Children form a significant consumer group in their own right and, in addition, influence the purchasing choices of their families and friends. They represent a huge market offering significant financial returns to companies. Children are also the adults of the future so building a strong bond with a child could lead to significant customer lifetime value to a company. However there are inherent risks in marketing to children bound up in the fact that many feel that it is intrinsically unethical to market to children. As a result of this, companies that market to children and get it wrong face a moralistic and significantly stronger backlash. Applying a PESTLE analysis ...view middle of the document...
Environmental – There is a growing environmental awareness within society as a whole and there are expectations that companies will strive to be greener, to reduce carbon footprints and to be involved with fair trade. Children in particular have an interest and a stake in protecting the environment.
Examples of how the external factors can affect companies as both opportunities and threats are discussed below:
There is no doubt that children make up an attractive and valuable market segment which is going to attract the attention of companies worldwide. There is huge economic potential from this consumer group:
• Children under 14 spend about $40 billion annually. (3)
• Compare this to the $6.1 billion 4-12 year olds spent in 1989. (4)
• Teens spent about $159 billion in 2005. (5)
• Children under 12 influence $500 billion in purchases per year. (6)
• In the UK £105 billion is spent on children annually. (7a)
Despite the global economic downturn Disney announced a record quarter in 2012 - $1.8 billion in net income (CNN money) with a 31% increase in earnings. “Disney alone has 26,000 Disney Princess items on the market today,today; part of a $4 billion-a-year franchise that is the fastest-growing brand the company has ever created” (7b) .
If children are recognised as valuable consumers, then the opportunities are enormous especially if the product is itself an ethical one. The FairtradeFair Trade Foundation has clearly seen the value of marketing to children. The Foundation targets schools and their website is packed with resources that help teachers spread the fair trade message to their pupils. The Foundation’s publication brochure/booklet?, ‘Schools: Step by Step Guide to Fair Trade’ consists of a range of interactive, awareness raising activities that schools can get involved in including Fair Trade Fortnight which is an annual event that promotes fair trade products. In addition schools can sign up as a Fair Trade School. So far over 500 have registered. (7c)
The use of the ‘Pester power’ of children is universally seen as a negative thing; pressuring parents into purchasing products that are probably inherently bad for them. However some marketing companies are seeking to harness the ‘positive pester power’ of children. This view claims that children should be empowered to play a role in the design and development of products that affect them. It also recognises that children possess opinions, lifestyles and standards that are set within their own social community whether that is in the playground or online. It claims that children have an affinity with each other and feel compassion that can be harnessed as positive pester power. This may include encouraging the shopping adult to purchase a fair trade product during the weekly shop. (8) The demands of a child to buy fair trade products demonstratesdemands of a child to buy fair trade products demonstrate both societal and...