Teenage consumers - Understanding the teenage market segments

SUMMARY

Introduction

Teenage marketing has been subject to a boom over the last few years. New insights have been accompanied by finer segmenting of the teenage market. However, marketers in many industries are making a U-turn as they realize the small size of the market precludes successful subsegmentation. This report answers the question as to whether this is also true for banks.

Scope

• UN and proprietary data on the size of different teenage market segments
• Proprietary data on income levels of teenagers
• Analysis supported by Financial Services analysts as well as academics and consumer experts
• Coverage of Western Europe, with country data for Germany, France, the UK, Spain, Italy, Sweden and the Netherlands

Report Highlights

Teenagers made up 8.8% of the total Western European population in 1997. By 2007, this will have fallen to 8.2%. The total European market value is 6.0bn for tweens and 10.5bn for 14-to-17 year-old teenagers in 2002. The effect of independence parenting will be that current and future generations of teenagers will have much more of a say over who they bank with. Current approaches to marketing to tweenagers often fail to take into account the level of development of tweenagers and their need to affirm their maturity.

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 6

• What is this report about? 6
• Who is the target reader? 6
• How to use this report 7

CHAPTER 2 YOUTH STRATEGIES 8

• Customer-centric marketing 8
• Segmenting youth 9

CHAPTER 3 MARKET CONTEXT 11

• The number of teenagers in Europe 11
• Discretionary funds 13
• Teenagers and tweenagers 16
• Sources of income (tweens only) 19

CHAPTER 4 TEENAGE NEEDS 21

• Basic tweenage needs 21
• Aspirational ages 22
• Developmental compression 23
• Marketing awareness and media saturation 24
• Changing social structures 25
• Independence parenting 26

CHAPTER 5 APPEALING TO YOUNGSTERS 27

• Teenage switching 27
• A model for marketing to tweens 28
• Primary guidelines 29
• Best Practice 30
  • A brief background to Axion 30
  • Much of Axion's success stems from its excellence in branding 31
  • Innovative product offerings? ·ot quite! 37
  • Axion's distribution strategy benefits from Dexia's coverage 38
  • Others have tried to emulate Axion's success 38
  • Future direction: more of the same but with greater reach 41
  • What lessons should be learnt from Axion? 41

CHAPTER 6 APPENDIX 43

• Further reading 43
• Do you need further information? 44
• Datamonitor financial services consulting 44
• FS writing team 45

List of Tables

• Table 1: Teenagers as a percentage of the total population, by country in Western Europe, 1997-2007 13
• Table 2: Funds managed by Western European teenagers in a discretionary fashion, by country, 2002-2007 15
• Table 3: 14-to-17 year olds as a proportion of all teenagers in Western Europe by country, 1997-2003 17
• Table 4: Annual teenage income by age subsegment, 2002-2007 18
• Table 5: Tweens·sources of discretionary income (per week), 1997-2002 19

List of Figures

• Figure 1: Groups in the youth market 9
• Figure 2: Number of teenagers in Western European countries descends, 1997-2007 11
• Figure 3: Teenagers become a smaller segment of the total population, 1997-2003 12
• Figure 4: Yearly per capita teenage income in Western Europe by country, 2002-2007 14
• Figure 5: Differences of discretionary funds with age, 2002 16
• Figure 6: 14-to-17 year olds hold about two-thirds of teenage income, 2002 17
• Figure 7: Pocket money makes up 60% of tween income, 2003 19
• Figure 8: US youths and their aspirational ages 23
• Figure 10: Model of product design and age targeting 28
• Figure 11: In addition to standard banking product, Axion offers a number of extra-banking-services online, April 2003 34
• Figure 12: Dexia's Axion: more fun than banking, 2003 36
• Figure 14: Other Belgian retail banks have attempted to emulate Axion's success by introducing their own youth offerings, 2003 40