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TEENS THE MOST GLOBAL MARKET OF ALL They have moxie
(FORTUNE Magazine) IN A WORLD divided by trade wars and tribalism, teenagers, of all people, are the new unifying force. From the steamy playgrounds of Los Angeles to the stately boulevards of Singapore, kids show amazing similarities in taste, language, and attitude. African Americans and Asians, Latinos and Europeans are zipping up their Levi's, dancing to the Red Hot Chili Peppers, and punching the keyboards of their Macintosh PCs. Propelled by mighty couriers like MTV, trends spread with sorcerous speed. Kids hear drumbeats a continent away, absorb the rhythm, and add their own licks. For the Coca-Colas and the Nikes,[link widoczny dla zalogowanych], no marketing challenge is more basic than capturing that beat. There are billions to be earned. Teens almost everywhere buy a common gallery of products: Reebok sports shoes, Procter Gamble Cover Girl makeup, Sega and Nintendo videogames, PepsiCo's new Pepsi Max. They're also helping pick the hits in electronics, from Kodak cameras to Motorola beepers. Teen choices are big business. Last year America's 28 million teenagers spent $57 billion of their own money. In Europe, Latin America, and the Pacific Rim, a swath of over 200 million teens are converging with their American soul mates in a vast, free-spending market that circles the globe. Teens tend a universal shrine to pet products and icons: their bedrooms. In an ingenious experiment,[link widoczny dla zalogowanych], the New York City ad agency BSB Worldwide videotaped teenagers' rooms in 25 countries. From the gear and posters on display, it's hard to tell whether the rooms are in Los Angeles, Mexico City, or Tokyo. Basketballs sit alongside soccer balls. Closets overflow with staples from an international, unisex uniform: baggy Levi's or Diesel jeans, NBA jackets, and rugged shoes from Timberland or Doc Martens. companies. In 1992 teenagers bought 25% of America's movie tickets and 27% of all videos, for a total of $6.6 billion. They spent $1.5 billion on jeans, almost twice as much as in 1990, and $3 billion on sneakers, nearly four times more than four years ago, according to Simmons Market Research Bureau of New York City. Carried like an Olympic torch, America's choices explode overnight into worldwide trends. Though vast portions of Latin America lie in poverty, incomes are rising, and the sheer number of kids forms an awesome market. Together, Mexico, Brazil, and Argentina have 57 million 10- to 19-year-olds,[link widoczny dla zalogowanych], vs. In Japan, Korea,[link widoczny dla zalogowanych], Singapore, and Vietnam, 18% of the population -- 42 million kids -- falls between ages 10 and 19, vs. Europe has 50 million kids, who buy far fewer soft drinks, videogames, and PCs than American teens. To reach that global audience, marketers must penetrate the curious, impatient, thrill-seeking minds of teenagers. ''Teens go from teddy bears to condoms,'' says Irma Zandl, president of the Zandl Group, a New York City marketing consulting firm that specializes in young consumers. In all generations and cultures they discover sex, try on new identities, and seek approval from their peers. Long after the mumbling malcontent played by James Dean shocked solemn, square Jim Backus in the 1955 movie Rebel Without a Cause, teens are still fighting with their parents. In other important ways, today's teens are very different from previous generations. They are the world's first computer-literate generation, and they are better-traveled than many of their parents. Says Nicholas Arnault, 17, a student at the elegant Henry IV school in Paris: ''I've already been to Minnesota and California to learn English. My parents never had such a chance.'' In the unbuttoned universe of the fin de siecle, they talk more frankly than yesterday's teens about sex, drugs, and their own insecurities. ''Kids have a lot to say. They act more aggressive,'' says Jenema Mack, 18,[link widoczny dla zalogowanych], an African American from Brooklyn. The blunt, in-your-face lyrics of rap epitomize the new assertiveness. Teenagers around the world are deeply concerned with social issues, particularly environmentalism. Many actually practice what they preach. Jessica Mantz, 15, of Piscataway, New Jersey, buys cosmetics that don't use animal testing, such as Natural Glow makeup from Del Laboratories. In Germany, Coke and Pepsi's refillable plastic bottles are a hit with teenagers. ''We like green products and public transportation,'' says Tobias Albrecht, 16, a student in Berlin. Today's kids feel they've inherited a dangerous, decaying world. Pollution, violence, racism, and AIDS touch their daily lives. and Europe. Kids mourn friends killed by drug dealers in Brooklyn and hear their jobless fathers rant about Turkish immigrants in Berlin. Increasingly, teenagers are embracing other races. That helps to explain the worldwide popularity of ethnic music like rap, reggae, and salsa, and the fascination with black urban culture. Mary Anne Rose, 18, who is white, attends Westchester High School in Los Angeles, which is 70% black and 10% Asian and Middle Eastern. ''I'm used to being in the minority, and I like it,'' she says. Far more kids today earn their own money -- and spend it. Philip Gulizio,[link widoczny dla zalogowanych], 16, a student at Brooklyn's John Jay High School, is typical. as a stock boy in a pharmacy. Working teens reflect a seismic change in families. Many come from struggling, single- parent homes. Without a job, they couldn't pay for videogames or hip-hop clothes. In Japan part-time jobs -- and the touch of financial independence they bring -- have helped teens break free of the strict, traditional world of their parents. Japanese students used to study endlessly to pass stringent college entrance exams. Today they also want to have fun. Working part-time supports their heavy shopping habits. After classes, Naoshi Sato, 17, a high school junior in Tokyo, peels off his drab school uniform, puts three gold and silver hoop rings in his left ear, and slips into Levi's jeans and Nikes. Then he goes to the moving company where he earns $855 a month riding around Tokyo with the drivers, reading complicated maps of the city's streets. Says Sato: ''When you're young is the one time in your life you can enjoy yourself.'' His job pays not only for his wardrobe but also for his record collection, which includes hits by his favorite rappers, Doctor Dre and Ice Cube. A media revolution is knitting a common fabric of attitudes and tastes among teenagers. Take comic books. For two years Marvel Entertainment Group of New York City has been aggressively expanding its audience of European kids, who thrill to the exploits of Spider-Man and other superheroes with outsize pectorals. Today Marvel sells 12 million copies a year in Britain, Spain,[link widoczny dla zalogowanych], and Italy. By far the most powerful unifying -- and advertising -- force among teenagers is television. But in Europe and other regions,[link widoczny dla zalogowanych], stations seldom reached beyond national borders. Today satellite TV is helping to unify patchworks of domestic markets. Companies can mount Europe- or Asia-wide campaigns by using similar ads in a series of national markets. PepsiCo runs its snazzy TV spots for new Pepsi Max, dubbed for local audiences, on European stations from Denmark to Spain. music video network owned by Viacom. MTV is a monster hit in Europe. MTV can splash the same programming all across Europe, and is almost single-handedly creating a Euro-language of simplified English. MTV is keenly aware of teenage concerns. Most of the music videos feature American or British groups, like America's Mariah Carey or Britain's Peter Gabriel. It helped discover the Swedish pop group Ace of Base in 1992. MTV Europe gives companies the stage for a huge, international teen audience. The roster of 200 advertisers includes Levi Strauss, Procter Gamble, Johnson Johnson, and Apple Computer. ''MTV is not only broad, it's very targeted on the segment we want to reach: teenagers,'' says Donald Holdsworth, head of sales and marketing for Pepsi-Cola International. MTV reckons that marketing to teens will become far more important. Today it is difficult to sell the same products to 35-year-olds in different countries. They prefer traditional food and fashion, from Schweinbraten in Germany to bicycle jerseys in France. In part, that's because they never bonded with international brands as teenagers. But this generation is different. MTV and magazines, sports and music are building sturdier loyalties than in the past. MTV predicts that today's teens will keep buying Levi's and Apples as adults. Winning over teenagers is at the heart of Pepsi's battle plan against Coke. Pepsi's hip ads, filled with kids, sports, and rock music, are aimed straight at teens. The young converts tend to stay with Pepsi as adults. ''It's like an annuity,'' says Holdsworth. ''We get a big share of the teenage vote, and they keep voting for us at 35.'' By contrast, Coke's ''Always Coca-Cola'' campaign portrays a festive beverage with different ads appealing to people from 8 to 80. Since 1985 its share of the soft drink market has risen 3%, to 32%. Coke, whose share has increased slightly less, remains the leader, with 41%. Now the contest is shifting onto Coke's richest turf, the fast-growing foreign markets. 17% for Pepsi, according to Beverage Digest,[link widoczny dla zalogowanych], an industry newsletter. But Pepsi is gaining ground with Pepsi Max, a sugar-free drink designed for foreign markets. In Asia and Europe people find diet drinks hard to swallow. They miss the creamy sweetness of regular Pepsi or Coke and regard sugar-free beverages as the drinks of diabetics and the obese, not the young and vital. Pepsi seems to have solved the problems of both taste and image. It used ASK, a sweetener produced by Hoechst Celanese, to create a drink that tastes remarkably like regular Pepsi. for beverages.) By May, Pepsi Max will be available in 16 countries, including Britain, Australia, and Japan. Pepsi has been introducing it with a single set of commercials aimed at kids who like to live on the wild side. The ads show a quartet of macho teens vying to perform the most outrageous feats: skydiving from Big Ben, rollerblading off the Sphinx, surfing down the dunes of the Sahara. Pepsi is also enlisting the Ministry of Sound, a cavernous London club * where kids dance to blaring, electronically produced rave music. Starting soon, the Ministry of Sound will take its show on the road to promote the Pepsi brand -- and Pepsi Max -- at dance parties around Britain. Since launching Pepsi Max last September, Pepsi has lifted its market share about two percentage points in Britain, Holland, and Australia. Coke is fighting back. In Britain the study found that 41% of the 16- to 24-year-olds had sex before age 16. Says Penny Hughes, head of Coca-Cola in Britain and Ireland: ''Kids are making choices about everything earlier and earlier.'' Coke is aiming smack at the teen market with a new carbonated drink called OK, due to be launched at home and abroad later this year. And it is airing a fresh batch of commercials for the teen market. Produced by CAA,[link widoczny dla zalogowanych], the Los Angeles talent agency, the ads contain plenty of teen-pleasing animation. One shows a band of sugar-loving ants marching toward a pool of Coke spilled by humans. Nothing is molding common tastes around the world more than sports and music. Teen music sets the tempo in clothing, and kids who listen to the same bands cultivate a common look. One hot style in both music and fashion is hip- hop, first popularized by African Americans. Hip-hop fashion might best be described as loose-fitting urban street wear, clothes to relax and sweat in. Staples include baggy jeans, sweat shirts, hiking boots, and baseball caps, usually worn backward. But hip-hop kids stir in other ingredients like flannel shirts, Lycra jackets with sports logos, and Nike or Reebok athletic shoes. In the democratic kingdom of hip-hop, boys and girls dress alike. and Europe that made hip-hop so popular. In the early 1980s, African American kids in Detroit and Chicago started wearing baggy street clothes in dance clubs. In the mid-1980s, urban dance music invaded Europe, becoming the rage in Manchester, England, a capital of the European rock scene. In 1989 and 1990, Manchester bands like Stone Roses and Charlatans UK crossed the Atlantic. The combination of the white British bands and black American performers inspiring each other's music and wearing the same outfits transformed a motley collection of cult clothing styles into an international fashion sensation that became known as hip-hop.
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer
LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer.
Morningstar: 2013 Morningstar, Inc. All Rights Reserved. Disclaimer
The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM 2013 is proprietary to Dow Jones Company, Inc.
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