Aging Population - Essay Example

Introduction "All the world's a stage, And all the men and women merely players, They have their exits and their entrances, And one man in his time plays many parts, His acts being seven ages" Shakespeare has beautifully described the life of a man. He further describes it, in terms of ages and names it seven ages of a man's life. These are ages are: an infant, a child, the lover, the soldier, the justice, the old age and finally mental dementia and death. It is the ultimate reality of life that a child that has born has to ultimately enter into the old age. In olden times, it was a common perception that when a person gets old, he remains good for nothing. People start to ignore them, ignore their needs, ignore what they want, ignore the changes that occur in their living style. In short, they were considered as a useless part of the society and were thus isolated. This very idea had and probably has penetrated the business community as well. This fact was quite reflective in the marketing activities and campaigns launched until recently. However, the time is changing now; the old people are getting more prominence in the business society. They are now considered an important segment of the society. Business society is giving more attention the aging population, especially in the industrialized world. Their changing needs and behaviors are tried to be addressed by the marketers in more efficient manner than ever before. This matter is quite encouraging that the need has been realized; however, as a matter of fact, what is really missing is the direction to cater their changing behaviors and needs. Thus this paper is aimed to address the fact that how the old population in the industrialized country does affects the business strategist seeking to respond their changing needs. Outline In formulating this paper, we would start with the fact that who the aged ones are, in current scenario. Later, we would explore the key features of the aging population and what characteristics and features make them different from others After discussing this, our discussion will lead to the point that what are the corresponding marketing challenges faced by the marketers, furthermore, we will evaluate the efforts of the business community done so far to address these challenge. Lastly, we would like to know that what can be done further to address those issues. (Heibing and Cooper 2004) What is 'Old' Universally there is not any agreed upon age for being called the 'old'. However, usually those who have passed a considerable age of their life are now retired or about to retire are considered as old. Though the age for retirement also varies from country to country, however, in general that ranges between fifty to sixty years. Thus any person beyond the age of retirement is considered as old. If we accept this definition and start to look for the generation that is going to be the old or aging population, we find that our recent aging population is baby boomers. Before moving further, it is essential to know who are baby boomers are, since it would help in building this topic further. Those people who are born between 1946 and 1964 in United States are called baby boomers. (Hess and Markson 1991) Though this phenomenon is referred to US population only but the people who were born in the same period in other industrialized countries also share the same features. The baby boomers were born during the economic upsurge in those economies. As a result, they were fortunate to have best possible education, as compared to rest of the world. On account of the fortunate period in which they were, in general, they had a wonderful childhood leading to a promising career and prosperous youth and adult life. Now this generation that has made a lot of money is entering in to the old age. Obviously, the big sum of money that they have gathered in this period has the potential to make them one the greatest market for the marketers of the industrialized world to capture. Aging Population in Various Countries Moving further, we can analyze the significance of aging population in various countries. 2001 Census data shows that the median population was 37.6 years as of May 15, 2001, an all-time high and an increase of 2.3 years since 1996, which StatsCan reports is the biggest census-to-census increase in a century. One-quarter of the Canadian population was aged 45 to 64 in 2001. By 2011 this group should make up one-third of the population. In United States of America, Few marketers could have missed the news stories about the US baby boom generation turning 60 in 2006.' Business Week, Newsweek and Forbes have all pondered how boomers might spend the next phase of their lives. According to the Australian Bureau of Statistics, Australia's population, like that of most developed countries, is ageing as a result of sustained low fertility and increasing life expectancy. This is resulting in proportionally fewer children (less than 15 years of age) in the population. The median age (the age at which half the population is older and half is younger) of the Australian population has increased by 5.8 years over the last two decades, from 31.1 years at 30 June 1986 to 36.9 years at 30 June 2006. According to UK Bureau of Statistics, In mid-2005 the UK was home to 60.2 million people, of which 50.4 million lived in England. The average age was 38.8 years, an increase on 1971 when it was 34.1 years. In mid-2005 approximately one in five people in the UK were aged under 16 and one in six people were aged 65 or over. According to the Commissioner of Census and Statistics, Hong Kong "The population is expected to remain on an aging trend. The proportion of the population aged 65 and over is projected to rise markedly, from 11.7% in 2003 to 27% in 2033, though the rise would be gradual up to around 2015 (when the proportion would reach 14.3%) and would be at a much faster pace thereafter. Meanwhile, the proportion of the population aged lesser than 15 would decrease gradually from 16% in 2003 to 11% by the end of the projection period" The above facts, figure and statistics are aimed to provide a snapshot of the proportion of the aging population in various industrialized nations of the world such as United States of America, United Kingdom, Canada, Australia and Hong Kong etc. These snapshots provide a clear idea the proportion of aging population is significant in these nations and above all, the trend is increasing. Thus, this is the high time for the marketers to take some action and make strategy to capture this 'often ignored' chunk of market. We can attribute this increasing pattern of aging population to several reasons. For example, we can attribute it to the increasing fertility rate or it may be due to advancement in the science and technology, especially that in the discipline of medical sciences that increased the life span of the common man, which ultimately reflected in the increasing median age in specially these developed nations. There is, however, a possibility that these trends may be absent in developing nations, probably a reflections of the fact that these advancements of medical science have not set their foot so firmly in the third world countries. To sum up, keeping our scope limited to the industrialized nations, we must keep into mind that these aging people are the significant part of the population. They have 'changed' needs, which can be capitalized, if addressed properly. (Mowen and Minor 1998) Ageing Population from a Marketing Aspect The most ignored, yet the most important, part in this regard was the analysis of the various consumer behavior features of this market segment. Before moving to any feature, we, as marketers, must appreciate the fact that the stigma attached to the 'old' is disappearing. These old people consider themselves a pride of society. They consider their experience as their biggest asset. They are more active and productive than the previous seniors. To business organizations, they are getting more and more aware of their behavior patterns and thus they are becoming an impressive force in the marketplace. This is a matter of fact that the society is more used to with seeing the older faces. Companies, their marketers and advertisers have realized that a teenager can not sell all the products to all the segments. A teenager may be able to sell a new t-shirt, a concert's ticket, but not the family products, the insurance policies. Suppose, you are in an office and seventeen year guy comes to you ask you to buy the policy. You decline and the guy returns. In a while, an experienced man comes to your office, who is elder than you. He advices you for any particular policy, his advice will have more affect on you as compared to that of the young guy. You know why The age matters. Thus the induction of seniors in marketing research and marketing campaign is now a rapidly growing trend. Until 1979, Nielson did not use to collect the data of the people older than fifty years. There were less than two percent of the commercials where old people were made the spokesperson in the 1970's. However, today, as a response to the changing demographics, as described above, marketing campaign are increasing their focus on older population. The older population has become a target segment too. Now, in numerous advertisements, old people are presented as role model and are shown in a variety of situations and slices of life. If not all, yet many sectors of the economy are already generating a handsome sum of revenue from seniors. The term, 'mature customers', has been coined for seniors. The mature customers are spending three times the national average on the health care products and services. Since they have both, the free time to travel as well as the money to do so, the travel and tourism industries is also at the fore front to serve the mature consumers. (Pizam and Mansfield 1999) For example, according to the research by Moschis, a profound research of mature consumers, the average age of the guests on a cruise is 67. (Swarbrooke and Horner 1999) So far the luxury automobile industry is concerned, here too, mature customers seems to play a significant role. In olden days, when people used to think of their old age, they used to think of a life with all luxuries and no worries. Thanks to provident funds and pension plans, this made all this possible for the mature customers. Thus the majority customers for the luxury automobiles are of the category of 55 years or even older. The same profound researcher of the mature customers, Moschis asserts that "The industry, both in commercials and in showrooms, concentrates its attention on the man," says Moschis. "But studies show that the older the couple, the more likely the woman is to assume responsibility for major financial decisions such as car purchases." The mature customer of today is more educated and sophisticated than the previous ones. "They are in touch with the importance of saving and investing, and they are realistic about the choices the future may hold," says Moschis. "With the advances in medicine, many people are living longer with chronic health conditions, and seniors are sensitive to unexpected costs and the high price of long-term care." Each generation is influenced by its scenarios. The happening around them throughout their lives finally affects their old age. Their old age become a reflection of it. Those who have experienced world wars in their youth or adulthood, they are more likely to have a negative behavior about war and fighting, since they have experienced its disasters. They are expected to have a defensive approach. When we talk about our point of concern, that is the aging population in today's time, we find that our mature customers have been grown up in the time, where knowledge economy was evolving. Technology was as rapid as never before. All this definitely had a profound impact on the mature clients. The hypothesis that they would be, unlike previous generation of old people, more attracted to the technology is based on the fact that primarily, they have seen the technology evolving. They know what life had been without technology and how the life has been benefited through it. Moreover, the new the technology is, the greater user friendliness it possesses. This is not the case with only Canadian or Australian territory rather this is the case with all the industrialized nations. According to Moschis, "Television was unknown to previous generations, but by the time the baby boomers reach age 65, they will have spent a total amount of 11 years in front of the television," Besides television, they can also be a potential market for cyber marketers. It is so, on account of a number of features that this very segment of society possesses. First and fore most is the fact that they are result oriented. Once the cyber marketers convince them about the utility of the mature clients, they will go for it. Secondly, they have ample amount of time to spend on net, as compared to our youth. In fact, seniors who have access to the Internet are twice as likely as younger people to use the technology, according to Moschis. What really needs to be done in this regard is customization. The marketers and business strategists in this industry too, must consider this segment as an important one and develop products, according to their needs. American Association for Retired Persons (AARP) has a very successful Internet site that offers information and resources important to seniors. Once seniors do become involved in Internet technology, they are devoted participants who can commit great amounts of time. (Belk 2002) However, there are several challenges too, with regards to all this. The first and foremost challenge is that of junk or spam mails. With the growth of telemarketing, and collecting the database through 'spying', the mature clients are more suspected to fall prey of it. There is also a major growing concern that is avoiding the old people from the use of internet is the fraudulent activities and scamming over internet. People think that since they are not that much aware of internet and its security measure that much; they can easily be the victim of such cyber crimes. However, these findings are actually not that surprising, says Moschis, given that wisdom comes with age. "Older people don't expose themselves to risk and they have learned defensive strategies over time. Experience is worth a lot and they have learned lessons that protect them from many situations." Seniors will wisdom comes with age. "Older people don't expose themselves to risk and they have learned defensive strategies over time. Experience is worth a lot and they have learned lessons that protect them from many situations." Seniors, being more experienced and aware of the crime tactics, are thus more cautious and thus hardly reveal their information over the net or phone to strangers. They usually prefer the known stores, use referral and buy branded names and not engage in uncertain and risky lives. However, this does not mean that the mature customer will not buy anything over internet. They will. They will buy a book from Amazon but not the same book from any unknown site, even at the half rates, that youths usually do. So what marketing strategists need to do in this regard is to go online. The mature customers are not hesitant to buy over internet; they just need the well-known brand names over net. To sum up, the mature clients are a significant marketing proportion. They may be, in many industries, the greatest sources of revenue. What the business strategists need to do is to customize their products and services according to their needs and behaviors. Challenges After having a clear idea of the features and significance of mature customers, let's explore the challenges that the marketers face accordingly: 1. The first and foremost point of consideration for the marketers is the fact that this rise in aging population is not a temporary one. This demographic and economic change, as mentioned above, is expected to rise further in future. Thus, the business strategist must not consider it something as temporary as fad. Rather, it is expected to be the constant trend. The horizon of marketing is expected to have more senior people in their marketing force so as to attract the mature clients. 2. The perception that age is the predictor of one's consumer behavior has now become a perception only. The trend of defining market segments by age is declining. A consumer's lifestyle features are better predictors of one's consuming pattern. In 2005 Duke University published research showing boomers are the most heterogeneous of all the generations. The idea that the marketing behavior of people, with similar ages, can be distilled into a few simple marketing rules is ridiculous. (Ward and Robertson 1973) 3. If we segment the market on the basis of age, it means that over large part of age spectrum, consumers belonging to the same lifestyle group respond to the marketing stimulus simultaneously. The most recent evidence for this conclusion comes from a research study conducted by OMD, in the US, Australia, France and UK. 4. This very study showed that the behavior of mature consumers vary from nation to nation. Australians become increasingly adventurous and intent on trying new experiences whereas the French become more conservative and less open to new experiences. Companies that mount global marketing campaigns, based on the age of customers, had better think again. (Harris 2003) 5. The common features among all the members of the mature customer segment is that they usually have a higher level of understanding of what is around them and they are more aware of the consequences of certain actions. Therefore marketing strategies should point directly towards the central idea rather than explaining each and every single bit of information. (Czaja 1990) 6. The single factor that unites all types of older people is their propensity to the physiological effects of aging. However, it is a bitter reality and an astonishing fact that, this is the issue ignored by the majority of marketers. The effects of aging on vision, agility, smell, touch, hearing and cognitive skills are well understood. All these changes lay a profound impact on older people's way to work, way to handle various products. The product designs, marketing strategies and marketing channels must take these factors into consideration. (Czaja 1990) 7. Keeping all this in view, it is implied to say that the consideration of the age factor must not only be considered but also 'reflect' through customization, product design and marketing campaigns. (Laudon & Della 1993) 8. To sum up, we can say that, currently, there are three types of responses to the aging population. Some are still planning that what to do, some are trying to approach it as a niche market, while some are far ahead and coming out with more and more products, customized to the needs of the mature clients. So far, the beauty industry is far ahead of others in this regards. Others are also customizing more and more to capture this segment, not only through customization in product design but that in marketing channels and campaigns too. There are only a handful of examples of how the automobile, consumer technology, white goods and the Fast Moving Consumer Goods (FMCG) industries have adapted products to appeal to older consumers. Conclusion and Recommendations To sum up, we can say that the aging population, in all the industrialized nations is not only growing in terms of numbers but also in terms of their spending. They can be a valuable marketing segment. Many industries generate a great proportion of their revenue from it, yet the target to this segment in terms of marketing, in order to cater their changing behaviors is as much as their impact on those industries. What can be done in this regards are as follows: Customization of Product Design Customization of Marketing Campaigns Customization of Marketing Channels Inclusion of Seniors in relevant industries' marketing and product design forces, so as to achieve effective customization Works Cited 1. Belk, R., (2006). Research in Consumer Behavior, Volume 10. Greenwich: JAI Press. 2. Czaja, S., (1990). Human Factors Research Needs for an Aging Population. Washington: National Academy Press. 3. Harris, L., (2003). 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