Lecture 12: Millennials

Central Questions

  • How do consumption theorists approach the case of millennials?
  • How might classical theorists approach this case?
  • How might contemporary theorists approach this case?

Mundel, Huddleston and Vodermeier Video 1

  • The video discusses the millennial generation and their money attitudes. The millennials ranges from 19-34, where some individuals are employed or unemployed
  • The millennials are actively starting their own businesses, thus there is the rise of entrepreneurships. This indicates how generations have changed over the years, yet they are and will increasingly borrow loans from banks to support their businesses
  • Furthermore, mobile banking is more evident among the millennial generation, where individuals do not carry cash. For instance, 23% of the millennials carry $5 on them, since they prefer electronic transaction (Debit / Credit)
  • Thus, there is a demographic shift from baby boomers (the largest population generation in America) to the millennial generation
  • Additionally, the millennials tend to have more than one job, where they would have a small business on the side while having a full-time job

Mundel, Huddleston and Vodermeier

  • Affordable luxuries look at how the millennials can spend a little bit more (Ex. Luis Vuitton pens and wallets which will help the individuals signal status and taste. Seeking affordable luxuries allows individuals to capitalize on the trading-up phenomena. Thus, it involves shopping for cheaper goods in one category in order to free up resources for higher spending behaviour in other categories such as coffee, hair salons, spas)
  • People are doing this because they want to signal good taste and expensive lifestyles
  • Disposable income (refers to income available after paying off bills) goes to these affordable luxuries. This is important to pay attention to because millennials represent the largest consumer generation in history, since the population is rapidly growing
  • Furthermore, the millennials are the most educated with the rise of credential inflation, yet most in debt with expensive tuition fees. Thus, they have more debt than any previous generation. In fact, it effects other generations (Ex. Parents support their children financially when needed)
  • They have had most of their life with access to internet, and as a result, have become increasingly sophisticated consumers. This has multiple effects, such as the way goods and services are acquired (Ex. The rise of e-commerce where millennials increasingly shopping online. Furthermore, the access to the internet has allowed them to research consumer goods more than previous generations)
  • They spend money to signal fashion consciousness and status to others (Ex. Buying a Starbucks coffee to signal taste and luxury)
  • Furthermore, luxury brands are developing downward extensions to mass-tige brands/offerings
  • Despite democratic setting, people still seek social differentiation, which is where affordable luxuries intersect
  • Luxury Brand: Refers to one that is selective and exclusive, has creative and emotional brand value for the consumer. It must have artistic content, must have craftsmanship and must be international (Ex. Hugo Boss and Tiffany). This relates back to conspicuous consumption (back to Veblen)
  • Hedonic Consumption: Refers to the multi-sensory, fantasy, and emotive aspects of one’s experience with products (Ex. Sitting at Starbucks among middle-class individuals)
  • Buying an affordable luxury like specialty coffee allows individuals to express a luxurious lifestyle through the experience
  • Luxury goods are refinements of basic human needs
  • 11 themes of luxury include high quality, unnecessary, pleasure, improving quality of life, brand, emotional satisfaction, indulgence, status, exclusive, (price), impulse purchase, relaxation opportunities
  • However, affordable luxuries are unnecessary items (Ex. Fashion, jewelry, perfumed, wines and spirits, watches, foods)
  • However, Mundel et al.’s top 5 unnecessary affordable luxuries are watches, concert, sports tickets, specialty coffee, wine and spirits
  • Affordable luxuries should only be up to 40% more than necessities. In other words, an affordable luxury should not be 40% more of the price than the non-luxurious item in the given category
  • According to Mundel et al., top 5 attributes of affordable luxuries include quality, successful, status, impressive, glamorous
  • Furthermore, decreasing quality does not seem to be a good alternative for competing in this arena

Mundel, Huddleston and Vodermeier Video 2

  • The video clip discusses how the car company Cadillac is increasingly reaching out to the millennials.
  • It is estimated that by 2020, 40% of millennials population will purchase vehicles.
  • Furthermore, since millennials are more interested in fashion than previous generations, Cadillac is taking an aggressive stand toward marketing by using multiple strategies to target millennials
  • However, most millennials are moving toward urban areas of cities, thus the purchase of a vehicle is not a large interest to this population

Smith Video 1

  • The video clip discusses five tips for marketing to the millennials. Networking (having networking events to integrate millennials). Invite only (millennials are most likely to join a group if they receive a direct invitation). Guidance (Setting up a mentor program will help millennials to stay engaged with the organization / program). Communication (The use of digital means such as social media to reach out to millennials). Flexibility (Providing a flexible event will more likely to be attended by millennials)

Smith

  • Digital marketing is the most promising avenue to target millennials. Thus, online presence is the key
  • Research Questions: What forms of online advertising do millennials prefer? Which website features grab the attention of millennials? How can marketers get repeated visits? What motivates millennials to write reviews online?
  • Millennials are eager to share expertise and opinions with other online consumers (Ex. The system of YELP where reviews are constantly generated by consumers) (Ex. Social media sites such as REDDIT, where people seek experts’ opinions on a particular topic)
  • Furthermore, Smith argues how online word of mouth (WOM) and peer influence are most important in shaping purchasing power of millennials
  • Additionally, personalized messaging is important for businesses/organizations to target and convince millennials to purchase a product or service
  • Millennials strongly prefer online advertising and coupons (for example, “receive 10% discount”), as well as email updates and side-panel ads
  • Competitive pricing, good shipping rates and coupons all important for repeated visits
  • Strongest motivator for millennials to create an online review for a product or service is extreme dissatisfaction, with extreme satisfaction being second and personal benefit being third
  • Push is not the right strategy, where it involves providing all the information at once. Instead, there should be a need to pull consumers in
  • Additionally, freebies might go a long way to get repeat customers because people appreciate free products

Smith Video 2

  • The video clip discusses millennial marketing. Specifically, the millennials are interested in connectivity online. How does the company or organization connect the millennial consumer with their peers?


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