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Brands can fly high by wooing students
Several marketers in the region believe that reaching out to young adults in their college years is an ideal way to build brand loyalty.
September 23, 2008 10:30 by kippreport
Brand savvy and with increasing purchasing power, late teens offer brands a perfect opportunity to woo longer-term, if not lifelong, loyalty. In the UAE alone there are 120,000 higher education students, many of whom have a much higher average spending power than their peers outside the GCC. And the campus, where the average UAE student spends 60 percent of his/her time, is a great place for brands to start.
“The region is characterized by its large youth population and high disposable income,” says Faith Grove, Nokia’s marketing manager of the lower Gulf.
Tammy Jalboukh, head of the consumer connection unit at market researcher TNS agrees. “Based on our extensive work in this field, a qualitative feel would be that today’s youth in the UAE is able to spend an average of AED 2,500 ($680) per month. And although this is spent mainly on leisure, they are still able to make substantial (other) purchases.”
Stepping from adolescence into young adulthood, this demographic is beginning to make its own purchasing decisions. They call the shots on what to buy, where to buy and, most importantly, which brands to buy. “Students are the demographic that creates popular culture,” says Hassan Mourad, co-founder and director of strategic integration at Oobers, a regional company specializing in youth marketing. He says these early buying decisions, which are often invested with emotion, are important in the development of brand loyalty – and marketers would be wise to exploit it.
“Product differentiation these days is very low. For example, there are numerous different brands selling MP3 players on the market, yet despite this they are almost the same: similar features, similar price. There’s nothing that gives one the edge over the other. So what are they (marketers) using as leverage? Brand loyalty.”
On some UK campuses, specialized marketing consultancies offering a dedicated trade channel have come to treat student unions as fully fledged trade accounts. This is starting to happen on UAE campuses such as the American University in Dubai, Knowledge Village and Skyline College, but the lack of significant demand so far, means that the activity has a natural ceiling.
Nonetheless, many companies in the Gulf are waking up to the promising student market, as evidenced by campaigns such as Nissan’s “Win your first car” campaign and meBANK’s rollout of student credit and banking facilities. Other companies, such as Beiersdorf, the makers of Nivea skin-care products, are also testing the waters. Says Margie Gilbride, Beiersdorf’s Middle East marketing communications manager, “We have done sampling activities at women’s universities in Saudi Arabia and this is a touch point we will be pursuing further in the future. As yet we have not recruited student ambassadors.”
However, there is still a certain reticence among marketers. One possible reason is that they don’t want to be seen trespassing on educational institutes. Hatem Fakih, senior media planner at Universal Media, explains, “Despite there being few restrictions on marketing on campus, little such activity takes place because, at the end of the day, they are places of learning. However, far from encouraging the exploitation of students, we advocate a policy of assistance.”
Even in the UAE, students’ financial responsibility is seldom matched by the size of their disposable income: there are phone bills to pay and transport costs must be budgeted for, giving ample opportunity for companies to sweep in with a solution in the form of, say, a student talk time package or discounted fuel rates. But, as Fakih says, this relationship is a two-way street. Students helped at this time of budding financial independence will repay the favor with a lifetime of brand loyalty.
“This demographic has a tendency to think only of the moment,” says TNS’s Jalboukh. “They have no concept of saving. This is a great opportunity for banks to come to the scene and give them some guidance, a sense of how to manage their money.”
Students are also in dire need of services like health insurance that is tailored to their needs and medical discounts. The problem is that students don’t always know what they need, yet potential service providers appear to be falling down on the job of marketing to them properly.
Could the slow progress in marketing to students be due to a lack of awareness? Have companies yet to realize their importance? According to Mourad, it is not a lack of awareness but a lack of necessary marketing know-how on how to attract this demographic.
“The problem is not getting them to acknowledge that students are important. They have realized how important students are as a market segment. They have and still are allocating budgets to marketing to this segment. However, the question remains: how are they communicating with this segment? There are brands currently doing stuff inside campuses like putting up a banner. Putting up a banner is not engaging with the students. They need to start using tactics different from mass media to reach them.”
Then there is the possibility that the discrepancy is cultural; Arab youths gain their independence a little later than their western counterparts and hence are more likely to defer making financial commitments.
Jalboukh has the last word “There is something that brands in the Gulf need to do. They need to pay attention to the young ones. Incorporate them into your vision; incorporate them into your mission. After all, these are the mums and dads of tomorrow.”
First seen on www.gmr-online.com