The Kids Market

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One of Packaged Facts' all- time great bestsellers, The Kids Market has been thoroughly updated in this all-new edition, which pegs kids' spending power at close to $30 billion in 1998. This study's thought- provoking analyses of emerging trends in this lucrative market are organized into several major chapters, covering demographics, market size (kids' purchasing power estimates and forecasts), kids as consumers, kids' media consumption, and marketing strategies and campaigns aimed at children.
I EXECUTIVE SUMMARY
  • Figure 1-1: Projected Growth of US Population Age 5-14, 1998-2050 (dollars)

Demographics

  • Kids 5-14: A Powerful Consumer Group
  • More Than 39 Million Kids Age 5-14
  • Kids Market Really Several Markets
  • Kids Reflect United States' Growing Diversity
  • Most Children Live in Two-Parent Households
  • One-Third of Children Live in or Near Poverty
  • Being with Friends Is Most Popular Activity
  • Today's Kids More Savvy, Sophisticated
  • But Emotional Needs Still the Same
  • Kids Just Want to Have Fun

The Market

  • Kids' Purchasing Power Exceeds $157 Billion Annually
  • Kids Market Growing
  • Almost All of Kids' Dollars Are Discretionary

Kids as Consumers

  • Kids Love to Shop
  • Children Usually Buy Something When They Shop
  • Kids Look for Five Attributes in a Store
  • Many Retailers Moving to Meet Kids' Needs

Kid-Oriented Media

  • Kids Love Television But Viewing Is Down
  • Other Activities Cut Into TV-Viewing Time
  • Radio an Important Medium—Especially for Older Kids
  • Kids' Print Media Exploding
  • Kids Very Involved with Magazines
  • Kids Love to Get Direct Mail
  • Kids a Natural for Interactive Media
  • All Kids Equal on the Web

Marketing to Kids

  • Kids Market Is Segmented
  • Market Research Has Its Own Rules
  • Market to an Older Child
  • Know Your Audience's Parents
  • Use of Slang Is Risky
  • Sport Stars Are Favorite Celebrity Spokespersons
  • Cause-Related Marketing Big with Kids

Scope and Methodology 20

  • Kids Defined as Those Age 5-14 20
  • Report Methodology

II DEMOGRAPHICS

  • Introduction
  • Kids 5-14: A Powerful Consumer Group
  • Note on Terminology
  • Figure 2-1: Projected Growth of US Population Age 5-14, 1998-2050 (number)

Population

  • More Than 39 Million Kids Age 5-14
  • Kids Population Will Hold Steady Until 2015
  • Table 2-1: Projected Growth of Children Age 5-14, 1998-2050 (number)
  • Males Outnumber Females to Age 24
  • Table 2-2: Share of Kids 5-14 by Gender (number and percent)
  • Kids Market Really Several Markets
  • Developmental Issues Distinguish Children of Different Age Groups
  • Figure 2-2: Share of Kids Population by Age, 1998 (percent)
  • Gender Differentiation Occurs Around Age 6
  • More Than 12 Million 5- to 7-Year-Olds
  • Another 16 Million Are 8-11 Years Old
  • 12- to 14-Year-Olds Number 11 Million
  • Table 2-3: Share of Kids Population by Age, 1998 (number and percent)
  • Kids Reflect United States' Growing Diversity
  • Figure 2-3: Share of Kids Population Age 5-14 by Race, 1998 (percent):
  • White, African American, Hispanic, Asian and Pacific Islander, Native American
  • Regional Distribution of Kids Market
  • Half of All Kids Live in Suburbs
  • Growing Percentage of Kids Are Bilingual

Family Status

  • Percentage of Households with Children Declining
  • Most Children Live in Two-Parent Households
  • One in Four Children Lives in Single-Parent Household
  • Growing Percentage of Children Live with Grandparents
  • Many Children Have More Than One Home
  • Most Kids Live in Households of Four or More People
  • Table 2-4: Share of Kids Population by Number of Siblings, 1996 (number and percent): None, One, Two, Three, Four, Five or More Siblings
  • Both Parents Work in Growing Percentage of Kids' Households
  • Kids More Independent, Assume Role in Running Household
  • Yet Parents Are Taking a More Protective Stance
  • Kids Are Family-Oriented
  • Most Kids Share Many Daily Activities with Family

Economic Status

  • One-Third of Children Live in or Near Poverty
  • One-Third of Children Are Middle Class
  • Largest Percentage Live in Households with Incomes in Excess of $50,000
  • Figure 2-4: Share of Kids Population by Household Income, 1996 (percent): From $12,499 and Under to $50,000 and Over
  • Income Higher for Two-Parent Families
  • Income Higher Among Whites
  • Kids Derive Income from Three Sources
  • Approximately 50% of Kids Receive an Allowance
  • "Allowance" vs "Earned Income" Frequently a Matter of Definition
  • Allowances Generally Track Age
  • Table 2-5: Estimate of Kids' Allowance and Earned Income by Age, 1997 (dollars and number): Average Weekly Income, Yearly Total, Number of Kids, Aggregate Total
  • Kids' Allowances Have Grown, But They Don't Buy as Much as They Used To
  • Gifts a Significant Source of Income
  • Table 2-6: Kids' Annual Gift Income by Age, 1997 (dollars and number): Average Gift Income, Yearly Total, Number of Kids,
  • Aggregate Total
  • Almost All of Kids' Income Is Discretionary
  • American Kids Save More Than Their Parents, But Less Than Kids Worldwide

Leisure Activities

  • Being with Friends Is Most Popular Activity
  • Basketball Has Become Kids' Number-One Sport
  • Video and Computer Games
  • Card Collecting
  • Other Types of Collections
  • How Kids Have Fun
  • Kids Like to Belong
  • Other Activities, Hobbies
  • Kids of All Ages Like to Go to Movies, Watch TV 49

Issues Important to Children

  • Today's Kids More Savvy, Sophisticated
  • But Emotional Needs Still the Same
  • Kids Just Want to Have Fun
  • What Kids Dream About
  • Table 2-7: What Kids Daydream About, 1996 (percent): 13 Subjects Other Topics of Thought/Concern
  • Table 2-8: Subjects Kids Think About "A Lot": By Age and Gender, 1996 (percent): 10 Subjects
  • Kids Value Education
  • Kids Mature, Responsible, Pragmatic

III THE MARKET

  • Market Size and Growth
  • Kids' Purchasing Power Exceeds $157 Billion Annually
  • Children's Indirect Purchase Influence Estimated at $400 Billion
  • Kids Market Growing
  • Almost All of Kids' Dollars Are Discretionary
  • Children Spend More as They Mature
  • Parents Spend More on Older Children
  • Table 3-1: Estimated Annual Expenditures on Children, 1997 (dollars): One-Child, Two-Child, Three-Child Family Middle-Income Families Spend $238,840 to Raise Child
  • Table 3-2: Estimated Annual Expenditures on a Child Born in 1997 by Income Group (year and dollars): Age, Low-Income, Middle-Income, High-Income
  • Parents Encourage Kids to Make Purchase Decisions
  • Kids Market Really Three
  • Kids Spend Heavily in Six Areas
  • Kids Spend Nearly $9 Billion a Year on Food and Beverages
  • Kids Spend $79 Billion on Play Items
  • Clothing Accounts for $42 Billion of Kids' Purchases
  • Kids Spend $31 Billion on Movies, Videos, and Sports Events
  • Video Arcades Account for $25 Billion in Kids' Spending
  • Kids Spend $20 Billion on "Other" Items
  • Kids Manipulate Their Parents' Pursestrings
  • Parents Spend Over $126 Billion Per Year on Items for Their Children
  • Table 3-3: Total Direct-Influence Expenditures by Parents on Children: By Age, 1997 (dollars): Food, Clothing, and Miscellaneous Expenditures
  • Kids Also Influence Other Household Purchases
  • Several Reasons for Kids' Growing Influence
  • Growing Number of Products and Services Targeted to Children
  • Children Shopping More Than They Used To
  • Food the Biggest Influence Target
  • Children Influence Family Dining Out Decisions
  • Kids Influence Parents' Selection of Toys and Play Things
  • Children Dress Themselves with Their Parents' Money
  • Kids Also Influence Parents' Automobile Purchase
  • Kids Influence Consumer Electronics Purchases
  • Older Parents Spend More on Their Kids
  • Figure 3-1: Projected Growth of Kids Market, 1998-2003 (dollars)

Projected Market Growth

  • Market to Top $228 Billion by Year 2003
  • Methodology
  • Table 3-4: Projected Growth of Kids Market, 1998-2003 (dollars):
  • Kids' Income, Parents' Expenditures on Children, Total
  • Kids the Entire Future Market

IV KIDS AS CONSUMERS

  • Shopping Patterns
  • Kids Love to Shop
  • Evolution of a Shopper
  • Cereals First Products Selected, Followed by Toys
  • The Co-Purchase
  • Kids Shop Alone
  • Kids Develop Retail Preferences
  • Kids Shop Often
  • Kids Shop a Variety of Stores
  • Table 4-1: Types of Shopping Trips in Last Month: By Age and Gender, 1996 (percent): 5 Types
  • Children Usually Buy Something When They Shop
  • Kids Are Impulse Buyers
  • 70% of Purchase Decisions Made in Store
  • Kids Extremely Brand-Conscious
  • Brand Loyalty Highest at Grocery Store
  • Children Assign Quality to National Brands
  • Children Favor Status Brands of Clothing
  • Brand Loyalties Change with Fashions, Trends
  • Peer Pressure Often Driving Force in Purchases
  • Kids Emulate Other—Particularly Older—Kids
  • TV Advertising a Big Influence
  • Children Take Advertising Seriously

At the Retail Level

  • The Grocery Store: Where Children First Learn to Shop
  • Discount Stores Rate Number One with Kids
  • Kids Look for Five Attributes in a Store
  • Kids Don't Feel Welcome in Most Stores
  • Five Things Kids Would Change About Stores
  • Many Retailers Moving to Meet Kids' Needs
  • Other Merchandising Techniques Obvious But Often Overlooked
  • Shopping Center Targets Kids to Boost Traffic
  • Kid Superstores Gaining in Popularity
  • Retailer Profile: Toys "R" Us King of Toy Sales
  • Retailer Profile: GapKids and babyGap
  • Off-Pricers Compete with Discounted Brands
  • Marketing to Kids Draws Parents, Too
  • Retailers Can't Afford to Ignore Kids
  • Restaurants Compete for Families by Targeting Kids
  • Kids Menus Go Beyond Hot Dogs
  • Kid Activities Include Coloring, Puzzles, and Jewelry Making
  • "Kids Eat Free" Concept Boosts Weeknight Traffic
  • But Many Operators Rethink Strategies
  • Accommodation Replaces Promotion
  • Some Restaurants Accommodate by Isolating

V KID-ORIENTED MEDIA 101

  • Overview
  • Kids Have Own Media World

Television

  • Kids Love Television But Viewing Is Down
  • Other Activities Cut Into TV-Viewing Time
  • Kids' TV-Viewing Fragmented
  • Kids Watch the Most TV When Their Parents Do
  • Saturday Morning Is Third Most-Popular Time Segment
  • After-School Time Slot Also Important
  • Gender, Racial Differences Appear in TV-Viewing
  • Nickelodeon Is Kids' TV Leader
  • New Shows Bowing in 1998
  • Prime Time is Nickel-O-Zone
  • Nickelodeon Also Reaches Kids with Print and Alternative Media
  • Nick Introduces Noggin
  • Nickelodeon Movies and Production Studio
  • Number Two Fox Also a Favorite with Kids
  • Daily Programming Gives Fox and Nickelodeon an Edge
  • Fox's Kids Club Another Cross-Promotional Arm
  • Fox Expands into Radio
  • Fox Family Channel
  • WB Goes After Kids
  • ABC and Disney Compete for Kid Viewers
  • CBS Changes Strategy for Saturday AM Competition
  • TBS Appeals to Kids with 24-Hour Cartoon Network
  • UPN Set to Enter Kids Market in Fall 1999
  • MTV Also Big with Kids
  • But TV No Longer Guaranteed to Reach Mass Kid Audience

Radio 118

  • Radio an Important Medium—Especially for Older Kids
  • Table 5-1: Percentage of Kids Who Listen to Music Three or More
  • Times/Week: By Age and Gender, 1996 (percent): 3 Media
  • Most Kids First Exposed to Radio Via Others
  • Radio an Intimate Medium
  • Younger Kids an Underdeveloped Radio Market
  • Marketers Seek New Outlets for Kids
  • Until Recently, Kids' Radio Was Booming
  • Radio AHHS Created Children's Radio Community
  • Kids Get Into Act
  • KidStar Radio Another Short-Lived Star in Children's Radio
  • ABC and Disney Spell Death of CBC
  • Fox Also Sees Future in Kids Radio

Print

  • Kids' Print Media Exploding
  • But Success Not Guaranteed
  • Reasons for Magazines' Appeal
  • Kids Very Involved with Magazines
  • Magazines Fulfill Kids' Love of Detail
  • Marketers Find Magazine-Publishing Cost-Effective
  • Magazine Advertising More Credible, Easier to Show Parents
  • Some Magazines Successfully Target Kids and Parents
  • Sports Illustrated for Kids a Prototype
  • Time for Kids Published in Two Versions
  • Disney Adventures a Kid-Targeted Entertainment Weekly
  • Nickelodeon Magazine—A Take-Along Version of Kids' Television Network
  • Crayola Kids Targets Kids and Parents
  • GamePro and Nintendo Power Appeal to Boys
  • American Girl Builds Self-Esteem and Relationships
  • Pre-Teen Girls Seek Out Teen, YM, Seventeen, and the New Jump
  • Newspapers Not a Big Factor in Kid Marketing

Direct Mail

  • Kids Love to Get It
  • But Direct Mail Expensive and Usefulness Can Fade
  • Cooperative Mailings Can Cut Direct-Mail Costs
  • Custom Magazines
  • Kids' Catalogs
  • Factors for Continued Growth of Kids Catalog Sales
  • Challenges to Catalog Market
  • Legislation May Affect Direct-Market Fortunes

Electronic Media

  • Kids a Natural for Interactive Media
  • Table 5-2: Percent of Kids in Households with Computers Who Use Computer Technology at Home Three or More Times/Week: By Age and Gender, 1996 (percent)
  • Online Services Launch Sites for Kids
  • Media Metrix Tracks Kids' Website Preferences
  • Kids Use Online Services for Sense of Community
  • All Kids Equal on the Web
  • Kids Also Get Free Samples on the Web
  • Disney Operates Several Top Sites
  • SI for Kids Online on Pathfinder Site
  • A Number of Websites for Games
  • wwwgameprocom Also for Gamers
  • FIND/SVP Study Shows How Kids Spend Time Online
  • Computer Use a Group Activity
  • Forget Sales, Build the Brand
  • But Online Parents a Likely Target
  • Parenting Sites Are Key Sites for Advertising
  • CD-ROMs Combine New-Fashioned Graphics and High-Tech with Old-Fashioned
  • Parental Control
  • Other Media Opportunities for the Creative

Marketing Fundamentals

  • Know Your Audience
  • Kids Market Is Segmented
  • Market Research for Kids Has Its Own Rules
  • Segregate Kids by Age and Sex
  • Strive for Focus Group Homogeneity
  • Online Focus Groups an Exception to the Rule
  • Kid-Conducted Research Also an Option
  • Fantasy/Reality Shift Takes Place Around Age 7
  • Market to an Older Child
  • Younger Kids Have Appeal, Too, When They Show Up Their Elders
  • Know Your Audience's Parents
  • Kids' Market Used to Be Off-Limits
  • But Marketers Increasingly Push the Barriers
  • Parents Often Have Own Agenda
  • Sometimes Best to Market to Parent and Child
  • But Not to Parent or Child: Failing to Deliver Message Directly to Kids Is Risky
  • Market to Both Genders
  • Kid-Targeted Advertising Doesn't Have to Include Kids
  • Five Motivators Govern Kids
  • Kids Want to Feel More Powerful
  • Girls, Too, Like Power
  • Freedom Appeals to All Ages
  • Fun and Freedom Closely Linked
  • Kids Want to Belong
  • Many Marketers Offer Community
  • Kids Strive for Mastery
  • Kids Find Most Television Commercials "Annoying"
  • Kids Like Ads That Are Funny
  • Find Out What Is Funny to a Kid: Ask
  • Let Them Discover; Don't Teach or Preach
  • Hone Your Message
  • Kids Like Commercials to Tell a Story
  • Kids Love Surprises
  • Use Bright Colors and Bold Designs
  • Make It Interactive
  • Include Heroes
  • Pick Up the Pace, Production Values
  • Licensing Still Hot
  • TV Advertising to Kids Is Regulated
  • CARU Advertising Guidelines Govern Honesty
  • Online Advertising Has Its Own Rules
  • Children Don't Understand Privacy
  • Guidelines Attempt to Clear Things Up
  • Website Developers Police Their Own Sites

Use of Slang in Marketing to Kids

  • Use of Slang Is Risky
  • Yet Kid-Directed Speech Can Be Colorful

Use of Celebrities When Marketing to Kids

  • Sport Stars Are Favorite Celebrity Spokespersons
  • Use of Other Celebrities Can Be Tricky
  • With Research, Marketers Can Launch Products and Celebrities Simultaneously

Cause-Related Marketing

  • Cause-Related Marketing Big with Kids
  • Nickelodeon Scores Big with "Big Help"

Promotions for Kids

  • Promotional Tie-Ins Extend Value, Excitement
  • Nickelodeon and Partners Assemble $200 Million Movie Promo Deal
  • Kids Clubs Another Form of Promotion
  • School Promotions: Hot But Controversial
  • Guidelines for Promoting to Kids
  • Contests Another Way to Attract Kids
  • Master Lock Sponsors Xtreme Sports Sweepstakes

VII EXAMPLES OF STRATEGIES AND CAMPAIGNS TARGETED TO KIDS

  • Food and Beverages
  • McDonald's Reputation Built on Families and Fun
  • Burger King Is King of Kids Clubs
  • Chuck E Cheese Pizza
  • Supermarkets Beginning to Recognize Kids' Importance as Customers
  • Food Lion Supermarkets Team Up with Sports Illustrated for Kids
  • Wegman's Good Food Tours
  • Kellogg Appeals to Kids—and to the Kid in Every Adult
  • Kellogg Also Targets Busy Moms and Kids with Breakfast Mates
  • Froot Loops Ad Uses Interactivity, Fruit Scents to Involve Kids
  • Farley's Also Goes for Interactive Approach And for Teamwork
  • Mott's Rides Rugrats to New Image with Kids
  • Sargento Foods Teams with Sports Illustrated for Kids
  • Milk Banks on the Power of Celebrities

Play and Leisure Items

  • United States Leads World in Toy Sales
  • Toy Industry Tremendously Volatile
  • Classic Toys Exception to the Rule
  • That Irrepressible Barbie
  • Crayola Packs Top Ten
  • Other Top-Selling Toys
  • Two Toymakers Dominate
  • Best-Selling Toy Introductions Show Mercurial Nature of Toy Industry
  • Nintendo Revives Video Game Industry
  • Sega Turns Up the HeatThen Goes Cold
  • Sega Announces Dreamcast
  • Sony PlayStation Changes Video Game Market in 1996
  • Six of Top 10 Video Games Are for PlayStation
  • Video Game Advertising Some of Most Impressive
  • Trading Cards Continue to Evolve
  • Toys "R" Us Is King of Toy Sales

Video

  • Kidvid Growing by Leaps and Bounds
  • Disney the Leader in Kidvid Sales
  • Other Studios Storming the Field
  • PolyGram Targets Boys with X-Men and Power Rangers
  • KidVision Another Newcomer
  • Golden Home Video Sees Literacy Value
  • Popularity of Kids' Videos Creates Cross-Promotional Opportunities

Apparel

  • Kids' Apparel Market Skyrocketing
    • Sneakers Lead List of "Must-Have" Items
    • Style the Dominant Factor
    • Nike the Current Footwear Leader
    • Reebok Targets Kids with Weebok and Reebok Kids
    • Licensed-Team Apparel Big with Kids
    • Other Licenses Drive Kids' Apparel Sales
    • Designer Clothes for Kids
    • Gap and Levi Go After Kids

    Health & Beauty Care

  • Kids Market Growing Strong
  • Bold Colors, Fruity Scents, Fun Packaging Appeal to Kids
  • Licensed Characters Strong in HBC Field
  • Big Brands Also Strong in Kids' HBC
  • Tinkerbell Gives Itself a Make-Over
  • Grocery Stores and Mass Merchandisers Have an Edge in Kids HBC

Reading

  • Most Kids No Longer Read Comics
  • But Comics Publishers Trying to Change That
  • They Read Books! (That Are Written Like Comics)
  • A More Literary Side

APPENDIX I: EXAMPLES OF CONSUMER ADVERTISING
AND PROMOTIONS

APPENDIX II: ADDRESSES OF SELECTED MARKETERS

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