Baby

Boomers in Australia

Meet the parents

An insightful report on the 50-65-year-old consumer segment within Australia. Researched, and written for Professor Teresa Davis (University of Syd

Jessica Yang Masters of Marketing +61 413 320 520 jess_yang@me.com

MKTG6204

Jessica Yang - SID#311177212

Page 1

TABLE OF CONTENTS

The BBB Baby Boomer Background.03 Introduction..03 Youre only as young as the woman you feel..04 Age Myths....04 Tailored Messaging......05 Fine-Print........05 Healthy You, Healthy Me..........05 Piggy Bank..........06 PS. PESTLE..........06 Employment vs. Retirement..........07 Digital Age..........07 Respect Me.........07 Conclusion So What?.......09 Bibliography........10
MKTG6204 Jessica Yang - SID#311177212 Page 2

The BBB Baby Boomer Background The end of World War II through to the mid-1960s is commonly known as the Baby Boom, and when looking at the forecasted statistics of baby boomers in the next decade or so via the Australian Bureau of Statistics, and cross-referencing with Roy Morgan Asteroid, this segment is soon-to-be a huge consumer power in the developed market economy. Euromonitor (2011) argues that the nation is awaiting a demographic time bomb brought on by the main driver of the near mass retirement of Australias Baby Boom generation. This segment will clearly be a force to be reckoned with; the 2006 census revealed that Baby Boomers represented more than 20% of the Australian population, and an approximately even split between female, and male. (ABS, 2011). This number is only set to increase dramatically as the second cohort of Baby Boomers is yet to mature into retirement. Baby Boomers are unique in that they consume media differently compared with both their older and younger generations. Reisenwitz & Iyer (2007) found that unlike their older generation who prefer the radio, and the younger generations who are glued to the Internet, and Smartphones, Baby Boomers are familiar with both mass marketing, and also witnessed the emergence of the Internet. Introduction This conceptual report looks at the sizeable segment of Baby Boomers in Australia from a consumer researchers point-of-view. It will analyse previously written research papers, industry knowledge, academic journals, and statistics from Australia, as well as the United States, and United Kingdom as they are more mature economic markets on this segment in an attempt to forecast where this segment will be headed in the coming decade. Breaking this report down, we will be touching on both micro and macro environments affecting this segment; delving into key influences on their perceptions, interests, opinions, activities, consumption patterns, and attitudes. MKTG6204 Jessica Yang - SID#311177212 Page 3

Youre only as young as the woman you feel Having lived through a social and cultural revolution, age is only a state of mind. Boomers focus has been and continues to emphasize individuality, self- expression, and instant gratification (The Futures Company, 2006). Industry research (WARC briefing, 2010; Reisenwitz and Iyer, 2007; The Futures Company, 2006) shows that chronological age has nothing to do with the way Baby Boomers perceive themselves. Reisenwitz and Iyer (2007) found baby boomers did not like admitting that they were getting old, thus they generally reject marketing that spells this out for them. Boomers are leaders when it comes to experimentation, believing that people should try anything at least once in their life. This becomes even more relevant as their children leave the nest. They are happy to experiment in the marketplace, and try new and exciting brands out in favour of the comfortable, and familiar ones (The Futures Company, 2006). Delving into further analysis, Reisenwitz and Iyer (2007) found little empirical evidence differentiating attributes between younger (40-49yo) and older (50- 58yo) baby boomers. They outline in their research that the only exception is cognitive age, which should prompt marketers to target psychologically instead of chronological age. The study examined relationships between the two groups based on various behaviours that include internet usage, entertainment preferences; cultural activities, fashion interests; social involvement; volunteering activities; brand loyalty; and cognitive age. Age Myths A result of Boomers feeling younger than their chronological age; there is the widespread illusion that older audiences are more brand loyal to their established choices (White, 2008), the theory was that consumers made their brand choices reasonably young, then stuck with them over time, making marketing to teens and twenty-somethings a priority over the fifty-plus market (WARC, 2010). Instead, the Futures Company found that Boomers will actually continue to seek out the next adventure; redefining the rules at every life stage, and along the way theyll reinvent their sense of family, community, and financing the future. This segment is only human after all; Boomers still express a strong need for excitement, sensation, and novel experiences in fact, the joke about Boomers is that they are likely to die before they get old! (The Futures Company, 2006) As Boomers age, they express no interest in conforming to the rest of society. The quest for expressing ones individuality is a Boomer hallmark and has been adopted (and tweaked) by subsequent generations (The Futures Company, 2006). MKTG6204 Jessica Yang - SID#311177212 Page 4

Tailored Messaging Large demographic segments are often targeted with a one-fits-all generic message. However, WARC reports that Baby Boomers prefer a brand story to an emotional pitch as they have been around the block, and have a justifiable scepticism. Research by the Central Office of Information (COI), a government agency in the UK found that older consumers disliked complex ads that needed decoding (WARC, 2010). The fifty-plus brigade grew up with radio rather than television, and Baby Boomers can find music from their youth very evocative, which some marketers use to great effect (WARC, 2010). The COI identified different types of consumers in this age group based on their attitudes toward key life-stage events, such as retirement, and bereavement. The key 3 segments were: 1. Impervious: still working, untouched by adverse life events, and not prepared to think about ageing; 2. Opportunity-Minded: making the most of life changes; and 3. Survivalists: coping day-to-day with restricted circumstances. (WARC, 2010) Fine-Print There is evidently, an increased need for Boomer-Friendly products and services in the next few years. As people begin to age, deterioration places some physical restraints on our perception (eyesight, hearing, taste) (White, 2008). Euromonitor (2011) reports there will be a high demand for easy-to-open packaging, large-print labelling, and smaller product. Ad recall also tends to decline with age, reaction times lengthen, and attention becomes more spasmodic (White, 2008). Being time-poor will definitely not be a Boomer attribute, as White (2008) also noted that older people, especially retirees had an abundance of time, which meant taking their time in researching product decisions, and actively looking for information on potential purchases. Using product information within marketing messages is a good way to respond to this behaviour, however noting that this segment is sceptical of bold claims (WARC, 2010). Healthy You, Healthy Me Although, most research (WARC, 2010; Reisenwitz and Iyer, 2007; The Futures Company, 2006) argues that seniors are only as old as they feel, society needs to face reality and look at the rising health concerns for the ageing demographic; widening waistlines, fluctuating blood pressure, or calcium deficiencies. There is an amplified trend of Boomers realising that they need to take better care of themselves, whether it be hitting the gym, or cutting back on the fast food. (The MKTG6204 Jessica Yang - SID#311177212 Page 5

Futures Company, 2006). A notable trend being the rise of visiting the Farmers Market for fresh organic produce, not all Boomers have jumped on this healthy bandwagon, but those who have are educated, and relatively affluent, and quite a number who have come to realise the value of good, fresh food and are happy to spend a bit more money in order to get it (LoveToKnow, 2011). However despite health concerns, Boomers have their naughty side like any other demographic, and will increasingly turn to food as a source of indulgence (The Futures Company, 2006). Piggy Bank Most marketing concentrates on younger consumers as they are the ones who are still working, but while retired consumers may have lower incomes than younger workers, their spending power will be boosted by fewer commitments in terms of mortgages, and dependants, unlike their Single Income No Kids (SINK), and Double Income No Kids (DINK) others (Euromonitor, 2011). As Baby Boomers age, they enjoy having more disposable income, and are more than happy to spend their savings. Research shows that they purchase products and services, and are likely to keep pace with changing trends (Reisenwitz & Iyer, 2007). WARCs Official Seniors Briefing argues that people in this age group spend approximately two and a half times as much as younger consumers. The Futures Company (2006) however, argues that although the kids are not living at home, Boomers are still aiding them with financial support, as well as caring for their aging parents coining the term Sandwich generation. A growing number of Boomers report that this is more than they can manage without help. So, it would seem that disposable income is not generic across this demographic segment. PS. PESTLE High disposable income or not, upcoming political, and societal issues for the Baby Boomer group will present itself in the form of rising healthcare costs, failed pension plans, and caring for aging parents, and Boomerang children [children who cohabitate with their parents after a brief period of living on their own] (The Futures Company, 2006). The governments will likely be amenable to the aforementioned issues as the grey vote is increasing by the day. According to Josephine Simsa, a 72-year-old widow from Melbourne, the most hurting is the attitude that it is socially shameful and inferior that she draws the state pension compared with being a self-funded retiree, We worked hard, we paid our taxes, we represented our country in

MKTG6204

Jessica Yang - SID#311177212

Page 6

various ways. I was in my 50s before super became compulsory. (Euromonitor, 2011). In Australia, a more recent example, Tony Abbott promised employers $250-a- fortnight as an incentive to hire workers 50-years and over to overcome ageism in the job market (The Daily Telegraph, 2010). The large cohort of the baby boom, clearly visible in the current population structure, will continue to influence social and economic policy in Australia well into the 21st century. Between 2011 and 2031, baby boomers will make a significant contribution to the numbers of people aged 65 years and over. During this period, the population aged 65 years and over is projected to grow from 3.2 to 5.7 million This has major implications for future policy and planning, particularly in the areas of superannuation and income support, and provision of health and aged care services (ABS, 2004). Employment vs. Retirement The first cohort of Baby Boomers has already reached the age of 65 this year (ABS, 2010). This aging generation presents a dilemma for all developed market economies, including Australia, with a massive drop in experienced employees (Euromonitor, 2011), the nation will see a shortage of employees to keep the economy running at its current pace. Not to mention the majority of this segment will either be relying on the state pension and/or do not have enough saved up. "People need to stop thinking about retiring at 65 Mr de Cure from the Australian Institute for Population Ageing Research has said. "Yes, you may reduce your participation, yes, you may work fewer hours, but I don't think we can afford for people to stop working altogether (The Australian, 2009). Digital Age Internet usage is becoming integrated into Australian pensioners lives. In 2008, the federal government launched The Broadband for Seniors initiative, but this is too little. According to one online poster, Im a senior, and every time I needed to go to the library to use the Internet, there was a line of people One day I waited almost two hours, so I left, went to the bank took money from my retirement account, and bought my own, most seniors dont have that luxury to do that. The up-side to using the Internet is that studies have shown that using the computer and playing electronic games helps keep the brain active and reduces the early onset of Alzheimers disease. (Euromonitor, 2011). Respect Me Boomers activist roots today manifest themselves in a mentality that leads to a stronger degree of pushback when they feel like they are being treated unfairly

MKTG6204

Jessica Yang - SID#311177212

Page 7

in the marketplace. Constantly cynical about businesses motives, Boomers these days are fighting against invasion of space, and privacy (The Futures Company, 2006). MKTG6204 Jessica Yang - SID#311177212 Page 8

Conclusion - So What? In summary, the Baby Boomer segment will gather momentum, and become a force to be reckoned with in the next few years, and whether its more Botox or usurping cars originally targeted to young adults, Boomers will continue to appreciate products, services, and intangibles that reinforce their conviction that age is purely a state of mind (The Futures Company, 2006). As Maslows hierarchy illustrates, Boomers are heading towards the tip of the pyramid; self-indulgence, and lifestyle experimentation remain central to Boomers fulfilment quest. This will call for Marketers to construct tailored products, services, and messages targeting this segment via detailed analysis of their psychological wants, as well as physical needs; avoiding segmentation based on age, instead focusing on health, affluence, travel, hobbies, interests, values, their parents, children, and/or grandchildren as examples. This exposes a significant marketing strategy to tailor communications to baby boomers who feel younger, as these people tend to be opinion leaders within their groups; baby boomers, like most other demographic segments predominantly rely on word-of-mouth recommendations. In terms of affluence, and spending power, Marketers will need to A/B test sample markets in order to truly analyse an effective pricing structure, as there will be Boomers with a high volume of savings to spend, and Boomers with financial challenges that come in the form of relatives needing to be looked after. Most older workers should be postponing, or at least phasing their retirement if possible, so that public expenses are not haemorrhaged during the one specific time period, and it can be smoothed out over time whilst the nation campaigns for migrants to replace those in the workforce that are retiring. "Yes, you may reduce your participation, yes, you may work fewer hours, but I don't think we can afford for people to stop working altogether (The Australian, 2009). Tony Abbott attempted to help the issue along by promising employers $250-a- fortnight as an incentive to hire workers 50-years and over to overcome ageism in the job market (The Daily Telegraph, 2010). Marketers must keep this in mind as it will affect the entire economy, and not just the marketing department. Marketers need to make sure that they are looking after their booming consumers in sincerely communicated marketing as they not only like to feel special, but also are sceptical in the way that you try to win their hearts. Lastly, Marketers will need to keep their eye on Boomers media and marketing consumption in order to deliver their marketing messages effectively. MKTG6204 Jessica Yang - SID#311177212 Page 9

 BIBLIOGRAPHY Australian Social Trends, 2004, Australian Bureau of Statistics, Canberra, viewed 8th March 2011, <http://www.abs.gov.au/ausstats/abs@.nsf/7d12b0f6763c78caca25706 1001cc588/c9c319dd7e17542fca2572e300810a3f!OpenDocument> Australia in 2030: The Future Demographic, 2011, Euromonitor International, viewed 13th March, 2011, http://www.portal.euromonitor.com.ezproxy2.library.usyd.edu.au/Port al/Magazines/GeographiesHeavy.aspx> direct URL is not shown. Consumer Lifestyles Australia, 2011, Euromonitor International, viewed 13th March, 2011, <http://www.portal.euromonitor.com.ezproxy2.library.usyd.edu.au/Port al/DocumentView.aspx> direct URL is not shown. Dunlevy, S. 2010, Coalitions incentive to hire older workers The Daily Telegraph, 4th August, viewed 8th March, 2011, <http://www.dailytelegraph.com.au/election/coalitions-incentive-to- hire-older-workers/story-fn5zm695-1225900829373> Futures Company, The. 2006, Y Report 10 Things You Need to Know About Baby Boomers, Yankelovich MONITOR think tank, United States, viewed 13th March 2011, < http://www.warc.com> direct URL no longer exists as it was a trial login. In Focus: Consumer Market Segmentation of the Future, 2010, Euromonitor International, viewed 13th March, 2011, <http://www.portal.euromonitor.com.ezproxy2.library.usyd.edu.au/Port al/DocumentView.aspx> direct URL is not shown. Jackson, N. Walter, M. and Felmingham, B. 2006, Australian Survey of Retirement Attitudes and Motivations, Australian Research Council, viewed 13th March 2011, <http://www.ozretirementsurvey.com/webapps/site/60545/48909/inf o/info-page.html?info_id=81065> Jackson, N. 2007, Population Ageing in a Nutshell, University of Tasmania, viewed 13th March 2011, < http://eprints.utas.edu.au/3724> Jones, K. 2008, Targeting the Modern SME Audience, B&T, 19th August, viewed 13th March 2011, < http://www.bandt.com.au/news/targeting-the-modern-sme-audience> MKTG6204 Jessica Yang - SID#311177212 Page 10

Newsletter: Age Matters, 2003, Australian Bureau of Statistics, Canberra, viewed 8th March 2011, <http://www.abs.gov.au/ausstats/abs@.nsf/7d12b0f6763c78caca25706 1001cc588/c9c319dd7e17542fca2572e300810a3f!OpenDocument> ONeill, M. 2009, Baby Boomers retirement plans left in limbo, National Seniors Australia, viewed 8th March, 2011, <http://www.productiveageing.com.au/userfiles/file/Media%20Release %20%20National%20Seniors%20%20My%20Generation%20Report.p df> ONeill, M. 2010, Younger workers think older workers stop contributing in their 50s, National Seniors Australia, viewed 8th March, 2011, <http://www.nationalseniors.com.au/page/Membership/Blog/Age_Discr mination> Reisenwitz, T. and Iyer, R. 2007, A comparison of younger and older baby boomers: investigating the viability of cohort segmentation, Journal of Consumer Marketing, vol. 24, no. 4, pp. 202-13. Robinson, N. and Uren, D. 2009, Push to Raise Pension Age Above 67, The Australian, 19th September, viewed 8th March, 2011, < http://www.theaustralian.com.au/news/nation/push-to-raise-pension- age-above-67/story-e6frg6nf-1225776885127> Sinclair, W. 2005, Travels Baby Boom, B&T, 19th December, viewed 13th March 2011, < http://www.bandt.com.au/news/travel8217s-baby-boom> Stroud, D. 2011, Connecting with Older Consumers, Market Leader, United States, viewed 13th March 2011, < http://www.warc.com> direct URL no longer exists as it was a trial login. Veldre, D. 2002, Chasing time-poor consumers, B&T, 1st November, viewed 13th March 2011, < http://www.bandt.com.au/news/chasing-time-poor-consumers> WARC Briefing: Seniors, 2010, WARC Exclusive, United States, viewed 13th March 2011, < http://www.warc.com> direct URL no longer exists as it was a trial login. White, R. 2008, Communicating with Older Audiences, WARC Best Practice, United States, viewed 13th March 2011, < http://www.warc.com> direct URL no longer exists as it was a trial login.

MKTG6204

Jessica Yang - SID#311177212

Page 11