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VI.6 Nov.-Dec. 1999
Page: 68
Digital Citation

Strategic outlook


Authors:
Andrea Moed

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Across the US media spectrum, there are signs that families are getting networked. Over the past 9 months, E-Groups—an online group communication service with more than 6 million members—has helped numerous families start their own Internet mailing lists. The New York Times reports that 8.5 percent of America’s 69 million cell phone users have also bought cell phones for their children.

Nonetheless, today’s virtual family get-togethers are mostly confined to affluent early adopters. When will these practices gain mass market acceptance, how will they get there, and what role will consumer electronics and software companies as well as content providers play in this market? These are major research issues for Carolyn Ramsey-Catan, who helps turn Philips Research projects into business plans.

Ramsey-Catan is looking ahead to a time when personal communication becomes broadband. More families will have access to affordable communication options that incorporate video and audio, still photography, and other imagery. The technologies for such multimedia messaging already exist, and many have declined in price to consumer levels. "But," says Ramsey-Catan, "there are many tasks ahead for companies looking to broaden their acceptance. As products become more powerful and complex, the business question is: ‘How do you sell the device?’"

Ramsey-Catan has considerable experience with these issues. While at Philips, she has focused her attention on emerging technologies with a particular focus on new TV technologies and applications for the family. One such device is WebTV, which has clearly helped pave the way for the Web as a consumer medium. For Ramsey-Catan, the WebTV experience has been particularly informative because the product and its uses were initially unfamiliar to the American family. "Today’s U.S. market has a good understanding of what e-mail and Web surfing are, because penetration is high enough to make them household words. When Web TV was first introduced, there were only some people who knew and could share in the excitement."

"How can you create a marketing message for a brand new experience? That is a fundamental challenge for all kinds of emerging products," says Ramsey-Catan. "One interesting question is, should the company selling the product do all the education, or should it enable other market forces to assist in that process?" Regarding visual communication in families, she points out: "Mass market adoption is likely to be preceded by very strong market penetration of e-mail, and sharing pictures via Web sites. Important preconditions for WebTV’s success were more widespread Internet usage in schools and offices. Those forces, in addition to advertising, all contributed to a general market awareness that e-mail and Web surfing on TV could be wonderful."


"In the United States, 40 percent of all purchases are made by or influenced by children"

 


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She goes on to give an example of a possible scenario. "As teenagers left home for college and discovered e-mail there, many urged their parents to join in on this fun way to communicate. Arguably, no single company fueled that trend. At the same time, WebTV greeted the market with a nice message saying, if you want to have e-mail so that you can correspond with your kids and see what ‘the Internet’ is all about, here’s an easy-to-use, low-cost way to do it."

Here lies an interesting implication for marketers to families. It is known that in many cases, family relationships motivate people to try new technologies. But what Ramsey-Catan suggests is that in addition, certain family members, especially younger ones, serve as conduits to bring in technologies that subsequently get used by everyone. "In the United States, 40 percent of all purchases are made by or influenced by children. This leads to the question, at whom should we target the marketing? If a product will be used by all members of the family, do you try to capture the teen audience, knowing they will persuade their parents to bring it home? And if you do that, is it sufficient just to deliver a message with a value proposition for teenagers, or do you also have to teach them what the value for parents would be, so they can use that as a selling point at home? One interesting example of this is in the PC market. Frequently, children are attracted to the PC for games and fun communication. They realize, however, that their parents are more likely to be influenced by the educational possibilities that a PC offers. So they talk about the educational value to convince their parents to make the purchase, but the time they spend has a high entertainment component."

In any event, companies will need to acknowledge a major shift in media habits between baby boomers and their children, says Ramsey-Catan. "The baby boomers were happy to sit and relax in front of the TV at the end of the day. Now, new technologies such as the Internet, increasing global trends, and new behavioral patterns make multitasking part of a new way of life, even with entertainment. Generation X-ers and Y-ers are leading these trends and very much changing traditional patterns and expectations."

Their tastes are already influencing the portables market. The first young cell phone users may have been simply imitating their parents, but in the future, says Ramsey-Catan, they will have their own needs and preferences. "Kids are going to be increasingly demanding. As portable products reach an affordable price range, kids will become increasingly vocal about their needs and desires, and I wouldn’t be at all surprised to see them driving the marketing."

As long as young people explore new ways to communicate, companies will try to exploit their curiosity, thereby appealing to their families. In Ramsey-Catan’s visions of multimedia messaging, kids are the catalyst, but everyone gets in on the act. "There will be scenarios where a family sits down and watches TV together, and the TV is also the device they use to receive multimedia messages from someone else. There are going to be new models of how the family behaves, works, and plays together."

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