The mature market...is it for real?

Editor’s note: Howard Willens is president, and Leslie Harris is managing partner, of Mature Marketing & Research, a Boston research firm.

One of the hot topics in marketing in 1990s was the senior market. Speaker after speaker, book after book, and article after article talked about the growing importance of this economically powerful segment of the U.S. economy. This, they told us, was the segment to watch, the segment to attract and sell to. They also told us that manufacturers and retailers needed to concentrate their efforts on this segment if they were to prosper and grow in the ’90s and on into the new century.

Well, a funny thing happened on the way to the new century! For the most part, marketers and advertisers today seem to be ignoring the mature market in favor of a youth orientation.

Let’s look at the numbers that led the pundits to urge marketers to target mature consumers.

The first and most obvious indication of the potential inherent in the mature market was the projected population trend.

• By 2000, projections showed 70 million consumers age 50+; 20 million Boomers (born 1946-1955).
• By 2005, 115 million consumers would be age 50+, making 40 percent of adult population.

In short, the numbers told us that the population of Americans 50+ was growing…and fast!

Second, research at that time showed that the mature market had a lot of money available for spending, as well as a willingness to spend it.

Third, the mature market is not one-dimensional. Rather it is a diverse group comprised of five different and distinct age segments. Each group has its own distinctly different attitudes, behavior patterns and propensity to spend. And, the attitudes and behavior of each group are determined by the era in which its members were born.

Specifically, the five groups that make up the mature market are:

• Baby Boomers: This generation was born between 1946 and 1955 and came of age between 1964 and 1973. They are now slightly more than one-quarter of the total U.S. population (267.6 million) and 37 percent of the adult (over 20) population. By 2006 they are expected to be 42 percent of all adults. Their spending power is overwhelming, but a high proportion of their available funds will likely be set aside for their retirement.
• Those moving into the 60-to-64 age group by 2006 are the Wartime Children. They were born between 1941 and 1945 - and began their adult lives during JFK’s Camelot of the early 1960s. This group is economically blessed, so the short-term outlook for early retirement remains bright.
• Depression Babies - born between 1931 and 1940. These people became adults between 1949 and 1958, meaning their careers began during a rapid economic expansion. For that reason, they have lots to spend - and indications are they are not afraid to spend it.
• The G.I. Generation - those who were adults during World War II - and parents of the Baby Boomers. They are now in the 75-to-84-age range, and today’s increasingly longer lifespan suggests moderate growth in this age group. Further, coverage by Social Security, Medicare, and pensions will ensure their security and good health. Their spending will likely be limited to necessities, as travel and excessive self-indulgence become increasingly more difficult. However, they will spend on their grandchildren.
• The fifth generation - those aged 85 and older - are survivors of the Great Depression of the 1930s. These people find it difficult to forget the hardships of their formative years. Thus they are essentially security- and savings-minded. Rather than spending, they will be preparing legacies for their great-grandchildren.

Interestingly, due to likely gender-related differences in outlook, the five groups listed above might easily be broken into 10.

Based on our analysis, those desiring to sell their products and services to the mature market should focus their efforts on the first three segments. These are the groups who, by their stage in life and available funds, are the most likely targets for the broadest range of consumer products and services.

Two studies we recently conducted provide some indication of the needs, motivations, and buying behavior of the three target groups.

The first of these two studies covered Baby Boomers and those in the 60-69 age category; the second study covered Boomers only. Areas covered included behavior and attitudes with regard to new technologies, automobiles, restaurants, banking/finance, vacations, retirement, and television habits. The second study also included attitudes towards marketers and advertisers - with specific focus on how well they satisfy the needs and motivations of the key Boomer segment.

We learned that for the most part, consumers in the mature market keep up with the times, are quite definite about their wants and needs - and have a series of unique behavior patterns.

To summarize:

• They take frequent vacations.
• They eat out quite often - in both high-end and fast-food restaurants.
• They have specific needs with regard to banking and investment services, with definite differences between Boomers and the older segments.
• They own computers, and they utilize them for a broad range of purposes.
• They are heavily into the Internet, including online shopping.
• They are somewhat light viewers of television (watching the major networks for news and entertainment, cable for education).

These studies also provide some insight into their attitudes towards marketers and advertisers - which in turn strongly suggest what happened to those predictions about the importance of the mature market.

We learned that Baby Boomers are not happy with the way they are treated by marketers and advertisers. For the most part, they believe marketers and advertisers do not have their interests or needs in mind when developing products, designing packaging - and preparing advertising.

• More than half feel marketers do only a fair to poor job in considering their needs when they develop new products.
• Two out of five say marketers do only a fair to poor job in considering their needs when they develop packaging (as opposed to the 4 percent who feel they do an excellent job).
• And, most damaging to advertisers: almost half the respondents in the Boomer segment feel advertisers and their agencies ignore them in preparing their campaigns (4 percent are satisfied).

This latter finding is consistent with a study conducted by Georgia State University which showed that the vast majority of senior consumers are unhappy with the marketing approaches used on them. (Anyone who monitors television advertising - and sees gray hair only in commercials for products like Depends, Efferdent and retirement communities - would agree.)

The conclusion we draw from our findings - as well as the findings from other research - is that the current focus on youth by marketers and advertisers overlooks the growth and affluence of the mature market.

To paraphrase bank robber Willie Sutton, it’s time for marketers to “go where the money is.” Baby Boomers are a market waiting for companies with the foresight to develop appropriate products and packaging - and for their advertising agencies to develop mature market-specific campaigns. Those companies will benefit from the loyalty of this segment.

Marketers with an interest in attracting the numbers and economic strength of the mature market to their products/services should concentrate their marketing and advertising efforts on three of the mature market cohorts:

• Boomers - to begin building their loyalty for the long haul. They are in a good financial position now and they expect to be so later as well. Many are planning early retirement to indulge themselves in the “good life.”
• Depression Babies and War Babies - they are active, healthy older people who travel, eat out, seek entertainment, take care of themselves, buy new cars, and spoil their grandchildren! They have money to spend and are ready to spend it.

Now is the time for marketers to start lining these people up for recreation, travel, financial services, second/retirement homes, etc. And, most important, marketers should not forget these are large and affluent markets for everyday and high-end products as well!