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Free «Baby Boomers Market» Essay Sample

Introduction

The baby boomers comprise of people born after the Second World War from 1946 to 1964. Many features that determine their expenditures characterize these people. They are knowledgeable and have contributed much to the economy. Their aggressiveness has left many of them wealthy. Despite the effects of the 2008 financial crisis affecting their wealth, they are still financially stable and they form a potential market with many business opportunities that can double the revenue of an organization if the organization provides the necessary services that fit into their needs.

The baby boomers are aging fast leading to service crisis that many organizations do not realize due to their ignorance. With the market at more than 100 million, and growing at a rapid rate, clearly, the aging boomer and senior customer is the ”New Customer Majority” for the target market of firms today and also tomorrow. The penalty is growing for those companies that render insensitive services. The success of firms in this highly industry rests with the discovery of the importance of good customer relationship management, though services may be getting worse for many firms operating in this large market. many companies shave failed due to failure to distinguish between age and stage while others have failed due to lack of sensitivity to the changing needs of the group.

Some firms have succeeded because they successfully provided effective services to the baby boomers thus maintaining the customer loyalty. Marketing is an important strategy that can help a firm succeed. Since many firms have failed in marketing their services to baby boomers, this study examines the reasons for their failure and the possible marketing strategies that can help them gain the baby boomers market while improving their market share. Using a survey in three case studies, this research will examine the need for better marketing strategies that will increase business opportunities for organization in the baby boomer market segment.

Study objectives

This study examines the baby boomer market and available marketing opportunities to this market segment. The baby boomers are rapidly aging with their service needs also changing fast. There is need for a change in marketing strategies so that they change with the changing needs in order to meet the market needs. This study will focus mainly on the baby boomer market in the U.S. it will focus on examining the marketing needs and opportunities in the baby boomer market segment and the reasons why firms have either failed or succeeded in penetrating this market.

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Study significance

This research is important given the latest turn of events with the rapid increase in the aging of baby boomers. As they age, their needs change and many firms have not exploited the opportunities due to some problems. This study will examine the reasons for success or failure for firms operating in the baby boomers market segment. This is important because it seeks to examine the issues that arise for marketers and consumers in the branding of generational cohorts, with a focus on the baby boomers recent encroachment into the seniors market.

Research questions

This study will seek to answer research questions such as; what are the marketing opportunities available to firms operating in the baby boomers market segment? What are the reasons for marketing failure or success for firms operating in such markets? How can obstacles be overcome in order to improve marketing strategies in the market segment? These questions are relevant since they are related to the research topic.

Literature review

Marketing to Boomers

Baby boomers are a generation of U.S citizens that was born immediately after the Second World War between 1946 and 1964. This generation has been very successful in their lives because they have always broken the odds and cultural barriers. The generation has become a profound effect on public policy and the demand for public services. Because of its sheer number and shifting needs as it ages, the generation will continue to influence society for the next thirty years. Demographic shifts, especially increases in life expectancy and decreases in birth rates, have changed the way individuals and families think about their work years, their “old age,” and what it means to retire. Economic changes, beginning after World War II, are altering the way baby boomers address the latter half of their lives and the way in which public policy may need to respond. Policies, particularly around marketing are of great concern in order to increase more products targeting this group.

According to Susan, the baby boomers generation has been having changing needs and priorities that make marketing and selling to this generation difficult1. It is important that these characteristics be analyzed in order for marketers to succeed in market to this group1. The baby boomers are extremely hardworking and motivated by position, perks and prestige1. Baby Boomers relish long work periods and define themselves by their professional accomplishments. They are confident, independent and self-reliant. Having brought up during the era of reform, they believe that they can change the world. They have always questioned the authorities and challenged the status quo. Having endowed with more education than their previous generations, they are achievement-oriented, dedicated and career-focused. They welcome exciting, challenging projects and strive to make a difference.  Lastly, the baby boomers are very competitive and equate work and position with self-worth.

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Dean and David notes that the above characteristics of baby boomers have made them wealthy with most of the generation population having enough wealth that makes them an important group in the society that cannot just be ignored by manufacturers2. According to Dean and David, baby Boomers listen to the radio an average of 21 hours per week, about two hours more per week than most other adults do before they make any purchase2. When they buy, they usually do consider their needs. Though the needs of baby boomers change as they age, Jim notes that their needs do not change with age but change with stage in human development. Their needs are just as described by Maslow3. He noted that our needs drive our behavior. Our need to be physically and mentally comfortable, whole, safe and secure does not change from one generation to the next. In Maslow’s hierarchy, this is the most basic bundle of all needs. Then, our need for love and to be loved never changes from one generation to the next. The same holds true of our need for self-esteem and the esteem of others. What does change from generation to generation are the ways in which we strive to meet our needs.

According to RAB Instant Background Report, marketing to boomers means that marketers need to have an understanding of the stage of the customer4. Being in the same age group dos not mean that the stage that people are is the same. New marketing opportunities arose when Baby boomers are approached from the stage perspective. For instance, the GRAND magazine is a magazine that addresses people’s stage in life rather than age. By recognizing the importance of this role, the grandparent role, GRAND and its advertisers, connect with their audience on a much deeper level3.

Stacy and Demetra indicate that the rate at which boomers are ageing is very fast and over 50 & of the households in the U.S are headed by a baby boomer5. A third of Americans today are over 50 years. The most important thing is that this Baby boomer generation controls the bulk of the wealth in the U.S. Households with baby boomer members account for nearly $230 billion in sales of consumer-packaged goods and represent 55% of total consumer packaged goods sales. When the mature market is included, the numbers rise. The mature market controlled 67% of the U.S wealth by 2001. Their investments are overwhelming though they were affected by the 2008 financial recession. More women boomers also control more wealth.

The above statistics prove that the baby boomer market cannot be ignored and marketers must exploit the opportunities. In order to effectively market to boomers, Arlene indicates that the marketer must analyze and understand a few things about the target group6. He needs to know whether they are retired, have children at home, are still active or not and their health and ailments. These factors have determined the success or failure of marketing to baby boomers and the mature generations. If an organization acknowledges that marketing is a whole lot harder than just selling to a “herd” of boomers, the firm will start to position its products more carefully.

The ageing of Boomers means that they progress up the Maslow’s pyramid of needs and their needs become less materialistic and more emotional/spiritual. Therefore, marketing should include the creation of advertisements that connect with them emotionally and logically. Additionally, the psychological and visual differences at different stages must be considered. Stacy and Demetra argue that TV advertisements for the boomers who are over 60 years and the mature generation should be different from those advertisements that target younger boomers. This is because vision is an issue of print media and TV5.

 
 
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Success or failure of marketing to Boomers

The baby boomers are increasingly ageing with many services and needs required. However, many companies do not recognize the need for services to this generation of customers. According to Susan, many companies are ignorant and the price of their ignorance will be significant1. Organizations have failed to recognize the needs of the baby boomers. The baby boomer market comprises of over 100 million customers and they are growing at a rapid rate. This means that their future demand for services will be very high. Despite the opportunities for service provision for the baby boomers, very few organizations have realized this. Due to this, Stacy and Demetra argue that there is a service crisis in the United States, and many companies do not know it. Firms that have not realized this need have failed to succeed in providing services to boomers because they provide services that are insensitive to the needs of the ageing baby boomers’ population5.

Aging customers are smarter than companies think they are, and they are willing to take their money elsewhere unless services and products are improved. The successful companies that have served the aging customers have realized the secret of good customer relationship management and recognition of the changing needs of their clients. Companies that do succeed in good customer care relationship rarely succeed in delivering outstanding service to this group of customers. Though there are many organizations that serve the baby boomer market, many have failed due to the following reasons:

  • Many managers of organizations do not understand the looming service crisis in the baby boomer market.
  • Management is aware of the surface problems but do not understand the seriousness of the deep and abiding reasons that drive customers away
  • The information that companies look at is misleading or incomplete; they do not think the service problem is as serious as it is
  • Research findings tell us that, in general, employees have negative attitudes toward the senior adult or "Myth-interpret" their actions, values, needs or behavior
  • Most companies take a programmatic or tactical, rather than a strategic approach to product, service and communications development and management5-6.

Due to these mistakes, only companies that have rectified have succeeded in serving the baby boomers. However, they are very few and as the aging of the baby boomers increases rapidly, the future has business opportunities. Therefore, marketing strategies should change with the aging population. Another additional reason for the failure of firm is the confusion between age and stage. It is important that firms determine the stage of the customers so that right services can be provided based on stage rather than age1.

Research design and methodology

Methods are the various techniques and approaches that a research can use. A research can use methods such as quantitative of qualitative approaches methods it can also take a subjective r objective approach. A quantitative research is a research that employs statistical and mathematical tools in collection and analyzing of data. This method is commonly applied in natural sciences and it is applied in limited studies in social sciences. On the other hand, a qualitative study uses qualitative tools for collecting and analyzing data.  This method is mainly used in social sciences8.

A research can also take the form of a deductive or an inductive approach to the research phenomena. More over surveys, experiments and case studies can also be used in a research. This study will use quantitative methods in data collection and analysis. A survey together with a case study will also be used7. The study will use three case studies in U.S, Canada and Europe to examine the marketing strategies and effectiveness in the boomer market. The sources of data will mainly be primary sources. Both published and unpublished works in the archives of the organization of study will be used to generate the findings8. The paper reviews current knowledge of the brand characteristics of the baby boom generation and their consumption patterns compared to traditional seniors.

Summary of Findings

Marketing to baby boomers as they rapidly age may prove difficulty especially if the management and employees do not recognize the rapidly changing needs of the baby boomers. This study will examine marketing opportunities and strategies that firms should use for the baby boomer market. The baby boomers, although now in their 40s to 60s, are perceived by marketers as a generational brand which is different from the objectively defined seniors market which, based on seniors membership organizations, starts at age 503-5.

This implies that given the changing consumption patterns of baby boomers when compared with prior generational cohorts at the same age, brands need to reflect this generation's perceptions of itself to appeal the 50 plus market. Due to this, many markets find it difficult to sell their products while leading to the failure of an organization to perform well in the market segment. However, there are other firms that have excelled in the industry because they determined the right stage of human development (and not age) and the they provided the services diligently while conducting successful customer relationship management practices.

Because of the world wide phenomenon of the ageing of the population, the 50 plus market is the fastest growing and wealthiest market in developed countries. A better understanding of the influence of generational cohorts as opposed to age as a segmentation and positioning variable will result in more effective targeting of this cohort. Therefore, a change of strategy should enable an organization to market its products better to baby boomers and improve its performance. 

   

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