The Kids Market

Nov 1, 1998
277 Pages - Pub ID: LA524
Attention: There is an updated edition available for this report.
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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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