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The mature market.

The Mature Market

Though there are some exceptions, for the most part business has not heeded the warning signals that went up with the publication of the 1980 census. That census, along with subsequent updates, reported a rapid and dramatic demographic shift in the average age of Americans. In 1970, for example, the median age of the U.S. population was twenty-eight. By 1980 it had risen to thirty. Now current indications are that the median age of the population will be 32.8 in 1990 and, by the year 2000, could be as high as 36.5.

Major reasons for this "graying of America" include a substantial drop in the fertility rate following the post-war baby boom, and a longer life expectancy. Montana, like the United States in general, will have to face both the problems and opportunities connected with an aging population. In Montana, however, this situation could be exacerbated due to the outmigration of younger Montanans seeking employment outside the state. The U.S. Bureau of the Census, for example, reported that for the period 1980 to 1987 there was an estimated negative net migration of 29,000 (i.e. 29,000 more people left the state than moved in). Montana reached its peak population of approximately 825,000 in 1985 and has since declined. According to projections by the U.S. Census Bureau of the Census, this decline is expected to continue through the next decade. More important, however, is the fact that not only is Montana loosing population, but indications are that those leaving the state tend to be primarily the young of the prime-age workforce and that, if it continues, this trend could accelerate the "graying of Montana" beyond the U.S. average.

The aging of the U.S. population has set off a flurry of activity - as research and marketing consulting firms attempt to acquaint their clients with this powerful consumer market in order to revise their strategic marketing plans and compete more effectively in the 1990s and on into the twenty-first century. The new "core market thrust" in the future will undoubtedly be middle-agers and older, signaling an end to an almost monolithic emphasis on youth. The following represents some findings from current research on this consumer market.

Market Characteristics

In 1900, (American Demographics, February 1986) people aged fifty and older accounted for just 13 percent of the population; today they represent more than twice that proportion. In particular, those who came of working age in the 1940s and 1950s spent most of their lives in a "period of extraordinary economic influence," which allowed them to accumulate large amounts of financial resources. Currently, of the nation's total discretionary income, one-half accrues to householders aged fifty and older, as compared to only one-fifth by those younger than thirty-five. At this stage in life, mortgage payments are generally lower or paid off and the children are out of school. The buying power of many fifty-and-olders substantially exceeds that which they had even during their early years, and fully 77 percent of the financial assets of all U.S. households are held by those fifty and older. What is more, this consumer segment is growing rapidly and is expected to explode when the post-war baby boom begins to hit the half-century mark - shortly after the middle of the 1990s.

Those who belong to today's fifty-and-older age cohort differ from their predecessors not only in terms of size and affluence but also in terms of lifestyle. They tend, for example, to be better educated than previous groups, and the level of education is expected to rise. This is especially the case as many in this group return to college to obtain a college degree. It is the upsurge of these "non-traditional" students, in fact, that has kept university enrollments steady during a period of declining numbers of high school graduates.

Contrary to the stereotypical ways in which this age group has been portrayed, these individuals tend also to be healthier than those of similar age groups in the past. They are involved in more activities and have more interests than previous generations; hence the term "Opals" (older people with active lifestyles), coined by gerontologist David Demko, to represent them. These characteristics have made the fifty-and-older age group a consumer market that cannot be ignored - an attractive market for luxury goods and services and quality merchandise. They enjoy travel, recreation, and quality foods. They utilize a high portion of convenience and health-care goods and services. They represent the "golden" market of the 1990s and beyond.

Image in

Advertising

The most significant change that business will have to make in dealing with this age group is one of attitude. Long stuck on youth, business will have to move away from "age typing" stereotypes that have been so invidious in the past. Until recently, older consumers were usually confined to commercials for laxatives, denture creams, and arthritis medications. And, though there is some evidence that Madison Avenue mavens are beginning to wake up, one fact stands out from almost all studies: older Americans resent what they perceive to be the inaccurate and misleading stereotypes in advertising that portray them as being unattractive and incompetent, sickly or silly.

Research on the fifty-and-olders indicates that a new focus is necessary: one that portrays them much as they see themselves, as active and attractive mature individuals who have accomplished a great deal in their lives. To be effective, advertising will also have to begin featuring them in more dominant roles in family, business, community, and public sector settings rather than the subsidiary or peripheral roles in which they have been cast in the past. Advertising will have to portray them as accomplished individuals who can make meaningful contributions and not just as the crotchety grandparents to those leading "real" lives. There is a need to portray these people in advertising doing the things that they do in real life: working, playing tennis, falling in love and buying new cars.

The Use of

Older Models

In keeping pace with the current trend, some models in advertising are beginning to show up with lines of age and experience on their faces, and the new motto may well be: "Maturity Sells!" The model agency Rogers and Lerman, for example, frequently receives requests for models with "salt-and-pepper hair, wrinkles, and character." Currently, models aged fifty and older account for about 20 percent of the agency's billings.

A major issue within current research, however, is the reaction of the mature market to being identified as a separate market and the desirability of age-related ads directed at this group through the use of older adult models. In a review of the literature, Alan Greco (Journal of Advertising Research, June/July 1988) found that many studies raise the question of whether persons in older age categories actually see themselves as belonging to that age group. It has been suggested, for example, that many of the mature market may actually see themselves as ten or fifteen years younger than their chronological age, and several studies further indicate that there should, therefore, be a match between model age and product orientation. The method of targeting a product for people whose chronological age is sixty, therefore, may have to be altered if they think of themselves as fifty. This means that same age models may be appropriate in advertising for products used in particular by the mature market but not necessarily for products in general use. Although the use of more mature models is still recommended, the concept of "psychological age" must still be taken into account.

Intergenerational

Marketing

Research further indicates that marketers may be limiting their effectiveness if they only portray members of the mature market as associating with those their own age. In reality, members of this age group have very strong relationships with a lot of groups, especially their children and grandchildren. In addition, some of that discretionary income carries over to purchases for those of other generations. Therefore, some of the most significant opportunities in the future may lie in "intergenerational marketing" - an attempt to tie the generations together in the same promotional campaign. Kodak, for example, had a recent ad campaign featuring children taking pictures of their grandparents. A current AT&T commercial depicts an intergenerational conference call with the birth of a new baby.

Diversification

For some firms, a change in product emphasis or a revitalized advertising campaign may not be enough for them to adjust to the dramatic demographic shift now taking place. Some companies will have to diversify in order to stay in business. Gerber Products Co., for example, which once produced only baby food ("Babies are our only business") has gone into life insurance and pre-packaged meals for single dinners. Indeed, for many firms, future survival may depend on movement in new directions to provide goods and services catering to the growing mature market.

Gearing Up

Since Montana may be one of the states that will experience a major impact, Montana businesses should begin now to gear up for the shift toward the mature market. Among other things, these businesses should: (1) read recent marketing, retailing, and advertising journal articles pertaining to the mature market; (2) take advantage of recent psychographic or lifestyle research (i.e., the Geromarket by Goldring & Co., Chicago, IL); (3) subscribe to magazines (i.e., Modern Maturity and Lear's) which cater to this market; (4) utilize information about this market provided by marketing and consulting firms (i.e., The Futures of Group of Washington, D.C. and the Mature Marketing Institute); (5) invite older or retired marketing people back in for discussions; and (6) begin to survey individual members of the mature market in their particular area.

Aaron Anderson is associate professor of management, School of Business Administration, University of Montana.
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Title Annotation:the aged as consumer groups
Author:Andreason, Aaron W.
Publication:Montana Business Quarterly
Date:Dec 22, 1989
Words:1633
Previous Article:Economic trends in Ravalli County.
Next Article:Provisional 1988 county population estimates for Montana.
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