Spending_Habits_Among_Youngsters

Spending habits among youngsters Ashish owns an iPod, a latest 3 mega pixel camera phone with Bluetooth, GPRS, touch screen (add on all the features you could think the mobile companies offer these days!), has a personal computer at home plus a laptop for "personal" needs, a home theatre system in his room, a collection of the latest CD's, casual wear from the top brands, branded shoes..... Ashish is not an MNC executive or a software engineer who mints money but a Tweener (as the industry now puts these kids, who actually seem to not fit into the definition of a traditional kid), a 17 year old teen from a middle class family with both parents working. It is the face of the emerging new India where teenagers are suddenly spending much more than what their grandfathers earned in their lifetime. As families get smaller, teen spending power has also become a matter of demographics. Parents are splurging more because most parents have only two kids. As nuclear families are more with both parents working, children get more money as pocket money compared to large families with more than 3 kids. Children get cash with no strings like work or responsibilities attached to it. Ask or don't ask and you shall receive...a lot of money. That's the commandment at the core of parents turning their kids into carefree big-spenders. This is when a colossal chunk of Indian’s teenage population has no access to basic needs like food, shelter, and clothing and education. Parents feel that pocket money is important for the kids, as they can replace the time that they would otherwise have to spend with their kids, with some money. Parents also feel that what they were not able to get in their childhood, they have to get all that for their kids. During the last decade of unparalleled prosperity, the marketers have persuaded us that greed is not only good, but also necessary and natural. Then they took a look at the largest group of teenagers in our country's history and started marketing directly to them. Be it mobile phones, iPods, latest fashion and sports accessories or the newest gizmos in the market — the Tweeners are lapping them up. The Tweener has brought the gleam back to the eyes of marketers and advertisers. Rising disposable incomes, willingness to spend and greater exposure to media, make this class a spending machine. Yet, there is a spending pattern too. For today's youth (16-21years), apparel figures on top of the list. This is followed by fashion and lifestyle brands, sportswear, gifting and travel. Two basic characteristics associated with the shopping behavior of the young generation are its preference for shopping online and the increasing brand consciousness. With information just a click away, Tweeners spend considerable time comparing various products, their features and prices before making an informed buy decision. Importance of teenagers in the Indian society & economy: Demographic Details Table no. 1.1 : Youth Population in India - 2001 (In thousands) Age-group 2001 Total Males Females All ages 1028610 532157 496453 13-19 142701 75972 66729 20-24 89764 46321 43443 25-29 83422 41558 41865 30-35 106450 55116 51333 Total 422337 218967 203370 Source: Census of India - 2001- C-Series Tables This data shows that majority of the youth population in India comprise of age group 13 -19.Thus it is very important to study their spending habits, because youths of today are future of India, and if they are not spending money without any responsibilities then it can lead to generations of irresponsible citizens and can become a hindrance for the development of our nation. India’s population is her biggest asset and the fact that Indian population is growing young day by day adds to the joy. India has a huge number of youth and teenagers. In fact India has about 115.3 million teenagers! This also implies that India has more teenagers than the combined teen population of the G7 countries! Having a huge teen populace means investment opportunities for companies dealing in fashion, fast foods, soft drinks, clothes, music, electronics, sports goods etc is very high. While the Indian market is flooded with brands like Coca-Cola, Pepsi, Levi’s, Domino’s Pizza, McDonalds, Pizza Hut, KFC, Nike, Adidas, Reebok, Disney etc. there is scope for a lot more to enter the market. After all, India does have the largest teen population in the world! To give you an overview of the market and its potential: • 74% urban teens posses cell phones • 81% urban youth are computer users • 89% watch TV daily • 73% listen to the radio • 91% watch movies regularly Having a GDP of 9% and the third largest economy of Asia (after Japan and China) and the twelfth in the world, India, it is assumed, will have the third largest economy (leaving behind Japan!) by 2012. According to a survey by Business Today, Indian youths spend $42 billion per annum. According to some of the big brand managers, the Indian youth is willing to spend more for a brand name provided they get a rational argument regarding its utility. To add to this, 18% of LVMH sales in India come from teenage customers. As stated before, the Indian market, unlike its American and European counterparts, is growing young every day. Hence companies dealing with teen products have to look for markets having considerable teen inhabitants like India. The question is while Starbucks has opened its joint in India, will its foils like Dunkin Donuts, Café Nero sit back and watch Indian market being captured by its competitor, or will they too land in India soon' Hence it’s clear from all the above that multinational giants are all waiting to grab the huge pockets of Indian teenagers and the youth. The question here is, are the youth and teenagers of today getting enough education regarding money matters and their spending habits. Are they competent enough to choose wisely from a market where there are cut throat competitions and marketers trying out all sort of techniques (fair or unfair) to capture more market share' This project tries to find an answer to these questions. Why Focus on Teens' Because of the growth in the Teen population, marketers cannot afford to ignore Teens for numerous other reasons. This growing powerbase of spenders and influencers are important because they:  Have significant discretionary income.  Spend family money as well as influence their parents’ spending on both large and small household purchases.  Establish and affect fashion, lifestyle, and overall trends.  Provide a “window” into our society — a view of how it is now, and what it is likely to become. Lifestyle, Attitudes, Behaviors Today’s Teens live in a time of sweeping technological advances and relative affluence. Consequently, their attitudes and cultural awareness exhibit a number of distinguishing characteristics. For example, they:  Are realistic and optimistic with a strong sense of individualism.  Want and expect to have control over their media experiences.  Have access to evolving and new technologies — such as DVRs, instant messaging, and wireless phones. As per a study Teen Attitude in 2003 about themselves was: 86% People should be free to look, dress and live the way they want whether others like it or not 80% I have a very clear idea of my Objectives and Goals in life 75% I trust my own judgment only 68% I often buy a different brand just to see what it is like 62% I’m smarter than most kids my age 78% Being in control of your life Market Opportunities:  Teens are a growing market. The Teen population will expand from 32.4 million in 2000 to 33.5 million in 2010.  Teens influence household spending. Parents consult the computer and market-savvy Teens in their households for large and small purchases. Market Challenges: Teens have more choices than ever. How will advertisers get — and keep — Teens’ attention in the face of so many products lying for their attention' What Teens Purchase and Plan to Purchase with Their Own Money Teens spends in a wide variety of categories, from durable products such as clothing, CDs, video Games, and jewelry to nondurables, such as food, soda, snacks, and ice cream. Some specific observations about Teen behavior and purchase intent include:  Clothing topped the list of both what Teens planned to buy and what they actually purchased.  Entertainment items, such as video games, CDs.  Food and drinks were the most common items recently bought. Table no.1.2 : Top 10 Items Teens Plan to Buy with Their Own Money By Percent (%)* Overall Teen Rank Males Females  Clothes 24 48  Shoes 19 21  CDs or Recorded Music 19 18  Video Games 21 6  Jewelry 7 16  Food 10 10  Soda or Soft Drinks 7 9  Car or Car Parts 10 6  Candy 6 6  Lunch 4 7  Magazines 6 3 Table no.1.3 : Top 10 Items Teens Last Bought with Their Own Money By Percent (%) Overall Teen Rank Males Females  Clothes 21 43  Food 30 31  Candy 24 34  Soda or Soft Drinks 26 32  Salty Snacks (i.e. Chips) 15 22  CDs or Recorded Music 19 18  Lunch 13 22  Shoes 15 16  Video Games 18 5  Jewelry 7 15  Magazines 9 12  Ice Cream 7 10 (age 13-19)