Marketers have often made use of generations as a demographic and psychographic delineator for specifying and describing their target markets. But what exactly is a generation? And why is this understanding useful to marketers?
Generation Y Me?
Much has been written about the challenges of managing Generation Y - all those born between 1982 and 1995 to either Generation X or Baby Boomer parents. This populist classification, loosely based on demographics, allowed for some unique insights into behavior differences between generations. Those insights may well need adjusting given the unfolding global economic crisis.
Generation Y is markedly different to any other. Raised during a period of unprecedented prosperity, falling birth rates and little social upheaval Generation Y benefited from the full attention of their "helicopter parents", better, more rounded, education and little financial stress.
Exposed to an extraordinary period of advancement in technology, the defining characteristic of Generation Y is extreme technological savvy.
Social networking sites, texting, instant messaging and blogging have shaped the way in which they communicate.
They have been brought up in a world of instant access to information. With parents continuing to play a pivotal role in their lives well past childhood, Generation Y is very family oriented. Generation Y children are used to receiving high doses of acclaim and rely upon external praise from authority figures to validate their accomplishments.
Not surprisingly, members of Generation Y have proved to be very demanding and outspoken employees. Ambitious, and with an overdeveloped sense of entitlement, they demand high rewards, fast-track career progression, active mentorship, regular acknowledgement and time to pursue their own interests.
Over-praised in childhood, they struggle to deal with failure or criticism.
Raised to be team players, with a great deal of oversight, they tend to flounder if left unmanaged or unsupervised. And yet they resent hierarchical management structures.
If their demands are not met, they are quick to resign, often without another job to go to, safe in the knowledge that their parents will look after them. Over the past decade much time and effort has been spent on understanding and integrating Generation Y into the workplace. In effect, employers have had to change their expectations and management style when dealing with Generation Y employees. Tenure of employment is much shorter.
Performance management is more arduous and riddled with pitfalls. Patience, composure and fortitude are key requirements.
Given the financial turmoil one may well ask what the future holds for Generation Y. The answer is counter-intuitive. Generations are shaped by the events around them. In theory the economic havoc should act to modify their outlook on life. In practice it is more likely to merely change their short term behavior.
For the first time Generation Y is facing real difficulties which challenge their ability to make demands on others. Widespread unemployment and financial strife will challenge any feelings of entitlement. Where Generation Y has always relied on parents for financial support, the position may well reverse. Faced with the decimation of their savings the same parents may well have to turn to their Generation Y offspring for financial support going forward.
Although not brought up to be responsible and accountable, Generation Y is extremely adaptable. Having low innate expectations of corporate loyalty, Generation Y will deal with the emotional trauma of joblessness better and will adjust quickly to changing work conditions. Most members of Generation Y carry little financial responsibility in terms of property ownership or savings, and thus are better equipped to survive the crisis. They are also highly educated, adept at multi-tasking and cheaper to employ. Hence, they may well face fewer retrenchments. Although spoilt, they are not stupid.
They will lower their demands and expectations.
It is thus likely that, in the short term, all that savvy, higher education and creativity can be harnessed by employers with a minimum of effort. In a new financial reality, many companies will look to Generation Y to come up with cheaper, more technology-oriented solutions. One hopes that Generation Y will come out of the crisis more mature and more able to handle responsibility. But, as they are likely to be left relatively unscathed, in it is more likely that in the longer term their "high maintenance" behavior traits will reassert themselves.
Although Generation Y may feel that their comfortable existence is being threatened by current events, the global crisis may well be the best thing that has happened to its members. Undoubtedly, and gallingly for most of Generation X managers, they will emerge as a more powerful force in the workplace.
About Sygnia - www.sygnia.co.za
Sygnia is a leader in new-generation multi-management in South Africa.
Launched in 2003, Sygnia offers off-the-shelf products, customised multi-manager strategies, and pure investment administration. Sygnia relies on its leading edge multi-management technology, Sygnia Platinum, to provide clients with an incomparable service. Sygnia has been appointed by institutional clients in the United States, United Kingdom and South Africa.
About Magda Wierzycka - Chief Executive Officer - Sygnia
BBusSc(Actuarial), PhDip(Actuarial), FFA, FASSA, CFP
Magda was one of the founding members of Sygnia in 2003. Magda is an actuary with extensive experience in the field of investments. Prior to launching Sygnia she was a director and Head of Institutional Business at Coronation Fund Managers for six years, where she was responsible for overseeing all the day-to-day activities of the institutional side of the company, including administration, client relationships, product development, marketing, operations and quantitative analysis.
In 2003, when Sygnia was bought out by African Harvest (Pty) Ltd, she was appointed as Chief Executive Officer of the African Harvest Group, including African Harvest Fund Managers. Under her stewardship African Harvest Fund Managers grew its assets under management from R10 billion to R33 billion, entering the ranks of the top ten largest asset management companies in South Africa and becoming the largest majority black owned asset manager in the country. She was also instrumental in enabling staff to acquire a 45% stake in African Harvest and in launching African Harvest Collective Investments.
The youth of South Africa command billions of rands in spending power, directly and through their influence over household consumer decisions. Today’s young adults have more disposable income than the generations that have come before them.
n terms of segment size and buying power, the "Youth Market" are of great significance to marketers, with roughly half of South Africa’s population being under the age of 24 and the most recent annual spend for consumers aged 8-23 being estimated at around R111 billion.
If you’re a brand owner or retailer hoping to tap into the current go-to market – young, influential and aspirational millennials – you need to chuck almost everything you know about marketing out the window.
Young South Africans may account for less than 20% of marketing budgets, but they remain an important market bringing with them the power to dictate trends, parental purchases, fashion and the popular choice of technology.