The Kids' Market

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Published Mar 1, 2000 | 259 Pages | Pub ID: LA573

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This report analyzes the $166-billion U.S. market for kids' products, which is being transformed by sweeping changes in kids' preferences, strong undercurrents of e-commerce and advanced marketing techniques. The report offers a detailed discussion of kid demographics, market size, growth and composition, kids' behavior as consumers, retail trends and the new fundamentals of marketing to kids. Market projections through 2004 are included. Purchasers can expect a thorough discussion of specific kid-targeted marketing strategies and campaigns that have succeeded in the following product segments: food and beverages, play items, video, apparel, and health and beauty care. Kid-oriented media is comprehensively analyzed, with a special new emphasis on electronic media.
  1. Executive Summary
    Scope and Methodology
    • Market Definition: Little Consumers Age 5-14
    • Report Methodology
    • Kids 5-14: Consumers with Buying Power
    • More Than 39 Million Kids Age 5-14
    • Three-Part Kids Market Based on Developmental Differences Figure 1-1: Share of Kids Population by Age, 1999 (percent): 12- to 14-Year-Olds, 5- to 7-Year-Olds, 8- to 11-Year-Olds
    • Kids Reflect United States' Growing Diversity
    The Market
    • Kids' Aggregate Income Totals $38 Billion in 1999
    • Children's Indirect Purchase Influence Estimated at over $400 Billion
    • Kids' Market to Top $230 Billion by 2004
    • Table 1-1: Projected Growth of Kids Market, 1999-2004 (dollars): Kids' Income, Parents' Expenditures on Children, Total
    Kids as Consumers
    • Natural Born Consumers
    • Products Kids Select Include Cereal, Toys, Snacks, and More
    • Kids Establish Shopping Independence
    • Where Kids Shop
    • Retail Preferences Change with Age
    • Brand-Consciousness Common for Most Kids
    • Kids Influenced by TV Advertising
    • Kid Accommodation Now Mainstream Practice
    Kid-Oriented Media
    • Kids Media Comes of Age
    • The Transformation of Kid TV
    • Nickelodeon Number-One Cable Network on Strength of Kids Programming
    • Radio Disney Reaches One Million Kids
    • Kid Flicks Draw at Box Office
    • Which Magazines Kids Read Varies by Age
    • Newer Approaches to Direct Mail
    • Online Services for Children Flourish
    • Search Engines Reach Out to Kids and Families
    Marketing to Kids
    • The Rules Have Changed
    • Kids Are Next Market Growth Opportunity
    • Traditional Techniques Do Not Always Work
    • Visual and Verbal Sophistication Required

  2. Demographics
    • Kids 5-14: Consumers with Buying Power
    • Note on Terminology
    • More Than 39 Million Kids Age 5-14
    • Kids Population Holds Steady Through 2010
    • Table 2-1: Projected Growth of Kids Population Age 5-14, 1999-2050 (number)
    • Males Outnumber Females to Age 24
    • Table 2-2: Share of Kids Age 5-14 by Gender: Boys vs. Girls, 1999 (number and percent)
    • Three-Part Kids Market Based on Developmental Differences Figure 2-1: Share of Kids Population by Age, 1999 (percent): 12- to 14-Year-Olds, 5- to 7-Year-Olds, 8- to 11-Year-Olds,
    • Gender Differentiation Starts by Age 6
    • Almost 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): From Age 5 to 14
    • "Tweens" Designation Puts New Face on Pre-Teens
    • Kids Reflect United States' Growing Diversity
    • Figure 2-2: Share of Kids Population Age 5-14 by Race, 1999 (percent): White, African American, Hispanic, Asian and Pacific Islander, Native American
    • Regional Distribution of Kids Market
    • Most Families with Kids Found in Suburbs
    • Growing Percentage of Kids Are Bilingual
    Family Status
    • Children in Fewer than Half of Family Households
    • Most Children Live in Two-Parent Households
    • One in Four Children Lives in Single-Parent Household
    • More Grandparents Now Serve as Parents, Too
    • One in 10 Kids Raised by Grandparents Grandparents Interact with, Spend Money on Kids 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, 1998 (number and percent): One, Two, Three, Four, Five, Six or More Children
    • Both Parents Working in Many Households Kids More Independent
    • Parents Increasingly Protective
    • Kids Have More Freedom to Choose Clothes, Food Parents Remain Cautious in Media Choices Life of Kids Centers on School, Activities, Family
    Economic Status
    • Four-Fifths of Children Live Above Poverty Level Median Income Higher than Average Among Married Couples with Children
    • One-Fourth of Married Couples with Children Have Incomes Between $50,000 and $75,000 Table 2-5: Household Income for Married Couples with One or More Related Children, 1998 (number and percent) Income Higher Among Whites
    • Kids Derive Income from Three Sources Approximately 50% of Kids Receive an Allowance "Allowance" vs. "Earned Income" Allowances: How Much Kids Get Table 2-6: Estimate of Kids' Allowance and Earned Income by Age, 1999 (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 2-7: Kids' Annual Gift Income by Age, 1999 (dollars and number): Average Gift Income, Number of Kids, Aggregate Total
    • Kids Buy with Discretionary Dollars What Makes Kids Spend?
    • Kids Save More Than One-Fifth of Their Money Kids Are Financial Neophytes
    What Kids Like to Do
    • Being with Friends Is Most Popular Activity Basketball Has Become Kids' Number-One Sport
    • Computer Use Surges
    • Kids Embrace the Internet
    • Toys Less Important in Internet Ear?
    • Television Not the Only Game in Town Anymore What Kids Do Online
    • Electronics Pervasive in Kids' Rooms
    • Kids Play with Their Food
    • Snacking: Size Matters, Not Content
    • Kids Lives Increasingly Regimented
    • Kids Want to Belong
    • Other Activities, Hobbies
    • Kids of All Ages Like to Go to Movies, Watch TV
    What Kids Are Thinking
    • Today's Kids More Worldly, Sophisticated
    • But Emotional Needs Still the Same
    • What Kids Dream About
    • Other Topics of Thought/Concern
    • Social Concerns Common for Older Kids
    • Kids Mature, Responsible, Pragmatic
    • Kids Call Themselves Kids
    • Kids Look Up to Heroes

  3. The Market
    Market Size and Growth
    • Kids' Aggregate Income Total $38 Billion in 1999 Children's Indirect Purchase Influence Estimated at over $400 Billion
    • Kids: A Growing Market
    • Kids Spend Coveted Discretionary Dollars
    • Older Children Spend More
    • Parents Spend More on Older Children
    • Table 3-1: Estimated Annual Expenditures on Children, 1998 (dollars): One-Child, Two-Child, Three-Child Family Middle-Income Families Spend Over $240,000 to Raise Child Table 3-2: Estimated Annual Expenditures on a Child Born in 1998 by Income Group, 1998-2015 (year and dollars): Age, Low-Income, Middle-Income, High-Income
    • Parents Encourage Kids to Make Purchase Decisions Kids Spend Heavily in Six Areas
    • Kids Spend Nearly $11 Billion a Year on Food and Beverages Kids Spend $9.5 Billion on Play Items
    • Clothing Accounts for $5.1 Billion of Kids' Purchases Kids Spend $3.7 Billion on Movies, Videos, and Sports Events Video Arcades Account for $2 Billion in Kids' Spending Kids Spend Nearly $3 Billion on "Other" Items Parents Spend Over $130 Billion Per Year on Items for Their Children
    • Table 3-3: Total Direct-Influence Expenditures by Parents on Children by Age, 1999 (dollars): Food, Clothing, and Miscellaneous Expenditures Kids Also Influence Other Household Purchases Why Kids' Influence Has Grown Plethora of Products and Services for Kids Children Like to Shop
    • Food the Biggest Influence Target Restaurants Often Picked by Kids Kids Influence Parents' Selection of Toys and Play Things Children Dress Themselves with Parents' Money Digital Kids Influence Electronics Purchases Older Parents Spend More on Their Kids Figure 3-1: Projected Growth of Kids Market, 1999-2004 (dollars)
    Projected Market Growth
    • Kids' Market to Top $230 Billion by 2004 Methodology
    • Table 3-4: Projected Growth of Kids Market, 1999-2004 (dollars): Kids' Income, Parents' Expenditures on Children, Total Kid Consumers Become Adult Consumers

  4. Kids As Consumers
    Shopping Patterns
    • Kids and Shopping
    • Natural Born Consumers
    • Products Kids Select Include Cereal, Toys, Snacks, and More In Transitional Phase, Kids Make Co-Purchase with Parents Kids Establish Shopping Independence In Absence of Own Pocketbook, Kids Shop by Nagging Where Kids Shop
    • Discount Stores Lead List of Where Kids Like to Shop Retail Preferences Change with Age Shopping Trip Usually Yields Purchase Impulse Buys Are Frequent
    • In-Store Displays Influence Purchases Brand-Consciousness Common for Most Kids
    • Evidence of Brand Loyalty Emerges at Supermarket National Brands Mean Quality to Kids
    • Clothing Brands Mean Status to Kids and Parents Brand Preference Doesn't Predict Web Surfing Trends Kids Fickle, Tastes Hard to Anticipate
    • Table 4-1: Sample List of Kid "Rages" and "Outrages" for Late 1999 (percent): 6 Product Types
    • Kids Want What Others Tell Them They Want
    • Kids Look Up to Older Folks
    • Consumer Focus: Tweens
    • Kids Pick Snacks That Taste Good
    • Soda Beats Milk
    • Kids Don't Eat Enough Fruits and Vegetables
    • Nutrients Come Mainly from Breakfast Cereals
    • Lunchroom Drink Choices Expand Beyond Chocolate Milk Kids' Parents Purchase Bulk and Prepared Foods
    • Table 4-2: Percent of U.S. Households Regularly Purchasing Frozen or Prepared Foods by Presence or Absence of Children Under 17, 1998 (percent): 7 Product Types
    • Important Factors in Food Purchase: Price, Time Savings Meal Planning a Habit Among Families with Children Kids Accumulate Stuff
    • Kids Influenced by TV Advertising
    • Humor Can Illustrate Product Benefits
    • Children Take Advertising Seriously
    At the Retail Level
    • Grocers Cater to Kids
    • Kid Accommodation Now Mainstream Practice
    • Convenience Stores Reorient Toward Kid Preferences 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
    • The RAGGS Kids' Club
    • Retailer Profile: Toys "R" Us Leads Retailers with Record Toy Sales
    • Holiday Sales Flat
    • Toys "R" Us Grows Up, Diversifies
    • Toys "R" Us Seeks New Bricks-and-Mortar Approach Toys "R" Us Makes Move Online—Late
    • Retailer Profile: GapKids and babyGap
    • Old Navy Retail Approach Scores with Kids Retail Market for Kids Products Migrating Online Web Could Spawn New Retail Strategies
    • Online Retailer Profile:
    • E-Christmas Suggests Future of Toy Retailing Virtual Shopping Marred by Real Headaches Retail Name Recognition Proves Powerful Online Kids' Apparel Sales Seasonal
    • Back-to-School Brings in Kids and Parents Restaurants Targeting Kids Lure Families
    • McDonald's Thrives on Kid Business
    • Kids' Meals' Appeal Larger than Just Food and Toys Burger King Courts "Big Kids"
    • Kids Meal Toys Draw on Kid Media
    • Kids Menu Choices Become Varied
    • Kid Activities Include Jungle Gyms, Video Games, and Arts and Crafts
    • "Kids Eat Free" Promotions Fill Tables on Slow Nights Restaurants "Accommodate" Kids
    • Families Visit Theme Parks in Record Numbers Table 4-3: Top Ten Theme Parks in North America by Attendance, 1999 (number and percent)

  5. Kid-Oriented Media
    • Kids Media Comes of Age
    • The Transformation of Kid TV
    • When Kids Watch
    • Viewing Options Multiply
    • Table 5-1: Television Viewing Hours Per Week: Kids 2-11, 1996 vs. 1998 (hours): 6 Media
    • Television Viewing Down Slightly
    • Kids Are Watching Nickelodeon, Cartoon Network, Others
    • Table 5-2: Television Ratings for Kids 2-11: Kids-Only Programming, 1998 vs. 1999 (rating and percent): 8 Media Nickelodeon Number-One Cable Network on Strength of Kids Programming
    • Nickelodeon Programming Departs from Tradition Troubles Ahead for Nick?
    • Cartoon Network Builds on Hanna-Barbera Library
    • Kids WB! Rides Pokemon to Saturday Morning Success
    • Walt Disney Plays with ABC
    • Disney Uses New Media to Drive TV Viewership
    • The Mouse Has Deep Roots Disney Channel
    • Marks Foray into Cable Disney Channel Uses Zoog as Model for "Convergence" Toon
    • Disney Complements Disney Channel
    • Identity Crisis Plagues Disney
    • Fox Entertainment Lags
    • Fox Kids Flagging in Face of Competition
    • Fox Kids Hosts Popular Kids Club WAM!
    • America's Kidz Network
    • Galavision Taps Fast-Growing Market
    • Odyssey Tones Down Religion, Adds Muppets
    • Odyssey Has Growing Pains
    • Educational Kids' Television Takes New Approach
    • CTW and Nickelodeon Fuse Fun with Learning
    • Noggin References Internet Whenever Possible
    • Noggin Has Full Development Slate
    • Technology Expands Universe of Viewing Options
    • Digital Nets Take Cost-Effective Approach
    • Digital Channel Focus: Nickelodeon GAS
    • Animation an Easy Bet for Kid TV
    • TV Animation Gives Way to Quality Live Action
    • TV's Mass Kid Audience Loses Luster
    • Ad Agencies Embrace Kid Marketing
    • Kids Listen to the Radio The Personal Medium
    • Radio Disney Reaches One Million Kids
    • Radio Disney Needs to Mature and Grow
    • Kid Flicks Draw at Box Office
    • Animation Goes High Tech
    • Animated Features Carry Holiday Season
    • Kid Home Video Market Is Strong
    • Kids' Print Media Exploding
    • How Kids Interact with (and Learn from) Magazines
    • Kid-Specific Magazines
    • Which Magazines Kids Read Varies by Age Book Sales Dominated by Harry Potter Potter Beats Pokemon
    • Print a Part of Cross-Media Promotional Strategy
    • Kids Seek News, But Not Usually from Newspapers
    • Newspapers Akin to Broccoli, Poll Suggests
    • …So Newspapers Aim to Please Kids
    • Kid-Specific Features Found in Newspapers
    • Inserts for Kids Rise to Meet the Challenge
    • Newspapers Secure Future Readers with Headbone
    Direct Mail
    • Direct Mail Allows Focused Reach to Kids
    • Direct Mail Drawbacks in Kids Market
    • Newer Approaches to Direct Mail
    • Kids' Catalogs
    • Kids Catalog Sales Should Grow
    New Media
    • Kids Embrace New Media
    • How Kids Interact with Internet Varies with Experience Online
    • Services for Children Flourish
    • Kid Sites Climb Ranks of Dot-Commerce Leaders
    • Media Metrix Tracks Kids' Website Preferences
    • All Kids Equal on the Web
    • Kids Get Free Content on the Web
    • Discovery Kids Features Online Adventures
    • New Media Content Producer Profile: Headbone Interactive
    • Software Screens Bad Content
    • Web Filtering Service Launches
    • Crayon Crawler: The Web Browser for Kids
    • Search Engines Reach Out to Kids and Families Partnerships
    • Online Players Spend Millions on Offline Advertising
    • Privacy Battles Brew Over Kid Data on Internet
    • What COPPA Means for Kids
    • Dot Coms Opt for Self-Regulation
    • Website Owners Demand Advertisers Comply with Privacy Measures
    • Websites Make Privacy Policies Clear
    • The "Fourth Mass Medium" Drives Animation Revolution

  6. Marketing to Kids
    Marketing Fundamentals
    • The Rules Have Changed
    • Kids Are Next Market Growth Opportunity
    • Traditional Techniques Do Not Always Work
    • Visual and Verbal Sophistication Required
    • Catching Cool Is More Art Than Science
    • Wrong Approach Can Kill Product's Chances
    • Kid Marketing Includes the Whole Package—Literally
    • Time to Market Is Critical
    • Familiar Images Sell Product
    • Humor Can Sell, Too
    • What Kids Think Is Funny
    • Tips for Incorporating Humor in Marketing to Kids Humor Does Not Always Work
    • Don't Go Overboard on SFX
    • Empowerment a Powerful Kid Motivator
    • Using Celebrities to Promote Products
    • Spokescharacters Often More Influential Than Real Human Beings
    • Brands, Not Generics, on Tip of Tongue
    • Tapping Pop Culture for Marketing Ideas
    • Products as "Kids Only" or "Girls Only"
    • Kid-Specific Market Research
    • Homogeneous Focus Groups Work Best
    • Alternatives to Standard Focus Groups
    • "Junk Food" More Okay Than in the Past
    • Food Must Entertain, Always
    • Lure of Fast Food Makes Restaurant Marketing Challenging
    • New Directions in Kid Restaurant Marketing
    • Kid-Effective Tactics Need Not Be Overly Complex
    • Special Business Considerations in Toy Market
    • Toy Marketing Must Account for Fashion-Forward Business Trends
    • Toy Marketing Tactic Smooths Peaks and Valleys
    • New Strategy Eliminates Need to Predict "Hot" Toys
    • Licensing Drives Kid Product Sales
    • What Sells in Licensing Varies by Year
    • Movies Often Provide Fodder for Licenses
    • Licensing Not Always the Best Approach
    Marketing and Electronic Media
    • Marketers Must Understand Digital Orientation of Kids
    • Websites Not "Sticky" Without Kid Criteria
    Advertising, Promotions, and Contests
    • Kids' Favorite Commercials Don't Always Sell Product
    • Effective Advertising Hits Right Buttons
    • TV Advertising to Kids Is Regulated
    • Deal with Disney Gives McDonald's Promotional Muscle
    • Burger King Milks Pokemon for Promotions
    • Pokemon Demand Overwhelming
    • Pokemon Promotion Hit with Massive Recall
    • Kids Enjoy Put-It-Together Promotions
    • Burger King Adds Larger Dimension to Kids Meals
    • "Arch"-rival Challenges Use of "Big Kids Meal" Moniker
    • Kids Business Hotly Contested
    • Other Examples of Kids Meals Promotions
    • Big Names Not Always Needed for Kid Promotions
    • Memorable Promotions Count
    • Cable Operators Do "Good Works" Through Classroom Initiative
    • Kids Cable Network Tackles Columbine Issue
    • Contests Take a Variety of Forms
    Trade Shows and Marketing Events
    • The American International Toy Fair
    • Play and Technology Converge at Toy Fair
    • International Juvenile Products Show
    • The Youth Market Xchange Executive Conference
    • Consumer Kids
    • Selling to Kids University
    • Kid Power Food and Beverage Marketing

  7. VII. Examples Of Strategies And Campaigns Targeted To Kids
    Food and Beverages
    • Kraft Teams with Cartoon Network for "Election" Campaign
    • Missing Spokescharacter Theme Marks Major Quaker Oats Promo
    • Playing with Food Reaches New Heights
    • Pokemon-Related Candy Deals Abound
    • Reinvigorating Flat Sales with Kid Marketing Works
    • Cases Make Pringles More Kid-Friendly
    • Junior Mac: McDonald's Latest Kid Food Test Product
    • Restaurants Redouble Efforts to Lure Kids Away from Fast Food
    • Beverage Marketers Take Notice of Kids
    Play and Leisure Items
    • Pokemon Sweeps the Nation
    • Does Pokemon Have Staying Power?
    • Even Traditional Toys Get Wired
    • Electronic "Toys" Now Actually Functional
    • Mattel Leads Toy Market
    • High-Tech Push Comes Just in Time
    • New Directions for Mattel
    • Careful Marketing Invigorates Super Soaker Sales
    Apparel and Accessories
    • Apparel Sales Strong
    • School Uniforms Represent Portion of Apparel Sales
    • OshKosh B'Gosh Maintains Emphasis on Kids' Clothes
    • OshKosh B'Gosh Pioneers Kids' Clothing Market
    • New Directions in Kids Market for OshKosh B'Gosh
    • Stride Rite Targets Kids' Footwear Market
    • Great Feet! Provides New Interactive Shopping Environment
    • Stride Rite's Next Wave Includes Apparel, Accessories, More
    • High-Tech Shoes: Blinking Lights plus a Brain
    • Happy Kids Rides Licensing Wave
    • Kids Accessories Focus Sharpens for Discounters
    • What's Hot Now in Accessories Varies
    • Hair Accessory Business Growing at Retail
    Health & Beauty Care
    • Growth Expected in Kids HBC Market
    • Major Marketers Expand Product Offerings
    • New Product Introductions Emphasize Play
    • Other Introductions Abound in HBC for Kids
    • Nail Care Product Marketers Focus on Kids
    • Innovations and Fun Come to Bandage Lines
    Other Merchandise
    • Even Umbrellas Can Be Kid-Friendly
    • Kids Represent Up-And-Coming Market for Cameras
    • Products That Are Cool
    On the Web
    • Content Companies Stake Claim on Kid Media Time
    • Dot Coms Bring Fun to Finance
    • Not Too Late for Traditional Banks
    • Fun Mutual Fund Aims for Kids
    Licensing Trends
    • Recent Activity
    • Universal Studios Hones Licensing Approach in Sequels
    • Nickelodeon Reinvigorates Rugrats Through Licensing Deals
    • Licensing Agreements Frequent in School Products Arena
    • M. Hidary Launches Scholastic-Branded School Uniforms
    Retail and Entertainment Centers
    • Mackie's World: America's First Mall for Kids
    • Mackie's World Beset with Financial Troubles
    • Disney Launches New Family Entertainment Center Concepts
    • Disney Quest Extends Family Entertainment
    • RAGGS Drives Purchasing Loyalty at Malls

    Appendix I: Examples Of Consumer Advertising and Promotions (only available in bound editions of the report)

    Appendix II: Addresses Of Selected Marketers