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Trimester 3 2009/2010
PBL2 CHILDREN AS CONSUMERS
GROUP 6 KUAN YEN NEE TUNG WAI CHEE YONG AI LEE CHEE JINQ SHYAN (GM03698) (GM03578) (GM03633) (GM03528)
: PROF. SAMSINAR BT MD SIDIN
Page 1.0 Learning issues 2.0 Problem statement 3.0 Analysis 3.1 Analysis on Problem Statement 1 3.2 Analysis on Problem Statement 2 3.3 Analysis on Problem Statement 3 4.0 Recommendation 5.0 Appendix 3 3 3 3 5 7 7 8
1.0 LEARNING ISSUES 1. What is a child? A child (plural: children) is a human stages between birth and puberty. In Malaysia, the legal definition of "child" (Age of Majority Act 1971) generally refers to a minor or a person younger than the age of majority (below the age of 18 years). Biologically, a child is anyone in the developmental stage of childhood, between infancy and adulthood. 2. What is children’s consumer socialization process? The children’s consumer socialization process defined as the process by which children acquire the skills, knowledge, attitudes, and experiences necessary to function as consumers. This process is shaped by a number of sociocultural sources including parents, peers, school, shopping experiences and the mass media. Inevitably, the process is also influenced by prevailing state of the local, national and global economy. 3. What is marketing stimuli? Marketing stimuli plays an important role in intergroup communication. It is a key variable both in influencing quality and moderating effects of intergroup contact on prejudicial attitudes. 2.0 PROBLEM STATEMENT Marketers concerned with children as future adult consumers need to look at: 1. How is the current status of children as consumers in Malaysia? 2. What are the several factors that determine children influence in consumption (not only in product relevant to them)? 3. What are the future challenges posed by these soon-to-be adult consumers? 3.0 ANALYSIS 3.1 Analysis On Problem Statement 1 Factors Geographic Demographic: 1. Population Projection by Age in 2010 (based on 2000 Population census) 2. Gender 3. Race and Religion Details Urban, Suburban and Small Towns 0 – 4 years old (3.29 million) 5 – 9 years old (3.05 million) 10 – 14 years old (2.82 million) 15 – 19 years old (2.65 million)
about 41% of Malaysia total population
Male and Female All daily pocket money (RM1 – 5) 4. Possible Source annual duit raya or angpow during festive seasons of Income occasionally earn as bonus from adults (run errands, reward for good school results, etc) 4 – 6 years old (pre-school) 5. Education 7 – 12 years old (primary school) 13 – 19 years old (secondary school) high obesity rate among pre-school (2006 study) 25% primary school children were either overweight or obese underweight (malnutrition) stood at 10.3% 6. Nutrition Status in peninsular Malaysia, (refer Figure 1 in overweight among 6 – 12 years old (11.0%) Appendices obesity among 6 – 12 years old ( 6.0%) for statistic by race) in whole of Malaysia, overweight among 7 – 9 years old (6.8%) overweight among 10 – 13 years old (5.9%) Table 1: Segmentation of Malaysian Children (Geographic and Demographic) 3
Table 1 tabulate the current empirical (geographic and demographic) status of Malaysian children. Subsequent Table 2 and 3 look at child Psychographic and Behavior respectively.
Factors Psychographic: 1. Social Class 2. Culture 2. Family Life Cycle
Details Upper, Middle and Lower Social Class Collectivist (Keshavarz S. and Baharudin R., 2009) Orphan, Single Parent, Nucleus and Extended Family (mainly with Generation X parent) visualizers Boys and Girls both watch 5 – 6 hours of television (alone and with others) during school day/weekends (even more than housewives). Both gender love watching cartoons, but girls also preferred dramas and movies while boys yield to thrillers. As a child gets older, preference for cartoon decrease. Instead, they watch dramas, movies, comedy and variety shows (Nik Rahimah Nik Yacob et al, 1996). digital natives – electronic gadgets savvy (internet, computers, mobile phones, etc)
4. Personality Traits 5. Idol 6. Socialization Agent
homework reader – fiction and non-fiction books, newspaper, magazines, comics extra classes – ballet, abacus, mental counting, swimming, etc Gamers – play video game Little Greenies – support green movement Social Networkers – communicates online Team Players – play sport television characters (cartoon) family members, teachers, neighbours
Table 2: Segmentation of Malaysian Children (Psychographic)
Factors Behavior: 1. User Status 2. Usage Rate
Details First-Time, Regular, Ex-Users Regular, Moderate, Infrequent among global kids (slowly creeping into Malaysia): Toys and Candy tops spending lists but video games triumphant all avenue among Boys.
Source: www.marketingcharts.com 3. Spending Avenue
4. Loyalty Status
other among local kids: stationeries for Girls and sport magazines for Boys1 Innovators (attract to and like to try new things) Table 3: Segmentation of Malaysian Children (Behavior)
3.2 Analysis On Problem Statement 2 A lot of factors that determine children influence in consumption (not only in product relevant to them) can be gain from the consumer socialization process (refer Figure 2: A conceptual model of consumer socialization (Moschis and Churchill, 1978) on the left)
a child social structural variables (socioeconomic status, gender, birth order) age or life cycle position A children’s consumer socialization began at a very early age. Long before children are able to purchase products they are already expressing their preferences to parents (Reynolds and Wells, 1997). Involvement with the consumption process has been observed to occur as early as age 5 (McNeal, 1969). While growing up, they increasingly become involved in decisions related to the purchase of products or services. They may observe, request (just ask, plead, bargain, others – refer Figure 3 in Appendices) and select goods with permission while accompanying their parents shopping as well as make independent foray to shops themselves (McNeal, 1992). the presence of socialization agents (agent-learner relationships) Children can learn from the socialization agents due to their frequency of contact, primacy and sometimes control over rewards and punishments: children tend to pester parents to buy things use or wore by television characters as they want to be just like their idols (Nik Rahimah Nik Yacob et al, 1996) especially stationeries bearing the cartoon.
Source: focus group with GSM-UPM MBA mothers
parents (especially mothers) are powerful agents because they normally took their children shopping from 2 – 3 years of age onwards and often explain to them what they are doing. By the time the child reached 9 years, most have acquired fairly sophisticated consumption orientations though it may differ by gender and social class. modeling/observation learning A child imitates the agent behaviour (e.g. buying the brands that parents buy). Research has indicated that unknowingly, parents frequently instruct their children about the household brand preferences without letting potential young consumers observe their own choices (Bahn, 1987). reinforcement Whenever a child’s request is fulfil – with intention to please the child, to reward them or simply because the products is inexpensive and deem suitable – repetition of behaviour (request) is encourage. On the contrary, with reference to Figure 3, mothers’ refusals might lead to argument or anger from the child. However, if the mothers imply negative reinforcement (e.g. just keep quiet or walk away), the child’s unreasonable request for consumption will be future discourage. social interaction A child social interaction with his/her surrounding greatly influences consumption. Take Figure 4 and Figure 5 in Appendices for example, kids that had taste and experience good food at his/her friends home will eagerly tell her family members about it. Gradually, it changes the buying and consumption process of a household. Similarly, one household2 reveal that the kids initiated the boycott on companies that support Israel based on a list circulating on the Internet. Apart from the consumer socialization process, several other factors that determine children influence in consumption are: encouragement and opportunity provided by parents and society to self consume Children are free to use their pocket money before and after school hours plus light meals during recess. Sometimes, they run errands for nucleus or extended family members. Nucleus family household with double income enrich and empower kids with money. They are mostly also free from scrutiny on eating habits – resulting in malnutrition or overweight. The status of the only child at home make it not possible to have “hand-me-down” resulting in kids demanding for “all the best things in the world”. Children from broken homes or under single parent had to assume the role of substitute “father”, “mother” or protective/providing elder siblings which control the household purchase at a tender age. abundance of advertising Children are vulnerable to advertisement whenever they are on screen (television or computer). They are also exposed when they co-shopping with family members or out for outing (cinema, park etc) or simple leisure activities (radio, read newspaper, magazines and comics).
(Source: Nielsen Advertising Information Services)
Source: focus group with GSM-UPM MBA mothers
3.3 Analysis On Problem Statement 3 Children serves as a double market – the present market for all the products which are meant for them at this age (toys, eatables, books, clothes etc) and secondly the future market for most goods and services. To gain an upper hand on the latter, marketers must thoroughly know the children present status and predict on possible future challenges posed by these soon-to-be adult consumers: children of today belongs to Generation Y and Z which are innovators and low brand loyalty Little Greenies do not only support green activities, they also live healthy – a threat to the fast food (and unhealthy) industry digital natives are technology savvy which also served as viral marketing – blogging, social media with higher spending power gain from higher income (upon higher education), Gen X and Y naturally will demand high quality yet cheap goods minimize ads exposure (selective attention) in the future: someone might online 24/7 but they do not necessarily log on intended websites viewers can zip and zap off ads on television with tools like TiVo patrons of hypermarkets protect their privacy by refusing retails monitor their consumption database too many ads to notice (higher just notice difference, absolute threshold) cluttering around – resulting in “drown” or wear out effect the unpopular or possible extinction of traditional print media (although now it is “not yet dead” in Malaysia) making it harder to promote high involvement product that works better with central route to persuasion
4.0 RECOMMENDATIONS Some recommendations for marketers targeting the children of today are as such: Products – as innovative as possible because Generation X and Y are Innovators Place ensure no interruption in inventory in all outlets of purchase (including virtual market) place ads or organize public relation in youth oriented place/activities (e.g. concert, cinema, shopping complexes, cyber café, mamak chain etc) Advertising and Promotion creative ads that ensure carryover effect to make "hostage" of the children consumer channel of advertising have to be on spot channel (e.g. Astro) rather than network channel (e.g. ntv7) as kids of today prefer pay/cable TV over free channel for high involvement product, use public ads that direct consumers to particular website/hotline repetitive integrated communication tools (IMC) to product brand equity and publicity Price – reasonable yet can charge premium for those who is not that price sensitive 7
Figure 1: Nutrition status of children by race (2002 survey)
Figure 3: Model of children’s requests and parental response (Isler, Popper and Ward, 1987)
Figure 4: The family food model taking the perspective of children’s direct participation and influence based on the family model originally developed by (Jensen, 1990)
Figure 5: Hypothesized interaction between food availability, children’s lifestyle choices, food intake behavior, food consumption, exercise and weight status.