Marketing
Research Reveals Marketing Opportunities in the Baby Boomer Generation
For many years, marketers have focused upon
consumers feel that the ages of 34 promote products. Marketers wooing consumers
early in life will ensure that they become lifetime customers. While this seems
logical research is revealing that Baby Boomers might be a more profitable
demographic. Statistics show that while spending Millennials actually
shrinking, Baby Boomer spending has been increasing. Baby Boomers are estimated
to ha $3.4 trillion in annual buying power The Baby Boomer generation is vastly
different from the generations preceding i Baby Boomers desire to have a
variety of products available to them. Many of the products traditionally
thought to belong to the younger generation are and the With approximately 20
percent technological products. of the U.S. population estimated to be 65 years
or older by 2030, marketers are beginning to research better ways for marketing
to Baby Boomers. In one study researchers attempted to understand ho consumers
shop and interact in stores. Because store marketers often target younger
generations of consumers . little thought has been given to how accessible
these stores are for older generations The research design involved equipping a
person with gloves, neck braces, helmets, blurry goggles, and other equipment
to simulate how a person in his or her 70s with arthritis is feeling.
Researchers would then observe how the person takes items off of shelves, gets
into his or her car, and gets up from chairs This research has been shared with
many businesses who have interpreted the findings to create a retail environment
better suited to this demographic. CVS, for instance has lowered its shelves,
made its store lighting softer, and installed magnifying glasses for
hard-to-read labels. Other businesses are using this information to redesign
their prod Foods Inc., for example, has designed the packaging of its Emerald
snack nuts to be easier to open at help for older consumers whose hands become
less mobile as they age. The company also studied consumers with arthritis and
decreased the time it takes to rotate the caps to open its products
Additionally, Baby Boomers have created a opportunity for businesses to market
entirely new products. Baby Boomers tend to embrace fitness and exercise
regimens as a way to stay fit and prolong their lives. Technology firms
products to be installed are seeing an opportunity to develop in the
homes of olde consumers. These products monitor the movements of the
inhabitants and alert family or expert if there are any changes in the
inhabitants’ movements. A decrease in mobility could signal a change in the
person’s physical and mental state, which may require medical attention.
Although these devices might otherwise seem intrusive, Baby Boomers’ desires to
stay healthy and prolong life are increasing their demand. Many Baby Boomers
are also concerned with preserving their more youthful appearance. Lingerie
maker Maidenform has created shapewear, or clothes that help to
“tone” the body, targeted toward those ages 35 to 54 here is one
description that marketers must avoid when marketing to Baby Boomers: any words
or phrases that make them feel old. Marketing research has revealed that Baby
Boomers do not like to be reminded that they are aging. Therefore, many
marketing initiatives aimed at old consumers must be subtle. For this reason,
Diamond Foods does not market the fact that its packages are easier to open
because it does not want to make Baby Boomers feel aged Even marketers of
products that are for older people have overhauled their promotional campaigns
to focus less on th concept of aging. Kimberly-Clark’s Depend brand for
incontinence was widely regarded as “adult diapers.” negative This
connotation led many to avoid them. To try to counteract this the released
commercials that discus benefits of the product also tried to the brand by its similarity
in look and feel to under wear. Many other businesses that sell similar
products are following suit Although marketers have long focused on
Millennials, demand for products by Baby Boomers is changing the ways that
businesses market to consumers. Marketing re ways to the Baby and creating the
goods and services that best meet their needs.
Summary
This case illustrates how a
variety of marketing research techniques can help marketers meet the needs of a
target market. Baby Boomers are a profitable demographic, and with
approximately 20 percent of the U.S. population estimated to be 65 years or
older by 2030, marketers are beginning to research better ways to market to
this population.Baby
Boomers desire to have a variety of products available to them, and many of the
products traditionally thought to belong to the younger generation are actually
bought the most by older generations, such as cars and technological products.
As they age, Baby Boomers are also creating a market for new products and services.
Questions for Discussion
1. Why are Baby Boomers such a lucrative
market?
Baby Boomer spending has been increasing, and they are
estimated to have $3.4 trillion in annual buying power. Baby Boomers desire to
have a variety of products available to them, and many of the products
traditionally thought to belong to the younger generation are actually bought
the most by older generations, such as cars and technological products. With
approximately 20 percent of the U.S. population estimated to be 65 years or
older by 2030, the spending potential for this market is growing.
2. How has the marketing research process been
used to understand how Baby Boomers shop and interact in stores?
Because marketers often target younger generations of
consumers, little thought has been given to how accessible stores and products are
for older generations. Businesses are using marketing research to understand
the customer preferences of Baby Boomers, including how they shop, what they
desire in products, and how to customize promotions to attract this lucrative
demographic.
3.
How have stores
used marketing research findings to tailor their stores and products to appeal
to Baby Boomers?
Many businesses have used marketing research findings to
customize their retail environments and their products. CVS lowered its
shelves, made its store lighting softer, and installed magnifying glasses for
hard-to-read labels. Diamond Foods Inc. designed the packaging of its Emerald
snack nuts to be more easily opened and decreased the time it takes to rotate
the caps to open its products. However, because Baby Boomers don’t like to be
reminded that they are getting older, companies avoid directly mentioning how
their changes help “aging” consumers.
Starbucks Refines
the Customer Experience
Starbucksthe
Seattle-based company that popularized the coffee cultureis
brewing up higher sales through new beverages and new cafes in global markets.
A stop at Starbucks has become
part of many consumers’ daily routines. Some are attracted by the high-quality,
brewed-to-order coffees, while others look forward to relaxing and socializing
in the third placebetween home and work.
Starbucks has researched and refined every
aspect of the customer experience, from the size of its coffees (tallis
actually small) to the number of minutes that customers spend waiting in line.
To speed up purchases, it offers a pay-by-cell phone option called mobile pay.Consumers
with iPhone or Android cell phones simply download the app and let cashiers
scan the Starbucks code on the screen during checkout. The app links to the
customer’s Starbucks Card, which combines the rewards of a loyalty program with
the convenience of a prepaid card for making purchases. Mobile pay is a big
hit: in its first 15 months, customers used their cell phones to make more than
42 million payments to Starbucks.
Well established in the intensely competitive
U.S. market, Starbucks is growing much more quickly in Asian markets. The
company will soon have 1,500 cafes and 30,000 employees in China, where
consumers drink, on average, just three cups of coffee every year. By opening
in more locations and encouraging consumers to bring their friends for coffee
and conversation, Starbucks aims to increase demand and boost sales throughout
China. In Japan, where Starbucks now has more than 1,000 cafes, consumers have
long enjoyed the tradition of meeting in neighborhood coffee shops.
Through market research, Starbucks stays in
touch with what its customers like and what their lifestyles are like. Coffee
lovers are still buying their espressos or lattes, but they’re also looking for
a healthier lifestyle,says a Starbucks executive. In response to this
trend, the company bought Evolution Fresh, which makes premium juices, and
opened its first Evolution Fresh store in Bellevue, Washington. On the menu:
all-natural, freshlyblended drinks from nutritious fruits and vegetables, plus
salads and wraps. Over time, Starbucks is adding Evolution Fresh drinks to the
menu in all of its cafes and opening additional Evolution Fresh stores on the
East and West Coasts. Although expanding into
fresh juices means competing with Jamba Juice
and other rivals, Starbucks is relying on its brand-building expertise to juice
up this part of its business.
Taking note of consumer interest in energy
drinks, which has blossomed into an $8 billion market, Starbucks has also
launched Starbucks Refreshers, a line of carbonated drinks with more than half
the caffeine content of an espresso shot. Available in supermarkets and in Starbucks
cafes, these all-natural drinks combine green, unroasted coffee with fruit
juices for a fruity, non-coffee flavor. To gain significant market share,
Starbucks must battle Red Bull, Rockstar, and other well-known marketers of
energy drinks.
Starbucks also believes in social
responsibility. It offers health-insurance benefits to both part-time and
full-time employees and donates generously to community projects. It also
protects the environment by recycling in every cafe and constructing buildings
designed to save energy and water. Finally, the company follows ethical
purchasing practices to ensure that coffee growers get a fair price for their
premium beans.
Summary
Starbucks is popular in the United States thanks to its
focus on the customer experience. While the company continues to improve its
American stores through innovations such as mobile pay, Starbucks is also
expanding globally, especially in Asian markets. It is also diversifying;
Starbucks recently purchased premium-juice company Evolution Fresh and is
adding the company’s nutritious blended drinks to the traditional Starbucks
menu. Starbucks plans to open more Evolution Fresh stores as the demand for
healthy foods increases. The company is also competing with energy drink
companies after releasing its all-natural Starbucks Refreshers. Starbucks is
also promoting its focus on social responsibility.
Questions for
Discussion
1. In terms of situational influences and
level of involvement, what are the benefits of mobile pay?
Starbucks is working to keep
customers involved by creating routinized
response behavior. Mobile pay reduces search-and-decision effort, and
the ease of payment and accumulation of Starbucks rewards makes it easy for
their customers to prefer Starbucks as a brand. Starbucks is also taking
advantage of customers’ momentary conditions to make sure they have an easy and
fast way to pay.
2. With Evolution Fresh, which psychological
influences on consumer buying decisions does Starbucks seem to be addressing?
Motives, attitudes, personalities, and lifestyles are all important to
Starbucks. With Evolution Fresh, Starbucks is primarily addressing
consumers’ attitudes, especially perceptions and interpretations of the
company. By providing products such as smoothies, juices, salads, and wraps,
Starbucks is creating the impression that it cares about consumers’ health and
is working to fit into their healthy lifestyles.
3. Why would Starbucks want customers to know
that it believes in social responsibility?
Once again, Starbucks wants to
improve consumers’ perceptions and interpretations of the company and its
actions. If consumers believe the company values ethical and socially
responsible behavior, they will be more involved with the brand and more willing
to purchase the company’s products.
