Essay on Global Kids
The market for children’s products at all times attracted a huge stream of different businesses and companies because of its stability and steady demand. According to James U. McNeal (n.d., Three Markets in One section, para. 1), “today, children are viewed as a viable market by many manufacturers and retailers.”
In turn, Ramkkasturi in his article “The Kid segment is a growth market” wrote that for corporations as well as marketing persons “…the kid segment an attractive emerging growth market is matter to think about” (n.d., para. 3). He continues to admit that “corporations are spending huge sums on this child segment. The media involve the kids almost everywhere no matter whether the product is targeted at child segment or at the grown-ups” (n.d., para. 6).
The modern children’s product market is considered to be one of the most dynamic and profitable markets. Its major key segments, such as the baby clothes, toys, food and shoes provide the highest rates of production and selling.
Thus, the purpose of this report is to assess the evidence of the existence of a global kids segment and recommend ways in which such a global segment could be targeted.
‘Global Kids’ Segment
Accessing the evidence of the existence of a global kids segment, it is possible to mention about a market segment in general. In this case, according to Litten (1979: p. 60), “A market segment is a group of consumers or clients – actual or potential – with common characteristics which differ from those of other segments.” Therefore, “the concept of market segmentation may be used for strategic alignment of the firm’s productive capacities with its existing and potential markets” (Beik and Buzby, 1973: p. 48).
As it has been previously noted, the children’s product market consists of multiple segments, each of which is a separate market with its own characteristics and laws. Some segments are poorly structured. For example, the toy market includes a segment of video games and video game consoles that are not considered to be the classic “toys.” A segment that is named toys & gifts is a border area between the child and adult market. But in any case, the toy market is considered to be one of the most promising and perspective markets all over the world.
There is no a common understanding of the age limit for children’s product market. It is possible to distinguish the market of products for the infants (up to three years): the products for baby care, cosmetics, toys, strollers, diapers, clothing, textiles, baby food, etc. However, the upper age range varies from 12 up to 18 years.
The key factors in the development of the market are the birth rate, income growth and development of children’s consumer culture. The birth rate directly affects only the market of products for newborns, but for the remaining segments it has a delayed effect. The market is largely provided by the fact that the children’s clothing, shoes, toys, and books require the constant updates. So the demand for products for children has no direct dependence on the price and level of family income.
The important feature of children’s product market is the target consumer, because the purchase decision, as a rule, is taken by the parents, but the product is consumed by the children. This applies, first of all, to the age segment from 0 to 3 years. But the older your child, the more he/she is involved in the product selection process.
In addition, a child quickly “passes” through the different market segments. For example, baby food takes an average of 12-18 months, diapers – 24 months. And some items from the product of subgroups, such as a stroller, playpen, crib, are purchased once. Thus, customer loyalty that is expressed in some repeated purchases of a certain brand of goods is limited.
A wide variety of sales channels is very specifically for this market. Baby products are not only presented in different specialized children’s stores, but also in the pharmacies, stores of cosmetics and household products, shopping centers, non-specialized stores, supermarkets and hypermarkets, etc. In this case, a children’s product range for the majority of these sales channels can be only considered to be concomitant.
The “toy” segment of the children’s product market develops very rapidly.
Nowadays, the market of toys for the children has become so broad and varied that it became possible to distinguish the individual segments of that market. Like any other goods, the toy products are comfortable, high quality, efficient, beautiful, even spectacular, and vice versa.
Demand for children’s toy products have always been and will be, because it is needed for each of us individually.
Today’s market of toys aimed at teaching and developing the children, is so versatile that the problem of choosing the correct, well-made and, importantly, aesthetically beautiful thing that can cheer up even the most dull child сomes to the fore. The parents are increasingly focused on the children’s development and seek to start it as soon as possible.
The capacity of the national market of toys and the development of consumer demand will provide it with a high rate of growth. The domestic industry has a significant regional differentiation under the conditions of the market dependence on the level of income and social situation.
A segment named “soft toys for children,” which in terms of its development is ahead of other market goods, can be considered to be a brand. The consumer preferences are formed mainly through the perceptions of parents about the usefulness of the children’s toys. First of all, the main priority is given to the foreign brands.
Nowadays, the traditional toys are replaced by different interactive products. In addition, there are niches, such as the educational toys, intelligent, music, board and sports games where the market participants are not really active.
This is a widespread fact that there are a variety of books and tablet computers for children on the shelves of different supermarkets.
For example, we can mention about “Children iPad” or the Kindle e-book for kids who are just learning to read. You can comfort your children with a colorful “mobile phone” or buy a laptop for them. Therefore, there are a lot of toys on the market to purchase for the children. Another trend is the toys that can sing. Mickey Mouse, colored bears, dolls – cheer up kids and parents. The popular toys are created based on hit movies, such as “Tron” and “Transformers.”
However, the traditional toys without batteries – designers, teddy bears are also in demand with the parents and their children. Ultimately, anything can become a toy for a child – the main thing is that it needs to be interesting and helps to increase the baby. Assessing the evidence of the existence of a global kids segment, it is possible to mention that “according to leading market research company, The NPD Group, U.S. retail sales of toys generated $21.18 billion in 2011” (The NPD Group, 2012: para. 1). It proves the fact that the toys are in demand and popular with the crowds. Moreover, the kid segment is a very promising area of conducting businesses.
What is more, various video games about Harry Potter, which are made for children, are very popular with them and thus form its own specific segment. “Harry Potter is extremely popular with the kids today. Lots of Harry Potter toys like the Harry Potter LEGO Sets, Harry Potter action figures, Harry Potter merchandise, Harry Potter Games and more are in the market today” (Mirpuri, n.d, para. 1). In turn, Punam Arpita (2009, para. 1) stated that J. K. Rowling’s Harry Potter Series “are targeted to the segment cluster of young generation and of course younger generation appreciate the fun of Adventures and the magic and the supernatural elements”.
Proving the evidence of the existence of a global kids segment, it is necessary to mention about a leading seller of toys, including the Harry Potter LEGO Sets, etc. in the world which proves the fact that a ‘Global Kids’ segment really exists and is a very promising area of business.
Toys R Us, Inc. that is a leading seller of toys in the world and the retail sale of goods for children, offers a differentiated experience in sales through its own brands. The company currently sells products in more than 1550 stores, including 848 Toys R Us and Babies R Us stores in the United States and more than 700 international stores in 33 countries. The company also sells extraordinal toys in some stores in the U.S.
Having a strong portfolio of e-commerce sites, including Toysrus.com, Babiesrus.com, eToys.com, FAO.com and babyuniverse.com, Toys R Us, Inc. offers a huge selection of online buyers of distinctive toys and baby products. The company also owns ePregnancy.com, an online resource for parents and Toys.com, which offers the customers exclusive sales via electronic commerce. Toys R Us, Inc. is located in Wayne, NJ, and it employs nearly 70,000 partners worldwide. For nearly a decade, Toys R Us Times Square, the international flagship store of the company, led to the delight of customers worldwide as one of the main areas of tourism in New York. A Ferris wheel, a lively animated life-sized dinosaur, Barbie doll house, spectacular special attractions in the windows of the world’s largest toy store and toy seller’s unrivaled experience.
The multi-trade is widely used with the businesses. In general, it is possible to conclude that today’s domestic market of toys has large investment attractiveness. Entrance to the market provides the investors with good business prospects.
Thus, “kids represent an important demographic to marketers because they have their own purchasing power, they influence their parents’ buying decisions and they’re the adult consumers of the future” (How Marketers Target Kids, n.d., para. 1).
In order to work more effectively in the market, you must have an information base on the requirements for the product and its availability in the warehouse, manage and control the inventory, have the information about the competitors, including their financial position, constantly monitor and take it into account when making some solutions.
The market of children’s products (toys) requires a skill building program for product promotion, particularly advertising. Advertising plays a vital role in this business, since the potential of advertising in this business is great. It is also necessary to carry out a proper communication policy. The head of the firm must pay his/her specific attention to the communication between the managers and the customers, so as the wrong approach to the potential customers leads to loss of the firm’s profits. In addition to this, it is necessary to use sales promotion with the sale of goods: provide the discounts on the large volume of goods purchased; attract a buyer, using advertising at the point of sale; use the coupons in a variety of print publications; a small gift from the firm can be given on the orders over a certain number of goods, etc.
In turn, Douglas and Craig stated that “the key to success is to understand the attitudes and behavior of consumers in these segments, and to tailor strategies to their needs” (cited in Hofstede, Wedel, and Steenkamp, 2002, p. 161).
In addition to the above-mentioned information, it is possible to add that price is an important indicator in the marketing process. Since carrying out a pricing policy, the organization actively influences both the sales and the amount of profits. That is why it is very important to conduct the right pricing strategy.
Recommendations how to target such a global segment
Children’s toys are the products, demand for which increases in direct proportion to the wealth of the country and birth rate. And since the government policy is aimed at further increasing the birth rate in the country, the market analysts predict the bright future toys. But along with excellent prospects, the market of toys faces much competition. To survive in a competitive environment and to maximize profits, it is necessary to take into account the main strategy to increase sales in the market of toys. In order to target such a global segment, it is necessary to provide the buyers with a wide range of products, up-to-date market trends, well-known brands, including new different items.
In order to properly present a wide range of products, it is necessary to take into account the proposals of competitors and vary in a number of items.
Besides, it is possible to add that merchandising plays one of the most important roles in increasing sales. The basic principles that must be met are the following: all new items should be marked with relevant advertising signs and leaflets. They should be placed in “hot spots” of commercial premises. Thus, it is possible to conclude that merchandising plays a great role in the promotion of different toys.
Moreover, the human factor in sales of toys is very important. Nowadays, you cannot imagine a successful organization without highly qualified personnel. The entire staff, from consultants, vendors, and ending with the senior managers, must meet the high standards of professionalism.
A good salesperson does not just sell, he/she sells a lot, and the buyer will want to come back for the purchase. The professional seller of toys must not only navigate the range, he/she should perfectly understand the psychology of sales, to be able to take into account the individual features of personality. One of the measures aimed at increasing sales in the toy store are training and retraining of personnel in the course of successful technology sales. In addition, it is necessary to adhere to the professional ethics of relations between employees, which will help to create a successful atmosphere in the team and the motivation to increase the sales. The human factor cannot be neglected in any case. Even a perfectly delivered and abundant range of advertising is not able to replace the impact of human factors to increase the sales.
It is important to understand that all these factors cannot work separately, they are interrelated and complementary. Combining together all the factors will significantly increase the level of toy sales.
Often the opposing factors influence the formation of the future model of the market. On the one hand, we can see strengthening the market positions of the strongest players. Distribution of their products is more and more increasing. On the other hand, we can note about such a thing as “fatigue retail” from the monotonous variety of manufacturers, the demand for something unique and up-to-date.
Despite the restrictive factors, the scenario of market growth is seen as the most likely. The market has not reached its maturity, there are a limited number of formats of trade, there is not enough a product offer, as well as specialized niche products. The number of trading formats, such as toy hypermarkets, specialized shops, including the products for babies, children’s retail brand, etc. is the potential to be realized. The children’s market has the potential to grow, and eventually it will “grow up”, focus and differentiate, adjusting to the interests of various segments of consumers.
What factors can significantly change the situation at the market of children’s goods, including the toys?
Reaching the maturity stage of the market can be considered to be an evolutionary process. For the economy as a whole, an infrastructure component could seriously affect the speed of development and market growth in this market.
There are not enough professionals with specialized education, incomplete legal and regulatory base. It is necessary to develop the new formats in trade and logistics, especially taking into account the production and sale of children’s goods. There is practically no legal, investment and consulting infrastructure oriented to the needs of this particular sector of the economy.
Moreover, it is important to develop a new approach to the media and the active introduction of advanced information technologies, serving the interests of families with children.
This is a serious problem for the Association of children’s goods industry, which understands this and consistently builds the infrastructure to support the enterprises and one of the most important development institutions – Industrial Management Training Institute. An important factor that could significantly increase the demand for children’s products is to reduce the cost of goods thanks to innovation and technological upgrading of industry, application of new technologies and advanced materials.
And finally, taking the above-stated information into account, it became possible to draw a conclusion that in recent years the impact of public opinion on the market has significantly increased. This tendency manifests itself, including the creation of various associations of parents, activists, educators and social workers who voluntarily take control over public utility, quality and safety of goods and services for children and serve as experts in their social groups. The new social institutions and means of communication also form a picture of the future on the kid’s market.
Conclusion
Taking the above-stated information into consideration, it is possible to draw a conclusion that the perspectives for children’s product market are largely due to the peculiarities of consumer behavior, which in this segment is slightly different from the others. Firstly, the children’s market has no concept of “pent-up demand.” This is a well-known fact that the children are growing constantly. And thus, they require the annual renewal of a wardrobe, buying special children’s products and other necessary things and goods. This ensures the market turnover. Secondly, it is naturally for most parents to want to “give their children the best,” and thus they are willing to pay for it by buying the expensive baby goods and other different things, receiving moral satisfaction. The expenditures on children are weakly dependent on the level of family income, except the very poor and very wealthy families.
Therefore, the market for children’s products is a very attractive one for different businesses due to its stability and steady demand. The new store children’s toys are a great option beginning their own business. The big opportunities assortment decisions, low seasonality factor, no significant changes in demand – all of which can achieve high profitability and stability work.
