GSM 5230

CONSUMER BEHAVIOR
Trimester 3 2009/2010

PBL2
CHILDREN AS CONSUMERS

GROUP 6
KUAN YEN NEE (GM03698)
TUNG WAI CHEE (GM03578)
YONG AI LEE (GM03633)
CHEE JINQ SHYAN (GM03528)

LECTURER : PROF. SAMSINAR BT MD SIDIN

 CONTENT
Page
1.0 Learning issues 3
2.0 Problem statement 3
3.0 Analysis 3
3.1 Analysis on Problem Statement 1 3
3.2 Analysis on Problem Statement 2 5
3.3 Analysis on Problem Statement 3 7
4.0 Recommendation 7

5.0 Appendix 8

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1.0 LEARNING ISSUES
1. What is a child?
A child (plural: children) is a human stages between birth and puberty. In Malaysia, the legal definition
of "child" (Age of Majority Act 1971) generally refers to a minor or a person younger than the age of
majority (below the age of 18 years). Biologically, a child is anyone in the developmental stage of
childhood, between infancy and adulthood.
2. What is children’s consumer socialization process?
The children’s consumer socialization process defined as the process by which children acquire the
skills, knowledge, attitudes, and experiences necessary to function as consumers. This process is shaped
by a number of sociocultural sources including parents, peers, school, shopping experiences and the
mass media. Inevitably, the process is also influenced by prevailing state of the local, national and
global economy.

3. What is marketing stimuli?

Marketing stimuli plays an important role in intergroup communication. It is a key variable both in
influencing quality and moderating effects of intergroup contact on prejudicial attitudes.
2.0 PROBLEM STATEMENT
Marketers concerned with children as future adult consumers need to look at:
1. How is the current status of children as consumers in Malaysia?
2. What are the several factors that determine children influence in consumption (not only in product
relevant to them)?
3. What are the future challenges posed by these soon-to-be adult consumers?

3.0 ANALYSIS
3.1 Analysis On Problem Statement 1

Factors Details
Geographic Urban, Suburban and Small Towns
Demographic:
1. Population  0 – 4 years old (3.29 million)
Projection  5 – 9 years old (3.05 million) about 41% of
by Age in 2010 Malaysia
 10 – 14 years old (2.82 million)
(based on 2000 total population
Population census)  15 – 19 years old (2.65 million)

2. Gender Male and Female

3. Race and Religion All
 daily pocket money (RM1 – 5)
4. Possible Source  annual duit raya or angpow during festive seasons
of Income  occasionally earn as bonus from adults (run errands, reward for
good school results, etc)
 4 – 6 years old (pre-school)
5. Education  7 – 12 years old (primary school)
 13 – 19 years old (secondary school)
 high obesity rate among pre-school (2006 study)
 25% primary school children were either overweight or obese
 underweight (malnutrition) stood at 10.3%
6. Nutrition Status
(refer Figure 1 in  in peninsular Malaysia,
Appendices overweight among 6 – 12 years old (11.0%)
for statistic by race) obesity among 6 – 12 years old ( 6.0%)
 in whole of Malaysia,
overweight among 7 – 9 years old (6.8%)
overweight among 10 – 13 years old (5.9%)
Table 1: Segmentation of Malaysian Children (Geographic and Demographic)
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Table 1 tabulate the current empirical (geographic and demographic) status of Malaysian children.
Subsequent Table 2 and 3 look at child Psychographic and Behavior respectively.

Factors Details
Psychographic:
1. Social Class Upper, Middle and Lower Social Class
2. Culture Collectivist (Keshavarz S. and Baharudin R., 2009)
2. Family Orphan, Single Parent, Nucleus and Extended Family
Life Cycle (mainly with Generation X parent)
 visualizers
Boys and Girls both watch 5 – 6 hours of television (alone and with
others) during school day/weekends (even more than housewives). Both
gender love watching cartoons, but girls also preferred dramas and
movies while boys yield to thrillers. As a child gets older, preference for
cartoon decrease. Instead, they watch dramas, movies, comedy and
variety shows (Nik Rahimah Nik Yacob et al, 1996).
 digital natives – electronic gadgets savvy (internet, computers, mobile
phones, etc)

3. Lifestyle

Source: www.marketingcharts.com

 homework
 reader – fiction and non-fiction books, newspaper, magazines, comics
 extra classes – ballet, abacus, mental counting, swimming, etc
 Gamers – play video game
4. Personality  Little Greenies – support green movement
Traits  Social Networkers – communicates online
 Team Players – play sport
5. Idol television characters (cartoon)
6. Socialization family members, teachers, neighbours
Agent

Table 2: Segmentation of Malaysian Children (Psychographic)

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 Factors Details
Behavior:
1. User Status First-Time, Regular, Ex-Users
2. Usage Rate Regular, Moderate, Infrequent
 among global kids (slowly creeping into Malaysia): Toys and Candy tops
spending lists but video games triumphant all avenue among Boys.

Source: www.marketingcharts.com

3. Spending Avenue

 other among local kids: stationeries for Girls and sport magazines for Boys1
4. Loyalty Status Innovators (attract to and like to try new things)

Table 3: Segmentation of Malaysian Children (Behavior)

3.2 Analysis On Problem Statement 2

A lot of factors that determine children

influence in consumption (not only in product
relevant to them) can be gain from the consumer
socialization process (refer Figure 2: A
conceptual model of consumer socialization
(Moschis and Churchill, 1978) on the left)

 a child social structural variables (socioeconomic status, gender, birth order)

 age or life cycle position

A children’s consumer socialization began at a very early age. Long before children are able to purchase
products they are already expressing their preferences to parents (Reynolds and Wells, 1997).
Involvement with the consumption process has been observed to occur as early as age 5 (McNeal, 1969).
While growing up, they increasingly become involved in decisions related to the purchase of products or
services. They may observe, request (just ask, plead, bargain, others – refer Figure 3 in Appendices)
and select goods with permission while accompanying their parents shopping as well as make
independent foray to shops themselves (McNeal, 1992).

 the presence of socialization agents (agent-learner relationships)

Children can learn from the socialization agents due to their frequency of contact, primacy and
sometimes control over rewards and punishments:
 children tend to pester parents to buy things use or wore by television characters as they want to be
just like their idols (Nik Rahimah Nik Yacob et al, 1996) especially stationeries bearing the cartoon.

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Source: focus group with GSM-UPM MBA mothers
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  parents (especially mothers) are powerful agents because they normally took their children shopping
from 2 – 3 years of age onwards and often explain to them what they are doing. By the time the child
reached 9 years, most have acquired fairly sophisticated consumption orientations though it may
differ by gender and social class.

 modeling/observation learning
A child imitates the agent behaviour (e.g. buying the brands that parents buy). Research has indicated
that unknowingly, parents frequently instruct their children about the household brand preferences
without letting potential young consumers observe their own choices (Bahn, 1987).

 reinforcement
Whenever a child’s request is fulfil – with intention to please the child, to reward them or simply
because the products is inexpensive and deem suitable – repetition of behaviour (request) is encourage.
On the contrary, with reference to Figure 3, mothers’ refusals might lead to argument or anger from the
child. However, if the mothers imply negative reinforcement (e.g. just keep quiet or walk away), the
child’s unreasonable request for consumption will be future discourage.

 social interaction
A child social interaction with his/her surrounding greatly influences consumption. Take Figure 4 and
Figure 5 in Appendices for example, kids that had taste and experience good food at his/her friends
home will eagerly tell her family members about it. Gradually, it changes the buying and consumption
process of a household. Similarly, one household2 reveal that the kids initiated the boycott on companies
that support Israel based on a list circulating on the Internet.
Apart from the consumer socialization process, several other factors that determine children influence
in consumption are:
 encouragement and opportunity provided by parents and society to self consume
 Children are free to use their pocket money before and after school hours plus light meals during
recess. Sometimes, they run errands for nucleus or extended family members.
 Nucleus family household with double income enrich and empower kids with money. They are
mostly also free from scrutiny on eating habits – resulting in malnutrition or overweight.
 The status of the only child at home make it not possible to have “hand-me-down” resulting in kids
demanding for “all the best things in the world”.
 Children from broken homes or under single parent had to assume the role of substitute “father”,
“mother” or protective/providing elder siblings which control the household purchase at a tender age.

 abundance of advertising
Children are vulnerable to advertisement whenever they are on screen (television or computer). They are
also exposed when they co-shopping with family members or out for outing (cinema, park etc) or simple
leisure activities (radio, read newspaper, magazines and comics).

(Source: Nielsen Advertising Information Services)

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Source: focus group with GSM-UPM MBA mothers
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3.3 Analysis On Problem Statement 3
Children serves as a double market – the present market for all the products which are meant for them at
this age (toys, eatables, books, clothes etc) and secondly the future market for most goods and services. To
gain an upper hand on the latter, marketers must thoroughly know the children present status and predict on
possible future challenges posed by these soon-to-be adult consumers:
 children of today belongs to Generation Y and Z which are innovators and low brand loyalty
 Little Greenies do not only support green activities, they also live healthy – a threat to the fast food
(and unhealthy) industry
 digital natives are technology savvy which also served as viral marketing – blogging, social media
 with higher spending power gain from higher income (upon higher education), Gen X and Y naturally
will demand high quality yet cheap goods
 minimize ads exposure (selective attention) in the future:
 someone might online 24/7 but they do not necessarily log on intended websites
 viewers can zip and zap off ads on television with tools like TiVo
 patrons of hypermarkets protect their privacy by refusing retails monitor their consumption database
 too many ads to notice (higher just notice difference, absolute threshold) cluttering around – resulting
in “drown” or wear out effect
 the unpopular or possible extinction of traditional print media (although now it is “not yet dead” in
Malaysia) making it harder to promote high involvement product that works better with central route to
persuasion

4.0 RECOMMENDATIONS
Some recommendations for marketers targeting the children of today are as such:
 Products – as innovative as possible because Generation X and Y are Innovators
 Place
 ensure no interruption in inventory in all outlets of purchase (including virtual market)
 place ads or organize public relation in youth oriented place/activities (e.g. concert, cinema, shopping
complexes, cyber café, mamak chain etc)
 Advertising and Promotion
 creative ads that ensure carryover effect to make "hostage" of the children consumer
 channel of advertising have to be on spot channel (e.g. Astro) rather than network channel (e.g. ntv7)
as kids of today prefer pay/cable TV over free channel
 for high involvement product, use public ads that direct consumers to particular website/hotline
 repetitive integrated communication tools (IMC) to product brand equity and publicity
 Price – reasonable yet can charge premium for those who is not that price sensitive

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5.0 APPENDICES

Figure 1: Nutrition status of children by race (2002 survey)

Figure 3: Model of children’s requests and parental response

(Isler, Popper and Ward, 1987)

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 Figure 4: The family food model taking the perspective of children’s direct participation and
influence based on the family model originally developed by (Jensen, 1990)

Figure 5: Hypothesized interaction between food availability, children’s lifestyle choices, food intake
behavior, food consumption, exercise and weight status.