Talking About My Generation

Marketers appear to be obsessed with different target groups. Words such as yuppies and dinkies have even entered the language of non-marketers while there are numerous studies that analyse different groups of consumers, the youth market, greys or third-agers, baby boomers, generations X and Y. There is no doubt that a deep understanding of different target markets is an essential component of marketing.

An analysis of these target groups will typically include values & attitudes, consumption patterns and media behaviour. One area that is often included but which is often under-emphasised is pure demographics. Quite simply, how many people are in the age group, is it growing or declining and what proportion of the overall target market do they represent? While it is possible to spend vast sums researching areas such as values & attitudes, tracking demographic changes is relatively easy and inexpensive.

A simple analysis of key demographic changes could show the following:

• As the front of the baby boomer generation reaches retirement age, demand is likely to soar for leisure services, healthcare products & services while the demands on state pension systems and healthcare will also rise rapidly.
• The size of the “youth” market in absolute and percentage terms is declining in some markets. This could make a popular target market less attractive to marketers.

This is nothing new. However, it could be argued that many marketers are “locked into” certain demographic groups and are therefore highly susceptible to changing demographics structures. To put it simply, a tight focus on a particular group will mean that the marketer’s level of success will be dependent on the size of that age group, i.e. the birth rate. Through the Loop has analysed this issue to find ways in which marketers can work with demographics in a different way. 

A demographic focus

One way to address the demographic issue is to focus a brand’s marketing on one particular age. For example, marketers of alcoholic drinks tend to focus on consumers who have just reached the legal drinking age. Not only are they entering the market for but they are also at an age when they are making many of their brand choices for the first time. Often they will stick with the brands they chose at this stage of their lives.

A focus on the youth market is common for many brands as they seek to gain a consumer’s loyalty at a young age. Consumers have to make brand choices, often for the first time on their own, as they leave school, start employment or higher education. In addition, their disposable income tends to rise dramatically at this time making their patronage more desirable. However, an analysis of demographic trends may show that the “youth” age group is declining in absolute terms and as a percentage of the population in many countries. The net result will be that there are more marketers chasing ever fewer consumers.

For example, there has been much discussion about the decline in sales of recorded music. There has been a debate about whether this is due to a drop in music quality or is there a rising incidence of piracy or illegal downloads over the Internet. While the former may be true and the latter almost certainly is, it may also be the case that the size of the teenager market in countries such as the UK has meant that the principal buying group for recorded music has contracted.

A further issue may be that this approach effectively forces a brand relaunch each time that the target group is renewed. The market for baby products is just one sector that is constantly renewed with sets of parents constantly joining and leaving the target group. A brand that targets a specific age group will always be faced with new potential consumers and a new challenge.

So one answer may be to switch the focus of a brand’s marketing to the demographic group that is growing fastest. With the move of baby boomers through the age groups in many countries this group may be the 40-55 age group. Clearly the size of the target group can be much larger and thus offer the brand greater potential. However, it may not be such a simple solution. The product’s usage patterns will often vary between different age groups. Again, in the case of alcoholic drinks, young people will consume different types of drink, in different quantities, in different places and with different people than an older couple who have children at home.

For this reason there should be alternative ways for marketers to address the demographics issue. One possibility is to look into age groups and then beyond this to identify the characteristics of consumers’ life stages.

A brand for life

A brand for life recognises that a brand may mean different things to different age groups. Different generations are exposed to different influences. They grow up in different environments and this tends to affect their values and attitudes throughout their lives. The baby boomer generation grew up with television and so advertising using this medium has tended to be an effective way to reach them. The children of today are growing up viewing the Internet as something that has always been there. For them this is not technology but “part of the furniture.” Older people may be more frugal as a result of living through wars and shortages and this may still affect how they make product choices today. Consequently, targeting by age group is only part of the solution. Marketers need to understand more about what the age group mean in terms of consumer values and attitudes and, ultimately, consumer behaviour.

Life stage marketing moves beyond simple demographics to understand wider aspects of consumers’ lives. This is based around the fact that the ways in which consumers behave change as they move through different life stages. Consequently, the role for brands will change. Some of the factors that impact consumer behaviour as they move through life stages are as follows:

• The level of disposable income and the nature of demands on this income.
• Young children/older children/children left home.
• Single/married/divorced/widowed.
• Busy social life/young children restrict a social life/older children allow social life to be regained.
• The occasions on which and ways in which products and services are consumed.

Under this approach the brand should be managed so that it is relevant and accessible to different life stages. This is not about developing a portfolio of brands for specific age groups but having a single brand or an umbrella brand that can appeal across the various stages of consumers’ lives. This strategy requires brands to have a different expression for different life stages. Clearly this is an area that has to be managed extremely carefully. A brand cannot have two distinct positionings or be saying two contradictory things as there will be overlap and potential leakage. One way to work around this is to develop a central positioning that can be adapted slightly for different life stages as long as the core stays constant.

Financial services companies can develop portfolios of services that are targeted at particular life stages. In many cases they appear to have used the same brand for these various services with differentiation on the product/service level. An alternative approach has been taken by magazine publishers have developed titles with individual brands that are appropriate for different life stages. A women’s magazine publisher can publish titles that target different life stages from teenage girls through to younger and older women. Cosmo Girl is an example of where the publisher has tweaked its Cosmopolitan brand to reach a younger audience. EMAP is present in the UK music magazine market with Q and Mojo that target younger and older life stages.

Marketing communications also need to be adapted so that they are appropriate to the life stages. One aspect of life stage marketing is that it acknowledges that media consumption changes with the life stages. Consequently, the media channel mix needs to reflect this. It may be harder to reach young people with what we would term “traditional” marketing communications. However, the intensive use of text messaging through mobile phones in this age group has made text-based promotional activity very attractive to marketers and popular with the target audience. Coca-Cola, Masterfoods and Cadbury Schweppes are among companies that have made extensive use of SMS messages in recent promotional activity. In a similar way young people may be more open to experiential or Brand Experience marketing that reaches them in pubs and clubs, for example, than older people who may have a less active social life. The latter group may be better targeted by in-home media.

Life stage marketing in practice

We are seeing more examples of brands that have adopted such an approach and have been flexing their branding and marketing to appeal to different life stages without sacrificing the core brand positioning. Examples of brands that have responded to an ageing consumer base are Nescafé, Coca-Cola and Bacardi. In all three cases they have leveraged the core brand into areas that are more attractive to a younger target group. Nescafé has launched a raft of innovative products that are more attractive to younger consumers as well as developing communications initiatives such as sponsoring the Ministry of Sound.

Nescafé can use such an approach to ensure that it appeals to an older life stage group as well as developing innovative new products that are more likely to attract younger coffee drinkers. This reflects the fact that the image of coffee and the way in which coffee is consumed varies across life stages. For younger people, coffee may compete primarily with soft drinks while older people are choosing between coffee and tea.

In 2002, Coca-Cola launched a 4oz slim-line can for sale in the nightclubs and leading fashion retailers of Manhattan. While this was basically the same product as brand Coca-Cola, the style of packaging and the graphical approach, with only a subtle reference to the Coca-Cola brand it is clearly intended to reach a younger audience that has been looking for newer, more fashionable beverages. Coca-Cola has also developed communications ideas that are more appropriate to the younger generation.

Bacardi-Martini can target one group of consumers through its core Bacardi brand and reach a different, younger market, through brand extensions such as Bacardi Breezer. Bacardi, the brand, will often be consumed with a mixer such as Coca-Cola. The “premix” Bacardi Breezer is more fashionable and popular with younger people and may frequently be consumed from the bottle. Bacardi Breezer is not just a beverage but a badge.

Implications

Changes in the demographic structure of the population have an immense influence on the success and failure of different products and services but often their relevance is not fully understood or acted upon. On their own, changes in a country’s or brand’s demographic structure are relatively easy to forecast. However, the demographics issue is more complex with the size of different demographic groups changing constantly. Consequently, there may be something to be gained from treating demographics differently when considering a brand’s target group and developing brand positioning.

One way is to take the brand beyond demographics to consider a broader picture of consumer issues at certain points in their lives. Marketing by life stage enables the product or service offer to be appropriate to consumers’ needs and desires at a particular stage in their lives.

Action points

• Does your brand target a defined demographic or generational group?
• Is your brand at risk from demographic shifts?
• How can your brand remain relevant to a set of consumers as they grow older?
• Are there ways in which the brand can be made relevant to two or more quite separate target groups?
• How can you make the best use of different media channels to provide appropriate communications to different life stages?