Annual Meeting April 22, 2006

Generational Marketing

Adding value by tapping into the generation driven attitudes, influences and tendencies that shape the marketplace Paul Bellantone VP – Marketing & Business Development Promotional Products Association International

WIIFM

“

What’s In It For Me?”

The Old Way

• MALE v. FEMALE • WORKING v. RETIRED • RICH v. POOR • OLD v. YOUNG

The New Way

The New Way

5 Stages of Retirement

Culture v. Customer

Culture v. Customer

Marketing • The commercial process involved in promoting, selling and distributing a product or service

Marketing Influencers

• Gender • Employment • Income • Location/Geography • Race • Education

Marketing Influencers

• Birth order • Television • Geographic sprawl • Work (pressure of time and money) • Family structure (2 income/lifestyle) • Normal life stages and familial commitments

Marketing Influencers

young and old AGE • Used as more than a numerical identifier to denote • A means of identifying the responsiveness to a particular group or ‘cohort’ to a message based on life experiences

Generational Marketing

1. Because generations were raised during different eras, they have particular sensibilities that shape their (consumer) behavior 2. Understanding the eras and events that have shaped consumers’ lives can help you and your clients better plan promotions that speak to that behavior

Does Size Matter?

“ Every 20 years or so, a new generation is formed. Since each varies dramatically in size, its consumption behavior is predictable. Big ones need more food and bicycles. Little ones eat and ride less. Historic behavior proves that size also affects personality.” Kenneth Gronbach – DMNews’ Outlook, February 2005

Generational Marketing • Definition:

The process of promoting, selling and distributing products or services based on the fundamental values, attitudes, and influences of a shared age group that shape their consumer behavior

Generational Marketing is More Art than Science

Today’s Goals

• To examine the differences between generations and how each generation’s fundamental values, attitudes and influences shape their purchasing behavior – reach, influence and sell • To recognize that age – in relation to life experiences – does make a difference in how we reach, influence and sell • To identify generational tendencies of our clients and their customers and implement programs that will lead to greater return on investment • To better understand how to get along with our co workers, parents, kids, neighbors, etc.

Who Are We Talking About?

Generational Tag 1. GI Generation 2. Silent Generation 3. Baby Boomers 4. Generation X 5. Millennials/Gen Y 6. Unknown (?) Year of Birth 1901—1924 1925—1942 1943—1960 Current Age 82—105 64—81 46—63 1961—1981 1982—2000(5) 25—45 6—24 2001(6)—2020(?)

Who Are We Talking About?

Generational Tag 1.

GI Generation 2. Silent Generation 3. Baby Boomers 4. Generation X 5. Millennials/Gen Y 6.

Unknown (?) Year of Birth 1901—1924 1925—1942 1943—1960 1961—1981 1982—2000(5) 2001(6)—2020(?) Current Age 82—105 64—81 46—63 25—45 6—24

• • • • •

The Silent Generation

Born: 1925 – 1942 Age: 64 – 81 Shared sense of commitment, camaraderie and postwar era Overshadowed by the greatness of the GI Generation before them and the sheer number of postwar Baby Boomers that followed Depression-bred habits of frugality and saving Accustomed to government intervention and programs (Social Security and Medicare) Integrity and honesty are paramount importance

• • • •

Marketing to Silents

Born: 1925 – 1942 Age: 64 – 81 To appeal to this group, opt for a courteous, straightforward approach Messages that are conservatively stated; words such as “dedication” and “sacrifice” trigger a positive response. Warranties are a hot button.

Silents respond well to marketing with a personalized touch. They appreciate holiday cards and thank-you notes. They are more likely to accept a marketing call – not because they want to but because being polite is important to them Tradition sells. The Silent is going to be interested in the heritage of the company and how long its been around – which may be an obstacle to start-ups.

• • •

Marketing to Silents

Born: 1925 – 1942 Age: 64 – 81 Not prone to buying luxury items, though they will lavish money on their children and grandchildren Tight-fisted tendencies make them challenging and attractive to marketers. The over-60 crowd controls more than 70% of the net worth of US households Appealing consumers because of loyalty. Once they establish a relationship with a product or company, they’re likely to stick with it.

Silent Generation

Born: 1925 – 1942 Age: 64 – 81 For Your Information… • In 2005, most retirees were Silents – – Those retiring at age 70 were born in 1935 Those retiring at age 65 were born in 1940 – Those retiring at age 62 were born in 1943 • By 2012, there will be virtually no members of this generation left in the workplace.

Managing the Generation Mix – From Collision to Collaboration

Baby Boomers

Born: 1943--1960 Age: 45—62 As Baby Boomers have grown up, they’ve taken America along for the ride. Their sheer numbers turned almost any passing interest they had into a national phenomenon. Think Hula Hoops in the ’50s, campus activism in the ’60s or disco in the ’70s.

Now, with the oldest of this generation already over 50, they’re set to re-define middle-age and retirement as we know it.

Managing the Generation Mix – From Collision to Collaboration Karen Akers, Associate Editor – Imprint Magazine

Baby Boomers

Born: 1943--1960 Age: 45—62 • • • • • Largest generation in American history Unprecedented prosperity and parental indulgence – free from the financial fears and threats that characterized their parents’ lives First TV generation – advertising campaigns targeted to them heightened their self awareness The first “youth culture” with their own music and heroes Growing up in postwar prosperity, Boomers were exposed to unprecedented educational and economic opportunities. They quickly developed a sense of entitlement, which led them to be dubbed the “me generation”

Baby Boomers

Born: 1943--1960 Age: 45—62 • • • • The first generation to see the workplace as an arena where they could make a difference Competitive and free-spending Image-conscious Boomers view cars, houses and almost all material possessions as merit badges – a way to show the fruits of their hard labor. Unlike Silents, they do not deny themselves luxuries Boomers value time and are willing to pay a premium for convenience

Marketing to Boomers

Born: 1943--1960 Age: 46—63 • • • • Marketers must be nimble. Having been catered to all their lives, Boomer’s expect companies to shift products and services as their own preferences change While it is easier to make them buy than Silents, they are not as brand loyal. You need to keep giving them reasons to buy your product Boomers are nostalgic and love things that tie into their history – Woodstock, Beatles, social crusades.

Boomers respond well to humor and are able to poke fun at themselves and accept it in marketing

Marketing to Boomers

Born: 1943--1960 Age: 46—63 • • • • Boomers dislike anything that smacks of a cookie-cutter approach. They want to customized products and services Best selling technique is a consultative approach, and they should be approached as partners They do not respond to ads when so-called “experts” tell them what to buy.

– Boomers value education, and when it comes to goods and services, they want a lot more detail than older generations. A Silent might accept a doctor’s prescription without much explanation. A Boomer will research and suggest a specific treatment.

Baby Boomers

Born: 1943--1960 Age: 45—62

“Oh lord, won’t you buy me a Mercedes Benz”

Janis Joplin

“Been a long time since I rock and rolled”

Led Zeppelin

Baby Boomers

Born: 1943 — 1960 Age: 45 – 62 For Your Information… In March 2001, the AARP rolled out a new magazine, My Generation , targeting the growing wave of its newest members, Boomers. GI and Silent subscribers to problems.” Modern Maturity have decidedly different issues than Boomers do, says AARP, and they “didn’t want their publication to focus on Boomers and that cohort’s “complex Managing the Generation Mix – From Collision to Collaboration

Generation X

Born: 1961--1981 Age: 24—44 • • • They are a sensitive and short-nerved generation which makes them more difficult to reach Born in less auspicious times than Boomers, half of them grew up as latch-key kids who were used to fending for themselves Always in the shadow of the Boomers, who were (and continue to be) the media darlings. They feel overlooked, ignored and misunderstood.

• – Realistic Pessimists, Xers are more careful about planning their future and saving According to US Census, 26% of unmarried Xers were homeowners. Boomers never hit higher than 21%

Generation X

Born: 1961--1981 Age: 24—44 • Grew up in recession and saddled with large school loans, Xers are more restrained about spending than Boomers

Marketing to Generation X

Born: 1961--1981 Age: 24—44 • • • • Gen Xers are a marketing challenge. Inundated with advertising since birth, Xers are predisposed to being critical. They know ads are trying to make them buy.

Bothered by negative stereotypes (slackers in flannel shirts), Xers hate generational labels. Instead of approaching them as a generation, show respect for them as individuals, or Appeal to them through individual affinities such as “computer literate” or “fashion forward” – part of a group that may be interested in what you are selling Because of their restrained fiscal focus, Xers appreciate value. Forget about selling image; VALUE is the hot button

Marketing to Generation X

Born: 1961--1981 Age: 24—44 • • • Gen Xers are technically savvy. Better have a well-designed Web presence – good graphics and seamless navigation. Honesty is critical. Xers look at things critically and try to spot the lie. Be sure you deliver what you promise.

Xers are environmentally friendly and a quick to do their part by buying recycled products. They also like products that haven’t been animal tested.

Millennials/Generation Y

Born: 1982—2000(5) Age:5—23 • • • • Even more diverse than Gen Xers. More than 40% of kindergartners are nonwhite.

Will be largest generation ever – even larger than boomers Raised in an era of unprecedented “long boom” prosperity Immediate information and access through technology and media – Real World, 24/7 news and instant messaging.

Millennials/Generation Y

Born: 1982—2000(5) Age:5—23 • • • Highly regimented and structured: homework, hobbies, team sports, self-enrichment activities. Pressure and time constraints are normal to this group. They thrive in a fast-paced world.

Faxes, computers, cell phones, ATMs, CDs have ALWAYS been a part of their lives Some have seen as many as 20,000 TV commercials a year since birth

Marketing to Millennials

Born: 1982—2000(5) Age:5—23 • • • Millennials are still young consumers (oldest in their early 20s), and it is still too soon to make any firm judgments. However… This will be the largest and most actively consuming generation ever. It is already the same size as the Boomers and growing and will have more than a five times stronger economic impact than Boomers had at comparable ages in adjusted dollars.

Although they are highly educated and pragmatic (twice as many college-educated members as Boomers), they are far more upbeat than Xers (Optimistic Realists vs. Realistic Pessimists)

Marketing to Millennials

Born: 1982—2000(5) Age:5—23 • • • Most technically savvy and culturally diverse of all generations. Marketing materials must have an electronic component (and feature diverse faces).

– Good news for small businesses: Millennials appear to be loyal to brands, albeit they want their own labels, not another generations labels.

This group has generated success for Tommy Hilfiger, A&F and Hollister butd tougher times for Levi Strauss. They are not only receptive to newcomers, but seem to prefer them Heroes and idols are an important theme (Tiger Woods and Brandi Chastain), which may begin a new round of endorsements.

Marketing to Millennials

Born: 1982—2000(5) Age:5—23 • They are marketing savvy and don’t want to be told by advertisers that something is cool. They’d rather find it out on their own or from a peer.

• Word-of-mouth and Viral Marketing are effective ways to reach this group. Try enlisting other “cool” teens to use and distribute products – stickers, magnets, t-shirts and other products that can be given away easily and quickly.

Millennials/Generation Y

Born: 1982—2000(5) Age:5—23 For Your Information… In 2005, the youngest Millennials were 5 and the oldest were 23. Nearly 22 million are already in the workforce as full-timers, part-timers or interns.

Millennials have more spending power than any generation before them.

Millennials will have a major impact on the workplace and consumer spending for every one of the next 70 75 years.

Managing the Generation Mix – From Collision to Collaboration

Applying GM Principles Your

positioning

Own Business

1. Identify your business goals, areas of expertise and • Solutions provider/consultant • Full service marketing expert • Order fulfillment specialist (order taker) 2. Identify your target audience 1. Focus on specific marketplaces or broad based 2. Are you and your customers of the same mindset?

Applying GM Principles To Clients’ Programs

1. How are you currently perceived by your clients?

• Marketing consultant or product source • PPAI’s 2005 End-Buyer Study reveals that there is little differentiation in perception between the role of a “supplier” and “distributor” 2. How sophisticated is your client to the role of promotional products?

• Part of a strategic, integrated marketing plan or just something to give away/sell?

Applying GM Principles To Clients’ Programs

Applicability of the Product: 3. What is your client trying to accomplish?

• Who is the audience and what are the goals of the program?

• Directly relates to the product selection and measurable outcomes

Applying GM Principles to Clients’ Programs

Applicability of Product: 4. When are you brought into the buying cycle?

• At the stage where you can influence the message OR as a ‘supplier’ to provide a particular product.

High Impact Low Impact Product R&D Marketing Plan Development Influence the use of promotional products Choose the promotional product How fast can you get me something

Applying GM Principles as Suppliers and Promotional Consultants

Technology

Jump drive Photo mouse pad

Travel

Backpack Pill case

Awareness/Fundraising

Silicon bracelets Lapel pin

Packaging

Same product. Different Generational Appeal.

Information Resources PPB Magazine

February 2005 November 2004

Information Resources Corporate Logo Magazine

Promowear

Magazine

www.BuildAPromotion.com

www.PromoBusinessBuilder.com

Information Resources Internet

The End

Q&A

Reviewing Today’s Goals

• To examine the differences between generations and how each generation’s fundamental values, attitudes and influences shape their purchasing behavior • To recognize that age – in relation to life experiences – does make a difference in how we reach, influence and sell • To identify generational tendencies of our clients and their customers and implement programs that will lead to greater return on investment • To better understand how to get along with our co workers, parents, kids, neighbors, etc.