Business Model Patterns

Marketing to Teens

Introduction

Electronic media already are playing a significant role in the lives of children and teens, many of whom enjoy access to their own personal media devices. They also are the first to grow up in a world saturated with networks of information, digital devices, and the promise of perpetual connectivity. They are in many ways the defining users of the new digital media.

Many websites allow users to interact with others on a real time basis. The trend is now shifting from communication to commerce and many companies have started leveraging the digital media to reach out to the growing segment in the market.

The Planning Commission’s report for the 10th five year plan puts the number of teenagers in the country at about 230 million, up from about 120 million in 1971. Being a teen has never been easy and especially so in today’s world, say experts. That is particularly true of children growing up in urban areas, who are exposed to satellite TV and internet. “In metros, teens ape westerners but if they are still expected to be ‘good Indian boys’ and girls’, it creates tremendous conflict.

How to Market to Teens

Teenagers have strong opinions and views that they want to be heard. Use marketing techniques that ask for their feedback, or allow them to express themselves. Social networking sites like Facebook have become an outlet for advertisers to get teens involved and create two-way channels of communication. Teenagers not only respond to the product but also provide information about their preferences, needs, and wants when coming up with new ideas.

Teens have a much shorter attention span as compared to adults. So getting straight to the point is the mantra for effective engagement. No long background information spiels about your product. This will only cause them to lose interest and divert their attention somewhere else. They are used to short, relevant messages that they can relate to.

Position your company as one that truly cares about and supports the issues they feel are important. For example, start your own cause or find an established one to support and connect yourself to. Things such as the educating a child, for example, have become increasingly popular. Promote the cause by means of information on company website or social profile and build a platform for the teens to express themselves, get heard and call out actions taken as a result of the whole exercise.

Take advantage of trends and big-named people. This does not mean you have to hire expensive celebrities to be in your advertising. Instead, find ways to connect your product to the phenomenon. If you want to do a sweepstakes, give away tickets to a popular concert.

If you have established yourself online, offer cool downloads, or connect yourself to websites that teenagers enjoy such as social networking sites, gossip columns, popular televisions shows, etc. Finding a way to incorporate your brand into their everyday interests will produce positive results in image awareness.

What to Be Aware of When Marketing to Teenagers

Never assume. Because there are many niche markets and tastes are constantly changing, do not assume that you know what teenagers want. Make sure your message is well researched- including feedback and opinions from focus groups consisting of teenagers. They are, above anyone else, who can tell you the most.

If you are using websites, online communities, or other forms of online marketing, make sure to constantly be changing and adding new concepts. This will keep them coming back on a regular basis to your site, and stop you from being old news.

Just like marketing to other segments, make sure your message is age appropriate. Do not speak down to them. They understand a lot more than teenagers from ten or twenty years ago, so market accordingly. If you are speaking to them like children, they will not listen. Instead, they will most likely become offended and be turned off by whatever message you are trying to convey. Even though they are still young, they want and expect to be treated like young adults.

Initiatives underway..!!

Teens are pretty hands on with their smart phones & tablets and prefer to browse on the same. They are really impatient as well. Most marketers put their films on YouTube as soon as they break on television. Bharti Airtel even launched its broadband campaign; Impatience is the New Life, first on the net. Sensing the drift in the market Aircel bundled internet into its service. The pocket internet service helped Aircel enlist better customers – 2 million of its 30 million customers use the internet service. Johnson & Johnson has launched a complete skin care range targeting the teens – including spot treatment gel, face washes, oil control moisturizers and oil control wipes. In fact, the brand now offers a comprehensive range to deal with various teenage skin issues—including Daily Care Range, Oil Control Range and Acne Control Range. Dermalogica is another brand that has focused on teens in a big way, launching large campaigns toward this segment. The brand’s Clean Start initiative and products were unveiled in January 2010 with much fanfare, including free makeovers and gift hampers to young adults and teens during a Dermalogica-sponsored college student-managed international film festival.

Way Forward

The companies see a huge potential market in the teens’ segment which is still unexplored. The advertising and promotional campaigns targeted towards teens are only going to increase going forward. A lot of these are likely to take the digital/ social media route to market. 

Reverse Innovation Reloaded..!!

The role of emerging markets

In fact, the needs and opportunities in the developing world are so different from those in the developed world that the very first requirements for reverse innovation success are humility and curiosity. One must let go of what he has learned, what he has seen, and what has brought him the greatest successes. In fact, it is best to assume that one have just landed on Mars.

Developing countries will become R&D labs for breakthrough innovations in diverse fields as housing, transportation, energy, health care, entertainment, telecommunications, financial services, clean water and many more.

Reverse innovation has the potential to transform wealth in the world. Growth in developed countries has slowed down. Much of the growth is now in developing countries. The 2008 financial crisis and the more recent debt crisis [in Europe] have only exacerbated this situation. As such, we are likely to see the center of gravity for innovation shifting from rich to poor countries.

How would Reverse Innovation benefit India?

Primarily Reverse Innovation would lead to further boom in industrialization. As more and more multinationals adopt and opt to produce and/or invent new products in India for local as well as western markets, the Indian economy would witness an increase in FDIs and also the indigenous multinationals would instinctively raise their investments to build advanced R&D facilities that would inspire cutting edge innovation and engineering. It also means the engineers would experience higher employment opportunities, and the consumer market would profit from better products developed to cater to their needs at reasonable prices.

Besides OEMs, Reverse Innovation would also lead to the overall development of the entire eco-system comprising of Tier I and II suppliers, technology vendors, educational institutions which support, fortify and facilitate this unprecedented growth through concurrent engineering, providing smart and agile engineering and production solutions to complex challenges, and development of resources.

Implications of reverse innovation for developed countries

If Western multinationals do not innovate for customers in developing countries, they not only stand to lose growth in these countries, the implications are far worse. Emerging giants will do the innovation and bring those innovations into rich countries and disrupt multinationals. We are already seeing strong local players such as Tata, Mahindra, Haier, Lenovo, Goldwind, Suzlon, Cemex and Embraer. The list will increase, no doubt. The biggest competitors for multinationals are local companies from emerging markets.

For multinational corporations, reverse innovation is not a "nice to have" boost to revenue growth rates. It will power the future -- not just in emerging markets, but everywhere. Many tremendous rich-world business opportunities will arise first in emerging markets. To compete, global corporations must be just as nimble innovating abroad as they are at home. The future is far from home.

Way forward..!!

The emerging economies have the world’s highest projected economic growth rates by a wide margin. The possibility of missing out on such growth should be more than enough to compel many of today’s multinationals to tackle the challenge of reverse innovation. And, again, the full implications of standing aside while others tackle the reverse innovation challenge are even more consequential. Failure abroad can lead to failure at home.

Innovation is expensive and risky. As such, it is hardly surprising that many established global companies discount the need to innovate when competing in emerging markets. How can it make sense to spend heavily on an innovation for a market in which customers have so little money?

Because in an ever lengthening list of industries, it is the only way to win.

Reverse Innovation

Introduction – What is reverse innovation?

Historically, multi-national companies innovated in west (developed countries) and sold those products in east (developing countries).  Reverse Innovation is doing exactly the opposite.  It is about innovating in east and bringing those products to west. Reverse Innovation is the strategy of innovating in emerging (or developing) markets and then distributing/marketing these innovations in developed markets. Reverse innovation has two parts; one is that companies got to innovate in east and then bring those innovations into west.

Who is doing what?

Many companies are developing products in emerging countries like China and India and then distributing them globally. One has to look at innovation paradigms in companies like GE, P&G, Nestle, Pepsico, Tata Motors, Godrej, etc. these companies have shed the conventional way of innovating in the west and have really generated dramatic growth by means of reverse innovation that has created huge market not only in the east but also in the west.

GE – GE MAC 800: GE’s innovation on the GE MAC 400 to build a portable low-cost ECG machine to cater to the rural population who cannot afford expensive health care was launched as an improved version a year later in 2009, in U.S. as MAC 800.

P&G – Vicks Honey Cough – Honey-based cold remedy: P&G’s (Vicks Honey Cough) honey-based cold remedy developed in Mexico found success in European and the United States market.

Nestle – Low-cost, low-fat dried noodles: Nestle’s Maggi brand – Low-cost, low-fat dried noodles developed for rural India and Pakistan found a market in Australia and New Zealand as a healthy and budget-friendly alternative.

Pepsico – Kurkure and Aliva: Pepsi is planning to give developed markets (particularly West Asia) a taste of its salted snack Kurkure (and also another snack Aliva). The product enjoys huge success in India and has become a Rs. 700 crore brand within a decade of its launch. The success is attributed to product innovation and a good marketing strategy. E.g. Made from corn, rice and gram flour, zero per cent trans fats and no cholesterol, Rs-3 small packs for pushing sales in the lower-tier towns.

Tata Motors – Tata Nano: While companies like Ford set up its global automobile platform in India and catered to the niche premium segments in India, Tata introduced the Tata Nano for the price conscious consumer in India in 2009. Tata plans to launch Tata Nano in Europe and U.S. subsequently.

Godrej – Chotukool Refrigerator: In 2010, Godrej Group’s appliances division, Godrej & Boyce Manufacturing Co Ltd test-marketed a low-cost (dubbed the world’s lowest-priced model at Rs. 3,250) refrigerator targeted mainly at rural areas and poor customers in India. The product runs without a compressor on a battery and cooling chips. The company wants to use a community-led distribution model (as an alternative channel of distribution) to push for product growth.

Key Drivers

The fundamental driver of reverse innovation is the income gap that exists between emerging markets and the developed countries. The per capita income of India, for instance, is about US$3,000, whereas it is about $50,000 in the U.S. There is no way to design a product for the American mass market and then simply adapt it and hope to capture middle India. You need to innovate for India, not simply export to India. Buyers in east demand solutions on an entirely different price-performance curve. They demand new, high-tech solutions that deliver ultra-low costs and "good enough" quality.

to be continued...