Cash register sales

Ringing the cash register on campus

Ringing the cash register on campus

At Boise State University in Idaho, Nestle Foods Corporation promotes its product by offering a $10,000 prize to whoever builds the best model of the Mayflower using Nestle Quik cartons. A market-research firm polls students at the New York University library about their preferences in blue jeans. In California, the maker of Schick razors offers readers of the San Francisco State University newspaper a free razor emblazoned with their school's name.

It's no longer only Greek-letter societies that are rushing college students. Business is doing it, too. And small wonder. There are now 6.6 million full-time college students, and they have an estimated $12 billion in annual discretionary spending power after paying for tuition, books, room and board. While the number of full-time college students has shrunk slightly in the aftermath of the baby boom, the proportion of the 18-to-24-year-old group that attends college either full or part time has risen steadily, from 26 percent in 1963 to about 45 percent this year.

Mass marketers increasingly are viewing different demographic groups as distinct market segments: College students form one target. Although the amount that will be spent this year on direct advertising and promotional campaigns for college students isn't expected to exceed $25 million, marketers say that the figure is growing rapidly. "Advertisers are starting to realize the purchasing power of this group,' says Albert Romano, of the J. Walter Thompson advertising agency.

The prospects of both current and future profits spur the marketers. Audio-equipment manufacturers know what any casual visitor to a college dormitory can observe: Students are big buyers of audio equipment and other music-related paraphernalia. The collegiate set also loves cosmetics, drinks beer regularly and consumes prodigious quantities of junk food. According to the Simmons Market Research Bureau in New York, nearly 1 of every 4 college students spends at least $31 a week at supermarkets.

For many firms, however, the real bonanza is down the road, when today's college students are destined to become tomorrow's most affluent consumers. "If you reach someone before they have established buying habits, you may have a lifelong customer,' says Linda Fidelman, a media executive at Ogilvy & Mather, an advertising agency.

College students are making many purchases on their own for the first time, and they are open-minded about it. "It's a moment in life when people's brand preferences aren't graven in stone,' says Joseph Ostrow, media-services director at the Young & Rubicam ad agency.

Take automobiles. Market research conducted recently by ASK Associates shows that about half of all juniors and seniors expect to buy cars within the next two years. To Detroit's dismay, most plan to buy imports. Marketers at Chrysler Corporation's Dodge division are especially eager to give it a more youthful image, since the average Dodge buyer is 39 years old. "But if you can get them into your car when they are young, there's more of a chance they'll continue to buy it,' says Dodge spokesman Tom Houston.

For the past four years, Dodge has held a national driving competition at scores of campuses around the country. Last year, 40,000 students participated. While it's impossible to measure how many cars Dodge sold as a result, the company is betting that the expense will pay off. It may be on the right track. After competing in a qualifying round at Daytona Beach, Fla., in March, Carnegie-Mellon University architecture student David Henderson says he'd consider buying a Dodge Daytona Turbo Z after graduation. "It's sharp-looking, affordable sports car,' he declares.

What goes for brands also is true for whole product categories. General Foods, which got 30 percent of its sales from coffee before it merged with Philip Morris in November, 1985, has turned to the college market to fight the industry-wide decline in sales of that drink. Last year, per capita consumption of coffee dropped to its lowest level since record keeping began in 1950, in large part because younger people prefer soft drinks. Drawn by the soft-drink industry's upbeat advertising, youngsters brought up on Pepsi find coffee unpleasantly bitter.

Rather than try to woo students to its regular java line, General Foods is advertising its sweet-and-creamy International Coffees brands, such as Orange Cappuccino and Cafe Amaretto, in college communities. "There's a higher likelihood that young people will like them, and it's a good way to introduce them to a beverage with coffee as a base,' says company executive Dan Lennon. In addition to placing ads in college magazines, the company recently had a free tasting of its Suisse Mocha coffee-based drink in 135 college bookstores along with a sweepstakes promotion offering a trip to Switzerland.

Selling to college students takes ingenuity, because the average collegian watches only 1.3 hours of television a day, compared with over 7 hours for the average household. And almost a third of all full-time college students don't watch any TV as part of their daily routine, according to a study by A. C. Neilsen.

Says Dodge's Houston: "I have a daughter at Michigan State. She is too busy reading her textbooks to read the magazines where we advertise. College students live in their own world.'

To reach that world, enterprising publishers are devising new media, from product-sampling programs to new magazines. Posters known as "magazines on a wall,' featuring ads that include written comments about popular entertainment personalities, are placed in student centers and other places heavily frequented by the college crowd. Ads and discount coupons are included in the term-planner calendars that college bookstores give away.

The campus booksellers have been changing, too. While the stores' main stock in trade--selling textbooks--traditionally has lost money, colleges now are pushing their campus stores to turn a profit. That means diversifying into everything from snack foods to sandals. "We try to get the students back into their college stores after the book-buying rush' at the start of the term, says Carol Diener, vice president at Market-Source Corporation, a marketing firm that works closely with college stores.

As college marketing gets more sophisticated, sellers are starting to divide the business into finer and finer segments. Dealers in personal-care products are going after incoming freshmen and underclassmen, rather than juniors and seniors who may have more-established buying habits. To reach that fresh-faced group, 13-30 Corporation, a specialty publisher, distributes samples of such personal-care products as shaving cream and soap to the dorms of new students, while Dorm magazine, a successful publishing upstart, is mailed to university housing at more than 380 campuses around the country.

Sellers of autos are more interested in upperclassmen and graduate students who live off campus and are likely to begin earning a substantial income sooner. The car companies often advertise in McGraw-Hill's 2-year-old Business Week's Guide to Careers, which is distributed at college job-placement offices.

Designing just the right appeal can be tricky. According to research by the Simmons group, college students are more skeptical about ads than are typical adults, but are more conformist and style-conscious in their buying habits than their parents' generation.

Many of the ads that run in the college media are written specifically with college students in mind. AT&T's ads say that "choosing a long-distance company is a lot like choosing a roommate.' Honda touts its least expensive cars to students with double-entendre slogans such as "Grade it on a curve' and "Pass with flying colors.' Says Gerry Rubin, president of Needham Harper-Los Angeles ad agency: "Our ads try to say that Honda understands their lingo.' Marketers try hard not to be preachy or talk down to students. The last thing they want, after all, is to be out of fashion with these very "in' consumers.

Table: Percentages of college students who agree that when making a purchase they are--

Photo: Thanks for the memories: At Daytona Beach on spring break, students pose for a group portrait sponsored by Nestle Quik

Photo: Grocery buying is a surprisingly popular college pastime

Photo: Beer and potato chips are high on student shopping lists. Almost 40 percent of male students drink beer regularly while over a third of their female counterparts admit to eating chips with frequency

Photo: Portable stereos and wheels for the road are the college kid's dream. Almost a quarter own compact stereo units, and half of all upperclassmen hope to purchase a car within the next two years