Marketing to Generation Y

Reaching Generation Y through marketing has created a whole new challenge for companies everywhere. Understanding this generation’s values and viewpoints can be quiet confusing for seasoned marketing veterans. Exactly how do you engage a generation that doesn’t remember a time without computers or mobile phones?  Where do they shop and what triggers their buying decision?

The best way to answer these questions is by comparing and contrasting Generation Y to previous generations. Here is a very concise overview of Baby Boomers and Generation X:

Baby Boomers

• Born Between 1944 and 1964
• Large increase in births after WWII
• One of the largest generations in US history
• Even amount of Males and Females
• Geographically prominent in South and Mid West
• More than 30 percent of Americans were over 50 in 2010
• The over 50 segment has annual spending over $2.3 Trillion
• Controls over 50% of all discretionary income
• Prefer face to face sales
• More loyal to brands than other generations

Generation X

• Born Between Mid 1960’s and Early 1980’s
• Over 60% attended College
• 50 Million Americans
• Individualistic
• Tech Adept
• Flexible
• Value Work Life Balance
• Marketing efforts include internet, direct mail, radio, television

Marketers already know a lot of this information and understand the marketing strategies that are effective for Baby Boomers and Generation X. Now let’s dive into Generation Y and see what it takes to connect with them.

Generation Y

• Born Between Mid 1980’s and Early 1990’s
• Estimated 70 Million Generation Y
• Young Professionals/College Students
• Tech-Savvy
• Pop Culture
• Family oriented
• Achievement driven
• Teamwork
• Attention-Seeking
• Connecters: Always on phone
• Forerunners: Social Media
• 90% of Gen Y have a personal computer
• 45% of Gen Y have internet on their mobile devices
• Generation Y spend an estimated $20 Billion on online purchases each year
• More than 50% of Gen Y often share information about interesting products with their friends

How do we take this brief description of Generation Y’s demographics and psychographics and conceptually integrate it into a marketing plan? Let’s take the 4 P’s of marketing and break this down.

Product- when considering a new product/service or if you are just trying to market your current product/service in the marketing mix there are a few things to keep in mind with this generation. Gen Y loves innovative products that make life easier, often this generation has the negative connotation of being “lazy” but what they really value is saving time and energy. Gen Y expects quick results that will lead to efficient use of their time. A product/service associated with a cause is going to be a huge hit with this generation; they love connecting with a greater good. Generation Y also takes pride in being unique and staying ahead of trends. Style and image branding are great ways to tap into this need by creating a feeling of being exclusive.

Promotion- start by choosing a few marketing channels that will reach Gen Y. Consider some of the last bullet points from above: we know almost all of Gen Y have access to a computer and they spend a lot of time and money on the Internet. So right away you know your marketing plan will need to include Internet marketing. For B2C companies this means utilizing Social Networks such as Facebook, Twitter, Living Social, and Groupon. Leveraging Google Adwords is another way to reach Gen Y online. Updating your website and Ecommerce site is also essential for Internet success. Generation Y can quickly spot an aging website that lacks updated features such as product information and reviews. For B2B companies, establishing a Social Media presence is still important. You should create and maintain a Facebook page and a Twitter account. However, the best social media network for many B2B companies is going to be Linkedin. Linkedin is great for lead generation and building credibility within your industry. Another consideration for this Internet marketing plan is advertising on sites that Gen Y frequent. Blogs and social networks are especially effective. One useful technique for Internet marketing is creating a call to action associated with all of your promotions, this is an interactive way to engage Generation Y.

(If you are looking for promotion ideas consider this video case study about Old Spice:) http://www.youtube.com/watch?v=fD1WqPGn5Ag

Mobile marketing is another channel to consider when marketing to Generation Y. This channel can help enhance buzz around your product or service and creates synergy with Internet marketing. Some common approaches to mobile marketing include using SMS to share deals or promote events and advertising on popular mobile games such as Angry Birds. Generation Y is always connected whether they are on the go, at work, or at home.

Place- “Location Location Location” an Ecommerce site is going to be the best place for your product or service when marketing to this generation. Brick and mortar locations will always be a component of business but the trend moving forward is Internet based sales. Reverting to the point above about Gen Y valuing their time and energy; Ecommerce is a great way to fulfill this need.

Price- Arguably the most important P of the marketing mix, what price is going to generate the greatest demand? Most of Generation Y is in their early to mid 20’s at this point so they have yet to establish a large amount of discretionary income. The combination of paying off student loans and dealing with a tough economy has made finding the right price point for this generation challenging. Conducting extensive market research on price for your product/service will be essential for success. Henry Ford had a great way of describing price in his operating philosophy that is relevant here:

“Our policy is to reduce the price, extend the operations, and improve the article. You will notice that the reduction of price comes first. We have never considered any costs as fixed. Therefore we first reduce the price to the point where we believe more sales will result. Then we go ahead and try to make the prices.”

This applies directly to Gen Y as they are tight on money and they want the biggest bang for their buck. Gen Y is endowed with the ability to find the lowest price online faster than you can adjust the price of your product/service. So make sure you have the lowest price or best value at all times. Adjusting your price or increasing value for this generation might not be attractive in the short run. Keep in mind that Generation Y accounts for roughly 70 Million Americans who will be spending for decades to come. Couple this with the fact that Generation Y can share information about products or services at an exponential rate. Building and maintaining a relationship with this generation has never been more important.

There are several key takeaways here that you should consider action items in your marketing plan:

• Create an internet marketing plan that includes social media, google adwords, and website ads
• Establish a mobile marketing plan that will reach Gen Y
• Your product or service should save time and energy
• Enhance your online presence with an Ecommerce site
• If your website needs updated now is the time!
• Conduct market research to find the right price

Adapting your marketing strategy to this unique Generation can be invaluable to the success of your company.

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