Evaluate the Opportunities and Threats Faced by Companies Marketing to Children. in Your Answer Provide Examples of How Firms Are Responding to These Challenges and Opportunities in Their Marketing Strategies.

2173 Words Jan 18th, 2013 9 Pages
Introduction
Children form a significant consumer group in their own right and, in addition, influence the purchasing choices of their families and friends. They represent a huge market offering significant financial returns to companies. Children are also the adults of the future so building a strong bond with a child could lead to significant customer lifetime value to a company. However there are inherent risks in marketing to children bound up in the fact that many feel that it is intrinsically unethical to market to children. As a result of this, companies that market to children and get it wrong face a moralistic and significantly stronger backlash. Applying a PESTLE analysis highlights the external factors companies that market
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Environmental – There is a growing environmental awareness within society as a whole and there are expectations that companies will strive to be greener, to reduce carbon footprints and to be involved with fair trade. Children in particular have an interest and a stake in protecting the environment.

Examples of how the external factors can affect companies as both opportunities and threats are discussed below:

Opportunities
There is no doubt that children make up an attractive and valuable market segment which is going to attract the attention of companies worldwide. There is huge economic potential from this consumer group:

• Children under 14 spend about $40 billion annually. (3)
• Compare this to the $6.1 billion 4-12 year olds spent in 1989. (4)
• Teens spent about $159 billion in 2005. (5)
• Children under 12 influence $500 billion in purchases per year. (6)
• In the UK £105 billion is spent on children annually. (7a)

Despite the global economic downturn Disney announced a record quarter in 2012 - $1.8 billion in net income (CNN money) with a 31% increase in earnings. “Disney alone has 26,000 Disney Princess items on the market today,today; part of a $4 billion-a-year franchise that is the fastest-growing brand the company has ever created” (7b) .
If children are

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