Wooing Generation Next

From telecom to apparel & credit cards, companies are reaching out to youthful high spenders

It might have seemed like an unusual move by Himalaya Drug Company. A few months ago the company decided to make a splash with its honey-based products in Cafe Coffee Day (CCD) outlets.

So, it designed a new bottle-shaped menu card which also carried an advertisement for its Forest Honey and put its honey products on sale at the CCD counter.

Why was Himalaya Drug Company selling honey at CCD? Because it wanted to turn Forest Honey from a "household" product into something trendy, and was riding piggyback on CCD's youthful clientele.

Himalaya Drug Company isn't the only one reaching out to youngsters via outlets like CCD. More recently, toiletries and food major Hindustan Lever has extended its blitz at Cafe Coffee Day to launch its Liril Orange soap. Liril Orange is also hoping to reach out to youngsters.

From soap and honey, it's a big jump to electronics. Take a look at the unlikely new contenders for youthful mindspace.

There is, for instance, Philips India which is shaking off its dowdy image and has, in the last few months, launched a string of hip, new products. Or, there's Asian Paints which used to address its messages to families or to women. Suddenly, it has put youth in the cross-hairs.

From white goods manufacturers, two-wheelers to credit cards, chocolates and mobile phone players, they are all making a beeline for India's most happening target segment "" generation next.

Is youth marketing new? Definitely not. Traditionally, beverage, motorbike and apparel makers have always pitched at a youth audience.

But today, what's changed is that companies and products of every hue are unleashing a spate of Generation Next products and services aimed at 15 to 30-year olds. And even those with established products are going back to the storyboard to sport a young-at-heart persona.

Why are they rethinking strategy? Because all the research figures indicate that youngsters have more money than ever to spend "" and they aren't afraid to put their cash on the table.

"Let's not forget India is a young country which makes it attractive for us," says Gunjan Srivastav, business head audiovisual entertainment group of Philips.

Of India's current 1 billion population, 47 per cent of the country is under 20 years. There are almost 160 million in their teens. This segment will explode to 55 per cent by 2015. At the moment, the marketing men say its annual discretionary income is a whopping $3 billion, with families supplementing it with an additional $3.7 billion.

The fact is that 60 per cent of jeans, soft drinks and chocolates are gobbled by teens. Says Jagdeep Kapoor, head of Samsika Consultants, "With the earning power reduced by 10 years, the catch 'em young phrase is working its magic."

Adds Madhukar Sabnavis, Head of Planning, at ad agency Ogilvy India, "The youth are wealthier with no baggage of past generations and have been born into a consumption society."

Around the world it's youngsters who keep the airwaves buzzing and the mobile phone companies in business. That's true in India as well. Mobile company Reliance Infocomm says 90 per cent of its pre-paid customers are youth.

Also, youngsters send more SMSes than any other age group and upgrade their handsets faster than anyone else.

At cybercafes, the young and trendy constitute more than 95 per cent of the clientele. And outlets like Barista and Cafe Coffee Day could easily double up as college canteens, with 16-28-year olds quaffing 82 per cent of its coffee.

It's the same even in the 14 million Indian credit card market where youngsters abound. "They are frequent users of plastic money," says an executive at a credit card company.

The credit card companies refuse to give precise figures but they believe India will be one of their biggest markets in a few years mainly because of youthful spenders.

Says Vikram Raizada, vice president marketing at MTV, which has a co-branded credit card with Citibank, "We are part of the youth lifestyle and come at them from a 360 degree angle. We have gone beyond television into different merchandise and on-ground events. They even wear our clothes."

Such youth stories, and the fact that 30 per cent of urban India is under 30 with a 10.6 million consuming class residing in the top 23 cities, are realities that marketers are not taking lightly.

As strategic business consultant Rama Bijapurkar says, "Earlier many products were aimed at youth and the rest for others. Today, youth marketing is mainstream marketing." Adds Naresh Malhotra, chief executive officer of Cafe Coffee Day, "They are the decision makers and trend setters."

That's why even HLL has finetuned the advertising message for its Close-up gel toothpaste. Last year, when the account moved from one HLL group agency J Walter Thompson to another "" Ogilvy India, it tried to enhance its youth positioning.

It introduced the catchy Close-up karte hain commercials and the relaunched brand now has an even younger protagonist responding to an animated pack.

It isn't the only one that has fine tuned its advertising message. One year ago Reliance Infocomm made its debut with its Kar lo duniya mutthi mein (take the world in your hands) tag line, which aimed mainly to point out how different the Relaince phone was from others.

"We had to make the market notice that there was a different offering from Reliance," says Kaushik Roy, head, marketing at Reliance Infocomm.

Now, with the launch of its prepaid cards four months ago, its Mujhme hain woh baat campaign is aimed at aspirational youth.

"If you have a product with enhanced features and bundled offerings, it is easier to sell it to youth than older people, as it is an experience they enjoy," adds Roy. Even Pantaloon Retail, which was earlier a family store, now displays a 'fashion destination' tag.

"Even categories conventionally addressing parents are including kids to get them to voice their opinions in their favour and influence decisions," says Ogilvy's Sabnavis. That's why Asian Paints used 'painting a child's room' as a trigger to appeal to the emerging new family in its 'Har Ghar Kuch kehta hai' campaign last year.

Hemant Sachdev, corporate director-marketing, Airtel, believes youth is no longer a niche segment. "Sixty per cent of the world's youth population is in Asia," he says (youth being defined as age 15 to 24 years). He reckons that around 40 million Indian youngsters are ready to buy Airtel's products.

So how different are today's youngsters? "Three years ago, youth was a different animal. Today, it is more decisive, knows what it wants and has money. So pubs are passe and cafes are the hangout places," explains CCD's Malhotra who claims 30 million footfalls at his 153 cafes nationally.

Adds Reliance's Roy, "It is a more discerning target audience today. The difference is that you can actually push through a product not purely on price.

According to MTV's Raizada, catering to a youth market involves constant evolution. "Aspirations change. Trendy is short term while trends are long term and we have to catch both." One campaign that attempts to reach youngsters differently is MTV's Roadies 2 show.

Another factor that has changed youthful attitudes is that they have more money now than ever before.

According to an MTV survey, 54 per cent of youngsters are earning money while studying. This has been triggered by the mushrooming of call centres and business process outsourcing (BPO) units in the last three years. With outsourced jobs popping up in practically every major city, a survey by India Consumer Markets data shows that there are more than 34.6 lakh people who have been hired in the last couple of years.

Then, with multiplexes, fast food joints and cybercafes, everybody is hiring young. "With people earning young, the indulgence is even more. So a lot of the out-of-home consumption is targeted at youth," says Jagdeep Kapoor.

And with youth spending more time out of home, aspects like attire and accessories like shoes, watches, glares, cosmetics are seeing a surge in sales.

This is obvious in the changing face of the MTV advertiser in the last two years. In 2002, fast moving consumer goods categories "" beverages, personal products, confectionery and liquor and pharma brands were the top five.

Last year, the personal products were joined by new categories like telecom, music labels, two-wheelers and consumer electronics. In the first five months of 2004, consumer electronics including technology are numero uno with confectionery and apparel making a comeback.

Take a look at how companies are reaching out to a younger audience. Airtel, for instance, has tied up with MTV and introduced a funky, 32K Sim card with a variety of ringtone downloads and greater storage capacity.

"Our research shows that youngsters tend to talk in clusters," says Sachdev. Hence the group messaging facility. There are also intriguing concepts like the "Rescue Ring", devised specially for younger women and girls.

The Easy Charge scheme, which enables customers to buy cards in denominations as low as Rs 50 and Rs 100 "" this too is targeted at youngsters who might not have much cash in their pockets. Airtel also has tie-ups with Radio Mirchi "" dial a number and you can listen to music while on the move "" and with Cafe Coffee Day.

In all these co-branding exercises, the biggest beneficiaries appear to be the popular youth hangouts like cafes, restaurants, multiplexes, even college festivals.

Take a look at Philips. Ever since it relaunched its mobile handsets, it has preferred one-to-one interactions with its target segment instead of mass media advertising. It conducted a "create your own ringtone contest" at the annual fetes at both the Indian Institute of Technology (IIT), Mumbai and at the Indian Institute of Management, Ahmedabad.

"It creates an association, top-of-mind recall with people who can influence businesses tomorrow, says Arshit Pathak, general manager, mobile phones at Philips.

So much so, at Philips' Rs 950-crore electronics division, business head Srivastav says that new products like its swank audio range account for 40 per cent of turnover. Six months ago, it tied-up with Nike stores to push its sports audio range.

Clearly, call it pester power or peer pressure, the young crowd is calling the shots.

Catching them young

In July, Delhi's Jawaharlal Nehru stadium will witness a 55-hour non-stop danceathon called the LG Summer Party. During that time 50 energetic pairs will try to break the existing Guinness Book record for non-stop dancing.

That's the Korean major's way of reaching out to its mobile phone users. "Our focus has shifted to the youth segment for our mobile handsets," says Prasoon Kumar, zonal manager, Delhi, LG.

As youth power rises the high-power marketing hotshots are going out of their way to woo favourite hangouts like Barista, Coffee Cafe Day's (CCD) and even college fetes where youngsters congregate. So much so, that CCD which earlier let its partners promote their products by giving away prizes, now charges a fee for displays.

Says Sudipta Basu, marketing head at CCD, "Earlier our partners provided the collateral. Now we are charging them for branding space, for eyeballs."

More importantly, these outlets are increasingly opening book and music corners to lure youngsters.

Reliance Infocomm uses its own Web World to promote its products. Web World has three sections, a cybercafe, a coffee shop Java Green and a service station.

"It is a catchment area for youth," says Kaushik Roy, marketing head. Reliance's ground level activities are more circle specific, For instance, it recently ran a campaign in the capital for students getting into college.

Or, take a look at what Satish Khurana, business manager of Invista, a wholly owned subsidiary of Dupont did when he wanted to create brand awareness for Lycra.

He figured the best way would be to associate with the MTV Style awards. "Since Lycra is only an ingredient in a fabric, there is no merchandise. So we associate with events to build brands." The next phase is to do events with retail stores.

Alternatively, look at how Philips has moved its portable sports audio range into Nike stores. Aimed at modern, image conscious youth, it hopes to catch the sport enthusiast who ventures into the Nike shop and makes that music purchase.

Similarly, Reebok says it has made India the recipient of the highest marketing and R&D budgets (8 per cent of sales) in the Asia-Pacific region. It will spend an additional 3 per cent for ground activities including identifying young sportsmen, tying up with schools for coaching and opening aerobic centres. Such is the power of youth.