The Age Curve: How to Profit from the Coming Demographic Storm

Citation

Taran, Z. (2010), "The Age Curve: How to Profit from the Coming Demographic Storm", Journal of Consumer Marketing, Vol. 27 No. 2, pp. 193-194. https://doi.org/10.1108/07363761011027303

The Age Curve's structure is clear and concise, and it is very easy and fun to read (alas, it was over well before my recent flight to San Diego, California). Gronbach illustrates and supports his points with multiple case studies. He takes facts that most of us know, or should have learned at any rate after passing a basic Principles of Marketing course, and shows us how they impact other things we know.

The main point of the text is there are different generations of people (baby boomers, generation X, etc.), and these generations vary in size, which affects all manner of social dynamics, notably, supply of labor and consumer demand. Certain jobs are filled primarily by groups of people of a specific age, and the same is true of certain products. Smaller groups of people buy fewer things and take fewer jobs than larger groups of people. The author's question then is “… why aren't marketers paying attention?” (p. 1).

Below are brief descriptions of the generations and the gist of marketing to them according to Gronbach:

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  The older generations. The GI generation, born in the USA between 1905 and 1925, numbered 56.6 million people. During these years, the USA experienced a surge in immigration, which further added to this population. The Silent generation, born between 1925 and 1944, was the smallest generation of the last 100 years, numbering 52.5 million people, and there was virtually no immigration during that time. Even with increased longevity, not many of the GI generation are still alive (as of 2008, these are people 83 and older), and there were fewer of the Silent generation to begin with. These two facts combined counter the commonly held notion of the “graying of America,” that is, the idea that there is a large increase in the number of older people. In fact, Gronbach states that the graying of America is a myth. Because there are so few older people, industries oriented at catering to them, notably assisted living and retirement communities, will suffer greatly. The older generations can still be marketed to. They can be reached by conventional media. They will buy goods and services that will help them live independently longer.

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  The baby boomers: the radical change generation. Born between 1945 and 1964, the baby boom generation includes 78 million people, and it peaked from 1957 to 1961 (these people are now entering their 50s). Baby boomers redefined the world around them, including, for example, cars and clothing to marriages and families. This group is currently the biggest market force. To do business with baby boomers, the author states, one must: “Make their life easy, save them some time, and not try to rip them off” (p. 249). When baby boomers age out of the market for cars, motorcycles, and a lot of shopping, they will signal the demise of Harley Davidson bikes, SUVs and Wal‐Mart. Baby boomers can be easily reached by conventional media; they love their toys and their “stuff” but hate to put too much effort into caring for them. This group refuses to grow old.

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  Generation X: the outsize expectations of a small generation. Generation X, born from 1965 to 1984, got its reputation of lazy, selfish slackers basically because they do not vote, join the military, or do much of anything else in numbers comparable to the previous generation. However, “the issue is quantitative, not qualitative” (p. 112). Numbering 69 million people, this group is 11 percent smaller than the preceding generation! So for every ten entry‐level jobs left by baby boomers, there are only nine generation Xers to fill them. There are fewer people to attend school, to vote, to buy motorcycles, to buy houses, and to hold jobs. This drop in births became especially acute in the mid‐1970s, partially because of the impact of Roe vs Wade. Generation X can be successfully marketed to if you have a new product aimed directly at them, and the best way to reach them is via the internet. Because there are fewer members of this generation, they will not buy as much as baby boomers. They will not pay enough taxes, be able to sustain Social Security, or maintain the healthcare costs of the baby boom generation. Gronbach stresses that this will be very serious in the relatively near future.

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  Generation Y: the giant on the horizon. Gronbach states: “There is an army of superconsumers headed right at us. Generation Y (born 1985‐2010‐ ZT) will be 100 million strong and its appetite for consumption is already 500 percent greater than Generation Y's parents. Of massive marketing opportunities, Generation Y is the most massive in history” (p. 179). This generation will change society even more than the Baby Boomers did. Because of the sheer number of young people, teen pregnancies and STDs will spike, as well as unemployment, crime, and entrepreneurship. This group will buy large quantities of fashion apparel; their motorcycles of choice will be small speedy road rockets, and their cars, small powerful hot rods. They will elude most conventional media, and right now direct marketing and billboard advertising are the best ways of marketing to them. (Internet marketing is critical, but has yet to develop into a high ROI tool). Generation Y will be environmentally conscious, and consume “green” products from companies who earnestly protect the environment. This group will despise “greenwashing”.

As the “parade of generations” marches on, social change continues in the USA. The author believes that “the bigotry is almost gone” from society, that we are increasingly more color blind. This change in attitudes was launched by the baby boomers and has become internalized by generation Y. Gronbach also considers the transformations brought about by the large Latin immigration, which has filled the gap left by the smaller generation X. As society has changed and continues to do so, marketing too must change accordingly.

For the reader, the beauty of the book is how it goes from clear logical, math‐based reasoning, to interesting case studies, to useful down‐to‐earth practical advice. One example is: “Marketers should watch for the market that's increasing” in size, not the one getting smaller. “Only the Baby Boomer Generation and Generation Y are delivering future expanding markets” (p. 166).

In Gronbach's own words, he has “reduced [his] demographic information into easy‐to‐understand corollaries that lean toward broad generalizations.” Herein lies the secondary point of his book: It teaches his readers how to produce useful information out of the sea of data. The core of the author's conclusions is based on ironclad logic and analysis of census numbers. He takes the analysis further by augmenting it with his own observation and interpretation of each generation's traits and features; after all, he has been consulting for a while and has, undoubtedly, accumulated insight on what makes generational cohorts tick. One cannot argue with the core logic, “the big picture” of his book. Inquiring minds, however, might wish to further probe the insight into generational specifics.

The book is written for managers and marketing practitioners of any level. It will also make a nice supplement – or at least, serve as a useful resource – in a marketing classroom.