Editor's note: Carol M. Morgan and Doran J. Levy are principals in Strategic Directions Group, Inc., a St. Paul research firm.

By now marketers should have the facts down pat. For at least a decade they've been told about the mature market's affluence and size. Today those 40 and older comprise 42 percent of the U.S. population, growing to 47 percent by 2010. In 2000 this demographic group generated $750 billion in pre-tax income, 66 percent of all income. Those 40 and older enjoy 65 percent of all discretionary income. In terms of net worth, they control the vast majority of it: 91 percent.

According to the Consumer Expenditure Survey and other sources, those 40 and older are account for 64 percent of all expenditures on entertainment, 73 percent of all catalog sales, and 62 percent of purchases related to shelter. While households headed by persons 40 to 64 represent 44 percent of all households, they spent 50 percent of all grocery store dollars. Baby Boomers and their elders make 72 percent of all new car purchases.

And yet this immense and affluent market is virtually ignored. Advertising Age recently reported that less than 10 percent of all advertising messages target persons 50 and older. Why is this so?

Our company has researched those 40 and older since 1989, surveying thousands of respondents and gathering millions of pieces of data. At the same time, we've also created nine separate psychographic segmentation strategies on this market. Our thoughts on the mature market have been captured in our new book, Marketing to the Mindset of Boomers and Their Elders (Attitudebase).

We are continually baffled by marketers' lack of interest in mature consumers. Over the years we've observed that one or more of the following 10 impediments may lead marketers to bypass the mature market. In reality, marketers often exhibit two or three related tendencies, facets of the same mindset.

The mature consumer does not exist

Today the mature consumer is simply not on most marketers' radar screens. Products and media are focused on the prized 18-to-49 demographic. The extent to which the mature market is undervalued was underscored last year when ABC considered ousting Ted Koppel and filling the Nightline time slot with David Letterman. Because Nightline's audience is in the generally ignored mature demographic, it generates only $22 million in annual advertising revenue as compared to Letterman's $176 million.

It's not surprising that the U.S. prizes youth more than age. Compared to European countries, the U.S. is itself an adolescent. As a culture our focus is on that which is trendy and hip. From movie roles to employment, fashions to advertising images, old is out. "I feel as if I do not exist," a 54-year-old woman told us. "I spend more money than I did 10 years ago, but in the most consumer-oriented culture in the world, I don't exist as a consumer."

They know it all

Lacking interest in those 40 and older, marketers have put little energy into studying this market. Too many of them have concluded that they know everything about Baby Boomers and their elders. After all, Boomers have been around a long time. Unfortunately, marketers actually know very little about those 40 and older. Instead of finding fresh perspectives, marketers rely on Baby Boomer stereotypes and generalizations concocted 30 years ago. They assume Baby Boomers and their elders have not changed or differentiated themselves as they've grown older, a major error.

Abbreviated lifetime value

Explaining why her advertising agency thought pursuing the mature market was a waste of time, a staffer commented: "They're going to die soon anyway." The reality, of course, is that today's 50-year-old still has 20 or 30 or more years of life left. During those decades, Baby Boomers and their elders will still consume an immense array of products, from cars to cosmetics, packaged travel to haircuts.

It is true that younger consumers may buy a dozen cars over their lifetimes, resulting in sales worth hundreds of thousands of dollars, but the mature consumer is the prime consumer now and many will remain so for the next few decades. And studies have demonstrated that younger consumers exhibit extreme fickleness. But whatever the customer's age, a good customer relationship management (CRM) program retains current customers, while the company trolls for new ones. Current, loyal mature customers shouldn't be taken for granted or ignored, certainly not in these difficult times.

Failing to recognize diversity

Sociologists tell us that as we age we become more unalike. A group of five-year-olds, having had few life experiences, has far more in common than a clutch of 55-year-olds. This diversity is reflected in many patterns or ways of growing older or experiencing aging. Instead of recognizing this diversity and honing their marketing tools to reach specific targets, marketers cling to overly simplistic views.

Massive generalities about Baby Boomers, for example, abound in the minds of marketers who think of them as a homogeneous mass ("All Baby Boomers are self-centered and demanding."). Marketers have been clinging to such generalities for years, adding no new perceptions of this market or considerations that Baby Boomers are, indeed, growing older and changing. For their part, those over 60 are thought of as curmudgeonly old men or adorably daft blue-haired women.

Frustrated when their stereotypes and simplistic views do not result in increased sales, marketers often retreat, concluding that the mature market is too difficult to pursue. From functional foods produced by major packaged goods companies to pharmaceutical drugs to certain cruise offerings, marketing graveyards are littered with the botched attempts to reach the mature.

Marketers too young

Another barrier to any interest in the mature market is that those doing the marketing and creating the advertisements are young themselves. According to John F. Zweig, CEO of the WPP Group-USA, "Most creative staff at advertising agencies are ages 25 to 35." Having barely severed ties with his or her parents, it's difficult to imagine that a young staffer will be able to relate to the needs and interests of the mature. The idea that a deep understanding of this market will be instantly arrived at by wearing eyeglasses smeared with petroleum jelly, as some consultants advocate, only supplants ignorance with stereotypes.

Too brand loyal to change

Marketers have long held the belief that mature consumers are just too brand loyal to switch. The reality is that those 40 and older are not distinguished by their brand loyalty. Our studies have shown that they are more or less brand loyal depending on their level of involvement with the category. For example, Traditional Couponers, one of our Food segments, are far more loyal to salted snacks as compared to orange juice.

The openness among those 40 and older to a variety of brands is evident when individual rather than household consumption is measured or when the time span measured is increased. Because mature households are more often composed of one or two persons, it simply takes longer for them to get through a bottle of ketchup or a box of breakfast cereal. Studies assessing consumption by brand over longer time periods show mature consumers switching brands as frequently as do younger ones. The idea that consumers are stuck forever to specific brands is a marketer's fantasy, not reality.

Too cheap to spend

While they may acknowledge that the mature control the overwhelming amount of net assets, marketers who ignore this market also believe that they will not spend it. This position is refuted by the purchases made by those 40 and older. Whether for face-lifts or cruises, mutual funds or cars, those 40 and older are responsible for the majority of expenditures in our economy. The charitable gifts and donations made by those 65 and older fuel the nonprofit sector. For example, in 1999, women 65 and older spent $14.7 billion on apparel, almost as much as those 25 to 34.

Demographics too fuzzy

Given the diversity that exists in the mature market - or any market - too many marketers are using a demographic chainsaw rather than a psychographic scalpel to separate out their very best prospects. As it has been for decades, the mature market continues to be divided into logical categories by age. Although not supported by any evidence, marketers have concluded that all of those who are, for example, 50 to 59 have the same interests and needs and can be reached via the same media. The reality is far from that. But however wasteful, inaccurate, or misleading, marketers find demographics convenient when buying mailing lists or media.

Demographics do not recognize the radical differences in motivations and attitudes that exist within the 40-and-older market, nor do they identify targets receptive to a particular product or service. For example, when we compared a subset of our Lifestyle segments enjoying annual household incomes of $75,000 and above, we found that Threatened Actives spend very little on luxury items as compared to two other segments, the Upbeat Enjoyers and Financial Positives. And yet their ages and incomes are similar. It's their attitudes and motivations that differentiate these three distinct segments.

Fearful of alienating the young

Marketers also avoid the mature market because of their deep-rooted fear of alienating younger consumers if their products appear positioned for or enjoyed by the mature. A great divide seems to exist between those 18-to-35 and those who have crossed over into maturity. Marketers believe they have to make a choice between continuing a relationship with their older and loyal customers or appealing to and converting younger ones. They've created this situation themselves by focusing on demographics and making massive assumptions about the motivations and needs of those in various age groups.

Ignoring motivations

Unfortunately, the mature market's psychographics are either generally ignored in favor of demographics or intuited. Seeking simple and convenient answers, marketers fail to acknowledge that demographics are very poor predictors of a market's needs and desires. And having avoided segmenting the mature market by its psychographics or motivations, marketers are still left with their central problem: what to do with what they see as a massive divide between youth and age.

In actuality, one way that marketers can appeal to all demographic groups is by centering their marketing on a psychographic segmentation strategy. The answer lies in positioning a product or service to mindsets that exist in both those under and over 40. A car buyer who wanted a fun, responsive car at 38 doesn't flip into a totally different mindset at 44. Instead of touting zippy cars solely for those under 30 and stodgy cars with ample seats for the mature, cars can be positioned for a mindset that transcends age. For example, according to a spokesperson, Volkswagen does not "target any group," but instead pursues "a psychographic that is active and performance-oriented..."

The Stylish Fun, one of our Car Purchase segments, are 20 percent of those aged 40 to 64 and 15 percent of those aged 65 and older. They're the clear target for distinctive, fun cars that provide them with the emotional experience they crave. This psychographic segment's high average household incomes and car-buying behaviors confirm that they are, indeed, the best target for Nissan's 350 Z car and the Audi TT.

The market dictates its own needs. Marketers have to realize that segments within every market, including the mature market, possess motivations and attitudes toward specific classes of existing products. Advertising does not reach a blank slate where, in the words of Stan Rapp, it "creates the mind-set to produce the behavior needed to boost sales." The Ford Focus, for example, was initially aimed at buyers in their 20s. But Focus buyers have an average age of 35 - meaning that half the buyers are, dare we say it, over 35. Those 40 and older who have bought a Focus are in our Reliable and Uninvolved segments. These segments both want a car for transportation, although the Reliables emphasize safety and mileage, whereas Uninvolved want an attractive and popular car.

Reaping rewards

With each passing year, marketers will inevitably find themselves facing a world population that is aging. While its monumental impact on our society's various social and health-related delivery systems has been greatly discussed, not much in-depth study has been focused on the business potential of the mature market. But those who are wise enough to recognize and cultivate this potential, while avoiding the 10 pitfalls we've outlined above, will do well in the decades ahead.

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