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CONSUMER BEHAVIOUR

AGE IN CONSUMPTION

Dr L. Spiteri Cornish

Last Lecture we discussed:

  • That it’s important for marketers to recognize that products can satisfy a range of consumer needs.
  • That the way we evaluate and choose a product depends upon our degree of involvement with the product, the marketing message, and/or the purchase situation.

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After this lecture, you should understand that

  • There are 6 main age segments for marketers
  • People of about the same age have many things in common.
  • Tweens is a recent age cohort but one that is become more and more powerful.
  • Baby boomers continue to be the most powerful age segment economically.
  • Seniors will increase in importance as a market segment.

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Age exerts a significant influence on identity

Consumers undergo predictable changes in their values, lifestyles, and consumption patterns as they move through their life cycle

Possessions let consumers identify with others of a certain age/life stage

Marketers need to know how to communicate with members of an age group in their own language.

Solomon, M., Bamossy, G., Askegaard, S & Hogg, K. (2013) Consumer behaviour: a European perspective, Pearson: London.

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You have probably heard these terms before. Marketers and other researchers divide the population into groups depending on the year they were born. There are many differences between these age subcultures, which will be explored in the following slides.

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  • Roughly 65 years and older
  • Traditionally neglected by marketers
  • Large proportion of population: Growing segment due to better medical care, declining birthrate and the aging of the large baby boomer segment
  • More affluent than previous seniors
  • Perceived age more important than actual age (Chronological vs cognitive age)
  • Fastest growing group of Internet users
  • Three segments by age
  • The Young-Old (65-74)
  • The Old (75-84)
  • The Old-Old (85 and older)

Coates, Julie. Generational learning styles. River Falls, WI: Lern books, 2007.

The older consumer is an important and growing segment. People are living longer and are healthier and more active at an older age. Many people tend to clump seniors together when, in fact, there are several segments within this group. The young-old tend to travel and purchase at a very high rate.

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Vuori, S., & Holmlund-Rytkönen, M. (2015). 55+ people as internet users. Marketing Intelligence & Planning, 23(1), 58-76.

Older consumers are very active online and are more connected than you might think at first. This graph shows the most common reasons that seniors use the internet and the online activities in which they engage.

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  • Women outnumber men
  • Tend to be brand loyal
  • Lower information processing skills (Impaired senses); Simpler, more schematic processing
  • Truth effect (trusting)
  • Shop at discount stores
  • Fairly resistant to the adoption of new products
  • Hate queuing

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  • Most older people lead more active, multidimensional lives than we assume

https:// www.youtube.com/watch?v=dQmaC_dMGVg

  • Older consumers are finished with many financial obligations

Most own their own homes

Child-rearing costs are over

  • “We’re Spending Our Children’s Inheritance”
  • Sector important for health and medical products in store
  • Interest in home and leisure based products
  • Grandparent consumers

Lu, Y., & Seock, Y. K. (2008). The influence of grey consumers' service quality perception on satisfaction and store loyalty behavior. International Journal of Retail & Distribution Management, 36(11), 901-918.

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  • Ads with positive older role models
  • Traditional brands – nostalgia.
  • Favour informative ad messages over imagery
  • Simple messages - bigger, louder and slower
  • Avid readers of media
  • Store designs to make life easier
  • Respond to discounts
  • Mobility, parking and transport important.
  • Offer higher level of service

Mumel, D., & Prodnik, J. (2005). Grey consumers are all the same, they even dress the same-myth or reality?. Journal of Fashion Marketing and Management: An International Journal, 9(4), 434-449.

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  • Born between 1946 – 1964
  • More than 40 percent of the adult population
  • Motivated consumers
  • Not anxious to retire and handle it as:

Opportunity for a new start

A continuation of preretirement life

Unwelcome disruption

Transition to old age

The baby boomers have a lot of purchasing power due to their size and their propensity to purchase for themselves, others, and their homes. They are mixed on their views of retirement and will therefore purchase in different ways during these golden years.

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  • Very idealistic - banned together and walked through life with their fists held high
  • Generation gap occurred between them and their parents
  • Captured phrases like “why be normal” and “question authority”
  • They weren’t friendly toward authority figures
  • Did not get along with their parents and swore they would not raise their kids like they were raised

Coates, Julie. Generational learning styles. River Falls, WI: Lern books, 2007.

  • Influential segment because of size and buying power
  • Value individualism and freedom
  • Peak earning years. Planning to work till they’re 70!
  • Lived through political, social and fashion changes
  • Trying to stay young and healthy
  • More educated/open-minded/diverse than previous generations.
  • Sceptical of authority
  • Self-obsessed
  • Interested in time-saving convenience

Parment, Anders. "Generation Y vs. Baby Boomers: Shopping behavior, buyer involvement and implications for retailing." Journal of retailing and consumer services 20.2 (2013): 189-199.

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  • Heavy consumers of financial services
  • Like retro products and nostalgia
  • Delayed leaving school, getting married, buying a home, child rearing, middle-age, retirement! Growing Up!
  • Concern about safety for the family
  • Ageing population
  • Youth preservation products popular
  • Playful and nostalgic ad messages
  • Use of selective media
  • Baby Boomers will spend and keep spending!

Parment, A. (2013). Generation Y vs. baby boomers: Shopping behavior, buyer involvement and implications for retailing. Journal of Retailing and Consumer Services, 20(2), 189-199.

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  • Target for cars, housing, travel, entertainment, recreation equipment, motor homes
  • Heavy consumers of financial services
  • Gourmet fast food
  • Comfortable clothing
  • Anti-aging products
  • Power in Numbers.
  • They created a revolution in style, politics, and consumer attitudes.
  • Consumers aged 45 to 54 spend the most of any age on food, apparel, and retirement programs
  • one of the most affluent sections of the population, controlling over $7 trillion in wealth

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Reisenwitz, T. , and Rajesh I. . "A comparison of younger and older baby boomers: investigating the viability of cohort segmentation." Journal of Consumer Marketing 24.4 (2007): 202-213.

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Born 1965–1982

A Lost Generation… A Nomadic Generation…

Half the Size of the Baby Boomers

Core Values

Dedication

Hard Work

Conformity

Law and Order

Patience

Delayed reward

Duty before pleasure

Adherence to rules

Honor

Schiffman, L. G. and Wisenblit, J. (2014) Consumer Behaviour. Prentice Hall: London

Divorce reached an all-time high

Single-parent families became the norm

Latch-key kids were a major issue of the time

Children not as valued – looked at as a hardship

Families spread out (miles apart)

Family size = 1.7 children (many only-children)

Perception of the world as “unsafe”

Average 10 year old spent 14 ½ minutes a day with a significant adult role model

Mitchell, M. ; McLean, P. and Turner, G. (2005): Understanding Generation X... Boom or Bust Introduction. Business Forum 27.1, pp. 26-30.

This is the conscientious, extremely pragmatic, self-sufficient generation that has a ruthless focus on the bottom-line.

Born and raised at a time when children were at the bottom of our social priorities, Gen Xers learned that they could only count on one thing - themselves. As a result, they are very "me" oriented.

They are not active voters, nor are they deeply involved in politics in general.

Are hands-on – like to get physically involved

  • Desire stable families, save portion of income, and view home as expression of individuality.
  • Less materialistic
  • Full of angst (like hard rock, rap, tattoos)
  • Entrepreneurial
  • Delayed marriage

Mitchell, M. ; McLean, P. and Turner, G. (2005): Understanding Generation X... Boom or Bust Introduction. Business Forum 27.1, pp. 26-30.

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  • High spending power
  • Important segment for many products (e.g. fast food, clothing, jeans, trainers, music)
  • Born and bred on TV - cynical
  • Respond to marketing that reflects own values and attitudes
  • Cult TV shows (The A-team, Star Trek)
  • Communication via Internet promotion sites

Williams, Kaylene C., and Robert A. Page. "Marketing to the generations." Journal of Behavioral Studies in Business 3 (1).

Călin Gurău, (2012) "A life‐stage analysis of consumer loyalty profile: comparing Generation X and Millennial consumers", Journal of Consumer Marketing, Vol. 29 Iss: 2, pp.103 - 113

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Generation Y

Echo Boom

Net Generation

Millennials

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Much is expected of the children born between 1982 and 1998, a cohort variously called :

  • “Millennial” - children of the new “millennium”
  • Generation Y - follow Gen X
  • Net Generation - internet, cell phones, computers, infinitely comfortable with technology
  • The Echo Boom - “population momentum”

Howe, Neil and William Strauss. 2000. Millennials Rising: The Next Great Generation.

Vintage Books: New York

Lancaster, Lynne C. and David Stillman. 2002. When Generations Collide. HarperCollins Publishers, Inc.: New York.

O’Briant, Don. 2003. “Millennials: The Next Generation.” The Atlanta Journal Constitution. (September).

Paul, Pamela. 2001. “Getting Inside Gen Y.” American Demographics. Vol. 23 Issue 9, pp. 42-50.

Tapscott, Don. 1998. Growing Up Digital: The Rise of the Net Generation. McGraw- Hill: New York.

Zemke, Ron, Claire Raines and Bob Filipczak. 2000. Generations at Work: Managing the Clash of Veterans, Boomers, Xers, and Nexters in Your Workplace. AMA Publications: Broadway, New York.

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  • The term Millennials is usually considered to apply to individuals who reached adulthood around the turn of the 21st century. Neil Howe and William Strauss, authors of the book “Generations: The History of America's Future, 1584 to 2069” (1991) are credited with coining the term.
  • The precise delineation varies from one source to another:
  • Howe and Strauss define the Millennial cohort as consisting of those born between 1982 and 2004.
  • According to Iconoclast, a consumer research firm, the first Millennials were born in 1978.
  • Newsweek magazine reported that the Millennial generation was born between 1977 and 1994.
  • In separate articles, the New York Times pegged the Millennials at 1976-1990 and 1978-1998.
  • A Time magazine article placed the Millennials at 1980-2000.

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  • 1 in 5 has at least one parent who is an immigrant
  • Most diverse generation ever
  • Have the best educated mothers in history
  • Have better educated parents
  • Came out of the infertility era – were very wanted as children
  • Born to older parents and raised in smaller families (lots of only children) – many have never shared a room
  • Many raised by single parent and/or working mother
  • Value fitting in/teamwork
  • Are as interested in where they live as what they do – so cities are working to attract them
  • Boomerang kids?
  • Expect what they pay for
  • Everyone should be concerned that they are satisfied and happy
  • If they are not happy with your answer, they will go over your head
  • Expect companies to bend over backwards to please them
  • Multitaskers with mobile phones, music downloads, IM on Internet: Been plugged in since they were babies; Have had mobile phones since they were children
  • Expect technology to be free
  • Most of many billion dollars that millennials spend go toward “feel good” products
  • Are much less brand loyal
  • Think it is cool to be smart

Hewlett, S. A., Sherbin, L., & Sumberg, K. (2009). How Gen Y and boomers will reshape your agenda. Harv Bus Rev, 87(7-8), 71-6.

Jackson, V., et al. (2011). Mall attributes and shopping value: Differences by gender and generational cohort. Journal of Retailing and Consumer Services, 18(1), 1-9.

Lazarevic, V., (2012). Encouraging brand loyalty in fickle generation Y consumers. Young Consumers, 13(1), 45-

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Millennials are becoming parents — and it's creating shockwaves in the retail, restaurant, automotive, and home-buying industries.

The 18- to 35-year-old generation is notorious for renting homes instead of buying, spending on experiences over apparel, and dining at restaurants instead of at home.

But now – more than 80% of the generation will become parents in the next decade, according to a study by marketing platform Crowdtap.

Millennials currently spend $170 billion a year and are projected to spend $200 billion annually starting in 2017 and $10 trillion in their lifetimes, according to a study by Exponential.

(Business Insider, 2016: https://flipboard.com/@flipboard/flip.it%2F_ThQfr-everything-you-know-about-millennial-sp/f-04fd95c24e%2Fbusinessinsider.com

http://www.inc.com/justin-bariso/why-everything-you-know-about-millennials-is-about-to-change-infographic.html

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In 2016, the Department for Work and Pensions (DWP)’s surveyed more than 20,000 households in the UK. It found that:

  • Britain's vote to leave the European Union will leave economic uncertainty and reduced opportunities for young people.
  • While incomes rose by 2% since 2008, most of the wealth went to the older generation.
  • The income disparity between age brackets means that Millennials are suffering- people 22 to 30 years old — income fell by 7%.
  • Millennials have stagnant wages and higher living costs, they are also struggling to get into the jobs markets, despite record low unemployment,.
  • Millennials and those aged up to 60, do not have subsidies like older people. They are less likely to own a home, have savings, and therefore pour most of their money into rent, transport, utility bills, and food.

http:// uk.businessinsider.com/ifs-income-poverty-report-young-people-versus-old-people-and-brexit-impact-2016-7?r=US&IR=T

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  • “Teenage” first used to describe youth generation in 1950s
  • Youth market often represents rebellion
  • First to grow up with internet, mobile technology and a 500-channel TV universe in their homes

Solomon, M., Bamossy, G., Askegaard, S & Hogg, K. (2013) Consumer behaviour: a European perspective, Pearson: London.

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Four basic conflicts common among all teens:

  • Autonomy versus belonging: break from family but attach to peers
  • Rebellion versus conformity: rebel against social standards but want to be accepted by society
  • Idealism versus pragmatism: view adults as hypocrites and see themselves as sincere
  • Narcissism versus intimacy: obsessed with own needs but want to connect with others

Dotson, M. and Hyatt, E. (2005) "Major influence factors in children's consumer socialization", Journal of Consumer Marketing, 22(1), pp.35 - 42

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  • Relatively newly defined cohort
  • More affluent than ever before
  • Highly influential in household decision making
  • Variety seekers – not very brand loyal
  • Brand perceptions built up now can persist into adulthood.
  • Peer pressure is critical – belonging is essential.
  • Exhibit characteristics of both children and adolescents

Lundby, E. (2011) Consumer research on tweens: putting the pieces together. Young Consumers: Insight and Ideas for Responsible Marketers, 12(4): 326-336

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  • New products and product updates needed fast.
  • Ethics are important – they are children
  • Peer-to-peer marketing more important (viral)
  • 24/7 availability essential
  • Interactive communications more important

Lundby, E. (2011) Consumer research on tweens: putting the pieces together. Young Consumers: Insight and Ideas for Responsible Marketers, 12(4): 326-336

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Is it ethical for marketers of high-priced goods, an iPhone for example, to target tweens?

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There are many consumer groups who feel that their young tweens are too heavily marketed to by clothing, entertainment, and technology firms. Do you agree?

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Is it ethical for marketers to market beauty products to tweens?

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There are many consumer groups who feel that their young tweens are too heavily marketed to by clothing, entertainment, and technology firms. Do you agree?

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