The Technology Elite of Latin America
Part 5: Propensity to Acquire Technology

Montevideo, Uruguay
Consumer Electronics Store
Montevideo, Uruguay
(photo credit: Pablo Verdin)

For the marketer, the importance of the technology elite is two-fold.  First of all, as a group, they account for 10% of the population but 28% of the technology assets used in the technology score (see Part 1 of this series).  This is a sizeable market in itself.  Second, they are likely to be the innovators that are essential to the diffusion of new technological products.  A quick gauge about the prospects of a new product would be to see how well the technology elite receives it.  If their responses are positive, then one is guaranteed to have at least a sizeable portion of the total market ready to commit themselves as well as influencing the imitators.  If their responses are negative, then one is shut out of a sizeable portion of the total market as well as receiving bad word-of-mouth opinions.

It is difficult to ask someone about his/her intention to purchase something.  Very often, one finds that the statements about the likelihood to purchase, even stated with respect to precise time bounds, do not match up with the actual sales figures.  The problem is more acute with new and evolving technologies, as witnessed by some spectacular successes and failures.  One alternative is to use the purchase behavior during a recent time period as an indicator of near-term trends.

In the following table, we show the purchase incidences over the past year of the technology assets that appear in the definition of the technology scores.  In this case, we observe that not all the incidences are greater than 100.  The two exceptions --- namely, refrigerators and radios --- are consumer durables based upon long-established technologies and have relatively long product life cycles.  By contrast, the item with the highest index is the personal computer, which is a new technology with also a relatively short product life cycle (that is, a technology expert probably needs to replace his/her machine once every two years, at least).

Technology asset % Technology Elite
bought last 12 months
% Total Population
bought last 12 months
Cellular Phone 13.1% 3.1% 423
Personal Computer 16.3% 2.5% 652
Clothes washer 6.9% 4.4% 157
Clothes dryer 1.5% 0.6% 250
Dishwasher 0.6% 0.1% 600
Refrigerator 5.3% 5.7%   93
Stereo system 9.8% 7.0% 140
CD Player 13.1% 7.7% 170
Radio 4.7% 5.7%   82
Video cassette recorder 13.0% 5.5% 236
Video game player 9.8% 5.3% 185
Fax machine 4.1% 0.8% 513
Calculator 5.2% 4.1% 127
Electronic organizer 2.9% 1.1% 264

(source: Los Medios y Mercados de Latinoamérica 1998)

In the next table, we show the past year purchase incidences for some products that do not appear in the definition of the technology score.  The lone item with an index less than 100 --- namely, the sewing machine --- is a diminishing technology today, as fewer and fewer people have the time, the need, the skill or the patience for it.

Technology asset

% Technology Elite
bought last 12 months
% Total Population
bought last 12 months
Electric blender 4.9% 3.1% 377
Electric can opener 1.5% 0.3% 500
Electric food processor 2.9% 1.0% 290
Electric iron 9.3% 7.4% 127
Electric mixer 7.7% 6.4% 120
Electric toaster 1.8% 1.1% 164
Electric range/oven 4.3% 1.5% 287
Gas range/oven 5.9% 5.0% 118
Microwave oven 7.7% 2.9% 266
Sewing machine 0.3% 0.9%   33
Vacuum cleaner 5.1% 1.2% 425
Air conditioner 4.6% 0.9% 511
Electric fan 9.0% 7.0% 129
Water heater 1.3% 0.7% 186

(source: Los Medios y Mercados de Latinoamérica 1998)

In conclusion, we have drawn a general picture of the technology elite as having  higher propensities for purchasing technological products.


(posted by Roland Soong on 1/14/00)

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