GUEST BLOG POST by Alexandra Henderson
Alexandra Henderson works for Welt Branding in Cincinnati, Ohio as Business Developer and Assistant Brand Manager.
Many companies that have products or services targeted towards older generations are going to have to re-think their business plan because the Net Generation (Gen Y) has surfaced. Net Gens are influential to businesses and consumers alike, and their current buying behavior foreshadows overall consumer behavior in the coming years. Here are the facts:
- The Net Generation demands high-quality products at lower prices, are tech-savvy, digitally adept, and are outspoken critics of both the good and bad.
- Net Geners are drawn to innovative products, technology, smartphones, and immediate gratification at low costs.
- Their buying decisions are often made after significant research and references.
- Additionally, this generation is extremely influential when it comes to their parents’ purchase decisions – an estimated $2 trillion in spending each year. As this generation grows older so will their disposable income and control. So, considering their high-expectations and persuade, how do companies satisfy their needs?
Let’s take a look at the automobile industry. In the United States, 52 percent of family car purchasing decisions have been influenced in part by Net Gens. In 2003, Net Gens were responsible for 5 percent of car purchases, and it is predicted that in 2020 Net Gens will be responsible for 40 percent of purchases, suggesting how important this generation will be for the auto industry to be able to successfully reach!
Case in point, luxury automobile Mercedes-Benz is carving room out for this generation.
The brand has announced plans to launch a new and less expensive line of cars in 2013 that will cater specifically to the interests of this generation. The line, which will be a tier lower than their existing C-class, will offer an updated communication system, mBrace2, and other technological features that are inspired by the Net Generation’s obsession with smartphones and the Internet. Steve Canon, Mercedes-Benz USA’s Chief Executive Officer, explains that Mercedes’ “ability to succeed” is dependent on the Net Generation and their reliance on smartphones.
The Internet-enabled mBrace2 will be equipped with popular applications, including Facebook, as well as 3G cell connection. Additionally, it will sync car location with the owners cell phone; the idea being that Mercedes will always be with the owner regardless of whether they are physically connected. Canon acknowledged that Mercedes may be playing with fire in regards to the danger of multitasking while driving. He emphasizes that Mercedes “has to be very careful, because [we] need to know what [we] do is safe.”
Focus on horsepower and engine capabilities have shifted towards car software and connectivity.
Honda’s Civic, which has historically appealed to a larger audience, is now gearing towards a specific connection with Net Gens. Although the newest Civics are equipped with the latest technologies, its marketing campaigns aim to capture the emotional state of this generation: freedom, individuality, excitement, speed. Similar to Canon, Jean-Marc Leclerc, Honda’s VP of Marketing, explains, “it became very clear that to ensure continued success of the brand moving forward, [Honda Civic] must appeal to the next generation of car buyers.” Honda is increasing the car’s perceived value by marketing emotions that connect a buyer to the car.
Mercedes are Honda are great examples of brands that are shifting gears. The automobile industry is just one category in which technology and the Net Generation’s digital lifestyle is changing buying behavior. In order for companies and brands to keep up – they must monitor the market place; correctly assess these behaviors by adapting to new expectations, and adapt core competences to survive.
