The KAGOY Factor
Kids' buying power and influence over purchase decisions are increasing

Parents will recognize this scenario. After a long day at work, they are too tired to cook. A discussion of restaurant options ensues. "How about McDonald's?" their son Junior pipes up.

According to Anne Sutherland and Beth Thompson, most parents would prefer to go to Burger King of Pizza Hut. But after persistent nagging from their children, parents eventually give in. And they grudgingly head off to the golden arches. "This dynamic has made McDonald's one of the most successful businesses in the world, and young kids' number one choice for a meal."

Sutherland and Thompson are youth marketing experts who have seen first hand the increasing influence have children have in today's economy. They share some of their experiences and insights in a new book Kidfluence: Why kids Today Mean Business.

Sutherland, a strategic planner, got her exposure to the kid's power while working on a project for the Blue Box recycling program in 1990. Attempts to motivate adults to drag the blue box to the curb each week saw little success. But when the marketing was targeted at kids, the results were more encouraging.

"Kids learned the three Rs of recycling in school, brought that information home, and pressured their parents," said Sutherland. "This insight changed how we communicated to parents and to kids." Sutherland hooked up with Thompson, a journalist, when the two worked on a lifestyle magazine called Zellers Family. Kidfluence was born from that collaboration.

Although what the authors call Generation Y - those born between 1980 and 2000, are a smaller group than their boomer parents, the authors believe their grip on society is stronger than the boomers' every was.

Since birth rates have gone down, parent's disposable income is divided among less children, thereby increasing each kid's individual buying power. And since the number of dual-income families has doubled from 1970 to 1995 from 1.9 to 4 million people, parent's have more discretionary income to accommodate those needs. That makes parents increasingly vulnerable to kids' longtime weapon of choice: nagging.

But "the billions (of dollars in purchases) that kids influence, goes well beyond pester power," say the authors. Kids today are active participants in family purchase decisions. "Today (they) get a vote in family discussions, regarding both major and minor purchases because of a trend in child rearing to a more consultative or shared-power philosophy." According to a variety of estimates, kids influence on family purchase decisions jumped from $5 billion in the 1960s, to $50 billion by 1984, to $188 billion today.

Divorced parents are among the most vulnerable to their kids' influence. They often feel guilty about the lack of time they spend with their children, and attempt to compensate by throwing money and material goods at them.

The profile of the average kid is changing. For one there is the KAGOY factor (Kids are Getting Older Younger). And its not just that girls are wearing lipstick, and gorging themselves on pop culture at nine or ten years old. Many parents - motivated by research showing that kids brains react well to early stimulation - are reading and playing music to unborn babies.

Kids now start playing hockey, going figure skating and attending music classes at just four or five years old. And it's not always just to have fun. Many are driven there by motivated parents who are already calculating the agent's fees they will reap from the Mario Lemieuxs and Brittany Spears that they are creating. This phenomenon is especially evident in kid's hockey, where parents are no longer laughing and having fun with the children, but are yelling at them to "play the system." The result, is kids who are becoming world wise at a much younger age.

The only problem is that those world wise kids are a much tougher group to market to than their parents ever were. For one they are media experts. The typical Amercian kid spends a whopping 38.5 hours a week on television, computers, video games, movies, music and print. By the time they are aged seven, they will have seen an average of 20,000 commercials a year.

So although they may be a very lucrative demographic for marketers to reach, getting their attention is no piece of cake.

 

 

Kidfluence: Why kids today mean business, by Anne Sutherland and Beth Thompson, 200 pages, McGraw-Hill Ryerson Limited

E-mail can be sent to Diekmeyer at: peter@peterdiekmeyer.com

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