Understanding the Older Consumer

The Grey Market

Barrie Gunter

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781134663910
• Edition: 1
• Topic: Psicología
• Subtopic: Historia y teoría en psicología

In Understanding the Older Consumer, Barrie Gunter provides a detailed examination of the demographic, behavioural and psychological profiles of the older consumer. He shows that without the responsibilities of loans and child raising and with better financial provision than in previous years, the over-50s represent a powerful spending force.
In order to reach this group, Barrie Gunter shows how to target advertising and respond to the changes that have occurred. Understanding the Older Consumer provides a wealth of information on older people's lifestyles and leisure, their interest in the mass media, their perceptions of advertising and their shopping.

1 The importance of the older consumer

Changing demographic profiles in modern industrialised countries mean that increasing proportions of their populations will fall into older age bands, above the age of 50. While older people are often stigmatised with negative stereotypes regarding their physical and mental capacities, they represent a segment of the population which has increasing economic significance. For long ignored by marketers, older consumers cannot be dismissed as a politically and socially insignificant homogeneous group with negligible spending power. Instead, traditional concepts of ageing need to be rethought as the over-50s evolve into an increasingly dynamic consumer group.

This book will examine the phenomenon of the ‘grey market’, the segment of the population aged 50 and over and its consumer-related activities. It will adopt a mainly psychological approach to its analysis, although drawing occasionally on sociological and anthropological theory or research in reviewing evidence on older consumers’ lifestyles, leisure and media-related activities and consumption. It will explore what is known about the way this age-band has been represented in the media, and how the image of this demographic group is changing. It will also examine how people over 50 respond to marketing and advertising messages and are influenced by such messages in their consumerism.

THEORIES OF AGEING

Before beginning this review, it may be helpful, in setting the scene, to examine some of the established theories about ageing. These theories reflect different conceptions about what it is to grow old and what might be expected of those who do in terms of the way they conduct themselves and live their lives. Key theories include disengagement theory, activity theory, development theory, continuity theory, exchange theory and labelling theory.

Disengagement theory represents one of the earliest theoretical perspectives which postulated that ageing involves a gradual withdrawal or disengagement of the individual from certain social roles in order to clear the way for other, younger people to come through. Such withdrawal in its ultimate form is regarded as a period of preparation for death. The individual plays fewer social roles and experiences a deterioration in both the quality and quantity of their relationships. Disengagement therefore implies a triple loss for the individual: a loss of roles, a restriction of social contacts and relationships, and a reduced commitment to social mores and values. Central to this theory is the assumption that both the individual and the wider society benefit from the process. Withdrawal for the individual may mean a release from social pressures which stress productivity, competition and continued achievement. For society, the withdrawal of older members provides openings for younger individuals to take over the roles which need to be filled.

There is little sound empirical evidence to support the opinion that the withdrawal of older people from the workforce and other social roles is necessarily and invariably for the good of the social system. Such a step may result in the removal of some of the most knowledgeable and experienced members of society. Some writers have argued that disengagement theory was used to avoid confronting and dealing with issues surrounding ageing and the problems that older people may pose for society (Blau 1973). It forms a justification for social policies which segregate older people and treat them separately from other less advantaged groups (Estes, Swan and Gerard 1982).

In contrast to the notion of disengagement is activity theory, which proposes that successful ageing is to be obtained through preserving, for as long as possible, the attitudes and activities of middle age (Havighurst 1963). While some changes in activities are to be expected with age, whether these occur in a person’s professional life, social life or private life, it is important to remain active in other ways. Maintaining an outlook on life which is distinctly middle-aged rather than old aged, an individual can sustain a higher level of personal morale and general satisfaction with life. The maintenance of social networks can play a key part in achieving this objective. Although this theory reflects an outlook on growing older which can be found increasingly, especially among the more affluent older persons, it does not explain what happens to those who fail to sustain a middle-aged outlook.

Holding on to an earlier life stage for as long as possible may be one strategy for not growing old too soon, but for some writers, successful adaptation at each stage of life depends upon what happened during earlier life stages. Development theory represents a perspective which regards life as a continuous process of development, from birth until death. Perhaps the best developed theory of this type is Erikson’s (1950), who describes life as being composed of eight phases: early infancy, late infancy, early childhood, late childhood, adolescence, late adolescence, the productive years and later life. At each phase, individuals must acquire certain understanding and competencies which will equip them to cope effectively with the next phase. Old age is a time when the individual takes stock of his or her life and must come to terms with what has or has not been achieved during their life and with the changing circumstances which accompany retirement and the inevitable losses of people close to them. How a person adapts to this final stage of life is dependent on developmental processes which occurred during earlier life phases. If the individual has treated each new life stage as offering a challenge, this attitude is likely to prevail into later life. Such an attitude can be expected to keep an older person more ‘youthful’ in many respects.

A similar view of life development is offered by continuity theory, which regards ageing as a process of continuing development. However, there is a growing tendency among people as they get older to try harder to maintain stability in their lives. New challenges may be relished, but most of all, according to this theory, individuals strive to preserve activities, tastes and a preferred lifestyle acquired over time. Retirement is regarded as a problem period for the individual who must come to terms with occupational role loss and the direction and goals which accompany that role. Disengagement is not seen as the most desirable reaction to this state of affairs. Instead, individuals need to become active in other ways. Finding new interests and goals lies at the centre of healthy and positive adjustment to this later stage of life.

The importance, in older age, of maintaining a social network and a body of activity which continue to give life purpose represented a core part of activity theory. This view that a person must strive to remain integrated as fully as possible with groups and events in the social environment, even when retired from working life, is elaborated upon more fully in exchange theory (Mauss 1954; Simmons 1945). Under exchange theory, however, as ageing takes place social interaction may decrease, or it becomes more selective and more targeted. In the pursuit of goals, whether professional or social, individuals seek out relationships which will be useful to them. Where the costs incurred by an individual in establishing or maintaining a relationship outweigh the benefits, the individual will gradually invest less and less time and effort in it. Where one individual values the rewards to be gained from a relationship more than another, there is an imbalance in terms of exchanged benefits. Power derives from this imbalance, whereby the individual who values the relationship less achieves a stronger position. For older people, this imbalance of power in interpersonal relationships may become more prevalent, gradually causing their interactions with others to diminish (Dowd 1980). For effective adaptation and coping during later stages of life, it is clearly necessary to maintain sufficient balance in a network of satisfying relationships, to avoid a significant diminution in the individual’s perceived personal social ‘power’.

Finally, another conception of ageing derives from labelling theory which posits that old age is socially defined and often labelled as a ‘deviant’ condition. Older people thus become stigmatised in a way which places them potentially at a disadvantage across a wide range of social relationships and interactions. Older people may be more susceptible than other age-groups to negative stereotyping which labels them as worn-out, over-the-hill, ineffectual, dependent and therefore socially (and perhaps politically) insignificant. Not only are such labels used by younger people, but they may become conditioned into the self-perceptions of older people. If older people become convinced of their own inadequacies, they may in turn live up (or perhaps ‘down’) to them (Kuypers and Bengtson 1973). This model of negative labelling can be turned on its head, however, to produce a strategy for inculcating a more positive view of older age both among the age-group itself and among people in general. This can be achieved by recognising that a person’s status does not (or should not) depend simply upon their economic position or the type of occupation they have. Improvements could be made in the services offered to older people and to the environmental conditions in which many of the poorer older persons live. The self-confidence and self-determination of older people could be boosted by presenting more positive images of ageing and by providing opportunities for this age segment to establish new life goals and the means to have a greater say in the management of their lives.

AGEING AND CONSUMERISM

Contrary to popular belief, older consumers are not mainly poor consumers. Indeed, on average, they are no more likely to be poor than their younger counterparts. In the United States in 1984, 14.7 per cent of people aged under 65 were at or beneath the poverty level, while for those aged 65 or over the comparable percentage was 12.4 per cent (Burnett 1991). Discretionary buying power among the over-50s was greater than among the under-50s (French and Fox 1985; Linden 1986). This spending power derives significantly from reduced expenses on child-rearing, paying off home or car loans, and the maturation of insurance policies (Allan 1984; Gelb 1978). By the mid-1980s, for example, around three-quarters of individuals aged 65 or over owned their own homes and among these, well over four-fifths had no mortgage to repay (Lazer and Shaw 1987). Not only do older consumers have greater spending power than other age-defined market segments, they are more willing to spend than ever before (Petre 1986).

Older consumers of today are not sedentary and retiring individuals who have withdrawn from the mainstream of a previously active lifestyle. They are involved and far younger in their outlook and activities than were their predecessors two generations ago. They are not the helpless, infirm dependants of our society; their members include heads of state, government leaders, chairmen of major corporations, and other people of stature, affluence and influence. The myth of poor health permeating the older consumers’ market should now be dispelled. Although some individuals do suffer physical limitations, these are neither as serious nor as widespread as many popular stereotypes would imply. Most older people tend to describe their health as good or excellent when asked to compare it with others of their own age (Schewe 1985). While negative stereotypes of older people are generally misleading and untrue, they do acknowledge that, in many ways, people in later years have been regarded as comprising a specific subculture (Rose and Peterson 1965). This outcome is thought to be the almost inevitable consequence of any group whose members interact more often with individuals of their own kind than with anyone else. The sub-culture view, however, fails to reflect the fact that older people comprise a highly diverse group. In some cases, older people maintain considerable prestige and power in areas such as politics, law or business. Additionally, though poverty is common in old age, by no means all of those who can be included as members of the ‘grey market’ are poor (Falkingham and Victor 1991; Walker 1980).

Stages of life and consumption

A person’s age is a poor indicator of their capacity and worth as an individual. To tag a person with the label ‘old’ because they have reached a certain chronological age, whether it is 60, 70 or 80, has little meaning. ‘Ages’, representing stages of life, may have more relevance in the consumer context, and are becoming increasing preferred as an impartial classifier of individuals, as this book will show. The onset of older age is marked most significantly not by a sudden decline into senility, but by the end of paid work or the completion of family-raising (although the last point is not always true). These activities constitute the ‘Second Age’, following the ‘First Age’ of childhood and socialisation. Earlier retirement and improved health have resulted in increasing, and now substantial, numbers of people who have entered the ‘Third Age’ of independent and still active life beyond work and familial tasks, which may continue for a long period prior to the ‘Fourth Age’ of decline, dependence and death.

The onset of the Third Age can vary from one individual to the next. For some it may begin at 50, while for others it may not start until the age of 70 or even later. Thus, chronological age alone does not mean inactivity or that a person is ‘old’. For some interests and activities, such as voting, cultural affairs, the arts, fine foods, luxury cruises and five-star hotels, the older age-groups are among the most important participants.

The older consumers’ market is among the least intensively researched and understood of market segments. Disagreement exists about both the age brackets that comprise this market and the terms used to describe them. Sometimes a classification of 65 and over is used, since that often marks the age of retirement. Sometimes a classification of 60 and over is adopted, indicating the decline in physical and mental skills. At other times, a classification of 55 and over is used because that represents consumers who have entered the pre-retirement years. Increasingly, however, early retirement may mean entry into a ‘Third Age’ as young as 50. The grey market can therefore be taken to mean those individuals aged 50 and over, who may be in the retirement or pre-retirement phase of their lives. A variety of terms have been used to describe consumers in this age-group, such as older consumers, oldsters, senior citizens, the elderly, old-agers, geriatric population, retirees, and maturities. Many of these terms are either patronising or simply inappropriate given the nature of many people in this section of the population, and particularly those at the younger end of this age spectrum. For the purposes of this book, reference will be made to ‘older consumers’ since that seems best to fit what these people are.

Some of the marketing misconceptions held about the grey market were succinctly listed by Loudon and Della Bitta (1993):

1 Older consumers are all the same. (Actually this is not a monolithic market at all, but rather one comprised of numerous segments.)

2 They think of themselves as old. (‘Older age’ is typically 15 years older than they are, and doesn’t begin until well past 70.)

3 They aren’t an important consumer segment. (Those 50 and over possess almost half of all American discretionary income and account for almost one-third of spending on refrigerators, floor coverings, new cars, jewelry, and groceries.)

4 They won’t try something new. (A survey for Golding and Company found that in the preceding 12 months 45 per cent had tried a new brand of cereal and 30 per cent had tried a new canned soup and soft drinks brand.)

5 They have impaired mental faculties. (Only about five per cent have serious mental impairment. Moreover, intelligence tests reveal little change from age 51 to 80.)

6 They are in poor health. (Most are not incapacitated and will remain healthy until their last years.)

7 They keep to themselves. (Many are sexually active, are involved as volunteers, and are taking on new responsibilities.)

8 They aren’t physically active. (A recent Gallup poll revealed half of those 65 and over regularly engage in exercise.)

(1993: 156)

The significance of the older consumer stems from the fact that there has been a growth in the market potential of the ‘grey’ population. This has occurred because of increased numbers of people in this age bracket, an upward shift in income and wealth, and enhanced expectations of older people. Increasing ‘grey’ income has been emerging from occupational pensions, asset holding, capital gains on property, and windfalls (Johnson 1990). Better health has resulted in a more active older population who wish to maximise the enjoyment they derive from their free time.

With their children having left home, and their mortgages paid off, empty nesters in modern western societies may have plenty of disposable income, particularly before retirement. For many years, this fact went unnoticed by marketing and advertising people whose eyes were fixed firmly on the under-35s and under-44s. Now that many older people are inheriting property from their parents and average life expectancy is increasing, the over-50s can no longer be ignored.

THE DEMOGRAPHIC SHIFT

To appreciate the importance of changes in the number of older people, it is important to grasp the magnitude of the demographic restructuring now under way in the developed economies. The high birth rates of the post-war baby-boom, followed by the very low fertility, or ‘baby-bust’, of the 1970s and 1980s, has produced populations that are ageing and, in many countries, declining in size.

In 1990, 32 million people in 20 million households in the USA were aged 65 or over, representing 13 per cent of the total population of the country. Each census during the twentieth century has indicated that the elderly make up an increasingly larger share of the population generally. If current trends continue, those 65 or over will account for 22 per cent of the US population by 2030.

Johnson and Falkingham (1992) explain the context in which the demographic transition characterising the population developments in most western countries has occurred:

1 An initial stage with high levels of fertility and mortality and low population growth rates. The population has a ‘youthful’ age profile with a high proportion of young people and relatively few older persons.

2 Mortality rates begin to f...