Boomer News & Views

LIFE BEGINS AT FIFTY

LIFE BEGINS AT FIFTY .. A conference about marketers who have done something about developing new

products and services for the 50 to 64 age group.and how they and their agencies have developed

advertising that has successfully targeted this age group.

Announcing a conference on how leading authorities in the fields of financial services (banking and

investment organizations), travel & leisure, personal health, technology/electronics, fast food and

retailing have successfully developed products and services and how these companies have created

advertiing campaigns that have successfully targeted the new lifestyles of those consumers older than

50.

The recent Deloitte & Touche report - "Wealth with Wisdom: Serving the Needs of Aging

Consumers" etimates the spending power of people older than 50 to be at $1.7 trillion.

Companies and their agencies who are interested in presenting their successful case histories are

invited to contact Dr. Harris at mmrharris@aol.com

AFTER FIFTY - Paramount

New Book Focuses on Selling To Boomers..

In AFTER FIFTY: How the Baby Boom Will Redefine the Mature Market (Paramount Publishing)

Dr. Leslie Harris, Managing Partner of Mature Marketing & Research (http:/maturemarketing.com)

has drawn together insights from top researchers and consultants on the future of the financial

services, travel and leisure, personal health, fast food, technology and apparel/retail markets.

To receive your complementary copy, e-mail your name, title, company and mailing address to

Dr. Harris at mmrharris@aol.com.

COMING SOON...Beyond the Boomers...The Transition Years. The book will present case histories

of how this growing and maturing population is motivated to spend on new investments, travel,

technology, eating out, retirement planning.

If you would like to receive advance synopses, let us know your areas of interest.

MATURE MARKETING & RESEARCH .. "The Leading Source of What Boomers and Matures are

Thinking, Doing and Buying"...

AFTER FIFTY..How the Baby Boom

Burger King and the Mature Market

There was an article in the Business Section of today’s New York Times that in essence is the sum of all this Blog has been saying over the past few months.

The article is about a so-called “hot agency” in the Miami area—cited for being creative in both its creative approaches and its use of media. It is also the current agency for Burger King (and I wish them luck because I had experience heading up a major piece of that account years ago at another agency). Anyhow, the part that caught my eye was its mention of the agency creative staff—young folks sitting around in jeans and sneakers.

To what extent do you believe that group pays attention to any market segment other than itself? Based on my experience, less than none!

Considering only their Burger King business—not the other accounts mentioned—what to you suspect is the age group to which their campaign with the grotesquely masked King appeals? Did their research (if any) tell them the campaign and character has appeal beyond the teen and 20-something set? Does the agency (and Burger King) care about any other segment? Have they defined the real market for Burger King—overall and for specific types of menu items, for times of day, for meal occasions, etc.?

I have no current information other than a gut feeling—based on my experience with Burger King and my knowledge of the Mature Market—but it looks to me as if the agency and Burger King have written off anyone over the age of 25. Burger King went down that path once before—to their detriment

If I were Wendy’s and McDonald’s management, I would be holding parties in celebration—while I preparing my campaign to attract and cement loyalty among a real heavy using group, the Mature Market.

Comments anyone???

Boomers and Beyond, Part 2

As of January 1, 2006, the Boomer age spread will be 42–60. This spread may very well lead marketers to wonder about the extent a 42 year old and a 60 year old have something in common with each other, no less to a marketer—especially when the 42-year-old might be the 60-year-old’s baby brother (or sister).

Logically speaking, therefore, many marketers might conclude that the all-inclusive term Baby Boomers is meaningless in their strategic planning. For example:
• A 60-year-old empty-nest couple—whose youngest child has just graduated from college and who now have more disposable income and personal freedom than they have had in the past 15 years—might be contemplating a second, or retirement home.
• His kid brother of 42 is now planning paying for college, still has two more in high school, and is perhaps wondering how to tell his family they are about to be transferred to another city.

Wise marketers—or demographers, or sociologists—should even now be dissecting this seeming non-homogeneous group for further investigation. They might learn, for example:
• Older Boomers, (e.g., born 1946–1955, and age 51–60 in 2006) might be more similar to the later stage Depression Babies (born 1937–1945, and now age 61–69)—and might be more correctly labeled the Mature Market
• Younger Boomers (e.g., born 1956–1964, and age 42–50 in 2006) might be more like the early GenX segment (born 1965–1974, and age 32–41)—and might be more correctly the Pre-Mature Market

One conclusion of the foregoing might be: Is it not possible that the reason marketers have not put greater effort into addressing the Boomer segment is that it is so broad—and, therefore, dissimilar at the ends of the spectrum? And, is it not possible that this might me the reason marketers simply threw up their hands and concentrated on the more familiar 18–49 demographic?

Accordingly, a simple demographic definition of Boomer, or Depression Baby or Generation X should likely not be the basis of describing and addressing the members of these age ranges. Rather, it may be more likely that psychographic or lifestyle examinations of the extreme ends of all these segments will uncover similarities to their adjacent segments.

This could lead to new segment definitions—as well as new directions that marketers might consider to address for maximum strategic value.

For example, that this examination may reveal the “hot” target for marketers right now is not the broad and loosely connected Boomer segment per se, but a newly defined segment that consists of “Early Boomers” and “Late Depression Babies” (e.g., born 1937–1955…or age 51-69 in 2006) That is:
• In 1967, a 21 year old corporate beginner (born in 1946) had more in common with a 30 year old corporate middle-manager (born in 1937), than the same 21 year old had with his three-year old Boomer brother or cousin born in 1964
• In 2006, that now 60 year old Boomer more than likely has more in common with a 70 year old than he has with his 41 year old baby brother, sister, or cousin.

Accordingly, these ideas should lead marketers to explore the commonality that may exist with the “Early Boomer” and Late Depression Baby”—and determine the benefits that would accrue to themselves if they focus their immediate efforts on this newly defined “Mature Market.”

Boomers & Beyond, Part 1

Demographers have defined the post World War II Generation (born 1946-1965) as the Baby Boom Generation. Sociologists have delved deeply into this group and have written countless papers, essays, magazine articles, theses, and books—all of which attempt to describe the group, and account for the attitudes and behavior of its members.

Coincidentally, marketers, in recent years, have considered the notion that their wisest strategy for maximizing profits would be to focus their efforts on this group—a group that the U.S. Census Bureau reports “has the money.” Unfortunately for sales and stockholders, many of these marketers have done nothing but to do research, attend seminars—and give little but lip service to this strategy.

Assessing potential reasons for the lack of action on what seems to be a wise course suggests the likelihood that it may not be due to short-sightedness. Rather, it seems possible that the wide spread of ages in the Baby Boomer segment may be sending mixed messages—thus, causing confusion. And, as is well know, the human response to confusion is generally to dismiss and ignore those things that cause confusion.

Considering the possible causes for confusion suggests the following: As of January 1, 2006, the Boomer age spread will be 42–60. This spread may very well lead marketers to wonder about the extent to which a 42 year-old and a 60 year-old have something in common—especially when the 42-year-old might be the 60-year-old’s baby brother (or sister).

Logically speaking, therefore, many marketers might conclude that the all-inclusive term Baby Boomers is meaningless. Their thinking might take the following thread:
• A 60-year-old empty-nest couple—whose youngest child has just graduated from college and who now have more disposable income and personal freedom than they have had in the past 15 years—might be contemplating a second, or retirement home.
• His kid brother of 42 is likely now planning on paying for college, still has two more in high school, and is perhaps wondering how to tell his family they are about to be transferred to another city.

This reasonable train of thought might lead some marketers to discard the whole issue and fall back on the old reliable 18-49. But, what would a deeper analysis bring?

They may be older, but...

Here are two facts marketers and their advertising agencies need to consider (i.e., not ignore) as they plan next quarter’s budgets:
• 2004 Census data revealed that income in households headed by a person age 55-64 was $4,500 greater than in age 25–34 households.
• People in the 60+ age bracket are increasingly empty nesters, with all of their children finished with college. Thus, their income is available to themselves alone.

The result is that these people are now free—and can afford—vacations to Europe; cruises; winter skiing and summer beaches; restaurants of their choice, as often as they like; good wines; investments; a second home, timeshares; redecorating and remodeling; cars—and they do not stint on things relating to their health, including foods; exercise (and the right clothing for it).

They also have more income at their disposal for—and research shows that they buy—plasma televisions; computers; cell phones; PDAs; and digital cameras; and, of course, the grandchildren. They surf the net; buy on ebay and other sites.

In short, they are a hot consumer market that any marketer would, or should, be giving his proverbial eye teeth to get. But, aside from some ads in the AARP publications and the AAA magazine, the focus remains on the outmoded 18–49 media model!

The Magical Age

The age of 60 (and 60+) is somewhat magical. It is the age which our Stage-One Boomers are rapidly approaching—and which our Late Depression and War Babies have already achieved. And, age 60 no longer seems to be when many retire, and/or when many companies start thinking about forcing early retirement—for whatever reason.

Look around offices today, as well as at some highly paid skill jobs, jobs that require specialized knowledge, jobs that require experience for effectiveness—and of course the professions. You will see a proliferation of gray hair.

Why is this happening—and what are the implications for marketers?

Obviously, one (if not THE) major reason for working later in life is the need for income over and above Social Security and available retirement/investment funds. This group is likely of little interest to marketers. But, there is a powerful trend beginning—one to which marketers need to pay attention.

A growing base of evidence strongly suggests that those who work during the “retirement years” tend to live longer, healthier, and more independent lives than those who do not. For example, a study conducted in 2004 at Johns Hopkins Medical Center shows that four to eight months after starting work in late 1999 and early 2000, retirees putting in 15 or more hours per weeks in Baltimore Public Schools were stronger—and more physically, cognitively and socially active than a non-working control group. They concluded that work requires one to have social contact, use the mind and get some exercise—all of which promote health and longevity.

What has this got to do with marketers? Simply this. With the trend toward a greater number of those approaching retirement age now opting to continue working—either in their earlier careers, or in new careers, or as volunteers—the U.S. will more than likely have a new and stable older population with money to spend. And, evidence has shown that this growing mature and maturing population is motivated to spend—on cars, travel, new technology, restaurants, clothing—and their grandchildren.

Good stimulus for marketers to learn about and address this group directly.

Grandparents: The Forgotten Market Segment

It’s a known fact that Grandparents buy gifts—and for a variety of occasions. However, too many marketers are missing their fair share of this large and growing market due to some popular misconceptions.

Primary among these misconceptions is that grandparents buy whatever the child demands or the parent requests. Unfortunately, few marketers have committed time or budget to ask grandparents about who makes the buying decisions, and how or when these decisions are made—for what kinds of products and for what occasions.

To pinpoint the importance of this, let’s take a brief look at some relevant demography:
• Between 1980 and 2000, the median income of households headed by people aged 65+ increased 22% in real terms, compared with a 6% gain for households in general.
• Nearly half of all grandparents are age 60±, one-third are younger than 55, and about 20% are age 70+. Interestingly, approximately half of those over age 65 are great–grandparents.
• Four out of ten grandparents have had at least some college.
• The median income of households headed by persons over the age of 65 is $18,100. But, 12% of t them earn better than $50,000—and grandparent headed households earn an average of $30,000.
• The average grandparent has four grandchildren. And, better than 10% of grandchildren have more than four grandparents or step–grandparents
• Importantly, Grandmothers outnumber grandfathers in the population by a factor of almost three to one.

Finally, grandparents today tend to live longer on the average than in the past.
• In 1970, 13% of households were headed by people 65 or older. This figure was 16% in 1980, 20% in 1990, 22% in 1995 and 25% in 2000. And, as the Boomer age, these averages will increase dramatically.

So, even a surface analysis of this simple demography suggests that today’s grandparents are relatively well educated, have a fair amount of discretionary income—and chances are they will remain a vital force in the lives of their grandchildren for an increasingly longer period of time. They will also remain a market of high potential for a significant portion of that period.

We also know something about what they buy, when they buy it and approximately how much they spend.
• While nearly 25% of all spending on toys in the U.S. was by grandparents, computers and sporting goods are today’s favorite grandparent gifts. Other favorites include investments (such as stocks, mutual funds and zero coupon bonds), travel, summer camp—and clothing.
• Holidays, graduations and birthdays are the primary gift giving time, but many grandparents buy gifts on the spur of the moment—e.g., when something strikes them as uniquely appropriate for their grandchild, or when they might be going for a visit.
• Interestingly, grandparents do tend to spend more on gifts for major holidays and graduations than they do for birthdays.

Unfortunately (for themselves) many marketers choose to ignore or downplay this potentially lucrative niche. As a result, for the most part grandparents buy gifts for their grandchildren without being specifically targeted by interested marketers of today’s relevant products and services.

It makes little sense.

Wave-itis

For the past few months we have concentrated our writing on the sense and sensibility of focusing marketing and communication efforts on the Boomer generation. In support of this argument we have cited quantitative and qualitative evidence that indicated these are the people with the money and they are not afraid to spend it. However, in thinking through our arguments, their supporting evidence—and reality in the world today—it occurred to us that perhaps we might have been somewhat misleading!!!

So, we went back to the drawing board. And, here is where we came out.

Gender aside, there really are two almost separate and distinct segments to the Boomer cohort. What demographers define as the first wave, those born between 1946 and 1954—and the second wave, those born 1955–1964. The logic is simple—and it strongly suggests that those of us who have been crying in the wilderness are really talking about the first wave.

Why? Because those in the second wave—today age 41–50—are still basically in their child-rearing years, including sending one or more children to college. Their needs—and the demands upon their financial resources—are focused in, on, and around the home, and are indeed quite different from those of the first wave.

On the other hand, those in the first wave—today age 51-59—are either free of, or freeing themselves from, the shackles chaining their younger Boomer brethren. They have increasing amounts of disposable income as each year passes (until, that is, the first grandchild appears). As such they are thinking travel, vacation homes, new cars, new electronic gadgets, the theatre, fine restaurants, “dress-up” clothing—and trying the new products that are constantly to be seen in advertising., etc.

Yes there are overlaps (like why do cosmetic makers focus their advertising on younger women who do not need the help), but for the most part the “pot of gold” for marketers lies with the first wave.

The next few issues of The Boomer Report will focus on the first wave, their wants, needs, motivations—and what it may take to motivate them towards specific brands (not products, because they already want them!).