Sorting consumers into age groups seems to make sense because it presumably makes clearer where marketing dollars and effort will yield the best results. This has usually meant much bigger investments in younger markets because many marketers believe that the marketplace value of people 35 and older falls with rising age. After 50, they fade from most marketers’ radar screens altogether. But segmenting consumers by age now makes less sense. Unprecedented changes in marketplace demography make age-based marketing increasingly counterproductive. Slow population growth or actual shrinkage in five-year age groups from 10-14-year-olds to 40-44-year-olds is eroding the traditionally biggest source of growth in consumer demand. The 25-44-age cohort, who spends most per capita on vehicles, housing and housing related products, is shrinking by 4.3 million people in this decade. These conditions are forcing many companies to look beyond their traditional target age groups for growth, but they raise the long-standing marketing dilemma of courting older consumers without turning younger consumers off.
Ageless marketing gets around that problem by invoking values that resonate across generational divides and by tuning marketing, including product design, promotions and customer relations, to psychological stages of life. One Exemplar in Ageless Marketing In the late 1980s, New Balance sneaker maker CEO Jim Davis observed that his company’s younger markets were shrinking – the result of over two decades of births below levels needed to replace the population. But Davis also saw that older populations were just entering a period of explosive growth. So Davis set his sights on people 40 and older that in 1989 became the New Customer Majority, following the principles of ageless marketing.
A new customer majority has emerged. For the first time ever, most adults are 40 or older. This New Customer Majority has radically changed the rules of marketplace engagement because its members see life through a different lens than younger consumers who once determined the rules.
The New Customer Majority is huge! In 2000, it was 45% larger than the 18-39 age group (123 to 85 million), by 2010 it will be 61% larger: 138 to 86 million money-spending consumers. Growth challenge:Expect no sales growth in this decade among 25-44-year olds because they're shrinking by 4.3 million people.
The marketing sweet spot is aging boomers. They will swell the 45-64-year age group by 16 million in this decade. The New Customer Majority, the richest market by far. By 2010, adults 45 and older will outspend younger adults by $1 trillion ($2.6 to $1.6 trillion).
Prime strategy for this decade: Compensate for shrinking young adult markets by using ageless marketing to get more sales from every adult age group – marketing based on values that appeal across generational divides.
Read more and order the book: http://www.agelessmarketing.com/
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3 years ago