Many fortunes have been made by following the « baby boomer » generation – the post-war avalanche of Americans born between 1946 and 1964 – as it matures. After all, it was this 76 million-strong segment that bought hula hoops and Frisbees in the 1950s, crowded colleges in the 1960s and sent the price of housing soaring in the 1970s and 1980s. And now, as the year 2000 approaches and the oldest baby boomers hit 50, companies across the country are faced with a massive demographic shift forced by the relentless march of time.
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To quantify this new reality, the number of adults 35 years old or less will decline a total of 8.3 million between 1990 and 2000, while the number of adults older than 50 will grow by 12.2 million. Fully one-third of the U.S. population will be age 50 or older by 2010, up from one-quarter in 1991, presenting abundant opportunities for alert businesses in every sector that can successfully meet the needs, tastes and concerns of this influential and affluent niche.
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According to Rick Adler, founder of The Senior Network, a marketing and research company geared to older consumers: « Simply based on population growth trends, if a product is marketed to the 50-plus audience and maintains its market share, it should increase in sales by 35 to 50 percent in the next 20 years. Conversely, a brand targeted at the zero to 50 age groups will be flat in sales. »
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« Middle age is where the action is for the next 15 years, » confirms Ken Dychtwald Ph.D., chairman and chief executive officer of Age Wave, Inc., a marketing services company focused exclusively on the maturing market. Not only are 76 million baby boomers beginning to move into their 50s, but they have money to spend. According to an Age Wave analysis, by the year 2000, heads of households ages 45-54 will increase their annual expenditures by 36 percent. At the same time, the 65-plus population will probably be close to 40 or 45 million in size.
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However, as the mechanics of the aging population pick up steam, « there is a huge peril at viewing this segment as one gray mass, » Adler cautions, « and not recognizing the diverse habits of 50-plus consumers. » People in their 50s could have young children or grandchildren, for example. They may be in their prime earning years, or have interrupted a career to go back to school or start a business. And they are as likely to be dating as their younger counterparts, perhaps for the first time in decades. As Dychtwald points out, « the traditional linear plan, from birth through adolescence and marriage to death » is no longer accurate.
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At the same time, as boomers begin turning 50, there’s no indication that they’ll expect or accept physical deterioration. This is, after all, the generation of aerobic exercise and « natural » foods þ a term that will continue to carry weight for this consumer bloc as it matures. « They’re not going to sink gracefully into fat old age. They’ve worked all their lives to improve their appearance, » says an executive with the research firm of Yankelovich Clancy Shulman in New York City.
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What this means is that companies desirous of courting the growing 50-plus audience must not define it by age or income alone, but instead should segment this diverse market based on a combination of physical, social and psychological factors.
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Opportunity Abounds
Many companies have already been taking steps to maximize this new 50-plus demographic reality. A luxury automaker uses a satirical Janis Joplin rock song from the rebellious 1960s in a television commercial. ; McDonald’s develops a hamburger targeted to adult tastes with a multimillion dollar marketing campaign to match. And the man who developed Clearasil to help the baby boomers navigate through their teenage years has acquired Grecian Formula hair coloring, repositioned it toward men, and started selling it in drugstores.
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There is definitely money to be made by paying attention to the needs and concerns of the various segments of the 50-plus audience. Although it is erroneous to assume that baby boomers ;are homogeneous in their buying patterns, common sense suggests that offering products or services aligned with some basic marketing principles will go a long way to attracting this ;complex segment:
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– ; Make sure what you offer is perceived as good value for the money. As baby boomers get older, they are making sure that what they buy is priced reasonably. And the existing retired population is faced with getting the most from their fixed incomes. Witness the recent growth in discount stores such as Ross Dress for Less, Home Depot and Wal-Mart.
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– ; Products should be well designed with broad applicability. « The key to success, » claims industrial designer Jim Mueller, « is to produce products flexible enough to be useful for older people and those with disabilities as well as the general population, resulting in products with wide appeal. »
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– ; Don’t assume that 50-plus customers are recalcitrant and brand loyal. According to Rick Adler, « All the studies indicate that mature consumers are as likely, if not more likely, to switch for value. »
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– ; Get 50-plus consumers involved in your sales and marketing. ;Have them sell, do customer service, and provide insights on how best to appeal to this diverse group. Keep in mind that ;the generation that said « don’t trust anyone over 30 » is now saying « don’t trust anyone under 30 » and may very well soon be saying « don’t trust anyone under 50. »
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