Tackling 'Generation Y'

How to tackle 'Generation Y', or the 'Net generation', and even 'tribal groups'? Such an array of segmentation, far from benefiting marketers, is limiting their ability to consistently target the youth of today, so claims a new report.

Marketers, writes Datamonitor, lack a clear view on how to most effectively segment the 14 to 24 year old audience. Although exciting sounding segmentations like 'Generation Y' can be useful for very specific brands and types of marketing, in general they offer too many segments and are too specific for marketers to effectively use. Alternatively, deeper insights, suggests the report, can arise from segmentation along the lines of life stages.

According to the report, the most successful consumer packaged goods brands have appeal right the wayacross all youth groups, such as Coca-Cola. But research would suggest a contradiction - the fact that targeting the needs and behaviours of specific groups is also very important.

Marketers require a segmentation that offers flexibility. Segmentation mustdepict both groups that are worthwhile targeting in their own right, as wellas offer insights into characteristics common across all groups, continues the report.

"All too often marketers pick up on new segments of the youth market, butthere is a tendency to overdo it and get caught in the hype. Some of thesesegments are important, but often segmenting young adults by lifestage is more appropriate than lifestyle and attitude-based segmentations,"​ said Piers Berezai, Datamonitor consumer markets analyst and author of the report.

"Lifestage segmentation allows advertisers and marketers to identify the specific needs of each group as well as characteristics common between groups. Such information is crucial - to avoid the dangers of a one-size-fits-all message without focusing on too small a target group. It also identifies stages atwhich changes occur in purchasing behaviour. "​

Berezai emphasised that hand in hand with the decline in the number of young adults, marketers will need to update their approaches and capitalise on demographic changes rather than fall victim to them.

Datamonitor identifies the three main lifestage groups within the young adult market as teenagers, students and the newly employed. The first of these is the favourite of many a marketer. Datamonitor found that the most useful view of teenagers was toconsider them as those between 14 and 17 years old, either in full-timeeducation or in employment. The second group - students - are people agedbetween 18 and 24 years old who remain in full-time education and the third, newly employed, is comprised of those aged between 18 and 24 and in their first year of employment.

The report highlights the fact that demographic trends among 'lifestage' groups show the growing importance ofstudents. While demographics indicate that overall the 14 to 24 year olds in western Europe are in decline, only the students group appears set to grow in the future.

But Datamonitor also suggests that there are many common characteristics across all groups. Teenagers, students and the newly employed are all seeking toaffirm their increasing level of maturity. One way in which they can achieve this is by showing how 'adult' their food, drinks and personal care tastes are. Although personal care manufacturers have targeted this in the past, increasingly food marketers will also incorporate this into their marketing.

For alcoholic drinks manufacturers this represents a clear problem -underage drinking - which should be addressed as much as possible throughprogrammes of corporate social responsibility. Other areas that affect these consumers are the need to 'belong' to a group and the need to overcome their lack of experience of buying and, if necessary, preparing and using consumer packaged goods. For some, targeting these needs will be worthwhile.

Datamonitor stresses that each group also has specific needs that can be targeted. For others though there will be a need to be more specific and the distinct needs of each young adult group provide a basis for doing this.

As long aspotential returns justify it, product development and updated marketing canbe used to target each group.

For Datamonitor the challenge to manufacturers and retailers is to either successfully incorporate brand values into their goods that have appeal across all of the young adult groups, or if seeking totarget one specific group, ensuring that sufficient returns can be made tojustify it.

For further details about the report, 'Young Adults' Consumption Behaviour', contact Datamonitor​.