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Friday, 5 February 2010

They’re loud and they’re proud – And they have cash to burn

Some years ago I was closely involved in managing the annual Australia SCAN survey and before that the Australian Social Monitor. These both paid close attention to the differences in values, attitudes, and behaviour between the cohorts of mature Australians, Baby Boomers and various post-boomer segments. I was also involved in the less frequent Youth Monitor and Youth Scan surveys.

One result was frequent invitations to address marketing conferences run by commercial conference companies. Every year I spoke about Baby Boomers at least two or three times, and whenever the Youth survey was held, would be invited to address seminars on marketing to the younger cohorts.

Perhaps once a year I would be invited to address a seminar on the Mature Market.
A point I made to every seminar was the demographic projections about the rapid increase in the numbers of people aged 55+, and the relative lack of growth or even contraction that was predicted for the younger age groups. I also mentioned the high spending power of the Mature Market.

This was of course very well received by the small audiences at the Mature Market seminars (usually under 30), and shrugged off by most of the very large audiences (often 200-300) at the Baby Boomer and Youth market events.

It was obvious that there was a much larger investment in marketing to younger groups than to those aged 55+. Yet the spending power of those aged under 18 is much less than the considerably more numerous and rapidly increasing population aged 55+; while younger people might spend a much larger proportion of their incomes, they simply do not have anything like the accumulated financial resources of Mature consumers.

As I looked around the sessions, one possible cause of this lack of interest was clearly evident: the age of the audiences. Product and brand managers tended to be under 35, with many in their 20s. While teenagers and even children aspire to be like those somewhat older than themselves, I suspect my audiences often identified with those younger than themselves – unless they were at the Mature Market seminars. Marketing to younger groups was seen as fast moving, exciting, and needing continual effort to stay in touch with a rapidly changing target. The 55+ market was seen as not dynamic, was not thought to spend much, and to not spend in many of the categories that attracted major marketing budgets, such as confectionery or luxury goods. All of this is arguably quite wrong.

The demographic tidal wave is now washing through the upper end of the population, with Baby Boomers becoming activist, vocal retirees and pre-retirees. Those in the 55-65 age range have increasing spending power and everyone who has looked at the life styles of Baby Boomers is convinced they will not go quietly into their mature years. Whilst it is not uniformly true that the older age ranges are all “loud and proud” this will become more true as Baby Boomers age into the mature range – and the total segment is growing fast, has money to spend, and is still being ignored by many marketers. I would urge marketers to pay attention to the realities of this expanding, asset rich and often cash rich market that will be growing much faster than any other age segment in the next ten years. Or are marketers themselves still from the younger end of the population that just does not “get it”, and has little empathy for, or interest in, what might appeal in this population segment?

And that raises an issue for market researchers: do we wait to be asked to do research about the rapidly growing and financially powerful market segments aged 55+, or should we be trumpeting the message to marketers that they neglect these markets (and those 55+ are many segments, not all the same) at peril to their profits and shareholder returns?

Dr Don Porritt

Senior Research Director

posted by Tom Mitchell-Taverner

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