Changing Demography and Your Future

A Generational Marketing Overview of The United States

There are five major generational markets in the United States. The distinctions of each generation are widely accepted by demographers and marketers and have been shaped by cultural circumstance, world events and above all, fertility. Because circumstance, events and fertility vary greatly, the U.S. generations, that are about twenty years in duration, vary greatly in size. This fact shapes each generation’s economic, social and political impact on the total U.S. population and has serious significance for marketers.

A wise mentor once told me early on in my marketing career that it is very important “to go fishing where the fish are.” I asked him why? This was a mistake. He just looked at me like I was a dunce and said “Because that’s where you will catch the most fish with the least amount of effort.” He went on to explain that it did not matter if you had a big expensive boat, sophisticated equipment and a crew of fishing experts, if the fish were not there you were not going to catch them. The same principals apply to marketers. I have watched large corporations with famous advertising agencies using award winning creative and huge advertising budgets chase markets that demographically no longer exist. The best example I can think of is Detroit automobile manufacturers scratching their heads because they can not figure out why they can’t sell as many cars to Generation X as they did to the Boomers. Too bad they didn’t count them.

Let’s take a closer look at the different U.S. generations

The G.I. Generation born 1905 to 1924 was once a huge consuming generation of about seventy million people when you combine native live births and massive European immigration. This generation is defined by it’s participation in WWII. As a market this generation has dwindled to about five million hearty soles that are eighty-four plus years old. Its consumption is largely limited to health care needs, assisted living and funeral parlors. (Contrary to popular belief the elderly market is not growing but will actually shrink dramatically over the next ten years.) Marketing to this group can best be achieved through their care givers who can be easily reached through conventional media.

The Silent Generation born 1925 to 1944 is the smallest generation of the last one hundred years. This generation is now about sixty-four to eighty-three years old. There are about forty to forty-five million Silent’s remaining out of the about fifty-three million born. As a market they have a presence but their consuming days are really behind them. They will buy anything that will help them maintain their independence, delay aging and stay in their own homes. They love to eat out. They are value shoppers who love a real deal. They can be reached with conventional media.

The Baby Boomers born 1945 to 1964 remain a consuming force to be reckoned with. About seventy-five million of them remain and they continue to devour age appropriate products with a vengeance, especially big screen HD TVs. The bloom is off the rose on their consumption however as the peak of the Boomer Generation is cresting the defining age of fifty years old. Their purchase of apparel and cars is most noticeably down, never to return to former levels. They control the Nation’s personal wealth and are retiring at a rate of about one every eight seconds. Remember if you want to do business with the Boomers make their lives easy, save them some time and don’t rip them off. They are easily reached with conventional media.

Generation X born 1965 to 1984 is now twenty-four to forty-three years old. Relative to the Boomers they are a small disappointing market owing to an alarming eleven percent decline in fertility during their birth years. They are consuming age appropriate products at normal rates but they can never consume at Boomer levels because there are nine million fewer of them. This numerical fact has dealt a death blow to many consumer product manufacturers who were caught flat footed and uninformed, most notably Japanese motorcycles in the early 1990s. Generation X has other issues. They don’t respond to conventional media. They are natives in the cyber world but are difficult to reach because the internet’s fragmentation.

Generation Y born 1985 to present are over ninety million strong, yes bigger than the Boomers. They are consuming at five hundred percent of the rate of their Boomer parents in adjusted dollars age for age when you take into consideration their influence on family purchases. We’ll see if this rate of consumption slows as Generation Y begins to pay for stuff with their own money. Generation Y is the first U.S. generation that routinely has had brand new cars in high school parking lots. Boomer parents are buying them houses as they begin to flood the marrying age. One karet diamond engagement rings are the norm. Japanese car makers recognized the merits of this market long ago but Detroit has been asleep at the wheel. Apparel sales will spike as Generation Y seeks mates. Wal-Mart will have difficulty serving Generation Y because their retail model can not bring fashion to market fast enough to satisfy a young fickle generation. In addition Generation Y will bring a new dimension to consumerism. They will not buy products from retailers and manufacturers with dubious ecological or humanitarian records. This leaves Wal-Mart and China out of the Generation Y picture. Also no amount of “Green Washing” is going to get by Generation Y. Generation Y like the small Generation X that precedes them is difficult to reach with marketing messages because their principal medium is cyber space. It is not impossible, just difficult. Ironically apart from brands that get established virally Generation Y could be the most brand diverse generation in recent history. Unlock the formula for efficiently marketing to Generation Y and you will print money. One very note worthy anomaly about Generation Y is the fact that they love snail mail, anything with their name on it.

Latino immigrants have essentially formed their own generation. Latinos came to the U.S. in droves to fill the entry level job vacancies unsatisfied by Generation X’s small numbers. This group is roughly twenty to forty years old and number anywhere from fifteen to twenty-five million depending on whose numbers you believe. This is a substantial geographically defined market that is here to stay. Even though this market is about the same age as Generation X don’t confuse the two. They are very different markets. The Latino market is free standing, unique and quite valuable. One area where Latino’s stand out as significant consumers is at the super market. They buy fresh, shop more often and spend more than average consumers. Latino’s can be reached with conventional Spanish or main stream media. Don’t make the mistake of translating ad messages in English to Spanish. This is very offensive to Latinos. Either leave them in English or create them in Spanish. This market has no where to go but up and while many of these immigrants will return to their native countries when the work dries up millions will stay, assimilate and make the United States a better place.

Generations are markets and generations age. This means that markets move. It is a measured pace and it never changes. It doesn’t speed up and it never slows down. When large generations/markets age toward products and services that are typically purchased at a certain time of life business will soar for these categories. Smart marketers will position their clients in front of this wave and ride it to success.

Don’t forget to go fishing where the fish are!