Marketing To Kids: Being Effective And Responsible

1. Marketing To Kids: Being Effective And Responsible Food & Drink Innovation Network – 15th November, 2006 Daniel Bone, Senior Consumer Insight Analyst Datamonitor

2. Agenda and key takeout Effective marketing involves a ‘layered’ approach that creates ‘duel appeal’ for parents and kids alike • KIDS INSIGHT • Children & Tweens declining in number • Heavy consumers of sugary foods, getting heavier and lacking key nutrients • ‘Consumer socialization’ is occurring earlier than ever • Influenced by a media-orientated lifestyle, their peers and the ‘cool factor’ • Value food and drink products that are unique, fun and explorative • PARENTAL INSIGHT • Huge role to play in the ‘consumer socialization’ process • Trying to eat more healthily and this will have a knock-on effect • Sceptical audience • Freshness and nutritional information are important factors for consumers of parenting age • Lacking time

3. KIDS INSIGHTS Kids are declining in number • The number of 5-9 year old children in the UK will decline from 3.9 million in 2001 to 3.2 million in 2011 • The number of 10-13 year old Tweens will decline from 3.1 million to 2.8 million over the same time period • Trends are playing out across Europe but the decline is steepest in the UK -6% 2001 2006 2011 -4% -8% -13% -15% -10% IMPLICATION: smaller market size – even more important to get it right!!

4. KIDS INSIGHTS Heavy consumers of sugary-snacky foods Number of snack occasions per person per year, 2005 • Heavy consumers of food products associated with fun, indulgence and unhealthy formulations • In 2005, European Children consumed over 8% more confectionery, ice cream and savory snacks in value terms per capita compared to the population average (Datamonitor Consumer Graphics) • In 2005, European Tweens also over-consumed in the same categories, but by more than 20% (Datamonitor Consumer Graphics) • Frequency of eating is also noteworthy Source: Datamonitor’s New Consumer Insight series

5. KIDS INSIGHTS …and getting heavier • Childhood obesity worldwide has more than doubled in the last 20 years with many Kids’ diets containing more fat, sugar and salt than recommended (International Obesity Taskforce) • 32% of UK kids were overweight or obese in 2005 • Children are 'drinking' almost five litres of cooking oil every year as a result of their pack-a-day crisp habit (The British Heart Foundation, 2006) • Average weight increasing due to the combine effects of unhealthy eating habits and decreasing physical activity • The media has been notably vociferous about issues relating to kids’ health, and in particular the part played by food manufacturers and marketers IMPLICATION: a genuine behavioural shift especially as kids and parents respond to campaigns challenging existing habits

6. KIDS INSIGHTS Diets lacking key nutrients • One in five kids currently skips breakfast (Office for National Statistics). Vital nutrients missed, if breakfast is skipped, are not made up for during the rest of the day • Earlier this year calcium was cited as the nutrient most lacking in kids' diets today by 84% of the 674 members of the New York State Dietetic Association (NYSDA) • 30% of boys and only 10% of girls were achieving the recommended daily intake (RDI) of calcium (Pediatrics – US Journal) • Threat of osteoporosis in later life by not getting enough calcium • Recommend that more milk, cheese and yogurt products targeting kids would be one way to address the deficiency IMPLICATION: the need to promote ‘positive nutrition’ – what’s added to products will be just as important as what has been removed

7. KIDS INSIGHTS Not very nutritionally savvy • What’s in a chip? 36% of UK 8-14 year-olds could not correctly identify the main ingredient as potato, despite chips being a firm (British Heart Foundation, 2005) • A need to re-connect kids with the food chain… • Get them thinking about what is in their food and how they can make healthier BUT equally tasty choices • Engage children in understanding why certain foods are less healthy than others, and encourage them to become interested in what's on their plate • Must communicate to children in their language and sparking their curiosity IMPLICATION: educational efforts need to be all encompassing – parents and kids

8. KIDS INSIGHTS ‘Consumer socialization’ is occurring earlier than ever • KGOY: Kids Growing Up Young – including as consumers • Greater role in household decision making and making more independent purchases at earlier ages 6 MONTHS: babies are forming mental images of corporate logos and mascots 3 YEARS: making direct requests for specific name brand 5 YEARS: can meaningfully distinguish television advertising from regular television 7-8 YEARS: become aware of advertising's persuasive intent, more than its informational intent 9 YEARS: developed an understanding of the symbolic nature of brand meaning 11 YEARS: articulate a detailed critical understanding of advertising and its intentions Source: British Food Journal, Journal of Consumer Marketing IMPLICATION: high potential to capture their imagination with the right product and communication approach

9. PESTER TACTICS DRIVERS RATIONAL • Stating that a food is their preferred food • Expressing opinions on foods EMOTIONAL • Begging or being unnaturally nice or affectionate to parents • Using deals (if you buy this for me, then I’ll do this for you) MEDIATING FACTORS • Product involvement – pester poweris higher when the child is the primary product user • Family income - family income and children’s influence are related positively • Age - influence increases with age while requests’ frequency decreases with the child’s age KIDS INSIGHTS ‘Consumer socialization’ manifests as pester power • Children average a purchase-influence attempt every 2 minutes when shopping with their parents • 60% of UK parents sampled agreed that they “give in to children’s demands in the supermarket when they want food products” (The British Food Journal, Turner et al., 2006)

10. KIDS INSIGHTS Influenced by a media-orientated lifestyle • The range of things competing for kids’ attention has snowballed • Internet and mobile phone usage growing and at an earlier age • The ‘connected generation’ – have grown up in a world surrounded by technology • Technology fulfils kids’ entertainment, educational and social needs • 2 to 11-year-olds spend around 17 hours watching TV each week in the UK • “With the same level of exposure, kids are three times more likely to remember that they have seen a brand advertised on TV than adults” (Lindstrom, Brandchild, 2003) IMPLICATION: with all these things competing for their attention engaging their interest is going to be more difficult in the future

11. KIDS INSIGHTS Influenced by peers and the ‘cool factor’ • Once children enter school they are increasingly influenced by peers • Behaviour is highly influenced by the desire of friendship, for acceptance and belonging • Children are looking for products as vehicles that can make them belong to other kids • SYMBOLIC MEANING OF BRANDS: worn as tribal badges to show their peer group affiliation and to provide them with ‘playground currency’ • Brandchild research showed that close to half the world’s 8-14 year old population state that the clothes they wear describe who they are and define social status (Lindstrom, 2003). • Is it possible to link messages about health eating with fashion? IMPLICATION: Kids will screen all forms of product attributes and communication cues and judge it against their criteria of cool. MAKE IT HIP TO BE HEALTHY!

12. KIDS INSIGHTS Kids respond to specific attributes and cues differently • Primary colours, organized and regulated patterns, soft words with gentle y-endings (happy, pretty, jammy, jolly, etc.) all encode 4-5 year-old products (Journal of Consumer Marketing, 2003, McNeal and Ji) • Seven-year-olds are into the strong colours, and rebellious chaotic designs that signify their growing independence (Journal of Consumer Marketing, 2003) • Impactful visuals in packaging are very important for recognition for children of all ages • The cool factor again: Datamonitor research has shown the packaging is the most important factor – aside from word of mouth – influencing perceptions of cool • BUT younger Children more likely than older ones to exhibit some sort of physical involvement with packaging beyond the functional contact required to pick up a package and place it in the shopping basket (Journal of Consumer Marketing, 2003) IMPLICATION: Packaging cues are important to providing the “wow factor” for kids

13. KIDS INSIGHTS They value food and drink products that are unique, fun and explorative • Interaction helps to accelerate the development of brand relationships that would otherwise take years to develop • Incorporating these principles into health-orientated product marketing will be important for future success • Healthy products perceived to be lacking ‘fun’ credentials • Formulating products against these principles of fun will help develop successful products

14. KIDS INSIGHTS Some product examples…

15. PARENTAL INSIGHT Parents have a huge role to play in the ‘consumer socialization’ process • “Parents play the dominant influence role until the child reaches adolescence, when peers become the favored source of information” (The Journal of Consumer Marketing, Dotson and Hyatt, 2005) • Key agents in shaping early food attitudes. 9 out of 10 children cite their parents as their most important source of believable information on food and healthy eating (Kellogg's Family Health Study, 2005) • If adults give children encouragement and incentives, they can begin to taste food they have previously rejected (The British Food Journal, Horne et al.,1998) Implication: parents need to be at the centre of any initiative that seeks to promote better nutrition for children

16. PARENTAL INSIGHT Consumers of parenting age are trying to eat more healthily and this will have a knock-on effect… • Almost half (47%) of UK mums worry that their children aren't eating a healthy, balanced diet according to Kellogg’s UK research published ahead of National Breakfast Week in 2005 • Deeply concerned with additives, sugar and salt Source: Datamonitor Consumer Survey, July 2006

17. PARENTAL INSIGHT But they are sceptical too… • Parents are concerned about misleading health claims made for foods targeted at children (Food Standards Agency, 2001) • 82% of European and US consumers overall ‘agreed’ or ‘strongly agreed’ that, “product claims made by food and drink products are often exaggerated or unproven”. 1 in 4 ‘strongly agreed’ (Dec 05) • Less than half of UK consumers consider the nutritional claims made by food and drink players to be trustworthy (Oct 04) • Even less (37%) consider that health-boosting claims made by food and drink players are trustworthy • Need to overcome this scepticism to get parental buy-in Source: Datamonitor Consumer Surveys (2004-2006)

18. This Argentinean cereal bar was developed jointly with Cesni training center on child nutrition. Each 25g bar is said to be a good source of vitamins, iron, zinc, and calcium, is targeted at children PARENTAL INSIGHT Leverage the product attributes and communication cues that consumers perceive as trustworthy Question: How influential are the following in (re)gaining consumers’ trust…? Source: Datamonitor Consumer and Industry Opinion Survey, Dec 2005

19. PARENTAL INSIGHT Freshness and information is an important factor for consumers of parenting age IMPLICATION: task for the industry is to make it easier for parents and their kids to make informed healthy choices Source: Datamonitor Consumer Survey, 2006

20. PARENTAL INSIGHT Parents are also deprived of time • According to a 2004 survey by parenting website raisingkids.co.uk, the traditional ritual of gathering around the table at dinner time to talk to one another is now only practiced by a small minority of families with the increasing demands on parents' and children's time a significant factor • Last week a Vodafone survey revealed that the majority of UK families spend an average of 17mins, 24s together every day • The main 'disconnector' is work, blamed by 7 in 10 for preventing more contact with family • Families end up eating “unhealthy food” because of time pressures and not involving children in the cooking process IMPLICATION: Develop strategies that attempt to bridge the gap between children and parents

21. New innovation and concepts still need to make family life easier

22. CONCLUSIONS Understand parents and kids’ needs Health has become a vital but sceptical issue. Make trust building a big part of the marketing effort Appealing to kids and parents may require separate communication strategies Kids are actually declining in number and family dynamics are changing Effective marketing involves a ‘layered’ approach that creates ‘duel appeal’ for parents and kids alike Parents need help: nutritional information and time saving product solutions are sought Profitable opportunities exist for products that are fun, healthy and tasty Kids are influenced by a range of factors and these change as they age

23. Thanks for your attention Email: dbone@datamonitor.com

24. Datamonitor (2002) Tweenagers • Datamonitor (2003) Children’s Consumption Occasions and Behaviors • Datamonitor (2005) Profiting and Building From Consumer Trust • Datamonitor (2005) Evolution of Global Consumer Trends • Datamonitor (2006) Capitalizing on Natural & Fresh Food & Drink Trends • Datamonitor (2006) Capitalizing On New Breakfast, Lunch & Dinner Consumption Patterns • Datamonitor (2006) Marketing To Kids: How To Be Effective And Responsible • Dotson, M.J. and Hyatt, E. M. (2005) Major influence factors in children’s consumer socialization, Journal of Consumer Marketing 22/1 (2005) 35–42 • Greenhalgh, T. (2002), Understanding family values, International Journal of Marketing and Advertising to Children, Vol. 4, No. 1, 2002, pp.13-19 • Lawrence, D. (2003) The role of characters in kids marketing, International Journal of Advertising & Marketing to Children, Vol.4, Issue 3, pp.43-48 • Lee, C.K.C. and Beatty, S.E. (2002) Family structure and influence in family decision making, Journal of Consumer Marketing, Vol. 19, No. 1, pp. 24-41 • Lee, C.K. and. Collins, B.A. (2000) Family decision making and coalition patterns, European Journal of Marketing, Vol. 34 No. 9/10, 2000, pp.1181-1198 • Lindstrom, M. and Seybold, P. (2003) Brandchild, Kogan Page • McNeal, J. and Ji, M.F. (2003) Children’s visual memory of packaging, Journal of Consumer Marketing, Vol. 20, No.5, pp.400-427 • Moore, M. (2002) Stupid White Men, Penguin Books • Oates, C., Blades, M, and Gunter, B. (2003) Marketing to Children, Journal of Marketing Management, pp.401-09 • Shoham, A. and Dalakas, V. (2005), “He said, she said . . . they said: parents’ and children’s assessment of children’s influence on family consumption decisions”, Journal of Consumer Marketing, Vol. 22 No. 3, pp. 152-60. • Shoham, A. & Dalakas, V. (2006) How our adolescent children influence us as parents to yield to their purchase requests, Journal of Consumer Marketing, 23/6 (2006) 344–350 References