Will the ageing population be the death of marketers?
THIS year the Market Research Society of Australia changed its name to the Australian Market & Social Research Society. This change reflects the increased importance of social research in identifying community needs and in supporting social change. Therefore, I will address the most pressing social issue of our time: the ageing population. What implications will this have for marketing professionals?
Even though we have known about the impending demographic shift for many years, we are only starting to debate what it will mean and whether there will be significant problems for our society.
To date, this debate has been focused around population demographics, working longer, health care, income support and age discrimination. More recently, issues such as migration, child care and working mothers have surfaced as governments try to figure out ways of maximising the participation in the workforce by younger people.
Marketers have not really given the issue much consideration, apart from the occasional question about "... how do we sell to old people ...", which usually results in the reply "... but most of them don't buy much ...".
What we do know is that, over the next 40 years, the proportion of Australia's population over 65 will increase from around 12% to more than 27%. At the same time, our birth rate will continue to decline and the growth of our workforce in the 15-64 age range will slow to almost zero.
As we stand now, our society is heavily skewed towards the marketing of youth and marketing to young consumers - all done by marketers who are often in their 20s and 30s. Imagine if in TV commercials the 'Brand Power' woman, the McDonald's staff or the Flight Centre captain were wrinkly 80-year-olds - would we have the same level of confidence or interest in the products?
We are subconsciously attuned to expecting young people and good-looking people in advertising and often prefer it that way. Many organisations want to exude an image of energy and optimism of youth, not one of 'grumpy old men'. Young people complain about the baby boomers staying in their senior management positions and not letting the next generation take the reins. What will the role of older people become in this environment; will they be paid mentors, company directors, consultants or on advisory panels?
Seniors' discounts will become too expensive
Marketing for older people has tended to focus around specific products designed for them (e.g. pensioners' insurance, superannuation) and often the focus is around giving discounted prices (e.g. Seniors Card holders). This sort of marketing is not greatly exciting for the youthful marketer; nor is it very creative. I would question whether businesses will be able to afford to give seniors' discounts when the population of seniors represents one in four customers. So, the focus for the older market must be on something else.
I would suggest that good, old-fashioned customer service would go a long way towards meeting the needs of older people. This includes being courteous and helpful (not just the rote "... and how are you today ..."), and maintaining high ethical standards regarding resolution of customer problems such as returns of unsuitable products.
But what other needs do the ageing baby boomers have that we do not know about because we have not researched them fully yet? Certainly, several of our clients have realised there is a dearth of information and are starting to ask for specific studies on predicting future trends.
There are other issues affecting marketers. First, there is likely to be a skill shortage because there will be fewer young people to support the marketing function. There is already a significant shortage in key industries such as market research.
This is partly being addressed by an increased influx of migrants into Australia, which is likely to grow faster than in the past. The Australian Financial Review recently published an analysis of new migrants which suggests that we are likely to allow more temporary working migrants into the country, both at the unskilled end and at the professional end. Many of these will be from Asia.
Do marketers need to tailor their strategies to cover the ethnic changes that are occurring? And what impact will Asian cultural values have on our business and marketing activities?
There will be urban and rural shifts, too, as we become short-handed in farming communities and rely more and more on migrant workers.
Not-for-profits and sports clubs will be rationalised
Not-for-profit (NFP) organisations are often ignored in this mix. We have seen a boom in the establishment of NFPs as everyone seems to want to create a foundation for this or that. The traditional NFPs have suffered from declining support as well as declining numbers of volunteers. There will need to be a rationalisation of this sector because the proportion of marketing dollars spent from revenue earned is becoming too high to be sustainable.
Sporting clubs will also be affected. We are seeing growth in the range of sports played, but there is likely to be a reduction in the numbers playing them. Will we have sufficient people to participate in this proliferation of sports? Will we have enough youngsters coming up to become professional sports people? Again, I believe that we are likely to see rationalisation in this sector, with possibly more concentration in the larger metropolitan areas.
Perhaps the most obvious shift we have noticed in recent years is in the housing sector, with the huge growth in inner-city apartments. The sea change is influencing people to shift from the bush to the beach, and from cities to regional centres, usually by the sea.
I predict that we will see a continuing shift as young people move to the large cities to find partners and highly paid jobs, with regional cities becoming retirement centres for older people. Marketing activities will then become increasingly distinct in the metropolitan cities and in the regions, as mass marketing seeks to differentiate the needs of different demographic mixes.
The issues of technology and customer service will continue to play a key role in distinguishing businesses in their competitive strengths. It is interesting to see the latest advertising by some banks and other financial services companies promoting brand positioning around "people first", "be heard", "we're always there for you" and "we care".
Some will be credible in this space, while others will lose credibility because of past bad behavior. So in this space, much of the marketing will need to be around changing internal systems, processes, people and culture to get back to a service way of thinking.
There is no doubt the next 20 years will witness big changes in marketing, not only because of ageing but also through other issues such as privacy and media. We need to have a much more lively debate in marketing about what these changes will involve and how they will affect our lives. After all, our role is just as much about better meeting the needs of customers and consumers as it is about selling products and services.
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