BBaker2008_KeitaiKids

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In order to test the hypotheses, multiple surveys were created based on the Connectedness Scale (Russell and Puto 1999; Russell, Norman, and Heckler 2004); the Personal Involvement Scale/Revised Personal Involvement Scale (Zaichkowsky 1985; 1994); the General Self-Efficacy Scale (Jerusalem and Schwarzer 2007). In order to create surveys optimum for child use, modifications were made based on Krosnick’s Satisficing Theory (Borgers, Hox, Sikkel 2003), Piaget’s Cognitive Developmental Theory (Huitte and Hummel 2003; Borgers, Hox, and Sikkel 2003), and other research conducted on surveying children (Fuchs 2002; Borgers, Hox, and Sikkel 2004). The results of each survey/scale were to be correlated in order to discover any relation between viewing of the super hero television programs and mobile phone perception and use. The survey process was planned to take place across grades 1 through 6, at several elementary schools in Japan.

While there were sure to be limitations in this process, such as a limited demographic (only several hundred students across a small rural region of Japan), the overwhelming limitation to this study is the fact that the surveys could not be run due to various setbacks (detailed below). Therefore, definite conclusions to the hypotheses could not be acquired. However, having completed a vast amount of research for this paper, the goals of the study could still be moderately achieved.

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(1)

The Youth Consumer Segment and Mobile Phones

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(1.1) Introduction

This chapter aims to inform the reader exactly how the issues and concerns of this paper have come to be. For years now, the youth consumer segment has grown to become one of the most influential and important groups in a variety of markets. Spending and peer influence has risen drastically, and marketers have assigned youths into four types of powerful consumers. At the same time, the popularity of the mobile phone has increased incredibly fast and beyond anyone’s predictions. The penetration rates of mobile phones in many countries around the world are reaching their maximum, thus market growth is limited and dwindling. Within the mobile market, youths everywhere are using mobile phones more often and in more ways than any other cohort. From a young age they are integrating the mobile phone into their lives as an essential part of their existence.

The mobile operators of the world are well informed of young people’s obsession with the mobile phone. Combined with ever increasing limited room for growth, the operators are aiming to acquire subscribers at increasingly younger ages. A major strategy for expressing a child’s need for a mobile phone has been to include safety features, such as GPS, as well as filling handsets with child oriented content. However, the operators are facing heavy opposition from watch groups and parents alike, as they question whether children need a mobile phone, and if the marketing is ethical. Yet, the research shows that young people are more open to implementing technologies into their lives and more intimately. Research also shows that the younger one begins to

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use a technology, their connection and involvement with it increases over time. The mobile phone industry recognizes this and shows no sign of backing down.

(1.2) The Importance and Power of Youth as a Consumer Segment

“What do you call a consumer who wants to buy everything you have, doesn’t care what it costs and is less than five feet all? A marketer’s dream? Nope. You call them kids” (AdRelevance Intelligence Report 2000). Children of all ages are continually assaulted with advertising messages for products that range from breakfast items, to toys, to television programs. Many of these messages come in forms of product placement in movies, pitches from entertainment and sports stars, advertisements on television and the Internet, as well as toy tie-ins with restaurants, and even educational texts that use well known brands as examples (Marwick 2006).

Today children are considered a very important consumer market to manufacturers and retailers of all kinds. Because of this, there is a whole segment of the marketing industry that is dedicated to finding out how best to sell things to children. As a result, children are becoming consumers at a younger age than ever before. It is said that most children start to remember and request logos, brand names, and other information heard in advertising as early as the age of two or three (“Children as Consumers” 2005; Marwick 2006). In the United States alone, almost 2 billion dollars is spent on advertising to young consumers, with nearly 1 billion of those dollars spent on print ads and television commercials (Shah 2008).

The reason for the amount of time, energy, and money put into advertising to children is the ever growing, enormous sum of money that flows back into the

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companies’ hands. American children aged four to twelve alone spend 25 to 30 billion dollars a year of their own money. As direct influences in household purchases they contributed to 20 billion dollars a year in the seventies, 50 billion dollars in 1984, 132 billion dollars in 1990, and 188 billion dollars in 1997. Their influence is now estimated at over 200 billion dollars a year annually in parental purchases (“Children as Consumers” 2005; Shah 2008). Canadian children aged nine to fourteen spend roughly 2 billion dollars a year, with an influence in family purchases of over 20 billion dollars (Marwick 2006). In the European Union, revenues of children focused television networks and producers have reached upwards of nine hundred million dollars (Shah 2003).

For Japan, statistics on the child consumer market are harder to come by, yet there are trends coming through that lead to very similar conclusions. In 1950, children in the age group of fourteen or younger consisted of 34.5% of the population. However, for many years now, Japan has been in an economic crisis threatening state due to a very low birthrate. As a result, the same age group only takes up 13.5% of the population today (Worsley 2007). At the same time, as women are gaining more power in Japanese society, more of them are working, and therefore adding to the household income. These two trends combined lead to families with less children and more money to spend on them (Sanada 2005).

Companies, such as Asics, are taking advantage of these trends. In the past few years they have released high quality, expensive shoes for young children, and have seen sales increase up to 50% (Sanada 2005). Adidas has even developed a new line of

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fashionable shoes for babies. Mobile phone operators are also taking advantage; marketing phones specifically designed for children. In the mobile phone industry, children alone were worth 275 million US dollars in communications costs in 2005 (“Japanese Kids Generated…” 2006). On the service industry side, there has recently been a high demand for babysitters that offer language and musical instrument lessons for a much higher price (Sanada 2005). The consumer value and power of Japanese children appears just as strong as anywhere else in the world.

It is clear that children worldwide are a very large source of retail income, in both terms of direct spending and influential purchasing. Because of this, marketers do not view children as a single market, but actually three. Due to their direct spending power, children are seen as a current market. In which they are considered to have their own needs, to have their own money to satisfy those needs, and to have the willingness to spend their money. Less expensive items such as candy and comics fall under this category. Children are also seen as a future market for goods and services. Companies attempt to pull them in now, in order to create long lasting brand loyalty. Special promotions at stores to build awareness are a popular strategy. They are also seen as a market of influencers; for items they are not able to purchase, yet can have purchased for them by others. Groceries and video games are examples (McNeal 1987).

Recently, the technology market has benefited extremely well from the purchasing power of youths around the world. Graeber and Dolan (2007) explain that, “Not only do young consumers adopt cutting-edge technologies at considerably higher rates, they also integrate them into their lives in more meaningful ways – to make

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decisions, socialize with friends, and educate themselves”. In particular, the Internet and mobile phones have created new paths for youths to find information and opinions about, as well as purchase products. Kelly (2002) concludes his report on “wired youth” stating, “Retailers must pay close attention to wired youth because they will soon become valuable, brand-loyal consumers”.

In 2002, American customers between the ages of 13 and 22 spent nearly 14 billion dollars online. These same customers have proven over time that when they are happy with their purchase online, they tend to stick with the same brand or retailer (Kelly 2002; Johnson 2006; Graeber and Dolan 2007). But just as important as their purchasing online, they are using the Internet and mobile phones to influence their peers’ purchases. Over forty percent of American youths under the age of eighteen have instant messaged or text messaged friends and family about products, have recommended a product via email, and bought a product based on somebody else’s rating. Dubbed the “MySpace Generation,” social networking sites have proven to be a core conduit for much of this peer influence (Johnson 2006).

The same trend in young consumer spending and influencing is also taking place in Japan. Japan’s number one social networking website, Mixi, has of over eleven million PC users, as well as over 2.3 million registered mobile users; with 15.2% of users less than twenty years of age (Mixi Press Release 2007). One of its most popular features is the review section, in which tens of thousands of product reviews written by users are listed. Mobile Game Town, a mobile Internet specific social networking site had 6.89 million users and 14.2 billion monthly page views as of August 2007 (Spahn

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2007). A step above Mixi, after reading a user created review on a product, one has the option to immediately click on a link to purchase the product through one of the website’s affiliated partners.

Through the advancement of the Internet and mobile phones we see that the youth of the world can actually be seen as a fourth type of powerful consumer market, that of an indirect peer influencer. It is now in many companies best interest to not only convince young individuals to get someone to buy them something, but to also convince young individuals to get someone, possibly a person they don’t even know, to buy something for oneself (i.e. – via reviews on websites, recommendations to friends). Around the world, the importance and power of youth as a consumer segment is staggering.

(1.3) The Global State of Mobile Use

On November 29th 2007, worldwide mobile phone subscriptions reached 3.3 billion, equal to half of the global population. In took just 26 years after the first cellular network was launched for this milestone to be reached (“Global Cellphone Penetration Reaches 50 Pct” 2007). For years now the mobile industry has constantly outperformed forecasts for subscriber growth. Recently, mobile companies have been making strong efforts in China and India, achieving high levels of success. They are even now aiming at rural parts of the African continent to maintain growth.

Even though the figure of 3.3 billion subscriptions globally is equal to half of the population, it does not mean that half of the people in the world own a mobile phone. According to the research firm, Informa, there are 59 countries that have a mobile phone

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penetration of over 100% (“Global Cellphone Penetration Reaches 50 Pct” 2007). This means that within those countries many of the subscribers own more than one phone. All over the world these very high penetration rates are beginning to emerge.

Europe leads the world in mobile phone penetration rates. In 2006, the mobile phone penetration rate had reached 85%. In a more specific country break down: 92% in Italy, 88% in the United Kingdom, 86% in Germany, 79% in Spain, and 73% in France (van Veen 2006). As a result of these high figures, the adoption rate of new subscribers has been on the decline. It is astonishing to realize that even though 3 out of 4 French already own a mobile phone, France has the most room for growth out of the 5 countries listed above. Nordic countries such as Sweden, where the first mobile networks were developed, have already broken the 100% ratio (“Many Countries Now…” 2006). And just as seen with the youth of Europe, text messaging is the most valued and used function of the mobile phone with all European cohorts.

The U.S. mobile phone market is by no means straggling behind, as its figures look much the same. In June of 2007, the mobile phone population reached 243 million subscribers, representing about 81% of the national population (“CTIA…” 2007). Research firm SNL Kagan recently released a 10-year mobile projection in which it predicts the United States will reach 100% penetration, 322 million units, by the end of 2013 (Rogers 2007). Until recently, due to the lack of 3G network development, the United States lagged behind Europe and Asia in terms of handset functionality, but subscribers are now sending an average of 1 billion text messages a day. Data revenues

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now account for 15.5% of all service revenues, resulting in over 20 billion dollars a year (“CTIA…” 2007).

As modern Japanese life is synonymous with the word “mobile phone,” it would be expected that the subscriber penetration rate would champion even the most wired countries. Yet, due to a declining birth rate and a rapidly aging population, Japan has only just recently reached the 100 million-user mark, equivalent to 78% of the population (Prabhakar 2007). A recent trend of carrying not only a standard mobile phone, but a PHS (personal handy service) phone as well, may lower the actual number of unique subscribers even more. PHS, an older technology, generally allows for much cheaper voice services, and thus many Japanese are seen using it for their phone calls and then relying on their standard mobile phone for data services.

Even with numbers not quite as high as other countries, it is clear that Japan is reaching its limit for new mobile customers. New subscriptions have been declining rapidly and the main operators have ramped up their services and price packages in order to draw users away from rival companies (“Number of Subscribers” 2007). A recent introduction of the number portability system, in which users can switch to a new operator without having to change phone numbers, has also escalated the competition. But with over 50% of the handsets in Japan using 3G technology, and 92% of the handsets sold in 2006 being 3G phones, Japanese subscribers are using data services like no other country (JETRO Report on Mobile Industry 2005; “92% of Mobile…” 2007). Estimates show that over 300 million US dollars are spent on ring tones and over 450 million US dollars are spent on mobile games per year (Rutledge 2003). The Japanese