The New Generation Gap: How Baby Boomers should market to

Gen X and Y.

Dr. Steven Ward

Murdoch Business School

Australian Market and Social

Research Society

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Outline of the presentation

•Who are the Baby Boomers, Generation X and Y?

•What are the major differences between Baby Boomers, Generation X and Y?

•Case studies of Marketing to Generation X.

•Case studies of marketing to Generation Y.

•Why we should not forget the Baby Boomers.

Baby Boomers.

•Born between 1946 and 1964.

•Now in early 40s to the late 50s., currently estimated at 5.1 million people.

•Net worth in Australia is estimated at 1.03 trillion dollars.

Baby Boomer Values

•Baby boomers tend to be motivated consumers.

•They enjoy buying for themselves, for their homes or apartments, and for others—they are consumption oriented.

•As baby boomers age, the nature of the products and services they most need or desire changes.

Generation X

•People born from 1965–79.

•Approximately four million Australians.

•Low levels of net assets, of around $445 million in Australia, partially because they have higher education debts unlike their parents and some a re still living at home (10.1% of 25-34 year olds).

Generation X Values

•Do not like labels, are cynical and do not want to be singled out and marketed to. •They matured during an era of rising divorce rates and economic uncertainty.•Unlike their parents, who are frequently baby boomers, they are in no rush to marry or start a family. •Job satisfaction is typically more important than salary. It has been said, for example, that ‘baby boomers live to work, Gen Xers work to live!

Generation Y

•Born between the years 1980 and 1994. •Approximately 4.2 million.•They are mostly the children of baby boomers and are thus also known as ‘echo boomers’ , ‘digital natives’ and the ‘millennium generation’. •In 2006, 59% of all 15–24 year olds lived with their parents (ABS 2914.0.55).•They can be divided into three sub-segments; Gen Y adults, Gen Y teens and Gen Y kids, or ‘tweens’. •Spend about 44.4 billion a year, on items such as travel, 14 billion, entertainment and going out, 11.8 billion, fashion ,11.2 billion, sport 5.2 billion and music 2.2 billion .

Generation Y Values

•More open to change than previous generations•Very sophisticated technologically, and always looking for the next gadget.•Disloyal to brands but highly loyal to relationships•Most influenced by friends and peers•Short attention span•Apolitical•Career focused and ambitious•Media savvy, highly educated•Confident and optimistic

The Mind Set of Gen Y: USA research in Time

• I prefer to buy luxury brands I know and trust (96%)

• I love wearing designer jewerly and watches (98%)

• Looking stylish is important to feeling good about myself (93%).

• I work hard, so I reward myself by splurging (92%)

• I love to look at advertisements for luxury goods (92%)

What have Gen Y bought in the last six months?

65% bought an average of six pairs of shoes.

59% bought an average of two pairs of sunglasses

52% bought an average of seven purses or bags (including briefcases).

Major Differences between Baby Boomers, Gen X and Y.

Context Baby Boomers Gen X Gen Y

Economy Prosperity Downsizing economy

Capitalism Rules

Cohort Vietnam War Death of Socialism

Rise of China and high technology

Experience Cold War Economic reforms

Iraq War, Global Warming

Core values Idealistic, individuality

Pessimistic, diversity

Positive, globalisation

Buying Habits Spend a lot, brand loyalty

Very sceptical consumers

Products with cool images are important

Effect of Generation X and Y on Media: Change in media habits

14-29 year old media habits 1998 2006

Those who watch two or more hours of commercial TV a day 64% 60%

Those who read a newspaper 24% 16%

Those who read two or more magazines over four to six weeks

55% 48%

Those who listen to at least two hours of commercial radio a day

80% 73%

Those who went to the movies at least once every three months

45% 33%

Those who use the internet at least once a week 70% 65%

Those who use the internet more than seven times a week 28% 75%

Households with pay TV 7% 35%

Source: Shoebridge, AFR 30 Sept 2006

What do Gen Y do online?

Case Studies of Marketing to Generation X•Amazon.com

• Part of the dot.com start ups. No nonsense retailer which appeals to the generations use of different media and value.

•American Express Platinum Credit Cards

• $395 in fees in return for rewards including domestic flights.

•Fair Trade Coffee• Appeals for causes appeal to

both Generation X and Y.

•Sunraysia Juices

Case Studies of Marketing to Generation Y

•Famous Magazine.• Tailored to the Y-Gen by online poling

and content.

•UTube/MySpace/Facebook• New community networks where the

generation defines itself.

•Apple.• Seen as the most admired brand by

Gen Y.

• “So clean and simple and easy to use, no excess”

• 7UP

Marketing to Gen X and Y: Nova 93.7 FM used Focus groups for

Programming and Advertising:

The focus groups consisted of:

Males and females

Even split of the sexes

All respondents were between the ages of 18-37

Income range between

$30,000 - $80,000

What they like:

• Ads that sound less like ads and more like entertainment

• Ads that connect – talk to them in their language

• Messages that challenge them, let them join the dots

• Brands that take a risk and have some fun

• Ads that appeal to them in an “individual” spirit – not a mass communication

ENGAGEMENT = REAL

ANZ

CK One

Jesus

Kegs on Legs

VW

Macleans Threadbo

Prostate Check

Mini Cooper

Don’t forget the Baby Boomers

•Harley Davidson.• The ultimate luxury, which

also a statement of freedom and lost youthfulness

•Luxury Cruise Lines.• Why leave the money to the

kids!

•Austerero Triple M/ 94.5 FM.

• May also appeal to Gen Xers as they start to purchase consumer durables for the home.

What about the Recession?

Some predictions:

• Baby Boomers will be the most well off. Have accumulated assets, may have to work a little longer.

• Gen X: With mortgages and families now will find it the hardest. (lose equity in home, unemployment fears).

And Gen Y?

• Gen Y can still live at home with their baby boomer parents.

• Demographic changes in the labour force for them will mean this recession is not as bad as those in the past.

• But who knows? They become cynical like Gen X.

More examples about marketing to age groups are available in a text on consumer behaviour in Australia

Schiffman, Leon, Ward, Steven, O’Cass, Aron, Bednall, David, Paladino, Angela (2007) Consumer Behaviour, 4th Edition, Pearson Education Australia ISBN 9 78 07 3398417 4 9

The one with the Gen X/Y Cover.

Questions?

I am interested in conducting further research in this area and would value your support.