From Savers to Spenders: How Children Became a Consumer Market

Excerpted from Children As Consumers: Insights and Implications by James U. McNeal. Posted with permission of Lexington Books. This article originally appeared in Issue# 52-53

Children received allowances then perhaps as frequently as they do today. Their allowances were relatively smaller, however, and parents usually dictated the amount or percent that could be spent - and this also was often small. Parents would justify this strict guidance with such sayings as, "a penny saved is a penny earned," and "save for a rainy day."

The youngest population segment that was of concern to retailers was the teens. Accounting for teens' expenditures by marketers did not begin to take place seriously until the late 1950s. In general, teens were viewed as tomorrow's consumers, whereas younger children were characterized only as future consumers.

All that changed with a phenomenon that we still talk about and write about, the baby boom. When World War II ended, families started having babies as if they were making up for all the lost war years. By 1950 the under-five population was 16,163,000 - an unheard of 60 percent increase in 10 years! As these baby boomers reached ages five to 12, their small amount of spending became very noticeable because of their substantially increased numbers. Moreover, these were prosperous years, and the amount that each child spent also increased; we do not know by how much because no one kept track. It was not considered important.

Three Markets in One

But, today, children are viewed as a viable market by many manufacturers and retailers. Saturday morning television, with its $100 million of child-focused advertising, is a moving monument to this new market.

Potentially, children constitute the most lucrative market there is for many businesses because the youngsters are actually three markets in one:

• They are a current market that spends $4.2 billion a year of their own money on their own desires. In this sense children are viewed as having needs, having money to spend on items that satisfy their needs, and having a willingness to spend money. Entire industries - such as producers of candy, gum, frozen desserts, soft drinks, toys, comic books, records and cassettes - treat children as a current market. At the retail level, such outlets as video game parlors, movie houses and convenience stores also treat children as a ready market.
• Children are a future market for most goods and services. Manufacturers and retailers respond to them as future consumers to be cultivated now. Thus, department stores have special promotions for children - a sci-fi Saturday, for example - to build store awareness for the day when they begin to buy their own clothes.
• Children also constitute a market of influentials who cause many billions of dollars of purchases among their parents. Probably best known of these marketers are cereal firms that intensively advertise to children on Saturday morning television and directly or indirectly encourage the children to persuade their parents to buy certain brands of cereal. In the spring of 1986, General Mills introduced a new presweetened cereal to children. Julie Franz wrote in Advertising Age, "General Mills promised grocery store buyers that 95 percent of all children ages two through 11 will see the Circus Fun TV spot an average of 107 times during the cereal's first year."

Today's typical young consumers have several sources of funds, can spend their money on objects of their choice and are encouraged by their parents to become economically responsible as soon as possible. Most parents regard the notion of their children as consumers as a natural role to be assumed. The idea of parent-blessed mini-consumers appears to be a post-World War II phenomenon.

Theoretically, children do not require money because the products and services that they may purchase are ordinarily provided by parents. Then how is it that by age six or seven children have money to spend and are spending it? Several social forces produce this activity, but ultimately the parents determine it through their desire to please their children and their desire to prepare their children. We usually pamper our children from day one by giving to them an unending range of things obtained from the marketplace. As soon as they develop some money awareness, probably around age four or five, we begin giving them money in a desire to please them more, so that they may independently obtain some of the things we have been giving them.

It seems clear, then, that children are turned into consumers at a very early age in our society through the desires and encouragement of parents, who also provide the youngsters with the necessary financial support. The net result of this is that the children become a relatively big market segment for such items as sweets, snacks, soft drinks and toys as they pursue self-gratification and self-sufficiency. But, should children really be referred to as a market? According to the best-selling principles of marketing textbooks, the following four requirements must be met in order for a group to be considered a market:

• The people must need the product. That is, if children are referred to as a market for candy, for example, there must be a definable need for this product by this group.
• Individuals in the group must have the authority to buy the specific product. This requirement addresses the concept of the child being permitted by social custom or by those in charge to buy things.
• The people in the group must have the ability to purchase the products. This, of course, refers to the child having money and having control of it.
• The people in the aggregate must be willing to use their buying power. This means that having money is not enough; there must be a willingness to part with it.

In the case of children, it might be appropriate to add a fifth requirement, that individuals in the group must have knowledge and understanding of the marketplace. It is one thing to have money and the willingness to spend it; it is quite another to understand how, where and when to spend it and what to spend it on.

There are no indications that the nation's parents are going to do anything to reduce the consumption efforts of their children. In fact, parents in general seem more determined than ever that their children will become consumers at an early age or, more fundamentally, become adult at an earlier age. Kids are marching toward adulthood at a much brisker pace than they used to and are wanting more mature things to go with this accelerated growth.

Casting children as consumers is not done without recognizing that there are many ethical, economic and social questions concerning this position. If children are in fact a market for various goods and services, does this mean we should consider them as adults to a greater extent than we do? Alternately, from the standpoint of the consumer role, are children miniconsumers? Should we use a child model or an adult model to explain their consumer behavior? And, what about children's ability to understand fully the advertising messages and their intent? More specifically, some questions that parents might keep in mind when considering their children as little customers are as follows:

• Are parents aware that giving their children money to spend gives the children market power? While the money that one child receives is insignificant, the combined amount for all children causes children to have buying power and to be recognized as a market.
• Do parents really need to give their children money, particularly during preschool years? The parents meet the children's needs already and do it better than the children can.
• Are parents cognizant of retailers' feelings about children being given money to spend and being encouraged to spend it? Regardless of what motives the parents have for giving their children money, by virtue of giving it to them they set in motion certain activities at the retail level, such as stocking and displaying goods. Yet parents may not know the viewpoint of retailers.
• Are parents giving their children money, encouraging them to spend it, but relying principally on schools to teach the children appropriate consumer behavior? There is not much evidence that parents deliberately teach their children consumer behavior, yet they encourage them to be consumers.
• If parents insist on their children being consumers by giving them money and encouraging them to spend it, are they also giving approval to marketers to court their children as potential customers? We hear a lot of condemnation of marketers, particularly advertisers, for pursuing children as consumers, but from a business standpoint, it would be more surprising if they did not.

Many parents, on the other hand, seem to view children's consumer wants as being practically nonexistent if it were not for ads. Advertising, according to many parents, teaches children materialism, which is to want things for the sake of having them, not because they satisfy a variety of needs. Consumer protectionists, who are usually parents themselves, also tend to fault marketing for creating wants among children. While they speak of materialism, they more often protest about children wanting things they don't need as a result of perceived heavy-handed efforts by marketers, mainly through advertising.

Being a consumer in our nation is a right. Being a marketer is a privilege. It is the marketer that must be licensed, not the consumer. Children have a right to be consumers in spite of some inadequacies - their limited abilities, their limited knowledge, and their clumsiness. If business chooses children as a target market, whether current, future or influential, it assumes the responsibility in general for acknowledging their inabilities.

The plain fact of the matter is that something needs to be done to improve the marketing-child consumer connection. A strong relationship is a good thing for marketers - it means sales and profits now, and even greater sales and profits in the future. It is a good thing for children - it provides enormous input to their consumer socialization process as well as current satisfaction from products and their purchase of them. But no one should forget that children, particularly those under eight, are vulnerable to commercial abuses. Marketers have been shown to be abusive to children far too many times for their good will to be assumed.