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Why Are Marketers So Obsessed with Millennials?

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Arguably one of the most used (probably overused) words in a marketer’s vocabulary has to be “millennial”, a term that represents society’s young adults and is often associated with words like “tech-savvy,” “self-absorbed,” and “free spirited.” And while these adjectives may apply to some members of this group, one could easily argue that other generations possess these same qualities – after all, I’m sure most of us could think of several baby boomers that not only own the latest tech, but are well-versed in its features.

It certainly begs the question of how different Millennials are from their parents and grandparents, and there’s been no shortage of research to try and find out.

From understanding their purchasing habits to how brand loyal they are, many companies have hired consulting firms just to try and figure out this group.

But why are marketers so captivated by the millennial generation? And is this fixation on them worth it?

The Importance of Millennials to Brands

In the U.S. alone there are about 80 million millennials, making them larger than any other demographic in the country. There are also more Millennials in the workforce than other generations, with an expected $1.4 trillion in disposable income by the year 2020.

There hasn’t been such a fixation on marketing to a specific generation since the baby boomers, and so many consumers outside of this demographic are left wondering why they’re being ignored. Older generations are currently in their prime when it comes to spending ability, so why is their money not seen as valuable as Millennials’?

It’s all about the long-term potential.

While many Millennials haven’t hit their peak purchasing power due to student loans and starting a family, they are certainly heading that way, and brands realize the importance of getting in front of them early. But marketers should take care in making sure that they aren’t alienating other groups of consumers in the process.

Focusing too much on a mobile-first mentality, over-appealing to Millennials’ tech-driven nature, and straying completely away from traditional marketing mediums could indicate that you are solely focused on targeting younger generations, which might make perceived outsiders rethink their brand loyalty.

It’s also important to remember that Millennials have grown up surrounded by advertising anywhere and everywhere they go, so they’re not going to be easily fooled by marketing messages. They know how important their demographic is to company sales, and they aren’t going to play into advertising schemes or games unless they have some real substance.

In fact, they’ll likely get a bad taste in their mouth and seek out an alternative option.

Understanding This Diverse Generation

At the surface, it’s easy to think that the Millennial generation can be generalized into simple categories. They don’t go anywhere without their smart phones, they’re obsessed with social platforms like Snapchat and Instagram, and they’re more open-minded when it comes to social issues like climate change. So why are brands spending valuable marketing dollars to study their psychographics and behaviors so meticulously?

It’s because the “Millennial way” of thinking varies quite significantly from traditional corporate views. A Millennial’s mindset is typically considered to be decentralized, meaning they don’t automatically follow societal norms and instead conduct research to develop their own opinions. Corporate structures, on the other hand, generally lend themselves to a more centralized view – one that’s less personalized and focuses on a mass-market approach.

Marketing is certainly beginning to adopt more of a personal, engaging stance, especially with the prominence of social media in most company marketing strategies. But while a brand might do a great job of interacting with its social media followers or email subscribers, do consumers feel that personalization once they get down to purchasing a particular product or service? Generally not.

With the wide range of options available to consumers and a strong awareness of pushy marketing tactics, the challenge is on to cut through the clutter in a non-interruptive way.

This is why mediums like social media and less traditional marketing efforts are now playing such a strong role. You have to find a healthy balance between brand awareness and product promotion to ensure Millennials don’t feel manipulated and are encouraged to take action.

Long-Term Brand Loyalty

The most significant benefit to attracting a Millennial audience is their potential long-term value to a brand. However, a common misconception is that they aren’t brand loyal because there are always new and improved products entering the market.

In reality, 1 in 5 Millennials say that they would willingly choose the same brand as their parents, just for different reasons (e.g. social media, mobile presence). So maybe this group isn’t as disloyal as marketers think.

It’s easy to focus so much on grabbing attention that you forget about the fact that you want these individuals to keep coming back to your brand. Price is certainly an important factor to Millennials, with 56% switching brandsbecause of price or a change in their financial situation.

Another factor that impacts brand loyalty is how modern a brand is perceived to be. Companies that don’t have a mobile-friendly website, don’t utilize social media, or focus too much on product promotion could be perceived as outdated and undesirable to this generation. And Millennials place a strong emphasis on brands that “get them.”

When it comes to reasons why they might switch brands, the availability of something new and peer recommendations are the biggest influencers. So while it’s true that Millennials are always looking to check out the latest and greatest, they’re still influenced by more traditional marketing, like recommendations and word of mouth. To best capitalize on this group both now and down the line, it’s important to listen and respond to them like you would any other generation. Listening to customer questions, feedback, and complaints is essential to creating and maintaining a positive reputation with consumers.

At the end of the day, the authentic brand will be the successful one.

Not Everyone is Convinced

Even though it seems like most brands have jumped on the Millennial bandwagon, some are holding out – there’s still some skepticism as to why marketers are focusing so heavily on this group and seemingly forgetting about the others. And rightfully so.

The baby boomer generation currently possesses 80% of the developed world’s wealth, so why would you want to ignore them? Even if they don’t have as much long-term value as Millennials, there’s money in their pockets right now that they are looking to spend. Brands should never focus their marketing on just one generation unless their products and services are only applicable to that group.

For instance, while a selfie stick manufacturer probably won’t be making a lot of sales to baby boomers, Apple is selling iPads to a wide range of consumers.

It’s also hard to figure out the best way to target the Millennial generation because there is so much diversityamong them. Millennials pushing 30 years old don’t typically have the same purchasing power or interests as those who are just entering college, even though they fall into the same generation. On one hand, recent graduates might have more disposable income because they’re entering full-time jobs for the first time in their lives, while others may be paying back loans and starting a family.

You can’t make simple generalizations for this group – or any demographic for that matter.

How Should Marketers Manage Millennials?

There’s no arguing that the Millennial generation possesses a lot of potential purchasing power and brand loyalty, so it’s important to develop a marketing strategy to cater to their highly digital nature. However, it’s also important to never alienate customers to target a specific demographic, so campaigns should include a variety of elements to appeal to all of these groups.

No matter what, there will always be brands trying to capitalize on the “it” generation of the moment. Right now, it’s Millennials as they enter adulthood and their peak spending years. In a decade, Generation Z will likely become the focal point as Millennials become older and more established. It’s a cycle that will repeat itself over and over again.

And, ultimately, it’s the brands that can find a way to cater to each of these groups simultaneously that will see the most brand loyalty and long-term success.

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About the Author

This article was written by Kim Speier of Social Media Today. Social Media Today is an online community and resource for professionals in marketing, social business, communication, customer experience, content marketing and digital strategy, or any other discipline where a thorough understanding of social media is mission-critical.Kim is currently an Inbound Marketing Specialist at Mainstreethost, a digital marketing agency in Buffalo, NY. As a regular contributor to the Mainstreethost blog, she enjoys writing about social media, SEO, content marketing, web design, and mobile technology. In her free time she enjoys watching the Bills and Sabres, skiing during the long Buffalo winters, and keeping up with the latest trends on Twitter.

Callum Connects

Jason Feng, Co-Founder of Pillpresso

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Mr. Jason Feng is re-engineering the healthcare industry.

What’s your story?
I am an engineer at heart. I enjoy the process of problem solving and have been actively developing innovative solutions to existing problems. Me and my co-founder settled on the problem of poor medication adherence among the elderly. This was a problem which struck a chord with us because we all have loved ones who have to take multiple medications on a daily basis. The complex medication regimen, coupled with declining cognitive abilities of the elderly tend to exacerbate the lack of medication adherence, which may lead to disease relapse and hospital readmissions, ultimately increasing the burden to caregivers and the society.

What excites you most about your industry?
The problem of medication adherence is not a new one in the healthcare industry. In fact, lack of medication adherence is a well-researched problem in many countries. Solutions which have been developed to address this problem face three major issues:

  • Entrenched mindset within the healthcare system, many of which are used to and unwilling to change from the legacy systems which were implemented decades ago.
  • Complex nuances in healthcare delivery across different countries, making it hard to “copy” and “paste” solutions which have worked well in other areas.
  • Because poor medication adherence is multifactorial, and many solutions focus solely on a few aspects, and do not employ a holistic approach.

Nevertheless, entering this industry at this time excites me because we are in the midst of a global shift in healthcare models; one where the industry is moving away from a service-based model, towards a more value-based model. This shift means that traditional players such as insurance companies and pharmaceuticals are under increasing pressure from patients and payers to demonstrate the value of their products under real-world use. Medication adherence data is one crucial missing link in this puzzle to deliver better care to patients. Being able to build a business around these incumbents and pioneer a new way of care is something which I look forward to.

What’s your connection to Asia?
I am a Singaporean. Most of my experiences throughout my life have been in Asia.

Favourite city in Asia for business and why?
I have not worked in other Asian countries outside of Singapore, so I can’t comment on other Asian countries too much. Singapore has a relatively low barrier for starting a business, and all business rules and regulations are clear and transparent. The startup ecosystem is also rather comprehensive and easily accessible. Being a small country, Singapore has a very limited market for products and services. However, due to its size and efficiency, it serves as an excellent test bed for new ideas. Being a travel hub, travelling to other Asian countries is cheap and easy.

What’s the best piece of advice you ever received?
Fail fast, fail often. The greatest lessons are never learnt through success.

Who inspires you?
Elon Musk

What have you just learnt recently that blew you away?
Successful launch of Falcon Heavy and the recovery of the 2 side cores. The way the 2 cores landed was like something you’d only see in CGI. Very well calculated.

If you had your time again, what would you do differently?
Applied for NOC (NUS Overseas College)

How do you unwind?
Go rock climbing.

Favourite Asian destination for relaxation? Why?
Nepal. I’m an outdoors guy. Being able to trek around the Himalayas is probably the best form of relaxation for me.

Everyone in business should read this book:
Creative confidence, by the Kelly Brothers

Shameless plug for your business:
Pillpresso is an award-winning health-tech startup that aims to improve medication adherence. We’re developing a medication management system that empowers seniors to manage their medicines independently and deliver proactive healthcare in the community through technology. Comprising individuals with complementary skills across business, engineering and medicine, our team is driven by a desire to improve healthcare and the human condition.

Grand Prize Winner of the 2017 Tech Factor Challenge
https://www.opengovasia.com/articles/8072-top-4-grand-prize-winners-for-3rd-edition-of-ageing-in-place-tech-challenge-announced-in-singapore

Grand Prize Winner of the 2015 Modern Aging
https://www.channelnewsasia.com/news/business/3-teams-receive-s-125-000-of-seed-funding-for-elderly-friendly-i-8246318

How can people connect with you?
[email protected]

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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Entrepreneurship

Will Financial Liberalisation Trigger a Crisis in China?

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The People’s Republic of China (PRC) has been liberalizing its financial system for nearly 4 decades. While it now has a comprehensive financial system with a large number of financial institutions and large financial assets, its financial policies are still highly repressive. These repressive financial policies are now a major hindrance to the PRC’s economic growth.

The PRC is at the beginning of a new wave of financial liberalization that is necessary for supporting the country’s strong economic growth. The country’s leaders have already unveiled a comprehensive program of financial reform, which includes 11 specific reform measures in three broad areas: creating a level-playing field (such as allowing private banks and developing inclusive finance), freeing the market mechanism (such as reforming interest rate and exchange rate regimes and achieving capital account convertibility), and improving regulation.

But could financial liberalization lead to a major financial crisis in the PRC? What would be the consequences for financial stability as the PRC moves to further liberalize its financial system? If the PRC repeats the painful experiences of Mexico, Indonesia, and Thailand, then it might not be able to achieve its original goal of overcoming the middle-income trap.

International experiences of financial liberalization, especially those of middle-income economies, should offer important lessons for the PRC. In our new research, based on cross-country data analysis, we find that financial liberalization, in general, reduces, not increases, financial instability. This powerful conclusion is valid whether financial instability is measured by crisis occurrence or by fragility indicators, such as impaired loans and net charge-offs. The only exception is that financial liberalization does not appear to significantly lower the probability of systemic banking crises, although it does lower the risk indicators for banks. These results have higher statistical significance and are greater in magnitude for the middle-income group than for the entire sample.

The insignificant impact on banking crises, however, should be interpreted with caution. One of the possible explanations is that under the repressed financial regime, the government supports banks with an implicit or explicit blanket guarantee. This reduces the probability of an explicit banking crisis, although the banking risks may be even greater because of the moral hazard problem. In fact, government protection of banks could also increase the probability of a sovereign debt crisis or even a currency crisis before financial liberalization.

If financial liberalization significantly reduces the likelihood of financial crises, especially in middle-income economies, then why did some middle-income economies experience financial crises following liberalization? We further investigate whether the pace of liberalization, the supervisory structure, and the institutional environment matter for outcomes of financial liberalization.

We obtain three main findings. First, an excessively rapid pace of financial liberalization may increase financial risks. The net impact on financial instability depends on the relative importance of the “liberalization effect” and the “pace effect.” In essence, what the “pace effect” captures could simply be the prerequisite conditions and reform sequencing that are well discussed in the literature. Second, the quality of institutions, such as investor protection and law and order, also matter. International experiences indicate that investor protection can significantly reduce the probability of financial crises. Third, the central bank’s participation in financial regulation is helpful for reducing financial risks during financial liberalization. This is probably because central banks always play central roles in financial liberalization, especially in the liberalization of interest rates, exchange rates, and the capital account. If a central bank is responsible for financial regulation, its liberalization policies might be more cautious and prudent.

Our research findings offer important policy implications for the PRC. (1) Further financial liberalization is necessary not only for sustaining strong economic growth but also for containing or reducing financial risks. (2) Gradual reform may still work better than the “big bang” approach, and sequencing is very important for avoiding the painful financial volatilities that many other middle-income countries have seen. (3) The government should also focus more on improving the quality of other institutions, especially market discipline, to contain financial risks. (4) It is better for the central bank to participate in financial regulation. The new regulatory system should focus exclusively on financial stability and shift from regulating institutions toward regulating functions. It should also become relatively independent to increase accountability.

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About the Author 

This submitted article was written by  and  of Asia Pathways, the blog of The Asian Development Bank Institute was established in 1997 in Tokyo, Japan, to help build capacity, skills, and knowledge related to poverty reduction and other areas that support long-term growth and competitiveness in developing economies in the Asia-Pacific region.

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