Young Guns

Business - April 7th, 2006
Japanese high school girls

Why more companies shoot for the student market

by Laura Fumiko Keehn 

Your music collection may not be the only thing you’ve kept from your student days. More and more companies are targeting the student market for their brand-name loyalty. ‘Get ’em young’ seems to be the marketing strategy of more and more companies, in the hope that young people who take advantage of stu­dent-friendly campaigns will continue to be loyal cus­tomers well into adulthood. But where is the money in targeting poor students, some may ask? The answer lies in the strong community factor. Students are strong trendsetters with broad contacts. In other words, when one student falls for a product, his or her network of friends are sure to follow.

Schooling is big business

On the other end of the spectrum are the educational institutions. Japan is finally pulling itself out of an ex­tended recession, and higher education has become an increasing priority both for prospective students and the government. Though more final year university students and high school students had official job of­fers by March of this year, the numbers show a clear advantage for university graduates. At 65.8 percent, the majority of university graduates had guaranteed employment, as opposed to 44 percent of high school graduates. A solid education is increasingly seen as a ne­cessity by the government too. In 2002, 9.37 percent of the total expenditure of the national government was used on education, a significant jump from approxi­mately eight percent in 1999. (Statistics from Japan’s Education at a Glance 2005, Ministry of Education, Culture, Sports, Science and Technology, or MEXT.)

All these numbers add up to the fact that education is in demand. With the country’s shrinking population and aversion to immigration, filling the job market — including elite, competitive positions — is going to be an increasing challenge. In response to an increased demand for lawyers, a new bar exam, to be introduced later this year, is scheduled to double the number of people who pass by the end of the decade. That’s a sig­nificant increase from the current two to three percent pass rate. Society demands the qualified and the edu­cated, and these institutions can no longer afford to be elite and attainable.

Perhaps another indication of the growth in the higher education industry is the increased accept­ance of international education institutions. It’s been over a year since Temple University Ja­pan (TUJ), the Japanese campus of the Philadelphia University, was officially recognized by MEXT as a Foreign Uni­versity, Japan Campus. Within the past year, TUJ has been able to sponsor stu­dent visas, a factor which, combined with the University’s extended pro­gram offerings, has allowed TUJ to en­joy record undergraduate enrollment last September. Education is a big deal, and where interest and money flows, business is sure to follow.

Student boomers

One company that has always valued students is Apple. “Apple supports stu­dents and faculty because they are the nest for the future,” says Apple CEO, Steve Jobs, “like iTunes Music Store, we love music. That is why we have iTMS.” Apple has supported the educa­tion demographic for years, providing schools with grants for computers since the 1980s. Ap­ple Grants are not yet offered in Japan, but with the Back to School campaign, higher education students are given hefty discounts, even a free iPod with the purchase of a Mac.

Students are effective in strategy planning as well. Boom Planning, a marketing, consulting and research company, has made a practice of using joshikosei, or high school girls, as marketing tools. “High school girls… boast an overwhelming communication net­work,” they claim on their website, a network which can be exploited for what they call kuchikomi, or word-of-mouth marketing.

Reaping the loyalties

This type of marketing, in which individuals with wide networks are targeted, can also be seen in the cell phone industry. According to a survey on cell phone and PHS-carrying junior high, high school and univer­sity students from April of last year, C-News, a Market Research company, found that “whether their family or friends are using the company” was the most important consideration when choosing a cell phone company. This could be why cell phone companies are putting so much effort into targeting students, who have a more ‘community’ based lifestyle. AU KDDI has made the student market a priority for years, offering the best stu­dent discount of all the top cell phone companies. Crys­tal Wreden, an engineering student at Tokyo University, said that the significant student discount drew her, and most of her student friends, to AU. “I had one friend who had a DoCoMo, but he switched to AU after hear­ing about our discounts,” she says. Wreden believes she will stick with AU even after graduation. “I don’t want to change my phone number,” she says, demonstrating strong brand loyalty companies so love to hear.

And there lies the key to the student market. As the government and people clue into the need for a quali­fied and educated population, universities and other learning institutions have clamored to be more stu­dent-friendly. Simultaneously, the community-based lifestyles of students make them a marketing dream, with student discounts effectively hooking students into products they — and their network of friends and family — may remain loyal to. How loyal will today’s students remain to a product, you may ask? Pretty loy­al. Look in your own closet for proof.