Posted: May 25th, 2022

Importance of the Youth Market

Neo Pets Case Study

NeoPets Case Study

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Company history

Company philosophy

Type of company culture and market suitability (Is NeoPets Suited for launching this new line?)

What is the Youth Market?

Definition and Characteristics of the Youth Market

Importance of the Youth Market

Trends of the Youth Market

What are some of the marketing methodologies that will help Neo-Pets? (With the appropriate marketing mix, strategic vision, and international expertise, neo-Pets is primed for this market niche).

What research instruments might be appropriate

What are the international implications

What are some regulatory issues

Youth Market is current market niche

a. Characteristics and synergies of youth market for Neo

Market/Product extensions

c. New Product Development

Conclusions and Implications

a. Predictive life cycle

b. Ways to ensure not a fad product

c. ROI vs. advertising expense

Neo-Pets — NeoPets is a California based internet company acquired by Viacom’s MTV in 2005. The company is focused on the Youth Market, and offers memberships to allow users to enter into its site, create virtual pets, interact with those pets, and custom build traits for their characters. In essence, users are entering a new town, complete with all the bureaucratic limitations, etc. The skill in the game, a reality-based family game, is based on individual abilities to appropriate interact and bond with several of the creatures already on the site. NeoPets earns money from advertising, promotions, and brand/logo tie ins for clothing, or other unique marketing materials that will duly help brand the current line. There is a “pay to play” version, about $8.00/month; and the site is clearly gearing a new niche population to be ready for more sophisticated forms of virtual reality (Kushner, 2005).

The company sees themselves as more than just an Internet entertainment provider, instead, they view themselves as technological advanced social engineers for the virtual world — new characters, new rules, new interactions continually evolve. With 110 U.S. based staff and another 20 in Singapore, liquid cash and funding, they are well poised to make a huge splash in this up and coming market.

The Youth Market — the Youth market is stratified into the Tween (8-12); Teen (13-19); College (18-21); and Young Adults (21-25ish). For most advertisers and retailers, this is a difficult group with whom to consistently connect — they do have disposable income, but also are fickle and rarely brand loyal. Placement of product on the teen and above category, for instance, seems to make more sense than any of the advertising commercials of the past (e.g. The rather overt National Guard presentation during the infomercials right at the edge of the theater auditorium (Yarrow and O’Donnell, 2009). At present, NeoPets seems more oriented towards the younger edge of the youth market, but plans are in place to expand the sophistication and robustness of the games, characters and interactions. This will likely prove appropriate as the younger users move into Middle and then Secondary school.

Marketing Methodologies — While it is often true that web-based marketing research is easier, faster, and therefore, less expensive than more traditional methods, there are several factors that would point towards using more traditional methods (e.g. Mall Intercepts, Telephone or Written surveys, or Focus Groups.)

There is little statistical control over respondents over the Internet, therefore skewing the target information population. Regardless of the criteria asked, there is no way to control who answers the question, and without sophisticated IP Address tracking, how many times an individual client might answer that question.

Because the product is designed for children of all races and socio-economic levels, it is important to have a population that is representative of that group as well. A focus group, carefully chosen, would represent a better statistical sample, and if more date was needed to correlate, a Mall Intercept would be able to target specific demographic types. Further quantitative research (e.g. telephone or written) could be targeted using 3rd party research to glean just the population make-up needed.

Internet research also tends towards a significantly less targeted population because much of it ends up in SPAM or blocked folders, and there is a bias towards answering questions based on security and privacy issues.

There are more potential technical problems in internet-based research. The cost appears to be lower unless something happens to negate the data collected.

Although this is becoming less of a problem, the assumption of the households with a computer tends towards bias in the sample. (McQuarrie, 2005).

Once there is an agreed upon strategy, NeoPet could easily mount a nation-wide, or even global, study to examine features, benefits, visions, and basic intrinsic value for the program. This could easily be accomplished through focus groups; then possibly partner with other groups to provide incentives for joining. One niche would be to hire and train educational consultants who would visit curriculum specialists in various school districts and try to find ways that NeoPet could enhance that experience. Many schools would welcome individual help — if a certain school was going to focus on a particular aspect of American history, perhaps a virtual program that covered many grade levels could be developed. Advertising could be minimized by finding relevant sponsors and have ads only when certain game or activities occur, and leave content ad free. This is not, of course, limited to the United States, but could be used as NeoPet expands globally.

Niche Marketing — the typical “user” at present is aged 9-11 are considered “at risk” by some groups since there are so many brand and advertisement placements with the NeoPets virtual world (Pace, 2006). While in many cases there are no “overt” sales — companies like Target, Wendy’s, McDonalds, etc. are so prominent in the makeup of the NeoPet world that it is a given that this age group simply expects them to be part of their world.

One of the more powerful issues surrounding NeoPets is just this; they are able to market and cross market at almost every juncture. For NeoPets, this immersive advertising allows ads into the cite content and emphasize them by playing “adventure games,” taking part in meetings, helping to plan a larger city area, etc. Not only can retailers sell clothing, supplies, and other branded product items, they can easily directionalize users towards a particular movie and/or television show. With the nation concerned about the activity levels of Tweens and Teens, then, this niche marketing may be considered negative by some (Ha, 2004). Society will need to decide how it wants to handle the development costs of technology — children see advertisements on television, cable or not; in magazines, and certainly understand it is part of society. It is naive to think that NeoPet could even consider funding the complex server and creative needs of development without capital influx. Regulations already exist regarding “adult content,” and certainly, as NeoPet evolves, the maturity “level” of certain scenarios and content will change based on the age of the user, parental permission, and likely culture.

There should also be no reason this evolution could not continue well into the adult market. Virtual games are already popular, why not virtual vacations, other learning experiences, documentary type interfaces (an evening with Lincoln, for instance), or simply fun puzzle or adventure programs. Once into the adult market, NeoPets could establish a larger portion of the entertainment, game market share for the whole family! Imagine getting a group of neighborhood friends together to play a neighborhood hockey game in mid-summer without worrying about an ice rink or location — as long as everyone had a PC and Internet hook up.

Despite some of the negatives, the site also has people who are firm believers in its ability to allow greater creativity and a place “to belong” for many latchkey children. For instance, the site is so flexible that it can cater to different cultures, languages, religious beliefs, and even shopping patterns. The world is moving into a global village paradigm — this is a fact. Allowing children to reach out and create within an diverse environment is both cognitively rational and entertaining. The simple fact is, however, like television and box office fees, someone has to help subsidize the research, development and hosting costs for innovating products (“Neopets, the Leading Virtual World,” 2008). As a pioneer into the virtual world, some criticism is, of course, expected. However, the number of positive actions that are possible in a site like this are seemingly endless:

Children can learn to speak and interact in a different cultural and linguistic setting.

Children can learn about careers, jobs, educational issues (the environment, weather, clouds, the sea, etc.) in a way that is both entertaining and relevant.

Historical worlds might be created, allowing for exploration, say, into Dante’s world; or the reenactment of a famous battle using what if software.

Like many of the SIMM games, if the economic or ecological world is out of balance, the program has problems — what a great way to teach children about the balance of nature.

The country and/or language barrier does not need to exist; there are numerous software translation solutions that could help students learn the new language.

Life lessons, relationship lessons, even artistic, music, and performance sharing could take place (imagine, a NeoPet “Grease” production using a global cast)?

Conclusions and Implications — NeoPets obviously provides a niche about which some consumers are excited. Like many technological entertainment devises, though, there is certainly potential for abuse. One would not necessarily want their children to sit in front of a NASCAR racing program, replete with ads, for hours at a time and never have any physical activity. It is not the place of technology to mandate other behavior, but the wisdom of parents and society to create a balance. Ensuring that this will not be a fad is quite simple — continue to evolve, to grow, to become more sophisticated in content and interaction. In a similar way, funding could come from private foundations that might sponsor a segment (e.g. Boeing on history of flight; Microsoft on computing or the world food crisis, etc.); educational programs designed to enhance curriculum, particularly for schools that have internet access but not enough students, say, to take a class in oceanography.

Currently, NeoPets wants to keep the site mostly “fun” and game like for younger children. As these children grow, though, and others come in, the level of complexity and sophistication will also need to evolve. The benefits, though, educationally, certainly outweigh any negatives. It is a fact that children are bludgeoned with advertisements — it is a fact that cross marketing at movies and fast food locations literally “brand” a new movie before it even reaches the theaters. However, none of these preclude the educational value of walking through a reenactment of the signing of the Constitution, a tribal dance, a trip to Manchu Pichu, and thousands of scenarios that even children can help write. Finally, what better way to teach the importance of programming and graphic design, not to mention interrelationships of people, flora and fauna, and the entire global ecosystem. It is not a question of whether these types of technologies will blossom; it is simply a matter of how quickly that will happen.


“Adults Play Neopets.” (2009). Neopets. Cited in:

Ireton, D. (2003), Internet-Based Market Research, Advanced Systems Development.

Ha, K. (September 14, 2004). “Neopets site for children stirs Controversy.” the

San Jose Mercury News. Cited in:

Kushner, D. (December 2005). “The Neopets Addiction.” WIRED. Cited in:

McQuarrie, E. (2005), the Market Research Toolbox: A Concise Guide for Beginners,

Sage Publications.

NeoPets. (2010). “NeoPets Home Site.” Cited in:

“Neopets, the Leading Virtual World for Tweens.” PRN News — Nickelodeon. Cited in:

Pace, G. (February 9, 2006). “Kids and Neopets: Who’s Getting Fed?” CBS News.

Cited in:

Yarrow, K. And J. O’Donnell. (2009). GenBuY: How Tweens, Teens, and Twenty

Somethings Are Revolutionizing Retail. Jossey Bass.

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