Selling America's Kids:
Commercial Pressures on Kids of the 90's

CONTENTS Intro Summary In-School Promotions Celebrity Endorsements Kids' Clubs Product Placements and Advertorials Licensing and Cross-selling Recommendations

Licensing is a traditional method of selling to children. Manufacturers pay a license fee for the right to use a popular character to produce a product kids will want. The Shirley Temple doll, Davy Crockett coonskin cap, Mickey Mouse watch, Superman underwear, and Teenage Mutant Ninja Turtle slumber bag are all examples of this marketing strategy.

Licensing took a major leap in the 1970's when the Star Wars license unexpectedly became a gold mine for the Kenner toy company. Since then, there has been a huge increase in the use of licensed characters to sell products to children. Cross-selling is double-barreled licensing: Two or more companies combine promotion efforts, as Burger King and the Teenage Mutant Ninja Turtles movie did in 1990. The movie was promoted by Burger King before it opened; Burger King was prominently featured in the movie.

Many licensing fads -- Batman, Teenage Mutant Ninja Turtles, The Simpsons, Nintendo, Barbie -- target the young. "Well-promoted licensed characters can cause children not to give enough consideration to the major attributes of the product," says James McNeal, professor of marketing at Texas A&M. "Licensed fads have a snowball effect. As they buy and display licensed products, the children are becoming salespeople, of sorts, for the licensed products." This report looks at some major licensing campaigns that target kids.

In 1980, sales of licensed products worldwide amounted to $10 billion. In 1989, sales hit more than $64 billion. The toy share of licensed products currently exceeds the entire total of licensed merchandise 10 years ago.

Three licenses are the acknowledged kings of marketing to kids: Disney, Nintendo, and Barbie. Products related to these licenses are routinely found at the top of toy-hit charts.

Disney's co-campaign with Nabisco's Bits for Honey, I Shrunk the Kids included posters and other materials for grocery and video store promotions. Disney has signed 15-year marketing agreements with Coca-Cola and Eastman Kodak. To support its videos, Disney arranged promotional tie-ins with P&G, Crest, Coca-Cola, Kraft, Jell-O and McDonald's. Disney's Buena Vista Television plans a $100 million marketing launch, including cross-promotions with McDonald's and Kellogg's.

Disney is using heavy cross-selling with its summer film, Dick Tracy. Marketing partners include McDonald's and Coca-Cola. Sixty-four companies have been licensed to sell Tracy products, including replicas of Tracy's trench coat, Dick Tracy figures, a Crimestoppers kit, a videogame, and watches. MTV was developing a summer promotion around Madonna's role in the film.

Barbie has been called "one of the most recognizable personalities in the history of licensing," and "the queen of sheen." An industry ad says: "Benefit from Mattel's success by becoming a licensee. Barbie is a success story that continues to gather fans with over 90% market penetration. More than 470 million dolls have been sold to date."

Barbie's younger sister Skipper comes wearing clothes with the Pepsi logo all over them. Barbie Lifestyles is a new product line including "designer bags" for girls ages 3 to 10. Breakfast with Barbie is a Ralson Purina presweetened cereal. Barbie also adorns calendars, stationery, bicycles and so on. She even appeared in 1989-90 in a cross-selling arrangement with the Ice Capades.

Nintendo revived the U.S. video game industry in the early 1980's, transforming it into a $2.7 billion business, according to the New York Times. Recently, growth has slowed. Nintendo is actively looking to advertising and cross-promotions to increase sales.

Nintendo has launched the largest promotion the video game industry has ever seen: the Nintendo World Championships. The traveling exhibition will hit 30 cities, with the co-sponsorship of Pepsi, Reebok and General Foods. Playing tips for Acclaim Nintendo games will appear on Jell-O Pops packages. "Jell-O Pops are enjoyed by millions of kids, many of whom are Nintendo gamers," explains an Acclaim marketing vice president. Nintendo has signed an agreement with Voyager Communications for comic books based on the Nintendo characters.

World of Nintendo boutiques are now located in many large toy stores. The products found there are heavily promoted in Nintendo's bi-monthly magazine, Nintendo Power. To quote one ad: "Nintendo's got the coolest T-Shirts and sweatshirts around.... You can accessorize with a 14K gold Triforce charm, and keep definite Power Time with a neat Nintendo watch. And try moving to the sound of your favorite Nintendo tunes on CD...Make your room your own with Nintendo comforters, posters, sheets and towels&emdash;plus a great Nintendo slumber bag. Keep it all neat in a Power trunk. When you're cleaning up your room you can even slam dunk your trash into an outrageous Nintendo bag...Make the day fly by with Nintendo book covers, bookmarks, notebooks and stickers..."

Popular kids' TV shows are prime sources for licensing and cross-selling. In 1989, for example, the licensing of Sesame Street characters brought The Children's Television Workshop $22 million.

The Simpsons on Fox TV is a new merchandising phenomenon, heavily targeted to the hard-to-reach 12- to 17-year olds. "In my business, you have to get inside kids' heads," said a vice president of marketing at a chewing gum company. "Kids want to be seen with something that's cool. Bart (Simpson) is clearly cool." Licensees include: Amurol products for chewing gum, BananAppeal for ceramic mugs and magnets; Ben Cooper for costumes and masks; the Bibb Company for sleeping bags; Chadwick Industries for children's shoes and boots; Dan Dee imports for talking dolls; Hamilton Group for talking dolls and PVC bendables; hi-Flier Manufacturing for Kites; M.L. Berger company for wristwaches; the Shirt Shed for t-shirts and sweat-shirts; and Western Graphics for posters.

Nickelodeon cable ("the channel for kids") has signed a $20 million-a-year deal with Pizza Hut. Under the agreement, "Pizza Hut will expand its ad presence on the network; be a charter advertiser in Nickelodeon magazine ... develop premiums and promotions tied to the network's programs; be a sponsor of Nickelodeon Studios at the Universal Studios Florida attraction; and be a sponsor in Nickelodeon's 20-city shopping mall tour this summer..."

Mitchell Fried of Nickelodeon: "We're saying to advertisers, you can be a sponsor of an event.... We've created Nickelodeon magazine which ... is a kid's magazine, a lifestyle magazine for children. So advertisers can go in there. They can sponsor the studio. They can go into licensing... we've packaged this now so that it's at home, it's in the school. It's on television. It's in the shopping environment."

Looney Tunes' Bugs Bunny's 50th anniversary has helped Warner Brothers sign on 150 licensees. Bugs and his Looney Tunes friends will appear on kids' microwave dinners from Tyson Foods, called Looney Tunes meals, with a $15 million ad campaign aimed at children. "Our target (kids 2 to 12) can name off the Looney Tunes characters," says Tyson's ad agency. Holiday Inn and McDonald's are planning promotions around Bugs. Six Flags parks will feature the characters prominently. There is a cross-licensing program with Major League Baseball.

Yogi Bear (Hanna-Barbera) and Wendy's are co-promoting the "Yogi Treasure Hunt" line of videos. Wendy's will offer six different Yogi Bear toy gliders along with "Kid Meal" boxes containing discount coupons for the cassettes, and support it with a spot TV campaign. Wendy Moss, of Hanna-Barbera: "It works out well for everyone...They're looking for these gliders to drive kids into the stores, where they'll learn about our tapes."

Movie Tie-Ins

Films can be a profitable license or cross-selling medium. The spring 1990 licensing/cross-selling winner was Teenage Mutant Ninja Turtles, which benefited from both licensing and cross-selling. In 1988, Playmates Toys introduced a line of Turtle action figures that (according to a company press release) "helped launch a licensing frenzy that has turned the Turtles into an American marketing phenomenon." Two hundred licensees produce "everything from turtleized lunch boxes, backpacks, pajamas, pillow sets, jogging suits, shampoo, breakfast cereal, Halloween costumes, drinking straws, calendars, decals and a talking toothbrush to one of the hottest video game cartridges for Nintendo." In 1989 the Turtles earned more than $350 million in license fees and merchandising.

The film was promoted at Burger King prior to release. Free Turtle toys were included with Kids Meals and low-priced videos (with commercials for Turtle products) of the TV show were sold. K-Mart decorated 2,200 stores with Turtle banners and promoted a Turtle sweepstakes that was advertised with inserts in 72 million newspapers. Upon release, the movie grossed approximately $25.4 million on the first weekend.

Ralson-Purina has put a movie poster giveaway on three million TMNT cereal boxes. Kraft is using the Turtles in a $1.5 million TV ad campaign for Light 'N Lively yogurt. Conagra will feature them on 53 million Banquet pot-pie boxes.

In Teenage Mutant Ninja Turtles, Domino's Pizza was prominently featured. This product-placement followed in the wake of Pizza Hut's appearance in the 1989 movie, Back to the Future II.

Jim Schwartz of Pizza Hut: "... product placement (is) a technique perhaps mastered by our parent company, PepsiCo. The film is set in the year 2015, and in a spectacular scene, a mini pizza pellet is placed in a microwave-type machine and in three seconds and much hoopla, a Pizza Hut pizza is produced.

"The movie also features futuristic sunglasses, which we have reproduced for a promotion targeted to junior high school, 'tween and early high school students, probably aged 11 to 15, where fashion, clothes, and music are a big part of their lives... All our 6,000 restaurants will sell these 'Solar Shades' for $1.99 with a pizza purchase... Theater personnel will get the sunglasses and buttons with both 'Back to the Future' and Pizza Hut logos to wear."

Discussion

Most adults treasure the memory of some licensed toy of the past. The difference between then and now is the volume and intensity of the sell. Whereas before an occasional toy or piece of attire was loved because of its link with a movie or TV character we'd come to know over time, today advance promotions and cross-selling make licensed items in demand even before the movie is released. And the excitement over one fantasy character can make numerous unrelated products very desirable.

The purpose of licensing and cross-selling is to forge powerful links in the minds of young consumers between a favorite movie, TV show, or character and some product they might not want or notice otherwise. It's instant advertising that triggers buying for emotional reasons. But when it encourages kids to want products without regard for their attributes, or to want a food because the Turtles ate it or because Barbie is on the box (instead of for nutrition or taste) -- kids are being misled. This way of promoting food appears to be growing. The Hollywood Reporter sees "two worlds coverging: entertainment on the one hand, and beverage/fast food/packaged goods on the other... Image conscious restaurant chains, beverage marketers and packaged goods companies eagerly seek tie-ins with family-oriented G and PG movies."

Licensing encourages kids to keep on buying, to get the latest fad, and chuck it when a newer one comes along. Ghostbusters stuff was outdated by Batman, which was outdated by Teenage Mutant Ninja Turtles. Keeping in mind that kids are learning about their consumer role, what all this licensing furor is teaching is continuous consumption and acceptance of planned obsolescence.

Referring to the Disney-McDonald's The Little Mermaid promotion, Janet Maslin, film critic for the New York Times, says: "It's lovely to feel that a movie has won your heart. It's less lovely to feel that marketing strategists have done to you what Hannibal did to the Roman legions at Cannae."

This look at recent campaigns shows that companies wishing to sell to children are spending many millions on licensing fees and cross-promotions. The hook is affection -- for a favorite show, movie, character. The goal is a purchase. The target is a child. The problem, as we see it, is the immense pressure to purchase.

Marketers to children are banking on the fact that children have a natural desire to buy something that reminds them of a beloved friend. But does a child understand those 10 Batman action figures will soon be superceded by 14 Dick Tracy pals? That a Nintendo bedroom may not seem as much fun next year? That Barbie cereal doesn't taste better just because her face is on the box? That a Cookie Monster bandaid isn't worth a lot more money than a plain one?