand with the higher quality of goods
and services offered, and nonmonetary price reduction strategies may become increasingly
attractive. The retail environment will become more competitive, with growth in retail space far
outpacing sales growth, continuing concentration of retail outlets in supermarket and other retail
store chains, and discount stores gaining share from a low level. The importance of advertising in
the marketing mix is set to increase further and will continue to be highly localized to
Singapore’s cultural environment. Market research is expected to become more formalized and
sophisticated in its application.
Conclusions and Implications for Marketing Management

Trends in Singapore’s marketing environment were described and analyzed in previous parts of
this chapter. This final section brings together the main themes in Singapore’s marketing
environment, which include trends in the economic, demographic, and cultural environments,
and trends in consumer behavior and the marketing mix. The findings are integrated, and key
implications for marketing management derived are discussed in the following two subsections.
The first deals with implications for the marketing mix; the second derives more general
marketing strategies.
Future Developments of Singapore’s Marketing Environment
With high literacy rates, relatively young populations, open economies, and vast untapped
hinterlands, Asia was expected to recover from the economic crisis. Singapore survived the
1997–98 crisis, because it had good fundamentals, such as high political stability, good
governance, and strong monetary policies. Singapore also has the ability to harness its debt-free
national reserves to stimulate the economy by increasing infrastructure spending.
We have identified four key sets of conclusions on long-term future developments in
Singapore’s marketing environment that will have important bearing on marketing management.
First, when the region eventually recovers, Singapore’s economic environment is
expected to reach the level of a developed country and is expected to remain favorable, with
continuing high increases in personal income, virtually full employment, and low inflation rates.
Second, Singapore’s demographic environment will continue to follow the same trends of
older industrialized countries. The population will grow slowly, due to low fertility rates, late
marriages, and delayed childbirth. These factors and an increasing life expectancy contribute to
rapid aging of the population.
Third, Singapore will remain a multicultural society, with Chinese, Malays, and Indians
as the dominant ethnic groups, each with its own strong cultural background, including
languages, religions, and customs. This cultural diversity is particularly distinct because of
Singapore’s tiny geographic size and small population of only some four million. Nevertheless,
Singaporeans are becoming increasingly multilingual, with more people speaking their own
dialects plus English and Mandarin. Significant changes will also occur in other aspects of
Singapore’s cultural environment. In particular, education levels will continue to improve
rapidly, with more Singaporeans receiving university and postsecondary education; the female
workforce participation rate, which has increased to one of the highest in the world, will remain
at high levels; and household sizes will continue to become smaller.
Fourth, Singapore is expected to continue developing into an increasingly affluent
society. This will have substantial impact on trends in consumer behavior. Real growth rates of
private consumption will be high, with the declining share of basic goods, such as food and
clothing, on total consumption. Consumers will become more and more brand and status
conscious, more discerning, and more health conscious.
A summary of the detailed economic, demographic, cultural, and consumer trends is
provided in Table 15.23. For ease of reference, these trends are presented in the same order as
they were discussed in the main body of the paper. Anticipated impacts of each of these trends
on marketing management are outlined in the same table. These implications for marketing are
summarized and discussed in the next section. Here, the discussion is organized broadly into two
groups: first, implications for the marketing mix, and second, marketing strategies.
Implications for Marketing Mix
Trends in the marketing mix are a direct reflection of and are shaped by changes in the macro
environment presented in the previous sections. In general, the implications presented here fit
into the overall picture of a steady growth environment with a focus on quality and upgrading
rather than just more of the same. Implications for the marketing mix are presented below.
Product
Although Singapore’s private consumption continues to grow, this does not apply equally to all
segments of the market. Table 15.23 shows a number of trends in the environment that will have
significant impact on the growth prospects for various product types. For example, high-quality,
high-end, and more sophisticated product markets are anticipated to grow faster than the overall
market, while low-quality, low-end, and basic product markets are expected to decline. Drivers
of this trend include increasing disposable incomes combined with improving education levels,
and consumers becoming more discerning. Shifts in consumer values and demand emphasizing
technology and health and environmental concern will lead to high growth for technology-
oriented, health improving, and environmentally friendly products, whereas low growth or
declining markets can be expected for goods being perceived as low-tech, unhealthy, and
environmentally unfriendly. Table 15.24 provides an overview of product types that are expected
to show higher growth than the overall market. The information in the table is based on trends
highlighted in Table 15.23.
Service Quality
With the consumer market becoming more competitive, marketers will eventually have to realize
the importance of value-added services. It has been criticized that there is no tradition in
Singapore for value-added services. Many businesses lack a positive attitude toward serving their
customers well, and simply see providing good service as contributing to extra costs. Despite
Singapore’s global competitiveness, its customer orientation was ranked sixteenth (Yeo 2001b).
However, the government has been working toward building awareness among businesses of the
value of good services. Public bodies, such as the Singapore Retailers Association, the Retail
Promotion Centre, and the Productivity and Standards Board, are contributing efforts to such
events as courtesy campaigns, Retail 21, and Service Quality 21, all aimed at encouraging
companies to do friendly business and also devising standards for gauging service quality.
Pricing and Price Promotions
It is not clear whether Singaporeans are actually more price sensitive than, for example, U.S.
consumers. However, preliminary evidence suggests that if there was a difference, Singaporeans
seemed to be more sensitive toward nonmonetary costs than U.S. consumers. Combining this
with anticipated trends toward higher-quality products, one may expect that pricing may not
increase in importance. Strategies focusing on lower nonmonetary costs may be increasingly
attractive to follow rather than continuing to focus predominantly on monetary pricing, as is
currently being done.
Distribution
Convenience, specialist, and discount shopping are expected to show strong growth. Convenient
shopping locations are important in Singapore, as more than two-thirds of all households do not
own cars and are unlikely to be able to acquire cars in the foreseeable future due to government
regulation. Large shopping complexes are currently being built in the suburbs, to benefit from
the trend toward decentralized retail locations. Specialist retailers will develop, as demand for
more high-end sophisticated products increases. Hypermarkets may also grow in sales and
outlets, as consumers seem to welcome the idea of a one-stop grocery shopping experience.
Many more marketing mix implications could be discussed for each of the trends shown
in Table 15.23. These general trends, of course, trickle down from market segmentation and
product development to packaging, pricing, distribution, advertising, and promotions. For
example, an increase in demand for healthier products and a more educated consumer base will
require food marketers to display much more information on ingredients on their packaging and
to focus advertising and promotions to help position these products as health improving. Or,
smaller household sizes may require smaller package sizes, and so on. The implications are
numerous and often product-category specific, but it is hoped that this chapter provides
interested readers with necessary background information to ease the first steps of developing
and assessing their own specific marketing mix for the Singapore marketplace.
Implications for Overall Marketing Strategies
A number of implications for overall marketing strategies can be derived from the environmental
analysis. Three main implications that refer to growth with caution strategies in higher-end
market segments, high volume/market leader strategies in a tiny marketplace with country-
specific costs, and to customer retention strategies in a market with declining numbers of new
customers entering the market are presented below.
First, marketers in Singapore can expect to operate in cautiously growing markets for
some time to come, and this is mainly fueled by disposable income of cautious consumers in the
face of economic uncertainties. This suggests the pursuit of slow and steady growth strategies in
general, but with a focus on growth in quality rather than quantity. It will be reasonable growth
in better-quality products, and products that are consistent with a higher standard of living, rather
than a growth in numbers of units sold. For example, this will not mean more television sets, but
more better-quality home entertainment sets.
Second, the Singapore market in absolute terms is small, with fewer than four million
consumers. This is further aggravated by the existence of very distinct cultural differences,
which often requires segmentation along cultures (e.g., food preferences of Malays and Chinese
can vary substantially). There are a number of country-specific costs that cannot be shared with
neighboring country markets. These costs can include advertising costs in Singapore’s media,
sales force expenditure, and logistics costs. Trends toward branded goods, and, often related,
increased advertising, channel management, and market research expenditures, will further
increase country-specific costs. However, worldwide future markets are expected to become
more competitive, with continuing pressure on both prices and costs (Lazer et al. 1990, 102,
140), and Singapore will be no exception. This has to be seen in the light of the current
competitive environment, which is, by far, not as harsh as in more developed economies, such as
the U.S. and European countries, and margins for all channel members can still be considered
quite generous. Nevertheless, it seems clear that for long-term profitability in an increasingly
competitive marketplace, economies of scale on those country-specific costs will become more
important. This is particularly so, as the small volume achievable in Singapore’s market may
mean that many firms are actually quite high on the sales volume/unit cost curve with strong
incentives to increase volume. Therefore, higher volume and market leader strategies seem to be
even more attractive than in larger economies, and for many products. “Follower” or “me too”
strategies with low market share may become unsustainable, as country-specific unit costs can
render those players uncompetitive. It seems that, similarly to Singapore’s retail sector, further
concentration of market shares can be expected. Exceptions to this rule may be high-end,
sophisticated image products in which margins remain high and snob-appeal favors low
volumes.
Third, similar to many older industrialized countries, the pool of new consumers entering
the market is getting smaller due to the aging population, markets serving basic needs are
becoming increasingly saturated, and as is generally known, it is expensive to switch consumers
from competitors. Although not yet to the same extent as in more saturated older industrialized
economies, marketing strategies achieving customer retention and loyalty will also become
increasingly important in Singapore for maintaining market share and profitability. An increased
pursuit of membership and relationship marketing strategies combined with competitive
strategies aimed at switching customers from competition seem appropriate. Most major
department stores, for example, issue loyalty cards at their openings and offer their frequent
customers discounts on goods and advance information on upcoming sales and promotions.
Other retailers also issue store cards, either in partnership with major credit card companies like
Visa, or with a group of other retailers. Despite being initiated more for retailers’ profits, store
cards also serve the function of persuading customers to repatronize businesses in which these
store cards can be used.
In conclusion, prospects remain excellent, in general, and for goods and service
categories catering to higher needs, in particular. However, the environment will become more
competitive, although it is still a far way off from the intensely competitive markets in the United
States and Europe. Nevertheless, it will no longer be sufficient to merely appoint importers for
Singapore. Integrated marketing strategies, with increasing investment into brand equity,
increasingly sophisticated channel management, supported by cost-effective logistics and market
research, will increasingly be needed to ensure success.
Summary of Implications for Marketing Management
Trends observed in implications for the marketing mix are a direct reflection and are shaped by
the macro environment presented in this paper. Product and service trends emphasize the
upmarket shift identified in previous paragraphs on consumer behavior, increasing sophistication
and education, as well as rising income levels. Pricing strategies should go hand-in-hand with the
higher quality of goods and services offered, and nonmonetary price reduction strategies may
become increasingly attractive to follow. The distribution environment will become more
competitive, with retail space increases far outpacing sales increases, continuing concentration of
retail outlets in supermarket and other retail store chains, and discount stores gaining share from
a low level. The importance of advertising in the marketing mix is set to increase further.
Three main implications for overall marketing strategies were proposed. First, marketers
in Singapore can expect to operate in slowly, steadily growing markets for some time to come,
which is mainly fueled by increased disposable income rather than population growth. This
suggests the pursuit of growth strategies, in general, however, with a focus on growth in quality
and upgrading rather than in terms of quantity. Second, the marketplace will remain small, and
there are substantial country-specific costs that cannot be shared with neighboring countries.
Therefore, it seems clear that for long-term profitability, economies of scale will become more
important, suggesting the pursuit of higher volume and market leader strategies. Finally,
customer retention strategies combined with competitive strategies aimed at switching customers
will become more important in a market with declining numbers of new customers entering the
market. The last two implications suggest an increasingly competitive marketing environment in
the years to come.
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Ministry of Information, Communications, and the Arts. 1995. Singapore 1995. Singapore:
Ministry of Information and the Arts.

———. 1998. Singapore 1998. Singapore: Ministry of Information and the Arts.
———. 2002. Singapore 2002. Singapore: Ministry of Communication, Information and the
Arts.
Ministry of Trade and Industry. 2001. Singapore: Ministry of Trade and Industry.
Retail Trade International. 2001. July.
Rojthamrong, Sopthon. 2000. Saving Culture. Bangkok: Information and Public Relations
Group, Bank of Thailand.
Shamdasani, Prem, and Ong Geok Yeow. 1995. “An Exploratory Study of In-Home Shoppers in
a Concentrated Retail Market.” Journal of Retailing and Consumer Services 2(1).
Shamdasani, Prem, Jochen Wirtz, and Michael Chong. 1995. “An Exploratory Study on New
Product Development Activities of Singapore Firms.” In Proceedings of the Academy of
International Business Conference on Asia-Pacific Business, pp. 327–30. Perth: Murdoch
University.
Sim, Susan. 1995. “Corruption Index Based on 7 Polls of Businessmen, Newsmen,” The Straits
Times August 26:2.
Singapore Census of Population. 1990a. “Statistical Release 2: Household and Housing.”
Singapore: Census of Population Office, Department of Statistics.
———. 1990b. “Statistical Release 3: Literacy, Languages Spoken and Education.” Singapore:
Census of Population Office, Department of Statistics.
———. 1990c. 1 “Statistical Release 6: Religion, Childcare and Leisure Activities.” Singapore:
Census of Population Office, Department of Statistics.
———. 2000a. “Advance Data Release No. 1.” Singapore: Census of Population Office,
———. 2000b. “Advance Data Release No. 2.” Singapore: Census of Population Office,
———. 2000c. “Advance Data Release No. 3.” Singapore: Census of Population Office,
———. 2001a. “Advance Data Release, No. 6: Key Indicators on Households and Population.”
Singapore: Census of Population Office, Department of Statistics.
———. 2001b. “Advance Data Release No. 7.” Singapore: Census of Population Office,
Singapore Statistical Highlights. 2002. Singapore: Department of Statistics.
Singapore Tourism Board. 2001a. Fact Sheet of 2001. Singapore: Singapore Tourism Board.
———. 2001b. Twin Accolades for the Singapore Tourism Board (April 11). Singapore:
Singapore Tourism Board.
———. 2002. Fact Sheet of 2002. Singapore: Singapore Tourism Board.
Singapore Tourist Promotion Board. 1994. Survey of Overseas Visitors in Singapore. Singapore:
Market Planning Department, Singapore Tourist Promotion Board.
The Straits Times. 1995a. “Christianity Here Has Strong ‘Social, Political Influence,’” April
26:25.
———. 1995b. “Singapore Has Highest Rate of Labor Participation Among NIEs, other
Economies,” September 13:38.
———. 1998. “Get Freebies for Bringing Visitors Here,” October 28:33.
———. 1999. “Small Grocery Shops Hang On,” May 25:35.
———. 2001a. “Poll Finds S’pore Govt Best in Asia,” September 23:6.
———. 2001b. “S’pore Stands out in Survey as a Wired Capital,” September 26:H14.
———. 2001c. “Easing Retailers into e-Business,” September 29:H1.
———. 2001d. “Asean, China Plan FTA,” November 7:1.
———. 2001e. “Economy Could Grow by 4.4% Next Year: NUS,” October 24:S12.
———. 2001f. “Big Investors Skipping Asean,” September 19:4.
———. 2001g. “S’pore Gets International Praise for Biomed Push,” September 29:H15.
———. 2001h. “December COE Results.” December: L20.
———. 2001i. “One in Five S’pore Homes Recycles Waste,” November 12:H8.
———. 2001j. “Wanted: Value-for-Money Brands,” May 1:H10.
———. 2001k. “E-asy Way to Shop.” July 21:H2.
———. 20011. “Net Transactions up Fivefold,” May 10.
The Straits Times Interactive. 2001a. “IT Students Get $2m Boost to Work Abroad,” September
22.
———. 2001b. “S’pore R&D Spending Tops $3b,” September 19.
———. 2001c. “Partners for Products Needed,” September 20.
———. 2001d. “Centre Here to Turn Living Cells into Drug ‘Factories,’” September 22.
———. 2001e. “Biomed Hotbed on the Cards,” September 20.
———. 2001f. “Tissue ‘Bank’ to Boost Research Here,” September 20.
———. 2001g. “Back to Nature: Organic Food,” May 21.
The Sunday Times. 2001. “75.3% Resounding Win for PAP,” November 4:1.
Tourism Focus. 2002. Singapore: Singapore Tourism Board.
Trends in Singapore Resident Population 1990–2000. 2000. Singapore.
Union Bank of Switzerland. 1991. Prices and Earnings Around the Globe 1991.
Wirtz, Jochen, and Thomas Menkhoff. 1998. “From Entrepôt to NIC—Economic and Structural
Policy Aspects of Singapore’s Development,” Sasin Journal of Management 4:1–12.
World Bank. 1993. The East Asian Miracle: Economic Growth and Public Policy. Oxford:
Oxford University Press for the World Bank.
The World Competitiveness Yearbook. 2001. International Institute for Management
Development.
Yap, Evelyn. 1995. “HDB Shopping to Change by Year 2000,” The Sunday Times February
12:2.
Yearbook of Statistics. 1993. Singapore: Department of Statistics.
———. 1994. Singapore: Department of Statistics.
Yeo, George. 2001a. Minister for Trade and Industry, Speech at Media Briefing on the Release
of Census 2000 Population Publication, February 20.
———. 2001b. Minister for Trade and Industry, Speech at the launch of the Robinsons Institute
For Service Excellence (RISE), October 1.

Table 15.2
Recent Economic Developments
1st 2nd 3rd 4th 1st 2nd 3rd

Quarter Quarter Quarter Quarter Quarter Quarter Quarter
2001 (2001) (2001) (2001) (2001) (2002) (2002) (2002)
GDP growth (real) in % 5 –0.5 –5.4 –6.6 –1.6 3.7 3.7
Consumer price index change
(%) 1.7 1.7 0.8 –0.2 –0.9 –0.4 –0.4
Sources: Economic Survey of Singapore First, Second and Third Quarter Reports (Singapore:
Ministry of Trade and Industry, 2002).
Table 15.3
Income Distribution
Change in Percentate
Points from 1990 to
Gross Monthly Income ($) 1990 (%) 2000 (%) 2000
Below 1,000 16.0 12.6 –3.4
1,000–1,999 27.1 14.0 –13.1
2,000–2,999 20.1 14.7 –5.4
3,000–3,999 13.0 13.1 +0.1
4,000–4,999 8.2 10.3 +2.1

5,000–5,999 5.1 8.2 +3.1
6,000–6,999 3.3 6.2 +2.9
7,000–7,999 2.1 4.6 +2.5
8,000–8,999 1.4 3.5 +2.1

9,000–9,999 1.0 2.5 +1.5
10,000 and over 2.8 10.3 +7.5
Total workforce 100.0 100.0 —
Sources: Singapore Census of Population, “Advance Data Release No. 7” (Singapore: Census of
Population Office, Department of Statistics, 2000).
Table 15.4
Wage Costs (US$)
West
Singapore Penang Malaysia Shanghai Thailand
Direct labor costs per hour excluding
bonus $7.00 $2.00 $1.40 $1.60 $1.20
Source: The Straits Times, November 5 (1998): 3.

Table 15.5
Labor Force Participation
Change in
% Points
Labor Force from 1990
Participation Rate (%) 1990 1995 1996 1997 1998 1999 2000 2001 to 2001
Total 66 64.4 64.6 64.2 63.9 64.7 68.6 65.4 –0.6
Male 79 78.4 78.7 78.3 77.5 77.8 81.1 77.8 –1.2
Female 53 50.1 51.5 51.1 51.3 52.7 55.5 54.3 +1.3
Youth Labor Participation Rate
15–19 years 30.9 19.9 20.1 16.8 14.7 17.2 19.1 17.6 –13.3
20–24 years 82.5 76.9 76.1 73.5 71.5 74 77.4 73.7 –8.8
25–29 years 86.4 86.6 88.1 88.2 87.9 87.1 91.1 88.8 +2.4
Sources: Singapore Statistical Highlights (Singapore: Department of Statistics, 2002); Yearbook

of Statistics (Singapore: Department of Statistics, 2002); Annual Manpower Statistics
(Singapore: Ministry of Manpower, 2001).
Table 15.6
Age Profile of the Resident Population
Change in
Percentage
Age 2002 Points from
Distribution (End of 1990 to
in % 1990 1995 1996 1997 1998 1999 2000 June) 2002
0–14 23 22.8 22.6 22.4 22.1 21.8 21.5 21.2 –1.8
15–59 68 67.5 67.6 67.8 67.9 67.8 67.8 67.7 –0.3
60+ 9 9.7 9.8 9.8 10 10.4 10.7 11.1 2.1
Total 100 100 100 100 100 100 100 100
Source: Yearbook of Statistics (Singapore: Department of Statistics, 2002): Advanced data

released.
Table 15.7
Median Age and Life Expectancy
Change in
Years
Life Expectancy in from 1990
Years 1990 1995 1996 1997 1998 1999 2000 2001 to 2001
Male 73.1 74.2 74.5 74.9 75.3 75.6 76.1 76.4 +3.3
Female 77.6 78.6 78.9 79.1 79.4 79.7 80.1 80.4 +2.8
Total 75.3 76.3 76.6 76.9 77.3 77.6 78.1 78.4 +3.1
Median age 29.8 31.9 32.4 32.8 33.2 33.7 34.2 34.6 +4.8
Sources: Yearbook of Statistics (Singapore: Department of Statistics, 2002).

Table 15.8
Ethnicity in Singapore
In % of Resident 2002 (End

Population 1990 1996 1997 1998 1999 2000 of June)
Chinese 77.8 77.3 77.2 77 77.7 76.8 76.5
Malays 14 14 14.1 13.9 14.1 13.9 13.8
Indians 7.1 7.4 7.4 7.7 7.1 7.9 8.1
Others 1.1 1.3 1.3 1.4 1.1 1.4 1.6
Total 100 100 100 100 100 100 100
Sources: Yearbook of Statistics (Singapore: Department of Statistics, 1994, 1998, 2002).

Table 15.9
Literacy of Ethnic Groups in Various Languages in Singapore
In % of Resident Population Change in Percentage

Aged 15 Years and Older Points from 1990 to
1990 2000 2000
Chinese 100.0 100.0 —
English only 19.8 16.4 –3.4
Chinese only 40.6 32.0 –8.6
English and Chinese 37.8 48.3 +10.5
Others 1.9 3.3 +1.4
Malays 100.0 100.0 —

Malay only 27.3 19.8 –7.5
English and Malay 68.1 76.7 +8.6
Others 1.4 1.5 +0.1
Indians 100.0 100.0 —

Tamil only 14.5 8.9 –5.6
English and Tamil 31.5 37.5 +6.0
English and Malay 19.1 17.4 –1.7
Others 12.8 14.6 +1.8
Sources: Singapore Census of Population, “Advance Data Release No. 3” (Singapore: Census of
Table 15.10
Household Language Spoken
Change in
Percentage
In % of Resident Households Points from 1980
Aged Five Years and Older 1980 1990 2000 to 2000
English 11.6 18.8 23.0 +11.4
Mandarin 10.2 23.7 35.0 +24.8
Chinese dialects 59.5 39.6 23.8 –35.7
Malay 13.9 14.3 14.1 +0.2
Tamil 3.1 2.9 3.2 +0.1
Others 1.7 0.8 0.9 –0.8
Total 100.0 100.0 100.0 —
Sources: Singapore Census of Population, “Statistical Release 3: Literacy, Languages Spoken

and Education” (Singapore: Census of Population Office, Department of Statistics, 1990);
Singapore Census of Population, “Advance Data Release No. 3” (Singapore: Census of
Table 15.11
Religion
Change in
Percentage
In % of Resident Population Aged Points from 1990
10 Years and Over 1980 1990 2000 to 2000
Buddhism 27.0 31.2 42.5 +15.5
Chinese traditional beliefs/Taoism 30.0 22.4 8.5 –21.5
Islam 15.7 15.3 14.9 –0.8
Christianity 10.1 12.7 14.6 +4.5
Hinduism 3.6 3.7 4.0 +0.4
Other religions 0.5 0.6 0.6 +0.1
No religion/free thought 13.0 14.1 14.8 +1.8
Source: Singapore Census of Population, “Statistical Release 6: Religion, Childcare and leisure
Activities” (Singapore: Census of Population Office, Department of Statistics, 1990); Singapore
Census of Population, “Advance Data Release, No. 2” (Singapore: Census of Population Office,
Department of Statistics, 2000).
Table 15.12
Education
Change in
Percentage Points
Highest Qualification Attained 1990 2000 from 1990 to 2000
Primary and below 58.3 42.7 –15.6
Secondary 26.5 24.6 –1.9
Upper secondary 7.3 14.9 +7.6
Polytechnic 3.5 6.2 +2.7
University 4.5 11.7 7.2
Total 100.0 100.0 —
Literacy Rate (% of population 15 years and over) 89.1 92.5 +3.4
Sources: Singapore Census of Population, “Advance Data Release, No. 1” (Singapore: Census
of Population Office, Department of Statistics, 2000); Yearbook of Statistics, Singapore:
Department of Statistics 2001.
Table 15.13
Private Household by Size
Change in Percentage
Household Size (persons) 1980 (%) 1990 (%) 2000 (%) Points from 1980 to 2000
1 5.7 5.2 8.2 +2.5
2–3 23.8 28.5 36.3 +12.5
4–5 36.7 45.6 43.5 +6.8
6 and more 33.8 20.7 12.0 –21.8
Total 100 100 100 —
Average household size 4.9 4.2 3.7 –1.2
Source: Singapore Census of Population, “Statistical Release 2: Household and Housing”

(Singapore: Census of Population Office, Department of Statistics, 1990); Singapore Census of
Population, “Advance Data Release, No. 6: Key Indicators on Households and Population”
(Singapore: Census of Population Office, Department of Statistics, 2001).
Table 15.14
Consumer Durables
% of Households 1995 1996 1997 1998 1999 2000 2001

Refrigerator 98.3 98.5 98.7 98.8 98.8 99 99.1
Washing machine 85.6 88.1 90.7 91.7 92 92.3 93.9
Air conditioner 44.2 48.7 53.2 54.2 55.2 55.4 55.7
TV 97.9 98.3 98.4 98.3 98.4 98.5 98.5
VCR 74 77.6 78.2 78.7 79.3 79.8 80.4
Piano/organ 11.1 10.7 10.3 10.3 10 9.8 9.6
PC 30.6 35.7 40.9 45.9 50.9 56 57.1
Car 33.5 34.7 35.9 36.9 38 39.1 40.2
Microwave oven 30.3 34.5 38.7 42.7 46.8 50.8 52.2
Source: Euromonitor International, “Global Market Information Database, National Statistics”

(London: Euromonitor International, 2002).
Table 15.15
Consumer Expenditure in Singapore
Private Consumption in % of Total

(at Current Market Prices) 1990 1995 1996 1997 1998 1999 2000
Food and beverages 20.1 16.0 15.6 15.1 15.2 14.7 13.8
Clothing and footwear 8.5 6.0 5.7 5.3 4.6 4.8 4.9
Rent and utilities 14.2 14.0 14.0 14.1 15.6 15.1 14.5
Furniture and household equipment 9.4 8.6 8.6 8.5 8.5 8.4 8.1
Medical services 5.0 5.1 5.3 5.4 5.8 5.9 5.6
Transport and communications 18.2 21.8 19.9 18.8 18.1 19.9 21.9
Recreation and education 19.4 17.5 16.5 15.9 15.6 15.6 16.0
Other goods and services 24.2 22.9 22.4 22.8 20.5 20.3 20.2
Add: Residents’ expenditure abroad 8.6 10.8 12.4 11.0 11.6 10.9 10.9
Less: Nonresidents’ expenditure
locally 27.6 22.7 20.2 17.0 15.4 15.6 15.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Consumer expenditure (in
’000,000) 30,847 48,840 52,741 56,456 54,198 57,429 63,565
Sources: Yearbook of Statistics (Singapore: Department of Statistics, 2001).

Note: Consumer expenditure includes residents’ expenditure abroad and excludes nonresidents’
expenditure locally (e.g., tourists’ spending).
Table 15.16
Values Orientation of the Seven Clusters
% of
Clusters Respondents Values Orientation
Traditional family 16.1 Least materialistic; low pecuniary adherence; spender; high
oriented moral standards; very pro-family and religious
New age family 13.9 Women should have own career; lifelong learning is
oriented important; environmentally conscious, concerned about
moral decay; pro-family
Entrepreneurs 13.1 Like stimulation and changes; value education; work smart
rather than work hard; sense of accomplishment is
important; nontraditional; more liberal about premarital sex
and divorce
Aspirers 18.4 Early adopters of new ideas/products; would rather fight
than compromise; materialistic; enjoy attention; highly pro-
family; observe traditions
Materialists 14.3 Not environmentally conscious; materialistic; financial
security very important; not society conscious; less trusting
of others
Pragmatists 11.1 Least adventurous; low entrepreneurial spirit; dislike
attention and do not worry about social status; low respect
for authority; pro-Westernization
Independents 13.1 Pro-feminism; low value for education; not too concerned
about financial security; liberal moral standards; not too
pro-family
Source: Kwon Jung, Jochen Wirtz, Ah Keng Kau, and Soo Jiuan Tan, “The Seven Faces of
Singaporeans: A Typology of Consumers Based on a Large-Scale Lifestyle Study,” Asia Pacific
Journal of Management 16, no. 2 (1998): 17.
Table 15.17
Tourism
2002 (End
of
1995 1996 1997 1998 1999 2000 2001 September)
Visitor arrival in
’000 7,136.5 7,292.4 7,197.9 6,242.2 6,958.2 7,691.3 7,522.2 5,629.00
Growth in % to year
before: 3.4 2.2 –1.3 –13.3 11.5 10.5 –2.2 —
Share of arrivals by continent (%)
Asia 73.3 72.9 72.3 67.7 68.9 69.2 69.4 —
Europe 13.5 13.7 13.7 15.7 15.1 14.7 14.8 —
United States 6 6.3 6.4 6.8 6.4 6.3 5.8 —
Oceania 6 5.9 6.4 8.3 8.1 8 8.7 —
Others 1.2 1.1 1.2 1.4 1.5 1.9 1.3 —
Total 100 100 100 100 100 100 100 —
Share of arrivals by key countries (%)
ASEAN 30.7 30.9 32.3 30.1 31.9 31.6 33.5 32.2
Japan 16.5 16.1 15.2 13.5 12.4 12.1 10.1 9.8
United Kingdom 4 4.3 4.6 5.7 5.8 5.8 6.1 6.1
Taiwan 7.9 7.2 6.9 5.8 4.6 3.8 3 3
Australia 4.9 4.8 5.3 6.8 6.7 6.6 7.3 7.4
United States 4.8 5.1 5.2 5.5 5.1 5 4.6 4.4
Other countries 31.2 31.5 30.4 32.6 33.5 35.1 35.4 37.1
Total 100 100 100 100 100 100 100 100
Purpose of visit
Holiday only 55.5 53.2 47.8 45.3 49 48.1 46.4 46.7
Business only 14.2 14.6 16.1 16.5 16.3 16.4 15.6 15.2
Business and
holiday 3 2.9 2.9 2.8 2.6 2.5 2.5 2.4
In transit 10 9.4 9.3 9.8 10.1 10.1 10.6 8
Others 17.3 19.9 24 25.6 22 22.9 24.9 18.9
Total 100 100 100 100 100 100 100 100
Sources: Singapore Tourist Promotion Board, “Survey of Overseas Visitors in Singapore”

(Singapore: Market Planning Department, Singapore Tourist Promotion Board, 1994); Yearbook
of Statistics (Singapore: Department of Statisitics, 1993, 2001); Annual Report on Tourism
Statistics (Singapore: Competitive Analysis Department, Planning Division, Singapore Tourism
Board, 2001); Tourism Focus (Singapore: Singapore Tourism Board, 2002).
Note: The data exclude arrivals of Malaysians by land.
Table 15.18
Subscription to and Penetration of Telecomm Services
Change in
Percentage
Points
Number of People 2002 (1997 to
(’000) from/% of the (end of October
Total Population 1997 1998 1999 2000 2001 October) 2002)
Mobile Phone
Subscribers 743 1,020.0 1,471.3 2,442.1 2,858.8 3,131.9 +321.5
Mobile Phone
Penetration Rate 24 32.3 45.7 74.8 69.2 75.8 +51.8
Pager Subscribers 1,300.00 1,309.40 1,199.70 839.1 481.6 330.7 –94.2
Pager Penetration Rate 42.3 41.4 37.3 25.7 11.7 8.0 –34.3
Fixed Line Subscribers — 1,751.50 1,850.70 1,935.90 1,948.50 1,937.3 +10.3
Fixed Line Penetration
Rate — 55.4 57.5 59.3 47.2 46.9 –8.5
Internet Dial-up
Subscribers 267.4 393.6 582.6 1,940.30 1,917.90 1,994 +645.7
Internet Dial-up
Penetration Rate 7 10 18.1 59.5 46.4 48.3 +41.3
Source: Infocomm Development Authority (IDA), Statistics on Telecom Services (Singapore:

IDA, 2002).
Table 15.19
Trends in Type of Retail Outlets
Change in
Percentage
Points
(1996 to
1996 1997 1998 1999 2000 2000)
Hypermarkets 0 1 1 1 2 —
Major supermarkets 154 163 175 182 181 +17.5
Convenience stores 194 209 224 244 292 +5.1
Independent grocers 2,687 2,759 2,657 2,567 2,477 –7.8
Electronics/computer outlets 677 761 753 779 811 +19.8
Booksellers 1,002 981 916 920 920 –8.2
Department store outlets 53 49 39 39 38 –28.3
Source: Euromonitor International, “Global Market Information Database, National Statistics”

Table 15.20
Awareness and Usage of Internet Services
Internet Services Awareness (%)* Use (%)*

E-mail/chat 98.2 91.6
Information retrieval 89.2 74.6
Online shopping 81.1 16.2
News/Web cast 80.1 39.8
Government transaction 78.9 31.9
Download online music 78.6 37.4
Job search 77.5 24.3
Online games 77.0 29.2
Watch movies/VCD 68.0 15.5
Library services 58.6 15.8
Source: Infocomm Development Authority (IDA), Survey on Infocomm Usage in Households

(Singapore: IDA, 2001).
*
Percent of the 1,500 households interviewed by IDA in 2000.
Table 15.21
Share of Advertising Expenditure by Media
Change in
Percentage
Points
Share of Advertising Revenue from 1996
(%) 1996 1997 1998 1999 2000 2001 to 2001
Printa 58.6 55.7 53.4 51.7 54.7 51.1 –7.5
Television 32.1 34.4 36.6 38.4 33.5 36.1 +4
Outdoorb 3.0 3.5 4.1 4.6 5.2 6.0 +3
Radio 5.4 5.2 4.5 3.9 5.1 5.3 –0.1
Cinema 0.9 1.2 1.3 1.3 1.5 1.5 +0.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 —
In $’000,000 1,135.0 1,273.0 1,185.0 1,219.0 1,503.0 1,460.0 —

Change in % from year before — +12.2 –6.9 +2.9 +23.3 –2.9 —
Sources: Euromonitor International, “Global Market Information Database, National Statistics”

a
Print includes predominantly newspaper, and also periodicals.
b
Outdoor includes posters and bus-back/taxi-top advertising.
Table 15.22
Newspaper Circulation
In % of Total by Language 1995 1996 1997 1998 1999 2000 2001

English 47.8 47.7 48 47.9 47.5 46.1 62
Chinese 45.9 46.2 45.8 45.7 46 47.7 33.4
Malay 5.7 5.4 5.4 5.5 5.6 5.4 4
Tamil 0.6 0.7 0.8 0.9 0.9 0.8 0.6
Total 100 100 100 100 100 100 100
Number of copies sold daily

in ’000 1,063 1,072 1,093 1,126 1,148 1,197 1,586
Change in % — 0.1 2 3.1 2 4.3 +32.5
Sources: Yearbook of Statistics (Singapore: Department of Statistics, 2002); Euromonitor

International, “Global Market Information Database, National Statistics” (London: Euromonitor
International, 2002).
Table 15.24
Trends in Consumption
Expected High-Growth Products Expected Low-Growth Products

Cater to needs of older consumers Cater to needs of young consumers
High quality Low quality
Branded Not branded
Sophisticated Basic, coarse
Convenient purchase, consumption, and disposal Inconvenient
Help to save time Do not help to save time
Maintain or improve health Do not help to maintain or improve health
Environmentally friendly Environmentally unfriendly
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for 2005 and the Years Beyond

Jochen Wirtz and Cindy M.Y. Chung

overall consumption, an increasing share of higher-level goods, such as recreational, education,

ranging between 24C and 32C, moderated by sea breezes.

Malaysia by mutual agreement and became a fully independent republic (Ministry of

Economic Outlook, as an “advanced economy” (Ministry of Information, Communications, and

traveled since its independence.

Political and Historical Background Information

in the economic, demographic, and cultural environments.

Some Explanations for Singapore’s Rapid Economic Development

(Wirtz and Menkhoff 1998).

success of high-performing Asian economies is largely due to private investment financed by

into housing, health, and education).

developing countries, corruption, which is vigorously policed, is not a concern in Singapore.

of Göttingen (Sim 1995). Berlin-based Transparency International, a nongovernmental agency

McRae suggests that the level of efficiency of an economy as a whole has to be

A discussion of the efficiency and effectiveness of the Singapore government would be

Competitiveness Report 2000; The World Competitiveness Yearbook 2001).

orientation. Furthermore, in contrast to many other Asian developing countries, Singapore as a

support from the United States.

Finally, cultural values have to be considered when explaining Singapore’s advance. It is

drivers of economic development (World Bank 1993; McRae 1995, 70).

Singapore’s Position in the Region

Trade Area are also under conception.

On the backdrop of an increasingly import-oriented Asia-Pacific in the global economy, a

with the underlying objective of generating economic spin-offs in Singapore (Ministry of

promoting Singapore as a regional gateway for mainly Western companies, by encouraging

democracy is expected to continue providing a favorable political environment for further

economic downturn worldwide.

<<TABLE 15.1 NEAR HERE>>

The Asian Economic Crisis and Recession in 2001

for that year (IMF 1998, 172).

<<TABLE 15.2 NEAR HERE>>

in 1999 (The Straits Times 2001f).

<<TABLE 15.3 NEAR HERE>>

and executives in Singapore earn internationally competitive remuneration packages (Union

economic aggravation by the crisis.

<<TABLE 15.4 NEAR HERE>>

proportion of teenagers who remained in the educational system.

<<TABLE 15.5 NEAR HERE>>

however, the unemployment rate is expected to rise.

sponsored by the Chinese Development Assistance Council, in which retrenched and

completing a National Technical Certificate Grade 3 course (Koh 1998).

high private saving rates.

Trends in Trade Policy

control traffic congestion (Asia Business Network 1997).

competitive international market prices.

Long-Term Trends in the Economic Environment

Competitiveness Report (2000), even with the economic downturn.

generated by Singapore’s labor, land, and capital resources.

To achieve the objective of adding value to Singapore’s various resources, investments

Vista (The Straits Times Interactive 2001d, e, f).

of government-linked companies to develop flagship projects, which put in place the