Research suggests that children are exerting more influence over family buying decisions. What are the implications of this for retailers, brands and marketers?

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Research suggests that children are exerting more influence over family buying decisions. What are the implications of this for retailers, brands and marketers?

Children are an important part of the family buying process. But what roles do they play?

Marketing theory suggests five main roles in a family buying process:

-Initiator
-Influencer
-Decider
-Buyer
- User

Which roles do children play in addition to the obvious one – “the user”

Children certainly influence family buying decisions from cars to holidays. They are also the buyers of the future. Provide children with Penguin bars and McVitie's may be able to hold on to the adult due to brand awareness and brand loyalty formed at such an early age.

But how should businesses market to children? Are there conflicts with being seen to specifically target the child audience – can it alienate parents?

Products have to appeal to the conflicting agendas of child and parent, while fighting off increasing competition. A marketer of children’s foods was recently quoted as follows:

"Ten years ago children wouldn't have given a damn about cheese. It used to be just Dairylea, but now children's dairy products encompass everything from cheese to yogurts, and fromage frais. Our brands also face more intense competition than ever and it's not just from other chocolate biscuits - it's from products such as Dairylea Dunkers and Fruit Winders. These things didn't exist before."

Marketers also have to recognise that children are moving into new markets. Children as young as seven buy DVD's, and no teenage lifestyle is complete without a mobile phone. This has a knock-on effect. For example, the money children spend on mobile phone cards reduces the money they spend on snacks.

Marketers also need to be sensitive to the peculiarities of children-related markets. It may be tempting to use a daring marketing campaign to make a product stand out. But a poorly thought-through campaign could result in the product and/or brand being attacked by ethical campaigners, outraged mothers, educationalists, health and safety organisations and others.

A good example of how things can go wrong is Sunny Delight. Sunny Delight enjoyed boom sales after its initial launch. However, the drink's popularity crashed when the media realised that it was sold from chiller cabinets purely as a marketing ploy to make it seem fresh and, therefore, healthy. The actual product formulation was far from healthy.

Retailers face a challenge to display products in a way that attracts children. Promotional displays have to be able to handle child usage (or abuse) and capture a child’s imagination and attention.
Disney has a reputation as being particularly good at interactive promotional marketing. Many children also prefer Woolworth's to supermarkets because of features such as pick 'n' mix sweets. The Early Learning Centre succeeds by creating a playground which allows children to play with toys rather than leaving them wrapped in plastic.

Understanding kids:
AN MCI Asia Pacific study

Across the globe, kids are emerging as a homogenous consumer cluster of their own and India is no exception.

In every country, peer group factor and mass media has huge impact on children's consumption, brand choice and on deciding what's hot and what's not.

Asian parents are coming to terms with this new millennium kid and striving to strike a balance between being understanding, modern parents and overindulging their children and spoiling them.

Leveraging this delicate and often conflicting parent-child-peer group dynamic to gain maximum brand advantage is a key issue for marketers across categories.

Catching them young

Just how important are kids as consumers?

In a time of Harry Potter, kids today have more money, more choice, more knowledge and know how than ever before.

With spending power in excess of US$150 billion a year, and doubling that number by factoring in their influence on their parents consumption patterns, it is unsurprising that marketers and advertisers are trying to understand and harness 'pester power' and how this can be leveraged to sell everything and anything from bubble gum to cars.

Different strokes

However does this paradigm hold true for India vs. the rest of the Asia Pacific region? With vastly divergent socio-economic and cultural mores, would Indian kids be the same brand conscious, precocious, net savvy consumers as their counterparts in Singapore or China? Do parents, peer-pressure, media shape their attitudes, behaviour and concept of cool to the same degree?

To understand the motivations, drivers and influences that effect kids and their consumption specific to the region, MCI (Media Consumer Insights, a specialist arm of Group M ) Asia Pacific carried out a study across APAC countries.

The survey was done using consumer e-Sights: respondents(parents) were contacted by email and asked to fill in a structured questionnaire online. The responses across countries were analysed to generate insights for each country and the region as a whole.

All my friends have it…

The key point emerging from across the region was that kids buying behaviour is highly influenced by their immediate peer group: 72% of the respondents felt their child/children decided their purchases basis what their friends said.

Parents had considerably less influence.

Among mass media, television emerged as the key medium with 66% of respondents saying that TV advertising influenced their kids.

Interestingly, in India, the TV actually scored higher than peer group (77% vs. 68%). Also, surprisingly, fewer Indian parents felt that their views affected their child's purchase behaviour than in the region as a whole (parents influence scoring a 35% in India vs. 41% for APac)

And though they may be Net generation, the Internet scores only 15 % and 9 % in terms of influencing kid's consumer behaviour in AP and India respectively.

Taking your kids along when shopping is asking for trouble as 44% of are bent on buying what they see at the shop.

Pocket Money

Indian parents were less inclined to give their children pocket-money: only 36% gave a fixed allowance to their kids vs. 54% of respondents in other countries.

The amount of pocket money is usually pegged by comparing with their friends.

Do children 'plan purchases' and save their money? The rest of the regions kids seem better money managers in this regard vs. Indian children-26 % of the Indian respondents said their child spends their weekly allowance vs. 14% in other countries where kids often prefer to save up for something they want.

In terms of what the child buys with his 'discretionary dollar or bhat or rupee' the patterns seem to be the same: toys and sweets are most popular across.

Sweets and confectionaries are more important in India whereas some of their South East Asian counterparts are more skewed to clothes, cassettes and CDs.

The big difference is in computer games which are half as popular among kids in India.



As home computer penetration increases, this gap is likely to diminish.

Conditional Independence

The differing attitude of parents is a key factor on what products children buy and do:

Parents are keenly conscious of over indulging their children and 'spoiling' them. There is a strong degree of unanimity and uniformity across countries in allowing kids some degree of freedom without giving in totally when they hanker for toys or computer games, clothes, outings or snacks and junk food.

Irrespective of country, they usually choose what to buy and how much to spend on most occasions but the child does get the occasional treat or is allowed to make his/her own choice.

Indian parents seem to be slightly stricter than other countries.

When it comes to clothes/shoes, Indian mums and dads give in less to their kids: only 26% of them said that they buy whatever their kids ask for as opposed to other countries where 34% of parents left it totally to their kids.

In matters of food, Indian parents definitely exercise more control-16% of them brook absolutely no argument about what their child should eat vs. 7% for other countries.

Implications for marketers

Differences do exist for India vs. the rest of the region but they are not as stark as they were in the pre-satellite and pre-Net, pre-global era!

Kids form affluent homes in India are very much the same as their toddler and tween friends across Asia. Just as the concept of the Global Teen, became a reality, where trends, fashions, fads, icons, and symbols of 'coolness' became more and more similar from Beijing to Bangalore…the Global Tween seems to be emerging.

The MTV generation Gen X being succeeded by the Cartoon Network Gen Y and Z.

Key drivers for children today are not so much their siblings or family but their friends and peers, much like teens. Assimilation into the 'group' is vital be it in terms of their toys, their clothes or the foods they eat.

This is as true in India as anywhere else…the imperative for marketers hence being to position their products as something it would be so 'uncool' to be without.

Recent success of consumer promos involving 'collectibles' seems to validate this…its crushing not to own a set of freebie stickers/toys that your friends have-and the more the merrier. The 'viral' effect plays an extremely important role in any children targeted product or communication, far more than for other 'adult' consumer segments: for a proposition that clicks with them, their spending becomes contagious.

With the high degree of peer pressure, identifying kids icons also becomes imperative in marketing: building promotions and communications around the latest fad will work well among this target audience. However the pulse of the audience has to be regularly checked to gauge whether Pokemon or Spiderman is the flavour of the month. Children offer the best bets to pull off a market driving promo.

The power of television in India is significantly higher in India…possibly a paucity of other entertainment options or excursions and outings could be the reason.

TV by far is the medium of choice: the inherent cost-efficiency of TV coupled with the huge quantum of children specific programming now available makes it the best bet for communicating to kids.

Gatekeepers

Parents still hold the purse strings. When it comes to ultimately paying, the child's, 'discretionary' funds will not cover items beyond sweets and confectionaries. especially with the Indian child's lower propensity to save for big ticket items.

Any proposition to the child should not alienate the parent. Indian parents are especially concerned with their children understanding the 'value of money' and are more apprehensive of future behavorial problems if they spoil their kids then immediate effects.

Everywhere, parents seem to be striving more to reason with their kids than 'just say no.' Teaching concepts like performance-reward, prioritizing purchases and managing money: rather than 'ordering/commanding' seem to be the favoured ways of dealing with a nagging child. The consensus seems to that kids today are smarter and hence must be dealt with more maturity and reason than before.

Advertisers and marketers must walk a fine line - between what's hip and what's beneficial - to satisfy both these consumer constituencies.

For many categories this may translate to a two pronged approach: differential communication through differential media addressing both parents and children would be called for- the audience investment ratio to be dictated by the relative magnitude of influence of each audience (usually higher outlay products skewed to parents).

It is clear however, that the dual audience issue has to be tackled. Success or failure of any 'kids' brand will depend on how well or badly this is executed.

3

How Marketers Target Kids

Kids represent an important demographic to marketers because they have their own purchasing power, they influence their parents' buying decisions and they're the adult consumers of the future.

Industry spending on advertising to children has exploded in the past decade, increasing from a mere $100 million in 1990 to more than $2 billion in 2000.

Parents today are willing to buy more for their kids because trends such as smaller family size, dual incomes and postponing children until later in life mean that families have more disposable income. As well, guilt can play a role in spending decisions as time-stressed parents substitute material goods for time spent with their kids.

Here are some of the strategies marketers employ to target children and teens:

Pester Power

Today's kids have more autonomy and decision-making power within the family than in previous generations, so it follows that kids are vocal about what they want their parents to buy. "Pester power" refers to children's ability to nag their parents into purchasing items they may not otherwise buy. Marketing to children is all about creating pester power, because advertisers know what a powerful force it can be.

According to the 2001 marketing industry book Kidfluence, pestering or nagging can be divided into two categories—"persistence" and "importance." Persistence nagging (a plea, that is repeated over and over again) is not as effective as the more sophisticated "importance nagging." This latter method appeals to parents' desire to provide the best for their children, and plays on any guilt they may have about not having enough time for their kids.

The marriage of psychology and marketing

To effectively market to children, advertisers need to know what makes kids tick. With the help of well-paid researchers and psychologists, advertisers now have access to in-depth knowledge about children's developmental, emotional and social needs at different ages. Using research that analyzes children's behaviour, fantasy lives, art work, even their dreams, companies are able to craft sophisticated marketing strategies to reach young people.

The issue of using child psychologists to help marketers target kids gained widespread public attention in 1999, when a group of U.S. mental health professionals issued a public letter to the American Psychological Association (APA) urging them to declare the practice unethical. The APA is currently studying the issue.

Building brand name loyalty

Canadian author Naomi Klein tracks the birth of "brand" marketing in her 2000 book No Logo. According to Klein, the mid-1980s saw the birth of a new kind of corporation—Nike, Calvin Klein, Tommy Hilfiger, to name a few—which changed their primary corporate focus from producing products to creating an image for their brand name. By moving their manufacturing operations to countries with cheap labour, they freed up money to create their powerful marketing messages. It has been a tremendously profitable formula, and has led to the creation of some of the most wealthy and powerful multi-national corporations the world has seen.

Marketers plant the seeds of brand recognition in very young children, in the hopes that the seeds will grow into lifetime relationships. According to the Center for a New American Dream, babies as young as six months of age can form mental images of corporate logos and mascots. Brand loyalties can be established as early as age two, and by the time children head off to school most can recognize hundreds of brand logos.

While fast food, toy and clothing companies have been cultivating brand recognition in children for years, adult-oriented businesses such as banks and automakers are now getting in on the act.

Magazines such as Time, Sports Illustrated and People have all launched kid and teen editions—which boast ads for adult related products such as minivans, hotels and airlines.

Buzz or street marketing

The challenge for marketers is to cut through the intense advertising clutter in young people's lives. Many companies are using "buzz marketing"—a new twist on the tried-and-true "word of mouth" method. The idea is to find the coolest kids in a community and have them use or wear your product in order to create a buzz around it. Buzz, or "street marketing," as it's also called, can help a company to successfully connect with the savvy and elusive teen market by using trendsetters to give their products "cool" status.

Buzz marketing is particularly well-suited to the Internet, where young "Net promoters" use newsgroups, chat rooms and blogs to spread the word about music, clothes and other products among unsuspecting users.

Commercialization in education

School used to be a place where children were protected from the advertising and consumer messages that permeated their world—but not any more. Budget shortfalls are forcing school boards to allow corporations access to students in exchange for badly needed cash, computers and educational materials.

Corporations realize the power of the school environment for promoting their name and products. A school setting delivers a captive youth audience and implies the endorsement of teachers and the educational system. Marketers are eagerly exploiting this medium in a number of ways, including:

  • Sponsored educational materials: for example, a Kraft "healthy eating" kit to teach about Canada's Food Guide (using Kraft products); or forestry company Canfor's primary lesson plans that make its business focus seem like environmental management rather than logging.
  • Supplying schools with technology in exchange for high company visibility.
  • Exclusive deals with fast food or soft drink companies to offer their products in a school or district.
  • Advertising posted in classrooms, school buses, on computers, etc. in exchange for funds.
  • Contests and incentive programs: for example, the Pizza Hut reading incentives program in which children receive certificates for free pizza if they achieve a monthly reading goal; or Campbell's Labels for Education project, in which Campbell provides educational resources for schools in exchange for soup labels collected by students.
  • Sponsoring school events: The Canadian company ShowBiz brings moveable video dance parties into schools to showcase various sponsors' products.
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The Internet

The Internet is an extremely desirable medium for marketers wanting to target children:

  • It's part of youth culture. This generation of young people is growing up with the Internet as a daily and routine part of their lives.
  • Parents generally do not understand the extent to which kids are being marketed to online.
  • Kids are often online alone, without parental supervision.
  • Unlike broadcasting media, which have codes regarding advertising to kids, the Internet is unregulated.
  • Sophisticated technologies make it easy to collect information from young people for marketing research, and to target individual children with personalized advertising.
  • ...

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