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Youth Marketing in Cosmetics and Toiletries - Business Insights

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CONSUMER<br />

<strong>Youth</strong> <strong>Market<strong>in</strong>g</strong> <strong>in</strong> <strong>Cosmetics</strong> <strong>and</strong><br />

<strong>Toiletries</strong><br />

By Piers Berezai<br />

Table of Contents


Piers Berezai<br />

Piers Berezai is an analyst <strong>in</strong> Datamonitor’s Consumer Goods Practice Area. S<strong>in</strong>ce<br />

jo<strong>in</strong><strong>in</strong>g Datamonitor, after graduat<strong>in</strong>g from Cambridge University, Piers has worked on<br />

a number of consultancy projects <strong>and</strong> reports that have focused upon market<strong>in</strong>g mix,<br />

market entry <strong>and</strong> new product development strategy with<strong>in</strong> the cosmetics <strong>and</strong> toiletries<br />

<strong>in</strong>dustry.<br />

Copyright © 1999 Bus<strong>in</strong>ess <strong>Insights</strong> Ltd<br />

This Management Report is published by Bus<strong>in</strong>ess <strong>Insights</strong> Ltd. All rights reserved.<br />

Reproduction or redistribution of this Management Report <strong>in</strong> any form for any<br />

purpose is expressly prohibited without the prior consent of Bus<strong>in</strong>ess <strong>Insights</strong> Ltd.<br />

The views expressed <strong>in</strong> this Management Report are those of the publisher, not of<br />

Bus<strong>in</strong>ess <strong>Insights</strong>. Bus<strong>in</strong>ess <strong>Insights</strong> Ltd accepts no liability for the accuracy or<br />

completeness of the <strong>in</strong>formation, advice or comment conta<strong>in</strong>ed <strong>in</strong> this Management<br />

Report nor for any actions taken <strong>in</strong> reliance thereon.<br />

While <strong>in</strong>formation, advice or comment is believed to be correct at the time of<br />

publication, no responsibility can be accepted by Bus<strong>in</strong>ess <strong>Insights</strong> Ltd for its<br />

completeness or accuracy.<br />

Pr<strong>in</strong>ted <strong>and</strong> bound <strong>in</strong> Great Brita<strong>in</strong> by MBA Group Limited, MBA House, Garman<br />

Road, London N17 0HW. www.mba-group.com<br />

Bus<strong>in</strong>ess <strong>Insights</strong>


Tweenagers, the 10 to 13 year old category 42<br />

Teenagers, the 14 to 17 year old category 44<br />

Ethnic segmentation 46<br />

The purchas<strong>in</strong>g decision 47<br />

The purchas<strong>in</strong>g decision of children 48<br />

The purchas<strong>in</strong>g decision of tweenagers 49<br />

The purchas<strong>in</strong>g decision of teenagers 49<br />

The pester power factor 51<br />

Pester power <strong>and</strong> young consumers 54<br />

Chapter 5 <strong>Market<strong>in</strong>g</strong> mix: The key variables 56<br />

Product <strong>in</strong>novation 57<br />

Packag<strong>in</strong>g 61<br />

Br<strong>and</strong> development 62<br />

Media advertis<strong>in</strong>g 63<br />

In-store market<strong>in</strong>g 67<br />

Chapter 6<br />

Children, the 3 to 9 year old age<br />

category 72<br />

Target<strong>in</strong>g child consumer characteristics 73<br />

Bipartite purchas<strong>in</strong>g decisions 73<br />

No personal <strong>in</strong>come 74<br />

Different <strong>in</strong>terpretation of br<strong>and</strong>s 74<br />

Will<strong>in</strong>g to learn but have short attention spans 75<br />

Lack of self-awareness 76<br />

The pester power factor 76<br />

<strong>Market<strong>in</strong>g</strong> mix: The key variables 77<br />

New Product Development (NPD) 77<br />

Media advertis<strong>in</strong>g 82<br />

In-store market<strong>in</strong>g 83<br />

Future outlook 84<br />

Case study: L’Oréal Kids 85<br />

Chapter 7<br />

Teenagers, the 10 to 13 year old<br />

age category 88<br />

Target<strong>in</strong>g teenage consumer characteristics 89<br />

The grow<strong>in</strong>g ability to underst<strong>and</strong> br<strong>and</strong> image <strong>and</strong> advertis<strong>in</strong>g 89<br />

Bus<strong>in</strong>ess <strong>Insights</strong><br />

ii


Bipartite purchas<strong>in</strong>g decisions 89<br />

Limited disposable <strong>in</strong>come available 91<br />

Self image <strong>and</strong> self-awareness develop<strong>in</strong>g 91<br />

Desire to grow up quickly 91<br />

Will<strong>in</strong>g to experiment but not comfortable with entirely new products 92<br />

<strong>Market<strong>in</strong>g</strong> mix: The key variables 92<br />

New Product Development (NPD) 92<br />

Media advertis<strong>in</strong>g 97<br />

In-store market<strong>in</strong>g 98<br />

Future outlook 99<br />

Case study: Brendon Cologne 100<br />

Chapter 8<br />

Teenagers, the 14 to 17 year old<br />

age category 103<br />

Target<strong>in</strong>g teenage consumer characteristics 104<br />

High degree of consumer knowledge 104<br />

Ability to work gives degree of f<strong>in</strong>ancial <strong>in</strong>dependence 104<br />

Decision mak<strong>in</strong>g is mostly <strong>in</strong>dependent but can be constra<strong>in</strong>ed by parents 105<br />

Trends are adopted <strong>and</strong> discarded quickly 105<br />

Access to large amounts of <strong>in</strong>formation <strong>and</strong> <strong>in</strong>terest <strong>in</strong> new media 106<br />

<strong>Market<strong>in</strong>g</strong> mix: The key variables 106<br />

New product development 106<br />

Media advertis<strong>in</strong>g 110<br />

In-store market<strong>in</strong>g 111<br />

Future outlook 111<br />

Chapter 9 Industry op<strong>in</strong>ion survey 113<br />

Introduction 114<br />

The rate of growth of the youth cosmetics <strong>and</strong> toiletries market 115<br />

Growth opportunity by product category 116<br />

The key growth drivers for the youth market 117<br />

Key drivers for the child age group 117<br />

Key drivers for the tween age group 118<br />

Key drivers for the teen age group 119<br />

Manufacturers or br<strong>and</strong>s target<strong>in</strong>g the youth market 119<br />

The most important features of New Product Development 120<br />

The most important features of NPD for children 120<br />

The most important features of NPD for tweenagers 121<br />

The most important features of NPD for teenagers 122<br />

Bus<strong>in</strong>ess <strong>Insights</strong><br />

iii


The most effective advertis<strong>in</strong>g media 123<br />

The most effective advertis<strong>in</strong>g media for children 123<br />

The most effective advertis<strong>in</strong>g media for tweenagers 124<br />

The most effective advertis<strong>in</strong>g media for teenagers 125<br />

The most important distribution channels 126<br />

The countries that lead youth market<strong>in</strong>g <strong>in</strong> cosmetics <strong>and</strong> toiletries 128<br />

List of Figures<br />

Figure 0.1: Segment<strong>in</strong>g the youth market 9<br />

Figure 3.2: <strong>Cosmetics</strong> <strong>and</strong> toiletries sales by country (US$bn), 1998 21<br />

Figure 3.3: Sales by product category (% value), 1998 22<br />

Figure 3.4: The US is the most developed youth market 24<br />

Figure 3.5: Population by age group, 1998 29<br />

Figure 3.6: Child pocket money <strong>in</strong> Europe, 1998 31<br />

Figure 3.7: Average pocket money levels per annum by country (US$/child), 1998 31<br />

Figure 3.8: Women’s share of the labour force <strong>in</strong> Europe <strong>and</strong> the US (%), 1995-99 33<br />

Figure 3.9: Spend<strong>in</strong>g on toys <strong>and</strong> games by country (US$m), 1998. 35<br />

Figure 4.10: Segment<strong>in</strong>g the youth market 39<br />

Figure 4.11: The <strong>in</strong>dependence of age categories as consumers 46<br />

Figure 4.12: The bipartite purchas<strong>in</strong>g decision 47<br />

Figure 4.13: Parental <strong>in</strong>fluence <strong>and</strong> youth <strong>in</strong>come. 51<br />

Figure 4.14: Factors contribut<strong>in</strong>g to the <strong>in</strong>creased effectiveness of pester power 52<br />

Figure 5.15: Factors contribut<strong>in</strong>g to NPD 57<br />

Figure 5.16: Henkel’s Schauma Kids features child k<strong>in</strong>d formulas 58<br />

Figure 5.17: Summary of media advertis<strong>in</strong>g for young consumers at present 66<br />

Figure 6.18: Differ<strong>in</strong>g child <strong>and</strong> parental concerns <strong>in</strong> the purchas<strong>in</strong>g decision 74<br />

Figure 6.19: Colgate, offers products that feature cartoon characters. 80<br />

Figure 6.20: Summary of media advertis<strong>in</strong>g effectiveness to children 82<br />

Figure 6.21: L'Oréal Kids Range 85<br />

Figure 7.22: Tween <strong>and</strong> parental concerns <strong>in</strong> the purchas<strong>in</strong>g decision 90<br />

Figure 7.23: Summary of media advertis<strong>in</strong>g to tweenagers 97<br />

Figure 7.24: Brendon Cologne 100<br />

Figure 8.25: Teen <strong>and</strong> parental concerns <strong>in</strong> the purchas<strong>in</strong>g decision 105<br />

Figure 8.26: Tommy girl by Tommy Hilfiger 109<br />

Figure 8.27: Summary of media advertis<strong>in</strong>g to teenagers 110<br />

Figure 9.28: Current <strong>and</strong> future growth rates <strong>in</strong> youth market<strong>in</strong>g 115<br />

Figure 9.29: Relative importance of growth by product category 116<br />

Figure 9.30: Key drivers for the child age group 117<br />

Figure 9.31: Key drivers for the tween age group 118<br />

Figure 9.32: Key drivers for the teen age group 119<br />

Figure 9.33: Most important features <strong>in</strong> child NPD 120<br />

Figure 9.34: Most important features <strong>in</strong> tween NPD 121<br />

Figure 9.35: Most important features <strong>in</strong> teen NPD 122<br />

Figure 9.36: Most effective advertis<strong>in</strong>g media for children 123<br />

Figure 9.37: Most effective advertis<strong>in</strong>g media for tweenagers 124<br />

Figure 9.38: Most effective advertis<strong>in</strong>g media for teenagers 125<br />

Bus<strong>in</strong>ess <strong>Insights</strong><br />

iv


Figure 9.39: Overall relative importance of distribution channels 127<br />

Figure 9.40: Countries driv<strong>in</strong>g youth market<strong>in</strong>g 128<br />

List of Tables<br />

Table 3.1: Overall cosmetics <strong>and</strong> toiletries sales by country (US$m), 1994-98 20<br />

Table 3.2: <strong>Cosmetics</strong> <strong>and</strong> toiletries sales by category (US$m), 1998 21<br />

Table 3.3: US youth expenditure spend on cosmetics <strong>and</strong> toiletries by age group (US$/head),<br />

1998 23<br />

Table 3.4: <strong>Youth</strong> spend<strong>in</strong>g on cosmetics <strong>and</strong> toiletries (US$m), <strong>in</strong> 1998 24<br />

Table 3.5: Future youth spend<strong>in</strong>g on cosmetics <strong>and</strong> toiletries <strong>in</strong> (US$) 25<br />

Table 3.6: Population (0-4 years), by country (millions) 27<br />

Table 3.7: Population (5-9 years), by country (millions) 27<br />

Table 3.8: Population (10-14 years), by country (millions) 28<br />

Table 3.9: Population (15-19 years), by country (millions) 28<br />

Table 3.10: Pocket money for 4 to 14 year olds <strong>and</strong> total pocket money of 4 to 14 year olds per<br />

country, 1998 30<br />

Table 3.11: Average weekly pocket money <strong>in</strong> the UK(£m), 1994-98 32<br />

Table 3.12: Spend<strong>in</strong>g on toys <strong>and</strong> games per capita (US$m), 1998 35<br />

Table 4.13: Divorce rate as a % of marriages by country, 1998 53<br />

Table 4.14: Household sizes <strong>in</strong> per capita per house 1994-1998 53<br />

Table 5.15: Global c<strong>in</strong>ema admissions per country <strong>in</strong> millions, 1993 –1997 64<br />

Table 5.16: PC households by country 1998-2003 65<br />

Bus<strong>in</strong>ess <strong>Insights</strong><br />

v

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