The aging population as users and consumers: marketing and the aging population

The changing demographics and the aging of the population are affecting the age  composition of consumer markets. This, in turn, creates opportunities and challenges for  organizations serving consumer markets. This short paper presnts some corporate challenges  and opportunities facing organizations serving the older population due to the aging marketplace. It also lists a set of propositions to guide research that would produce information useful in  developing cross-national and cross-cultural marketing strategies for the two oldest generations  globally. 

Demographic changes and an aging population are affecting the age composition of consumer markets.

Corporate challenges in marketing to the older generations 

Organizations that market products and services to older consumers are faced with both  opportunities and challenges. On one hand, the changing composition of the marketplace creates  new opportunities and puts pressure on them to respond to the increasing in size and wealth of  the mature consumer markets, whose needs are largely unmet because they have been ignored.  One of our studies, for example, found that 78 percent of Americans age 55 and over are not  happy with the products and services available to them. On the other hand, these organizations  find it difficult to effectively respond to these new opportunities due to relatively little (and often  contradictory) information available about this market. I have compiled a list of questions by  companies based on my experience in talking to them. 

The changing composition of the market creates new opportunities and pressures them to respond to the increasing size and wealth of older consumer markets, whose needs are largely unmet because they have been ignored.

Should we market to older generations?

Many companies still do not see the reason they  should be concerned with the mature market. Traditionally, the U.S. consumer market has  been viewed as comprised of younger people, and it is rather difficult for some companies to  consider the older population as part of their main market. They may be aware of the changing demographics, but they have been slow in responding to these changes.

Many companies still don't see why they should care about the senior market. They may be aware of the changing demographics, but they are slow to respond to these changes.

Should the older consumer segments be treated differently?

Even when companies  decide to market to the older segments of the population, many of them do not see the need  to treat this segment of the population differently. They are not convinced that mature  consumers differ substantially from the younger population to justify treating them as a  distinctive consumer market.

There are companies that are not convinced that senior consumers differ substantially from the younger population to justify treating them as a distinct consumer market.

Should the older consumer segments be treated as a homogeneous market?

Most  companies that have decided to market to the mature segment tend to consider everyone over  a certain age, such as 50, as part of the mature market and threat them the same way. They  do not see the need to consider them as a heterogeneous group of consumer who have diverse  needs and preferences for marketing offerings. However, reality is that older people are  more heterogeneous than younger consumer age groups because people become increasingly  different from others with age. 

Most companies do not see the need to consider the elderly as a heterogeneous group of consumers with diverse needs and preferences.

What are the most effective bases for segmentation? 

he organizations that accept the  reality of a heterogeneous older consumer market are often faced with the challenging task of  deciding how to subdivide this market. They consider a wide variety of bases for breaking it  down into sub-segments, and quite often are not sure which basis to use for effective market  segmentation. 

How do we market to the older generations?

Finally, whether an organization chooses to  market to the entire mature consumer market or to specific sub-segments, they must address  a host of marketing-related issues such as: 

∙ What products or product modifications should be made? 

∙ What advertising appeals and spokespersons should be used? 

∙ What types of sales promotions are effective? 

∙ What types of services should be offered? 

∙ How should products and services be distributed? 

In sum, they want to know what works best for the senior customer. 

Cross-national and cross-cultural marketing

Knowledge about consumers of one generation in one country may not be applicable to consumers of the same generation in another country.

The globalization of the marketplace has been creating increasing interest in marketing to  consumers of different nations and cultures. Businesses that contemplate selling products and  services to consumers outside their border must understand not only generational differences but  also cultural differences. Knowledge about consumers in a generation in one country might not  apply to consumers of the same generation in another country; and marketing strategies that have  proved effective in one country might not be as effective in another. 

Available cross-cultural research offers little help to international or global consumer  marketers. Most commercial and academic research points to the differences in consumption  habits between or among countries, but offers few explanations for the observed differences.  

Furthermore, many cross-cultural differences reflect differences in the ways people in different  countries respond to questions or measurement instruments rather than differences in cultural  values. Given the scarcity of information in this area and the need for additional research, I  would like to offer some propositions that might be intuitively appealing but they would have to  be rigorously tested and proven:  

1. Today’s younger generation of consumers in different countries have more homogeneous  consumption patterns than previous generations. This proposition is based on the  assumption that younger people in different parts of the globe were born and raised in  more homogeneous environments (e.g., mass media, retail, educational opportunities, telecommunications and technology), and therefore they have had more homogeneous  socialization experiences than older adults who were raised in more diverse commercial  environments. It also suggests that, in time, consumers will become more homogeneous  globally. 

Younger consumers have more homogeneous consumption patterns than older adults

2. Regardless of country or culture, the ratio of differences in the consumption patterns  within generations to between generations is higher in older than in younger generations. This proposition derives from a fairly well-established fact the people become  increasingly heterogeneous with age. The longer they live on this planet, they more likely  they are to experience different events and circumstances that shape their behavior and  set them apart from other people with different sets of life experiences.  

It is a fairly well established fact that people become increasingly heterogeneous with age.

3. Consumer needs driven by biophysical aging processes are more likely to be better  predictors of similarities in buying and consumption patterns of people across the globe  than needs driven by psychological and social aging. This proposition is based on the  premise that biophysical aging is similar in humans—programmed aging takes place in a  fairly similar fashion, regardless of one’s color, country, or culture. But psychological  and social aging are likely to be conditioned by cultural values. For example, older adults  command more respect in eastern than in western cultures; and their assumed roles in different stages of life might differ, as in the case of adult children who are expected to  provide for their aged parents in some cultures. 

4. The greater the socio-political stability a country has experienced during the lifes of its  consumers, the smaller the differences in consumption patterns between generations in  that country. Social, political, and economic changes and transitions create different  environments to which consumers are exposed at difference stages in their life course.  Consumer exposure to diverse environments is likely to create greater diversities in  socialization experiences and needs than exposure to stable environments over one’s life  span. Diversity is likely to result in dissimilarities in lifestyles and behaviors across  generations that experience such changes at different stages in their lives, leading to  different consumption patterns.  

5. There are greater within-generation differences in consumption patterns of consumers in  free, capitalistic countries than in countries that have “closed” political systems. Differences in consumption patterns are not merely a matter of individual differences in  needs but also the result of options available to consumers. Consumers in capitalistic  countries such as U.S. and U.K. are likely to have more options available to them than  consumers in countries such as North Korea.