On March 15, 2018, the iconic toy store chain Toys “R” Us announced the imminent closure of all its points of sale, leaving many consumers both stunned and nostalgic. With a global downward trend in the toy market, the sharp change in likes, preferences and consumption patterns of children regarding their entertainment needs is undeniable. In light of this about-face, companies need to pay particular attention to their youngest consumers.

In 2016, Euromonitor valued the global market for babies and children at over 200 billion dollars. However, understanding the youngest consumer not only benefits the brands that are specific to this sector, but can also help all consumer brands anticipate how the the next generations of adult consumers will behave.  

In our latest article, called “Children and Their Brands: How Young Consumers Relate to Brands”, published in the Journal of Consumer Marketing, we researched the process through which children, start, develop, end and even reestablish relations with brands.

The following ten branding strategies, drawn from the conclusions of this research article, serve to attract and/or retain this younger consumer segment:

1. Your brand should foster autonomy. Children appreciate brands that allow them to feel independent. Therefore, your brand needs features that allow children to make their own decisions and not depend on "grownups". Brands such as Netflix and Apple allow children to choose what to see and which Apps to buy (in the case of the Apple store) without the need for adult intervention. It must be stressed that, for ethical and privacy reasons, both brands offer child-friendly versions of their content, which can be monitored and pre-authorized by parents.
    
2. Build a visually attractive brand. Since children’s mental structures are highly visual, the visual components of a brand (logo, colors, brand mascot, figures, packaging, labels, etc.) are pivotal to achieving brand awareness in the children's market. Coca-Cola, a leading brand and benchmark for branding excellence, has managed to captivate consumers from a very early age with its characteristic colors, packaging, Christmas characters and family tradition, among many other factors.
    
3. Develop a corporate social responsibility strategy. Traditionally, social responsibility campaigns have focused on the adult market. However, children are also aware of social issues and value brands that do something to help the less fortunate. The American Girl brand of dolls, for example, has a social responsibility strategy called "Making the world a brighter place", through which they support a wide range of social causes related to children.
    
4. Use sales promotions. Children are becoming increasingly independent in their buying processes, very often making a purchase without the direct intervention of an adult. They are sensitive to prices and appreciate brands that give them greater value for their money by offering discounts, 2 for 1, free samples, etc. The girl’s clothing brand, Justice, has a customer loyalty program, in which girls who accumulate several purchases within a certain period of time can earn discounts and win free products.
    
5. Prioritize reach and not frequency in your spots. Children display advertising fatigue with brands whose spots have a high level of repetition. They are even aware of phenomena such as visual pollution and punish brands that over-advertise. Toy brands, such as Mattel and Hasbro, excessively increase the frequency of their spots during the Christmas season and on Children’s Day, which can in fact result in a negative performance for them.
    
6. Your brand should foment family time. The family structure has changed drastically over the past few years. At present, both parents work outside the home, so children welcome brands and products that promote quality time with their loved ones. An excellent example is Disney, which, with its films, board games and even theme parks, manages to bring families together and generate lifelong memories.
    
7. Your brand represents a sign of friendship. Friendships are increasingly important for children, since they are often the only contact they have with people of their own age with whom they can interact and identify. Therefore, brands that represent a common consumption between the child and his or her friends are highly valued. Nintendo is a brand that generates a common and often simultaneous consumption experience among children, either face-to-face or virtually.
    
8. Pay attention to word-of-mouth. Children talk about brands with their friends and schoolmates. They even recommend brands to each other and when they have a bad experience, tell their friends and warn them about that brand. Play Station offers the option of sharing a video game with a friend, even if the friend does not own the game. This option, called "Share Play", fosters word-of-mouth recommendation in children.
    
9. Your brand should make children’s lives easier. Children appreciate brands that allow them to fulfill their everyday responsibilities more efficiently. An example is the Photomath App, which allows children to do their math homework in a simple and very visual way, through photographs that can be taken on a mobile device.
    
10. Build a brand portfolio that evolves with the lifecycle. Children are aware that in a few years’ time when they are older they will no longer be using "kids’" brands. As a result, companies must develop a brand portfolio that reflects this gradual change across all the stages of children's development, so as not to lose this relationship, but keep it for life. Pink, for example, is a sub-brand of Victoria's Secret, which manages to connect with the young consumer at an early age, and then migrate the relationship to the parent brand. Another example is Tommy Hilfiger Kids, a sub-brand that reaches out to the children's market and then retains them as loyal consumers of the Tommy Hilfiger brand.
     

Regarding children, there is still a great deal to learn about how to reach them and the growing market they represent. These branding strategies offer valuable guidance for successful marketing campaigns that will help to forge a strong relationship with the children's market, thus generating brand loyalty and love. Taking these recommendations into account will help to benefit and focus more attention on the children's market.

We must keep in touch with this market as it becomes increasingly stronger and more important in diverse industries, such as toys, video games, clothing and footwear. Although we have not focused in this article on teens-young people, we strongly recommend further research on strategies and the way in which their connotations should change as children grow into adults and join the largest market targeted by brands. Let’s not forget Lucy Hughes’ recommendation about children: build that relationship when they're younger and you've got them as an adult.

“They [children] are tomorrow's adult consumers so start talking to them now,
build that relationship when they're younger and you've got them as an adult.”

- Lucy Hughes

Thousands of companies, all over the world, are in need of increasing the information offered to their stakeholders due to new legislation related to sustainability, such as for example, the European Directive on the Disclosure of Non-Financial and Diversity Information, which is now obligatory for the 2017 fiscal year.

Nevertheless, in Latin America, according to a global study by KPMG, 81% of the 100 largest companies are already reporting social and environmental impacts in its sustainability reports, an increase from 74% in 2015. This advance, which has primarily been led by stock market investors in many countries, looks for businesses to communicate transparency in their operations. However, how can we tackle the sustainability puzzle in our own business? How can we measure it, and essentially, communicate it to our stakeholders?

Nowadays, sustainability is understood as the capacity of a company to create value for its stakeholders, proactively managing risks and strategic opportunities in environmental, social and economic dimensions. This definition transcends from the more traditional concept of Corporate Social Responsibility and includes a wider spectrum of environmental issues (such as water, energy, and emissions), economic issues (such as innovation, corporate governance, and antitrust policy), and social issues (such as occupational health and safety, personal development, and Human Rights), all depending on the specific type of business.

Many companies have spent years developing initiatives for these issues, but how can we ensure that these actions are really contributing to a sustainable business? The answer, as with any management system, is the establishment and measurement of objectives.

Why do we need reporting standards?

Although the business sector has not typically been a pioneer in sustainability, in recent years more companies have joined the efforts of the United Nations and other players, such as governments, NGOs, and Civil Societies, to develop the Millennium Development Goals (2000) and Sustainable Development Goals (2015). These initiatives establish clear goals to achieve sustainable development. The UN also created the UN Global Compact (2000) for companies to commit to working toward responsible and sustainable businesses.

When companies comply with initiatives such as the Global Compact, one of the main requirements is the reporting of its operations. This stems from the need for companies to be more transparent with their stakeholders, to be open about the disclosure of clear information, regulations, plans, processes, and operations. Furthermore, their top management must act visibly, predictably and understandably to promote participation and accountability, and allow third parties to easily perceive what actions are being performed.

While there are numerous measurement standards and guides to report sustainability information, one of the most used and updated is the Global Reporting Initiative (GRI). The GRI proposes a common framework which helps companies to generate their sustainability reports with an integrated view of their impacts. Under these standards, companies can communicate their performance, as well as propose and follow up on the objectives they have set. Finally, they are used to guarantee the comparability, quality and pertinence of the information.

Recommendations for a good report

If you, or your company are about to start or are in the process or generating a report, the following recommendations will help you on your path to sustainability:

1. The report is a consequence of strategy: It may sound obvious, but reality usually shows that a company’s sudden interest in sustainability starts with the report. First we need to take a step back and analyze the company’s current strategy, then take a look at it from the point of view of sustainability, which means mapping out the risks and opportunities of the business model all along the value chain, in its social, economic and environmental dimensions.
2. Include top management: The process of the report, and in general of the sustainability strategy, works better when there is visible conviction from the head of the organization. This does not mean that the CEO needs to be involved in every step of the process, but they and their executive team should be one of the last filters of the information disclosed to the stakeholders, as it will also become public information.
3. Prioritize what you are going to disclose: A Materiality Analysis process is key to select the content that is most aligned with the stakeholders’ expectations, the sector trends and the company strategy. This process is normally carried out by a third party to avoid any bias.
4. Limit yourself to what is relevant for your company: There are many standards, indicators and indexes used to measure corporate sustainability, but here also less is more. Ask yourself: What standards are the most critical for my company? Do they generate value? Which ones can I manage, or am I able to use? Start off little by little, but well done, making sure about the contributions to improving the company’s performance.
5. Reporting is a process of continual improvement: At first some companies tend to feel overwhelmed by the amount of information demanded from them, but just like any process, it is based on learning and constant improvement. If the company does not have all the relevant information, that just means that it needs to adjust its information collection process.
6. Sustainability Culture: It is about adopting sustainability habits, attitudes and behaviors in the day-to-day management of the organization. Once people understand the concept, its benefits and the contribution it makes to company performance, the reporting process will become much easier. Invest in training and communicate the sustainability strategy in simple terms to the rest of your company.
7. A Positive/Negative Balance: Reporting is an exercise focused specifically on transparency and accountability in front of stakeholders. Thus, you must present the positive and negative aspects of the value chain in a clear and balanced manner. Avoid just showing the good parts, as this defeats the main objective of the process. Stakeholders do not generally focus on what the company did or is doing wrong, they want to know how it was resolved or will be handled going forward.
8. Match individual performance to corporate performance: Many companies are now relating their sustainability objectives with their variable employee compensation systems. This undoubtedly facilitates the management and reporting of sustainability. Working closely with Human Resources is key for this type of implementation.
9. Sustainable Development Goals: Once the main material impacts and issues have been identified within a company, indicators and goals will be integrated in relation to the SDG. This fundamentally contributes to the overall strengthening of the company’s relationships with its stakeholders and its contribution to the sustainable development of the region in which it operates.
10. Focus on the value chain as a whole: Although sustainability reporting is a process of continuous improvement, the entire value chain of the business model must be taken into consideration. This basically means that it is not enough to just manage issues within the company. You need to go further and manage the risks associated to customers, suppliers, contractors, communities, and any other stakeholders that may be affected by the activities of the business.

Corporate sustainability is a response to a new economic world. Sustainability Reporting is advancing rapidly and is becoming a vital tool in management and transparency with stakeholders, and particularly with investors. Initiatives such as the Dow Jones Sustainability Indexes (DJSI), Task Force on Climate-related Financial Disclosures (TCFD), CDP and Sustainability Accounting Standards Board (SASB) are clear examples of how investors are becoming increasingly interested in sustainability issues and how these issues are being translated into financial language. Therefore, companies are now being challenged to take a step backward, to analyze their Business Model, their risks and opportunities in relation to social, environmental and economic issues, as well as to communicate their management of these issues in a proactive and transparent manner.

It is much easier to measure product quality over service quality. When it comes to products, the customer creates their own expectation based on tangible attributes such as size, content, shape or material, whereas when it comes to addressing more intangible attributes, rating service quality is always going to be more subjective. This is down to quality being evaluated from the perspective of the customer. What may seem clean or fast to one person, may not seem the same to another, and what one person may deem important, another might not care for.

Quality perception can vary not just from person to person, but also from service to service, comparing the service of a beauty salon to that of an airline or even a dentist is remarkably different. That is why using a generically applicable measurement scale such as SERVQUAL for all sectors and cultures has been questioned. In fact, customer expectations tend to vary in accordance with their different cultural values. Furthermore, it can be difficult to measure the quality of some services, such as restaurants due to there being a large combination of several tangible and intangible attributes – such as the food and decoration, or service and atmosphere, respectively.

What are we measuring when we rate service quality?

Parasuraman, Zeithaml and Berry (1988) define service quality as “[…]an attitude related to, but not equivalent to, satisfaction, resulting from the comparison between expectations and the perceived overall performance”.

According to this definition, each attribute of service quality should take into account two reactants: one focusing on the customer’s expectation of the attribute (what they are hoping for) and the other on how this attribute is carried out (what they received). The difference between these two values, normally referred to as a gap, is what this approach refers to as service quality. However, Cronin and Taylor (1992 and 1994) proposed that, instead of measuring the gaps, we must measure the undertaking or carrying out of the service. This has proven to be a more valid method of rating service quality.

How many forks are awarded for my service?

This has sparked a focus on the measurement of quality with Professor Jorge Vera publishing the Mexican Scale of Service Quality in Restaurants (Emcaser), in 2017, with more than 6 pilot tests.

Specifically speaking, 29 main attributes were identified for the measurement of service quality in Mexican restaurants. The highest number of intangible attributes are found among table service restaurants, which are an intermediary point between service and product. It is recommended that each of these reactants be related to opinion scales that go from “Fully agree” to “Fully disagree” in order to really take full advantage of the scale.

How can we fill the Mexicans’ appetite?

It is vital for every service providing company to take care of the elements that are important to their customers, as well as making an effort to be perceived as an establishment that offers quality. In particular, it has been noted that Mexican restaurants need to pay more attention to the following aspects:

• Mexican diners are more critical of their food than other cultures, as they take into account many different elements such as: the portion size, the presentation, the taste, menu variety, freshness, hygiene, atmospheric temperatures and scent.
• Tangible factors such as facilities – appearance, cleanliness and location are important when evaluating restaurants in Mexico, as well as conveniences such as: parking, payment options and consistency in the food (meaning that what is served up is always of the same standard)
• With regard to intangible factors, atmosphere is a priority – the music, aroma and temperature of the restaurant, the appearance and knowledge of the waiting staff – and their assertiveness - speed, empathy, ability to deal with complaints and their fulfilment of promises made.
• Culture is also an influencing factor on how each customer judges the service that they receive. In Mexico, parking and the self-identification of the restaurant is highly valued, essentially, diners want to see people they deem to be similar to them in the establishment.

According to the 2014 Economic Census, 9.1% of registered businesses are related to food and drink preparation, and they employ over 1.5 million people.

Due to the Emcaser’s broad spectrum of attributes, it is a useful tool for restaurant owners and managers to identify specific service elements to improve on, so they can favourably increase their perception among diners. It can also be used to draw comparisons between different restaurants, or different restaurant branches of the same chain, as well as detecting the service strengths and weakness of restaurants.

Eating sugar-free biscuits and low calories snacks or drinking a diet milkshake does not necessarily mean that a person leads a healthy life-style. Health food brands offer a promise of healthy living, but need the consumer to adapt their own lifestyle if they are to really reap the benefits for their body and well-being.

A large part of the promise made by health food brands does not just depend on the consumption of their products, that is why brands need to step up and adopt a co-creative value paradigm with consumers. For example, consumers need to incorporate other activities into their lives, such as healthy eating, physical exercise, and socializing, if they are to fully embrace a healthy lifestyle.

As with products from all categories, it is important to analyse how a shared brand value is built. This can lead to the restructuring of some processes used by the brand to connect with its consumers, and, if needed, transfer resources from Production to Customer Service.

In our article “Delivering a health food brand promise through a proposed value co-creation model”, cowritten with Dr. Lisa Peñaloza, a professor at KEDGE Business School in France, we propose a health food brand value co-creation model. We start with three marketing steps:

1. Make a promise: Make that promise heard via publicity, sales and customer service.
2. Facilitate the promise: use internal marketing resources to deliver on that promise.
3. Keep the promise: The real “litmus test” is when the consumer recognizes the product’s value when using it.

Realizing that consumer expectations arise from this promise, it is important to understand its overall concept. The brand promiseessentially encompasses the benefits offered by a brand based on certain specific pre-established conditions, which must be subsequently fulfilled in the future.

When it comes to health foods, fuzzy promises, which are not just reliant on the internal product condition, but also on a larger scale of product conditions to help qualify the product’s healthy vision, are just as relevant as clear promises, which depend solely on the product’s internal conditions. Health food brands need to know how consumers interact with these conditions. For example, how can they find out more information on the relationships between nutritional value and physical exercise? Or social relationships and mental well-being?

A value co-creation model

Our model proposes that both brands and consumers can fulfil these promises together, by following these steps:

1. The first step is individual consumer experience feedback to the brand managers focusing on how these brand promises were interpreted, which allows them to understand and distinguish clear promises from fuzzy promises.
2. The brand managers make clear and fuzzy promises by means of health or nutritional declarations that are then placed on the packaging or displayed in their advertisements. Once these fuzzy promises are communicated, the consumer will be aware of them.
3. The consumer interprets the fuzzy promises. The brand accepts the interpretation and facilitates the promise, reassigning its resources if necessary. For example, it can enable more customer interaction via its website.
4. The consumer takes part in processes established by the brand, and the brand in turn must keep the promise passing the “litmus test”.
5. The final step is when the promise comes into fruition and has a positive impact on the consumer’s health. The relationship between brand and consumer is then strengthened by the co-creation of health.

This model is a useful tool when designing a value co-creation process and developing a brand promise. It can also be used by managers to focus their skills on a different and innovative brand vision, while also obtaining new consumer knowledge that allows them to reassign their organization’s resources and capabilities.