Consumer behavior: yesterday, today, and tomorrow

Business Horizons, May-June, 1991 by Judith Lynne Zaichkowsky

Seniors

Much has been written about the marketing opportunities for the senior segment. Right now approximately 7.3 percent of the population is over 65. By the year 2000, this group will increase by 20 percent, making it the fastest-growing segment of our population. This is one reason why marketers focus on the elderly. However, this group is not all that wealthy or all that healthy. It is estimated that 80 percent of people over 65 have chronic health problems, and 16 percent have severe physical problems. One in five Americans over the age of 85 resides in a nursing home.

The financial burden of caring for these people will be borne by extended families where possible. However, a good portion of these people will be without nearby sons and daughters to attend to them. The state will take on this responsibility in the way of retirement and nursing homes and also specially designated prisons for the elderly. A recent Wall Street Journal article "Godfather of Soul . . ." 1989) reports a geriatric crime wave that appears to be sweeping the nation. The frustrations of poverty and uselessness have contributed to a 50 percent increase during the past four years in the number of inmates over 55. More people are on waiting lists trying to get in than there are prisoners trying to get out. The elderly eat regularly in prison and are medically taken care of. At the South Carolina State Park Correctional Center, a full-time doctor writes an average of 925 prescriptions a month, and 13 nurses are on duty around the clock. The collective responsibility of the society for its poor elderly will be a major concern.

A full one-third of this market can be a delight to the sellers of goods and services, with almost all of this group's income being discretionary. But two-thirds of those over 65 will be below or near the poverty line. Right now the average annual income is $14,000 for those over 65. This is about half the national mean income in the United States. Food and shelter will be the key concern for the majority of the elderly.

The products to serve this market will focus on health and health-care needs. Since a portion of these people will be helped by families and social services, decisions about their personal consumption will he made at times by the buyer of the good rather than the user. Since costs will be shared, decisions will be shared regardless of who consumes the good.

The Baby Boomers

A full one-third of the population is bulging at middle age. In the year 2000 they will be 36 to 54 years old and at the middle of peak earnings. They are important to our view of consumer behavior because they will head 44 percent of all households and still account for a majority of purchasing power. Due to the conflicting structure of the population versus the corporate culture, there will be less moving around among this group, and they will be more stable in their jobs. Hence, their values and attitudes will change dramatically to reflect this stability. The collective decision-making style will be based on their stable environment.