GENERATION X: MARKETING STRATEGIES FOR CHANGE

LAKE BUENA VISTA, Fla. -- The times are a changin' for marketers and employers coming into contact with Generation X.Many retailers and manufacturers have misunderstood or stereotyped the generation of Americans born between 1963 and 1977, according to speakers at the Food Marketing Institute Midwinter Executive Conference here late last month. The product choices and career philosophies of Generation

LAKE BUENA VISTA, Fla. -- The times are a changin' for marketers and employers coming into contact with Generation X.

Many retailers and manufacturers have misunderstood or stereotyped the generation of Americans born between 1963 and 1977, according to speakers at the Food Marketing Institute Midwinter Executive Conference here late last month. The product choices and career philosophies of Generation X aren't the same as those of the baby boomers that preceded them. But understanding the motivations at work is crucial to successfully dealing with them.

Generation X, now 45 million strong, came of age in the 1980s and early '90s in harder economic times than those faced by young boomers, said J. Walker Smith, managing partner of Yankelovich Partners. Members of Generation X learned to be independent thinkers and rely on their own judgment. "This is the CNN generation with instant access...They understand and accept the diversity we anticipate for the future," he said.

This group also has a commitment to building families, and female heads of households have more education than men for the first time, Smith said.

Despite their "slacker" stereotype, members of Generation X are "more committed to competition and hard work than baby boomers were in the 1970s," Smith said.

Another speaker, Bruce Tulgan, managing principal of Rainmaker Thinking, a research organization, said, "The workforce of the future has arrived, and it's Generation X. They have the very skills businesses need to succeed."

The conference featured two sessions about Generation X. The first was a panel discussion on consumer marketing that included Smith; Tulgan; Karen Snepp, vice president of consumer insights at Frito-Lay; and Ronald Pearson, chairman, president and chief executive officer at Hy-Vee. Tulgan also gave a separate presentation called "Managing the Gen-X Challenge."

New World of Marketing

Panelists agreed that marketers have new opportunities in pitching products to Generation X -- and new pitfalls to avoid:

Reorganizing the Store "This is a generation that probably won't enjoy shopping for the sake of shopping," Smith said. Members of this group view stores as "hubs of resources." A store visit serves the purpose of attaining resources in order to return to more important activities. "Organize stores so items fit together from a tools standpoint, rather than for a shopping experience," he said. "Otherwise, they'll invent a different solution."

Embracing Customization

"Tune in to mass customization," Tulgan said, noting that members of Generation X don't want to fit a mold. "Market more to individuals than segments. An example for marketers would be "make your own ice cream; make your own sandwich."

Accepting Disconnects

Marketers shouldn't expect that trends affecting Generation X will always follow traditional logic patterns. Generation X "doesn't mind disconnects," Smith said, pointing to the Starbucks example. Why would this generation spend lots of money on flavored coffees when many are struggling financially? "Starbucks sees the new definition of luxury: You may not have a lot of money, but this is a status element and involves socialization with other people," Smith said. "Starbucks also has values and contributes to causes."

Redefining Cooking

Supermarkets need to rethink their merchandising to meet the "cooking needs" of Generation X, a group that cooks less than its predecessors but has learned to be resourceful at assembling. "Generation X is insulted if you make it seem they don't know how to cook," Pearson said. "Maybe they don't cook like their grandmothers did. But they assemble! So it's different....We must adapt to meal solutions and easy-to-assemble products. And we need to focus on trends like whole health for nutrition."

Plugging into Databases

"The future is to be one of diversity and fragmentation" Smith said. How can retailers face the new dynamics? "Grocery retailing will turn to databases to cope with this diversity," he said.

Accepting Diversity

While Generation X shares many traits, it is filled with individualists who value their own direction. "This is not a group that is easily targeted; there's a wide range of opinions," Snepp said. The task for marketers is to target this group -- or parts of it -- with a meaningful message. "The ability to craft a message is the challenge," she said. Smith posed one solution: Speak to this group with candor and an edge. "This is a realistic generation," he stressed.

Managing Locally

Dealing with Generation X and consumer diversity means making more decisions at the local level. For Hy-Vee, which operates in seven states, this is a crucial direction, Pearson said. "We've seen quicker diversity changes in the last five years than in the previous 20," he said. "What works best is to let managers market as fits best in the communities. Otherwise you miss a whole group of customers."

Big Work Force Changes

The old managing techniques and employee expectations no longer apply with Generation X. Here are some of the new rules for managers:

Offering Employees Skills

Members of Generation X want to be constantly learning -- or they won't hang around. "It's important to offer young employees skills, such as how to better manage their lifestyle or become better people," Smith said. "Companies emphasize moving through the corporate hierarchy, but these people want to learn skills. They want to live better, smarter lives." Tulgan advised managers to "create an obsession with training" and to emphasize "just-in-time training" that will coincide with a specific need.

Giving Feedback

Managers should adopt a "coaching style," which emphasizes frequent, immediate feedback and plenty of direction, Tulgan said.

Providing Rewards

Employers are advised to link financial rewards to performance, Tulgan said. "And you don't have to wait until the end of the year for a raise; give things like spot bonuses."

Offering Responsibility and Independence

Among the most prized nonfinancial rewards for Generation X is the opportunity to "produce results with their name on it," Tulgan said. They also want increasing responsibility, some originality in their work and more control over their own schedules, he said.