The Segment of Media and Central Costs - Essay Example

Executive Summary

In the marketplace, marketers often focus on the different needs that resonates with the various consumers groups. However, over the years, marketers have overlooked consumer cohorts such as the baby boomers as they have been considered reluctant in terms of spending their discretionary income. As such, their focus has been on the generation X, Y and Z who are considered to embrace free agency and have a tendency of exploiting new experiences. As such, marketers tend to perceive them as a potential customer segment due to their willingness to spend on different products and services. Conversely, while the younger demographics spend more in the marketplace compared to their older demographic who may only spend on important items, studies shows that the older demographic have substantial disposable income. On this note, in order for marketers to tap on the market potential of the baby boomers, it is important that they understand their changing needs as consumers. For instance, a Company such as Saga has observed the consumer behaviour of its over 50s customers and acknowledges the need to adjust in order to reach out to more customers in the older demographic.

Introduction

In a Company such as Saga that is based in the UK, their focus in the marketplace is mainly to provide products and services that target customers aged 50 and above. In essence, there are four segments associated with the Company, and they include, Healthcare Services, Financial Services, Media and Central Costs, and Travel. The Healthcare Services segment as embraced by the Company encompasses the provision of domiciliary care services, and other important care services for customers aged 50 and above. Further, the Financial Services segment involves the provision of general insurance and various financial services products. On the same note, the Company has established its own general insurer that is involved in underwriting certain insurance policies such as the Saga-branded Motor Insurance and Home Insurance policies. With regard to the Company’s Travel segment, its operation focuses on the provision of services such as package tours and cruise holiday products. The segment of Media and Central Costs is focused on providing the target customers with a monthly subscription to various products and services (Saga, 2016).

Conversely, as noted by Saga CMO Matt Atkinson, Fifty appears to be the new 40, which is the stage where life begins and subsequently the increased demand for various products and services from this particular age group. A common trend in the marketplace over the past decade has involved marketers’ obsession with the millennials, and as a result, have overlooked the changing needs of the baby boomers. In Britain alone, the population of the baby boomers is estimated at 25million, which is a third of Britain’s population. While they only hold about 48% of consumer spending, their wealth is substantial when compared to other consumer segments such as the millennials. On the contrary, instead of the marketers focusing their attention on understanding the changing needs of the baby boomers, their interest on the younger audience has been influenced by the perception that they are active consumers compared to the older demographic. On this note, with the market potential of the fifty and above, the focus of marketers should turn to understanding the changing needs of this demographic and providing products and services that resonates with such changing needs (Rogers, 2016).

Consumer groups and their different needs or behaviour

There are various consumer groups that marketers tend to target in the marketplace, and may include, for instance, categorisation into segments such as young and old demographics. In marketing circles, demographics is considered to have a significant influence on consumers buying behaviour. As noted by Jeddi et al. (2013), generations are not alike, and this often inform the decision to not treat them in a similar manner. When marketers considers the different characteristics and behaviours of the targeted generations, they are better placed to establish relationships and gain their trust in an attempt to succeed in their intended business venture. Due to the changing needs of consumers in the marketplace, there is need for businesses to embrace a multi-generational marketing. Such a strategy would play a role in ensuring that businesses can target both baby boomers and the millennial consumers (Valkeneers & Vanhoomissen, 2012).

In essence, the various generations that have often played a role in influencing marketers’ decision include, for instance, the baby boomers, and the generation X, Y and Z. The baby boomer generation in this context, are consumers aged 50 years and above regardless of ethnicity or race (Parment, 2013). In essence, the last of the baby boomers in the marketplace turned 50 in 2014. In the recent past, there has been a concerted effort by marketers to reach out to the baby boomer consumers who are considered to have a high disposable income. In addition, they tend to focus their attention on family responsibilities, they are techno savvy, and some of their key goals include maintaining their health and wellness. When it comes to consumer behaviour, the baby boomers have been observed to be prone to quick fixes and tend to focus their attention on superior products and good value. This consumer segment also appreciate things that seem to be relevant and appropriate to their life stage, but not age (Parment, 2013). As a result, marketers tend to focus on messages that depicts them as taking charge of their own destiny. Some of the important products and services associated with this consumer segment include, for instance, health clubs, cosmetics and health foods (Court, Farrell & Forsyth, 2007).

On the other hand, the generation X refers to consumers born between 1965 and 1977, and are considered to have reached adulthood stage at a period when there was economic meltdown. A significant percentage of this customer segment are self-employed and tend to embrace free agency compared to company loyalty. In addition, this group has also embraced multiculturalism especially with the advent of globalisation. While the generation X consumers have many needs, they are often hampered by financial constraints. On this note, marketers can play an important role in helping them to plan for the future. Further, the generation X are a key customer segment for products such as cars and children’s items. They also regard technology as an important component of their lives (Gurdu, 2013). With regard to the generation Y consumers, they were born between 1977 and 1994. This consumer group has been brought up in a rapidly changing environment, and the behaviours they exhibit include self-reliance and the need for autonomy. Further, the generation Y are also viewed as big spenders; a tendency that has attracted a significant percentage of marketers to this consumer segment. In essence, a common tendency with the generation Y is that they are often drawn to try new experiences (Parment, 2013).

The generation Z, on their part, are those born after 1994 onwards. This consumer segment are accustomed to multiple information and they tend to appreciate authenticity and “realness”. Marketers today are increasingly targeting the generation Z consumers because they prefer to make purchases themselves and mainly driven, for instance, by instant gratification, a desire for success and liberal social beliefs. The products and services they are attracted to include fashion, cosmetics and video games. Globally, businesses are increasingly focusing their attention on multi-generational consumers as a way of ensuring they understand the needs of such diverse buyers. For instance, each generation tend to exhibit unique expectations and demographics that play a role in influencing their purchasing decisions. Multigenerational marketing tends to appeal, for instance, to the unique needs of individuals in the different generational groups. On this note, it is important for marketers to adapt to the trend of multigenerational marketing by adjusting their marketing strategies (Jagami, Jain & Vatsa, 2014).

The baby boomers described in the article by Rogers (2016) are not different from other consumer groups in terms of their needs and behaviours because they are also embracing changes in the marketplace. Similar to other consumer groups, the baby boomers today are more adventurous and are increasingly focusing their attention on trying new experiences. In essence, they are looking for products and services that resonates with their changing needs. In a similar manner, the generation X, Y and Z are not monotonous and are rapidly embracing changes in the marketplace that has been enhanced by technological advancement. Similar to the young demographics, the baby boomers in the modern marketplace are techno-savvy and thus have access to multiple information regarding products and services available in the marketplace, and which, can suit their changing needs (Coleman, Hladikova & Savelyeva, 2006).

Initially, marketers targeted the older demographics with products and services that appeared to meet their immediate needs. Such products or services included, for instance, insurance and medical cover, home care services and financial services. While these services are still necessary for the over 50 who are preparing for retirement, their needs have also changed significantly over the years. For instance, the older demographics want to feel young, and as a result, it is important for marketers to adjust according to the changing needs of their over 50s customers. This is because, they exhibit similar interest to other consumer groups whose buying decision is driven by the desire to try new things rather than remaining static to the same products or services (Beauchamp & Barnes, 2015).

The concept of retirement investment no longer resonates with the older demographics, similar to the younger demographics they are more interested improving their life experiences, and as such, are willing to spend more on products and services that can provide them, for instance, self-gratification. The younger demographics are known to be big spenders in the marketplace, and this is the reason why most marketers tend to target the generation X, Y and Z, while overlooking the over 50s who are increasingly adopting a similar lifestyle to their younger counterparts in the marketplace. For instance, they are attracted to fashion, social networking and also tours and cruise. As such, the marketers targeting today’s older demographics need to be more innovative in terms of coming up with a product portfolio that resonates with the current needs of today’s over 50s who are increasingly shifting to new needs and expectations not similar to the monotony of products and services that often target the older demographics in the marketplace (Coleman et al., 2006).

Baby boomers are not a homogenous segment

The baby boomers are not a homogenous segment because they are likely to exhibit different needs and interests in the marketplace. While the younger baby boomers are increasingly interested in trying new experiences, the 65s and over are more focused on preparing for retirement. As such, while they might hold a substantial disposable income, they are less likely to spend significant amounts in the marketplace compared to the younger baby boomers who are showing a demanding attitude and willing to spend on product and services that can provide them with some level of self-gratification (Reisenwitz & Iyer, 2007). The younger baby boomers have come out strongly in terms of redefining their lifestyle, and are increasingly focused on feeling young rather than being seen as senior citizens. As such, when targeting the baby boomers segment, it is important to consider the age factors since those in their early 50s to mid-50s are more likely to exhibit similar characteristics and behaviours that are common with other consumer groups such as the younger demographics. For instance, they are more adventurous, healthier and have money to spend on new products and services that can improve their life experiences (Loroz & Helgeson, 2013).

Conversely, the older baby boomers are likely to stick with the concept of retirement investment where their attention is focused on products and services that can make their retirement more sustainable. For instance, they will focus on products that are likely to improve their health and wellness compared to the younger baby boomers who are increasingly showing the tendencies of free agents as evident on how they are trying new products and services. For example, younger baby boomers are embracing the new media and their changing needs are largely influenced by the information they derived from the digital media. On the other hand, the older baby boomers (65s and above) depends largely on the traditional media to make buying decisions. The older baby boomers are not likely to be active consumers as compared to the younger baby boomers who still want to feel young and are against the concept of retirement due to old age (Reisenwitz & Iyer, 2007).

On another note, instead of spending, the older baby boomers are more likely to save compared to the younger baby boomers who are likely to adopt a lifestyle that makes them feel young and productive in the society. On the other hand, of the spectrum, while baby bomber are often depicted as a monolithic group of consumers who almost exhibit similar behaviour, recent studies shows that their spending patterns vary significantly. However, while the older baby boomers are inclined to spend more on important items that they need, their younger counterparts in the same cohort seem to look for new experiences by spending, for instance, on leisure activities, consumer electronics and travel (Reisenwitz & Iyer, 2007).

Group and age effects

In this context, group denotes a collection of consumers with similar needs and interest. In most instances, the group that individuals associate with tends to inform their attitude and behaviour. In essence, groups are often associated with normative systems and members are influenced by the established system. How the individuals in a group act is intended to meet the group’s normative system expectation. The reward in this regard, is often an increased group acceptance. As noted by consumer researchers, individuals tend to be largely influenced by the people around them, and especially in their consumption activities (Goyat, 2011).

Further, the social influence that is exerted by the people an individual interacts with in the marketplace has an impact on the attitude or behaviour the individual may adopt as a consumer. For instance, the clothing choices of teenagers in the marketplace is influenced by the current trend or the acceptable brand rather than the cost (Goyat, 2011).With regard to age effects, buying decisions in the marketplace is largely influenced by age of the prospective consumers. For instance, the younger demographics are likely to exhibit free agency in the marketplace compared to the older demographic who are likely to settle for company loyalty. In essence, it is often difficult to disentangle groups or age effects due to an emphasis on a normative system that influence their chosen consumer behaviour (Cleveland, Papadopoulos & Laroche, 2011).

The appropriate market communications messages and channels to increase Saga’s active customers

As a Company, the research that Saga should undertake in order to identify the most appropriate marketing communication messages and channels to capitalise on its large database of consumers aged 50 and above is consumer survey. Through carrying out consumer survey particularly in consumer cohorts such as the baby boomers, Saga will be in a better position to understand the different needs of its existing and potential customers (Greig, 2003). The small number of active customers compared to the firms large database of contactable people could be as a result of a lack of understanding the changing needs of the over 50s consumers. As such, through consumer survey, the Company will be in a better position to develop a marketing communication messages and use channels that appeals to the different needs of the over 50s customers. In essence, through a focus on consumer survey, Saga can obtain customer feedback regarding positive and negative perception of its products and services in the marketplace. In turn, the Company can use such information to transform itself as a way to appeal to more customers in the marketplace (Greig, 2003).

On the other hand of the spectrum, Ritson (2016) reiterates the importance of generating both qualitative and quantative data in helping the marketers understand a particular brand from the consumers’ point of view. Further, rather than focusing on multiple concepts to reach the target customers, Ritson (2016) suggests the need to focus on one concept that can provide a differentiation strategy in terms of a brand resonating with the needs of the target customers. With the competition in the marketplace becoming stiffer, a company such as Saga when selecting a consulting firm to help with efforts to improve communication market messages and channels that can increase the number of active customers in its database, there is need for Saga to focus attention on understanding the changing needs, interests or perception of the target customers rather than the monotonous brand marketing that most often overlook the vital contribution of qualitative and quantitative data to ensure a company such as Saga remain relevant the market segment for the over 50s customers (Ritson, 2016).

Conclusion

In the contemporary marketplace, the needs of consumers tend to change on a constant basis, and this requires the marketers to adjust to such changes to remain relevant in a competitive marketplace. The similar case is evident in today’s over 50s consumers who are increasingly not interested on the concept of retirement investment and are shifting to new behaviours and attitudes as consumers in the marketplace. In this regard, firms such as Saga needs to understand the changing needs of the over 50s consumers as a way of increasing their customer base by providing products and services that resonates with the changing needs of this consumer segment.