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CHILDREN AS CONSUMERS Anna Wujkowska Noémie Muret Issues in Global Economic and Business Master 1 SEDI IUP, University of Nice Sophia Antipolis Table of Contents Abstract ............................................................................................................................................ 3 What is childhood consumerism? ................................................................................................... 5 Factors responsible for the development of childhood consumerism ........................................... 5 Triple power of children’s consumption ......................................................................................... 6 How important is children’s consumption for companies? ............................................................ 7 Different stages of children’s development .................................................................................... 7 Advertising techniques used to reach the youngest consumers .................................................... 8 Children’s consumerism in the food industry ............................................................................... 10 Negative effects of consumerism on children .............................................................................. 11 How to increase the awareness of negative influence of advertising campaigns directed at children? ........................................................................................................................................ 11 In need of new regulations ............................................................................................................ 12 Controversies about media industry ............................................................................................ 12 Possible side effects of banning advertising aimed at children .................................................... 13 European Union regulations and companies’ self-regulation ....................................................... 13 How to make children become more conscious and critical? ..................................................... 14 Don’t think, just buy ....................................................................................................................... 14 Bibliography.................................................................................................................................... 15 ABSTRACT Children have a big power on decisions This new trend did not remain unnoticed. concerning Quite the opposite, companies very the choice of clothes, software and hardware used at home, quickly food, restaurants in case of eating out, children’s influence on family decision- holiday destinations, ways in which a making and as the representatives of family (selection young generation are media users and between cinema, museum etc.) and early adopters of new technologies what even cars. Parents accepting children’s better way to reach them than through growing influence on their decisions advertisements in cell-phones, iPods, make them a target of advertising game platforms and television channels campaigns and unconsciously contribute which remain the most effective method to the fact that in the future they will of attracting them. Companies are eager become whose to spend huge amounts to capture the happiness will depend on having all the attention of the young consumers; just in branded, expensive products that they the U.S. in 2009 the firms sacrificed have considered important since early around 16 billion dollars for this kind of childhood is advertising. The campaigns differ in reinforced by the parents who are regard to the age of the targeted public, desperate to give their daughters and there are two main groups: teenagers sons to who receive more attention from the compensate for the time they cannot marketers and the biggest share of their spend together because of long working budget because they spend directly the hours. Moreover, in the XXI century it is money they have at their disposal: common that both parents work which around 160 billion dollars per year in the increases their purchasing power and as U.S. only and children under 12 who the size of a modern family is relatively spend smaller than in the past and bigger parents’ decisions. It is the second income is divided by fewer children. group that is mostly affected by the bad spends heavy This everything free time consumers worrying they trend deserve realized indirectly, the magnitude influencing of their impact of advertising because children’s abilities to distinguish reality from luring children to consume unhealthy marketing lies and their knowledge of fast-food without regard to the the world are both very limited and consequences like increased risk of companies hoping to boost their sales childhood obesity and chronic illness. do not hesitate to violate basic moral values. They use various strategies to keep children’s attention such as branded characters, celebrity images and free goods that accompany a product. Firms do not respect any professional ethics and exploit naivety of young consumers. the The dishonest advertising can be observed in all types of sectors: from toys industry to fast food industry which encourages overconsumption by providing small toys together with a meal. These toys aim at Advertising and commercials do not reflect the reality, they try to manipulate children and take advantage of their vulnerability. The above described problem is a very serious issue and cannot be ignored anymore by the governments. New laws and effective policies need to be implemented and public awareness in this aspect must grow. . 1. What is childhood consumerism? The concept of children as consumers started to develop in the second half of the 20th century. In general, consumerism means an increased consumption and buying bigger amounts of goods. Before, only adults were concerned by this trend, but recently advertisers have discovered the importance of children for their sales and started to launch campaigns directed at the youngest members of the society. This shift was caused by several factors that occurred recently and it has changed the way we live and the world around us. 2. Factors responsible for the development of childhood consumerism First of all, new technologies revolutionized the way in which companies reach their customers; nowadays children are surrounded by marketing campaigns broadcast not only on the TV and radio, but also omnipresent in the internet, in supermarkets and even in schools. Unfortunately, this change in advertisement techniques was not accompanied by new regulations which could protect children who don’t know how to distinguish the lies sold by big companies from the truth. Secondly, the model of a contemporary family has evolved, single-parent families have become the new normal. Children whose parents divorced tend to receive twice the gifts they would get in traditional families which increases their tendency to always ask for more and become obsessed with what they own. Moreover, the pace of life is quickening; adults spend more and more hours at work at the expense of time devoted to their children. As a consequence they feel guilty and try to compensate their children for the lack of attention by offering expensive toys and fancy gadgets. Last but not least, in present times children have more money at their disposal; they receive regularly their pocket money as well as extra money for special occasions like birthday or Christmas which they can spend as they please. 3. Triple power of children’s consumption After having described the factors responsible for creating consumerism among children, the dimensions of this phenomenon will be explained in more details. Children became the target of advertisements because they represent a triple power of consumption. To start with, children are important for companies because they spend their own money following the latest trends. According to Sharon Beder, author of the article entitled “Marketing to Children” [1] children under the age of 12 in USA were responsible for spending more than 11 billion dollars on their own which represents a significant amount that cannot be ignored. Next, children represent future customers and the sooner the companies make them acquainted with their products, the more loyal to the brand they will be. If the process of acquiring new clients starts in the further stages of their life by obtaining the market share of the competition, the customers will be constantly searching for the best deals and they will never feel attached to any brand in particular. Finally the main interest of enterprises in the young generation results from their power to influence the shopping behaviors of the adults. Children have a huge impact on the choices made by their parents not only in the trivial aspects of daily life concerning food, drinks or clothes but also regarding fundamental and costly decisions like choice of a car, house, computer, household appliances or holiday destination. To sum up this trend it can be affirmed without exaggeration that the selection of products is made by the children in the name of the whole family. As a result it should not come as a surprise that advertising spots of serious products are nowadays made in a way that attracts the attention and convinces also the youngest viewers. As Sharon Beder claims, in 1997 children contributed to their parents spending a value of 165 billion dollars. Markeing to Children, Sharon Beder, http://www.uow.edu.au/~sharonb/children.html,1997 4. How important is children’s consumption for companies? To illustrate the importance of child consumerism for companies it may be a good idea to look at the most recent publications in the domain of marketing. Guidebooks like: “Born to Buy: The Commercialized Child and the New Consumer Culture”, “Marketing to the New Super Consumer: Mom & Kid”, “Creating Ever-cool: A Marketer's Guide to a Kid's Heart”, “The Kids Market: Myths and Realities”, “Kids as Customers: A Handbook of Marketing to Children” prove clearly the vivid interest of advertisers in techniques letting them reach the children’s attention and gain shares in the newly appeared market. The growing importance of the youngest customers makes companies desperate to understand their shopping habits and the factors that determine their decisions. That is why enterprises tend to seek the help of psychologists and researches to understand the stages of children’s development and adjust the most appropriate advertising methods for each age group. This practice was perceived as immoral by the American Psychological Association who tried to oppose to it, unfortunately in vain. 5. Different stages of children’s development With the assistance of the above mentioned specialists, the marketers managed to establish that every child passes through five different stages of development. In the beginning they just accompany their parents and observe them shopping, in the second phase the children begin to notice there is a connection between the advertisements and reality and that’s when they start requesting certain products from their parents, in the following stage they already know how to recognize particular brands and they decide by themselves about their product selection, later on the young consumers become capable of paying for their own purchases, and in the last stage they are independent enough to go to the supermarket alone. 6. Advertising techniques used to reach the youngest consumers Considering those differences in the child’s development the companies were forced to develop various advertising techniques in order to reach all age groups of potential customers. Furthermore, the fast progress in new media and online marketing opened additional possibilities of planning and carrying out marketing campaigns which will be presented and discussed in the following part of this essay. The primary medium to reach children is through commercials passing on TV. Researchers claim that in Europe the youngest generation watches TV around 5 hours per day during weekdays and 8 hours per day at the weekend. Assuming this data as a starting point, it can be easily assessed that in total children stay watching TV for 41 hours per week, 174 hours per month and 2088 hours per year. In the USA the situation is even more dramatic, according to the recent surveys children spend more time in front of TV than at school. Marketers know how to take advantage of the time spent watching television. Disney can serve as a simple example to illustrate this marketing trend. On the basis of old comics the producers first create movies and later TV series. Once the characters become popular enough the advertisers release a wide range of products based on their image or containing their name. Products like toys, cosmetics, books, electronic equipment, snacks and clothes are later distributed to Disney stores. The characters are also used for marketing purposes in Disney parks, schools or supermarkets where they appear trying to boost sales. Having your own line of products aimed at children became very popular also among celebrities: singers and actors like Miley Cyrus or Justin Bieber are both trying hard to increase their income by tagging perfumes, nail polishes, toothbrushes, shoes, pullovers, headphones, pillows, bedclothes, cups, plates, clocks and mobiles with their names. Another trend connected with advertising products on the TV is product placement. This technique consists on including a subtle reference to a product during a television program or a movie. Children who see this form of advertisement develop positive connotations regarding the featured product and start to subconsciously desire it. This form of hidden advertisement is frequently more effective than its more obvious equivalents like commercials. Product placement is particularly dangerous for children as they are very vulnerable and they do not know how to tell the difference between the imaginary world of television and real life. While being exposed to this hidden form of ads sometimes they may not even realize the producers are trying to manipulate them and convince them to select their products. An even more worrying phenomenon is the appearance of advertisements at schools. School is a place children have to attend every day and where parents do not have any power to protect them or limit the exposure to marketing campaigns that is why it should stay an advertisement-free area. Nevertheless, schools that are in need of financial funds, willingly reach out for help to big companies that are just waiting to enter this market. Enterprises supply schools with vending machines full of snacks and soft drinks, provide modern equipment to schools like laptops, projectors and TV screens, sponsor educational materials, organize contests with prizes like free entrances to the cinema or discount vouchers for pizza or invite students for field-trips to their factories or offices to improve their image and help children gain experience. The companies also place advertising materials like posters all around school and buses in exchange for payments in cash. The marketing campaigns placed at schools diminish the ability of critical thinking of students, might encourage unhealthy eating habits and reinforce the consumerism trend among young and unaware children. Furthermore, in the last decade there have been important changes in the technology available for advertising with new forms of media such as the Internet or mobile phones. These new forms of media are offering low-cost and effective means of reaching children directly for marketing purposes. Indeed, it is estimated that about four million children are using the Internet worldwide. Children have increasing access to both mobile phones and internet sites and many of them own smartphones with internet access. Therefore, they can easily use them unsupervised, without parent control. Marketers are also using a new method to attract children called “buzz marketing”. This idea is based on dressing a kid or making him use a company’s product in order to create a buzz around it. Thanks to this method, companies can easily reach children by giving their products a “cool status”. Buzz marketing is particularly well known in the Internet, where young people use social networking platforms such as Youtube, Facebook, Hotmail or Twitter. These marketing methods are accompanied by free samples or extra products meant for children, a practice especially common in the fast food industry. To target children directly, fast food industry uses different techniques like giving them a free toy, games or snacks. 7. Children’s consumerism in the food industry For instance, McDonald’s HappyMeal represents a way of encouraging kids consumption. This fast food giant knows that each time children go to McDonald’s they will get a free toy together with their meal which constitutes a way of inciting them to return and develop their loyalty. In this case, toys may actually be more tempting for the small consumers than the food itself. Marketing tactics undermine their health. Food advertising remains the high stakes and its harmful commercials have a negative influence on children. About 98 percent of all food advertising in TV seen by children is related to food high in sugar, fat or sodium. In the past 30 years, obesity rate among children aged from 6 to 11 has quadrupled and nearly tripled for children aged from 2 to 5. Childhood obesity has caused a public health crisis and numerous children developed very serious health problems like diabetes, which is a disease usually found only in adults. Besides, in supermarkets everything is made in a way to attract children. As we can notice in every department store, sweets and snacks are often put on the shelves in shops at the eye level of children and their packaging is more attractive than the one of vegetables or fruit. The display of products in a shop is a part of marketing strategy and has an impact on children’s behavior. 8. Negative effects of consumerism on children The new ways in which food companies reach children make it difficult for parents to prevent their children from negative effects of all the food advertising rich in low-nutrient and calorie-dense products that appeal to kids in an interactive way. In addition to their dependence and increased demand in unhealthy fast food, children may make excessive requests and pester their parents because they cannot obtain the product that they saw in the advertisements. In consequence, the youngest generation gives priority to material items and insists on having the latest models of toys. Advertising aimed at children can change their social behavior and make them more capricious. A healthy society is based on being a responsible citizen and not just a consumer. Spending money rather than spending time with family shows another side of a new family lifestyle where children’s identities can be defined by their consumer habits. 9. How to increase the awareness of negative influence of advertising campaigns directed at children? International organizations understood the magnitude of the problem and they are now trying to make people aware of the influence of media’s advertising. The Committee on Communications of the American Academy of Pediatrics is in charge of supervising the messages transmitted to children through media. This Committee is allowed to protect children from anti-social content in TV by using all ways of communication with families in order to save child’s health. Therefore, they can influence families’ choices and warn them about the minimum age that the children should have to watch television. According to the Committee, children under the age of two should not watch television because their brain development depends on human interactions at that age. 10. In need of new regulations Minimum age requirement is an important point because until a certain age, children are inherently resilient and vulnerable to media messages. Some countries such as Sweden or Brazil have banned advertising for children under the age of 10 because the state considers that before reaching this age, children cannot see the difference between a commercial and a TV program. To deal with the effects of advertisements on children, states are trying to find solutions in order to regulate companies’ practices by going deeper into their media governance. The government regulators found out that the departments of these companies dealing with law and other departments responsible for management, financial control and self-regulation; even with government guidelines for their media governance are affected and influenced by informal facts and relations such as market forces, financial pressure, lobbies, norms and company values. Therefore, this approach aimed at children’s protection is not effective because companies very often do not follow the guidelines of governments. 11. Controversies about media industry Members of the European Union are considering implementing regulation policies or even banning some commercials for children’s sake. However, these regulations could lead to a controversy in the media industry. The media industry provides jobs opportunities for people and banning advertising would mean dismissing employees who work in this industry. Furthermore, it would lead to a decline of employment opportunities in this field and a decrease of media’s revenue. In addition to that, parents would become less aware of products available on the market and it would decrease sales for manufacturers and retailers of children products causing lay-offs and downsizing of the employees. 12. Possible side effects of banning advertising aimed at children According to the members of RACP (The Responsible Advertising and Children Program), a ban on commercial advertising targeting children could push them to watch more adult contents in the television and they could also be influenced and exposed to other types of commercial advertising that are not appropriate to them. 13. European Union regulations and companies’ self-regulation Other regulations have been discussed by the European Union such as taxing junk food or implementing nutrition criteria for food promotion. The fact that most multinational food and beverage companies had to develop their own policies of marketing communications directed to children can serve as an example of measures already adopted in accordance with the directives of European Union. They defined which food can or cannot be advertised to children following the general code of ethics related to products specificities such as their energy (kcal), total fat, added sodium and sugar. Burger King, General Mills, Ferrero, PepsiCo (snacks and beverage), Danone, Nestlé and other big companies can be cited among the companies that adopted this kind of measures. Companies also regulate their marketing messages directed at children by describing very precisely which media they include in their campaigns according to European Union pledges. Companies have also promised to restrict advertising on their own websites. The culture of consumerism in children’s behavior tends to be reduced thanks to companies’ self-regulation and countries pledges. However, children still believe that the material objects advertised on television will increase their happiness. In this way, children are focusing more on materialism and they are forgetting other aspects of life such as their family and friends. Advertising techniques damage children’s health by causing social ineptness, physical deterioration and slower mental development. 14. How to make children become more conscious and critical? Media awareness can improve and change children’s point of view about advertising. This process enables children to develop their critical thinking towards media. Thanks to media education, children can analyze and evaluate different messages broadcasted by media. The role of the parents is not insignificant in this educational process because they have an influence on their children. They should teach their children how to become less influenced by advertising messages and guide them in their choices. 15. Don’t think, just buy The mass consumption of toys reveals the dark side of the toy industry. The majority of toys are nowadays made in South East Asia and despite their knowledge people tend to ignore the working conditions there. The power of advertising can take people’s mind off the striking reality of the working conditions. According to the National Labor Committee of America: “The companies do not want us to know or to think, just to buy”. This sentence sums up the entire reality of the advertising campaigns and shows that it is necessary to look beyond advertising, to notice that there should be a reflection before acting. 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