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The perils of blanking tomorrow’s trend creators

The perils of blanking tomorrow’s trend creators

Generation Y. The Millennium generation. Many a name has been coined to name this one special generation, the generation of tomorrow: the 16-25’s. So why are they being ignored in the Middle East?

August 19, 2008 9:25 by

Brand savvy and with increasing purchasing power, this generation possesses needs and aspirations that practically shout out to be fulfilled by the modern corporation. While in the West, products and services beg for the attention of this demographic, the same does not hold true in this region. Why is this so? Is the call for marketers in the Gulf to broaden their horizons a valid one? Does the generation Y in this region have enough purchasing power to warrant a change?

A huge 55 per cent of the UAE’s population is under 25, creating a very large youth segment for companies to market their products to. In addition to this the majority have access to a relatively large amount of money for personal expenses.

“The region is characterized by its high youth population and high disposable income,” Faith Grove, Marketing Manager of Lower Gulf, Nokia, points out.

Tammy Jalboukh from TNS, agrees, “Based on our extensive work in this field, a qualitative feel would be that today’s youth in the United Arab Emirates is able to spend an average of Dh2,500 per month.”

The importance of this segment in the market is no different when examined from a social perspective. Stepping from adolescence into young adulthood, this demographic is beginning to make its own purchasing decisions. They are calling the shots on what to buy, where to buy and most importantly, which brand to buy. As a result, the brands this segment gravitates towards is crucial for today’s corporation.

Once one starts buying a particular brand, a relationship is forged (contingent obviously on product satisfaction) which is likely to continue through to graduation and eventually, adulthood. The importance of brand loyalty today, and hence the weight of these early decisions, is flawlessly illustrated by an example from Hassan Mourad, founder of Oobers, a youth community specializing in marketing to the youth.

“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 all almost the same; similar features, similar price. There’s nothing that’s gives one an edge over the other. So what are they using as leverage? Brand loyalty.”

And if all this isn’t reason enough for the youth to be high on the priority lists of companies, there is also the element that they are the creators of new trends in the markets, “They are the demographic that creates popular culture,” says Mourad.

Factor in pester power (the increasing say today’s youth has in family purchases), and corporations have on their hands a force to be reckoned with.

In comparison to the previous year it seems that companies in the Gulf are waking up to the promise and potential offered to them by this segment. Campaigns such as Nissan’s ‘win your first car promotion’ and me bank’s student credit card are evidence of the aforementioned.

Although marketing campaigns tailored to reel in customers of this demographic exist, the proportion of them to the number of people belonging to this demographic, not to mention when compared to their campaigns of this nature in the West, is small.

Plenty of potential is still unrealized in this region in terms of products and services that can be offered to this demographic. Banking facilities, as pointed out by Jalboukh, are a prime example of this. “This demographic has a tendency to only think of the moment. 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,” she said.

In a similar vein, members of this demographic are also in dire need of services like health insurance which is tailored to their needs, and medical discounts. To step into the arena of financial independence is no walk in the park, and is usually accompanied by a large increase in personal responsibility that is not always absorbed by ones disposable income. Inclusive in this increase can be payments towards ones phone bills or having to buy ones own fuel, leaving ample space for companies to sweep in with a solution in the form of a student talk time package or discounted fuel rates, and thus forming a brand loyalty that will carry through to when the youth, themselves, become the decision makers of a family.

Why then, is there still a discrepancy between this quickly burgeoning school of thought and real marketing practices in the Gulf? Could it be because of a lack of awareness? Are companies yet to realize their importance?

The reason, according to Mourad, 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 the youth is important. They have realized how important the youth is as a market segment. They have and are still allocating budgets to marketing to this segment. However, the question remains: how are they communicating with this segment? They need to start using tactics different from mass media to reach them.”

There also remains the possibility that the core of the discrepancy lies, as it often does in this region, at the heart of a cultural issue. Examined from an anthropological angle, it is possible to infer, that although more than half the population in the region is under 25 and the majority of them have a relatively high disposable income, Arab youth gains independence and therefore financial independence a little later than their western counterparts and hence are less likely to make purchases of a substantial nature until slightly later in life. As a result companies have limited incentive to market products and services to this demographic.

However as with all else in the gulf, cultural evolution is also careening down the fast lane and it may do companies well to be prepared for a time when a comparatively later independence is not the reality anymore.

Whatever the reason be for the discrepancy, it is clear that it is one that needs to be bridged. “There is something that brands in the Gulf need to be doing. 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,” says Jalboukh.

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