The challenges and opportunities of marketing to Millennials

Journal of Consumer Marketing

ISSN: 0736-3761

Article publication date: 16 March 2012

13132

Citation

Pitta, D. (2012), "The challenges and opportunities of marketing to Millennials", Journal of Consumer Marketing, Vol. 29 No. 2. https://doi.org/10.1108/jcm.2012.07729baa.002

Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited


The challenges and opportunities of marketing to Millennials

Article Type: Guest editorial From: Journal of Consumer Marketing, Volume 29, Issue 2

The dramatic evolution of consumers from baby boomers to Millennials has provided a complex assortment of opportunities and threats. Marketers seeking to satisfy Millennials’ wants, professors seeking to educate them, and even politicians seeking their votes have had to do what marketers have done since the beginning. To reach this generational cohort, it is necessary to speak their language, to reach them wherever they are, to use communications they use, and to understand the complex combination of experience and preferences that define them. For non-Millennial marketers, the challenges can be significant and even understanding how to describe Millennials in marketing-relevant terms can be daunting. Fortunately, research in marketing, sociology, psychology and economics aids in filling in the blanks.

In fact, the description of Millennials, as those who were born after the personal computer’s introduction, helps inform how they think, what they like and how they want products and services. In short, they want them now, they want them perfectly tuned to their taste, they want to buy them with comparatively little effort, and they want information from trusted individuals. Thus, consumer ratings are important since Millennial consumers will seek out rating information, even from strangers. The internet is the backbone of their lives and it provides a means of swift gratification, communication and social interaction. Without it, their personal computers, laptops, notebooks, i-Pads and smart phones will not deliver the information they want as quickly as they want it.

The papers contained in this special issue clarify different aspects of the generational cohort and their interaction with the world. Smith describes Millennials embracing online media for shopping, sources of news, entertainment, and social networking. Due to their profuse usage of digital media, digital marketing is an effective manner for communicating with Millennials. Digital marketing is considered to be the most promising venue for reaching this generation. Smith addresses the question of which digital marketing strategies are preferred by Millennials and which are effective in influencing their behavior. Smith notes that there is potential growth and value in using digital marketing aimed at Millennials, but the marketing strategies must be perceived positively by this online generation. In her longitudinal study, she notes that Millennials have a definite preference for certain forms of online advertising. Digital marketing strategies vary in their ability in grabbing the attention of Millennials, motivating repeat visits to a website, and encouraging Millennials to write online reviews, all of which are valuable communication outcomes. Her study shows the value of considering the preferences of Millennials. In doing so, the effectiveness of online communications and digital marketing aimed at this market segment can be increased. Recommendations are made regarding types of online advertising to use, how companies should design their web sites, how to motivate repeat visits to websites, and how to encourage Millennials to write online reviews. Even though online advertising is the fastest growing advertising medium, only a small percentage of total advertising expenditures are currently being devoted to the internet. There is potential growth and value in using digital marketing aimed at Millennials, if as Smith warns, the marketing strategies must be perceived positively by this generation.

Investigating another aspect of the cohort, Eastman and Liu found significant differences in the level of status consumption by individual generational cohorts. The average level of status consumption was highest for Millennials, followed by Generation X and then Baby Boomers. Notably, there was a significant difference between Millennials and Baby Boomers. The results illustrate, that holding generation constant, there is no significant relationship between gender, income, or education with status consumption. There is also no significant interaction between generational cohort and the demographic variables of gender, income, and education. This suggests that the relationship between generational cohort and status consumption is due only to generation and is not being impacted by other demographic variables. For luxury marketers it is important to consider generational cohort, rather than other demographic variables, when segmenting the market.

Gurau added to understanding of Millennial consumers. Brand loyalty is a vital element in marketing success. The specific elements and causes of brand loyalty are complex. Applying brand loyalty theory, he distinguished several levels of loyalty and several groups of consumers with different loyalty patterns. Moreover he studied consumers in two markets with distinctly different levels of economic development. He then compared groups of Millennial and Generation X consumers in different life-stages in terms of their brand loyalty. He found that life-stage was more important than generational stage in determining a given consumer’s brand loyalty patterns. Gurau’s work demonstrates the complexity of the brand loyalty effect and cautions researchers that despite the reports of Millennials as a homogeneous generational cohort, significant differences exist.

It is almost definitional that Millennials are surrounded by social media. Social media is identified as a transformative element in the world. The media are credited with transforming the buyer-seller relationship as well as enabling the wider changes including the political upheaval typified by Arab Spring and even the decay of grammar fostered by touchpads. Kilian, Hennigs, and Langner explore the younger generation’s integration of new media systematically. While much of the literature is anecdotal, the authors designed empirical research on the “Internet Generation” by focusing on the use of social media. Their results indicate that, Millennials’ participation in and identification with social media is generally high, However, as a cohort, Millennials are less homogenous than the literature suggests. Furthermore, they found that the traditional media have not been replaced by social media. Traditional media still represent integral parts of the overall media portfolio. These results are valuable not only as a starting point for future research on the Millennials’ media usage but also for media management practices in general. The authors note that the discussion on Millennials and related concepts currently lacks precision. Although Millennials in general use social media, the degree to which they use social media differs considerably among the different subgroups. Furthermore, the identified clusters use the same social media in different ways (i.e. passively or actively). This finding shows that traditional concepts, such as Millennials can only serve as broad labels, whereas the actual decision to adopt and use different media should be analyzed in a much more complex manner. The authors also provide a valuable differentiation of subgroups of Millennials and offer insights into how marketers can tailor their approach to each to succeed.

Veloutsou and McAlonan investigated an interesting aspect of the internet, the emotional link that users develop with the search engine. That link is the main predictor of brand loyalty. They note that most academic internet related research has continued to focus on consumer attitude and behavior from the retail web site perspective and has ignored the importance of the web search engine. Specifically, the perceived quality of search results is important. In terms of disloyalty, the best predictors are the level of two-way communication, the lack of satisfaction as well as the involvement of the user with computers. The actual perceived characteristics of the search engine do not predict disloyalty. The authors clarify that younger consumers search for more products online and are more likely to agree that shopping online is more convenient than older consumers. However, young Millennials are discriminating. They are independent entities who create their own rules of engagement and social behavior. They note that the online environment is the new domain of the modern teenager to develop personal relationships and learn new things. They do form strong relationships with their preferred brands, and they express love and passion towards them. One interesting finding is that the emotional part of the relationship contributes to loyalty, while the communicational part to disloyalty. This finding indicates that in the context of easy communication, where companies have been abusing their ability to reach the various audiences, communication with the search engines is not really something teenage internet users welcome.

Marketing is at the heart of entrepreneurship and many entrepreneurs capitalize on the internet to establish their firms. There is some question about whether Millennials stereotyped as wanting easy results with little effort will succeed as entrepreneurs. Lingelbach, Patino, and Pitta present a four-stage cycle model of entrepreneurial marketing by Millennials. The stages consist of: enabling through resource scarcity, bonding through social media, new product introduction through incremental stealth, and replicating through variation, selection, and retention. The work habit assumption may be irrelevant. Instead, expertise in dealing with the internet and social media may be important.

Marketers in entrepreneurial firms founded by Millennials can follow a few simple rules to enhance market penetration. Resource scarcity is something to be sought, not avoided. A thoughtful social media strategy can accelerate new product introduction. Stealthiness and its close relation small size should be embraced. Firms should avoid getting too big too quickly. Social media is vital for success and firms should use furtiveness to drive social media-based bonding.

Young and Hinesly expand the view of Millennials by investigating the formative nature of early influences. Specifically, the cultural context during a cohort’s adolescence and young adulthood plays a critical role in shaping their characteristics, values, and consumer preferences. They point out that considering the cultural context of just the adolescent and young adulthood years provides an incomplete picture of Millennials’ defining characteristics. Noting the powerful influence of culture, they stress identifying the key influencers of Millennials based on their early childhood years and their everyday, commonplace experiences of culture (rather than notable events). In addition they discuss, new methodological approaches to identify key cultural influencers from early childhood because Millennials, are unaware of the impact of these early experiences on their current lives. The authors propose a methodological approach to address these concerns and note that marketers can gain several benefits. First, the new methodology provides different insights into understanding the unconscious consumer. Second, knowledge of key generational influencers affords businesses with a means of anticipating Millennials’ future consumer preferences, which allows for adequate lead time for product production. Finally, it is important to distinguish between what children find most impressive from a given cultural context is not the same as what adults find impressive.

Patino, Kaltcheva, Lingelbach, and Pitta support the notion of diversity within the generational cohort and describe four clusters including enthusiasts, social/intellectuals, creatives and the disengaged. The literature has identified the Millennial generation in terms of the environmental and social forces that formed it. It has also catalogued its distinctive characteristics versus other generational groups; however, few studies have investigated segments within the cohort. Their study differentiates two subsets of Millennials based on their formative forces and investigates one subset, younger Millennials, in terms of its preferences for one salient product category, toys. Findings show significant differences that can be used to refine marketing practices.

The analyses suggest age x gender differences in toy preferences among pre-teen Millennials. While all Millennial pre-teens mature in their preferences for toys, males and females exhibit dissimilar preferences from the early pre-teen ages and those differences continue as toy preferences evolve. The results and conclusions of this study will enable toy companies to understand better what drives this generational cohort of pre-teen Millennials. Perhaps the most important implication of this research is that marketers need to do what they normally do, namely, look deeply for differences in any target audience. Treating generational groups as unitary cohorts is imprecise and may miss important differences that can be vital to new product and service success. One additional implication concerns the acute effects that shape generational cohorts. The Millennial cohort’s size, orientation toward achievement, and energy make it an attractive target for marketers. This research highlights the importance of studying the group carefully to exploit the potential it presents.

Overall, the issue examines Millennials from a variety of perspectives that add to our knowledge about the cohort. Each posits directions for future research. Together they reinforce what astute marketers already know: marketing is complex and consumers are not homogeneous. Moreover, sophisticated methods are often vital in understanding and reaching consumers.

Dennis Pitta

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