Reference no: EM132967465
Marketing to the Baby Boomer Generation
The nation's 78 million baby boomers, born between 1946 and 1964, are the wealthiest group of Americans. They have an estimated $1 trillion in annual disposable income and three-quarters of the nation's financial assets, but only 10% of advertising dollars are directed specifically at the 50-plus market. Marketers aim for the "sweet spot," the demographic group between 18 and 49. But as the aging boomers hurdle toward retirement, some marketers are realizing the commercial potential of such a huge, affluent market.
The baby boom generation has transformed every age and stage it has passed through. As children, boomers created a market for disposable diapers and strained peas in jars. As teenagers, they introduced the nation to long hair, rock-and-roll music, tie-dyed clothes, and skateboards. As the generation became parents, they demanded organic baby food, quality health care, and SUVs. Today market researchers are looking at the marketing opportunities for the wealthiest generation steadily moving into retirement. Almost 8 million Americans turned 60 in 2006. By 2010, one in three adults will be 50 or older. This huge demographic group will not go gently into retirement like earlier generations have done.
The conventional wisdom among marketers is that you have to get consumers to commit to your brand early in life and once they commit they will be loyal to your brand forever. However, a study conducted by AARP showed that consumers aged 45 and older switch brands just as readily as younger generations. This has tremendous implications for savvy marketers.
Half of all boomers live in households without kids. Companies like General Mills changed the packaging for its Pillsbury dinner rolls and Green Giant vegetables to resealable freezer bags that allow for several smaller portions instead of family-sized portions.
Boomer retirees will leave their primary careers near age 62 to 65, but most will not completely leave the job market. Many will pursue volunteer opportunities, take a low-stress part-time job, or start a completely new business. A study by Merrill Lynch found that 76% of boomers said they will probably hold down a job in retirement, and a majority of that group said they expect to shift back and forth between leisure and work.
Savvy entrepreneurs can capitalize on the unique qualities of this generation. Take Re/Max agent Kathy Sperl-Bell. Sperl-Bell is a Senior Real Estate Specialist (SRES), 1 of more than 14,000 real estate agents nationwide with an SRES designation, up from 5,000 in 2002. Agents go through a two-day training program, which includes analysis of the different generational needs and attitudes of those 55 and older, as well as the types of housing options available for that market. SRES agents specialize in dealing with this growing market segment that have specific needs-taxes, elder care, estate sales, health care availability-and also a large amount of disposable income to meet them.
This generation also has the income and leisure time to become doting grandparents. Disney has targeted this trend with TV commercials showing multiple generations enjoying theme-park attractions.
Retiring boomers don't want to look like retirees. From Botox to cosmetic peels to plastic surgery, the race is on to profit from the generation's desire to be forever young. Every cosmetic company from Avon to L'Oreal is rolling out wrinkle creams and serums to halt sagging skin and wrinkles.
But marketers must tailor their marketing carefully. According to one researcher, "Anything marketing to silver hair is bad marketing. Don't talk to their chronological age; talk to their self-image." That 50-year-old boomer probably still feels like a 30-something.
- Based on this upcoming, large spending group, what other types of products/services might be popular with this market? Why would these products/services be a good fit for this group?
- Is there a segment of the baby boomers who are not interested in buying products that speak to a younger living lifestyle as portrayed in this case study? If so, how would you define this segment and what potential would there be to sell other goods and services to them?
- For those baby boomers who would like to become entrepreneurs, what types of businesses might be a good fit for them to operate? What would be their motivation to own and operate their own business?