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This article presents a new way of segmenting the mature market. A segmentation model is developed based on research in various disciplines and data from several studies are used to validate it. The results suggest that the model is more effective than some commonly used approaches, not only in identifying prime segments for products and services, but also in suggesting viable marketing strategies for reaching specific segments of older consumers.
INTRODUCTION
The recent emphasis on the older consumer market has been primarily the result of new demographic data on numbers and wealth of older Americans, as well as the acceleration of the social and economic significance of the aging population.(9)
As a result of these changes, many companies are developing programs to tap the new opportunities. Yet the mature market presents challenges to marketers because much of the information about the marketplace is based on younger consumers, who tend to differ from older consumers in many important ways. For example, U.S. Department of Labor surveys show a great variation in spending on various types of products and services by age of householders.(14) Of greater significance to marketers, however, is the heterogeneity of the mature market. Research shows that the older a person gets, the more he or she differs from others.(1) This finding poses a problem to marketers who are developing strategies for mass markets, and also offers an opportunity for those appealing to groups of older consumers sharing similar characteristics.
MARKET SEGMENTATION
Because of differences in attitudes, values, and behaviors among older consumers, a "shotgun" approach to marketing does not appear to be an effective strategy. A given marketing strategy may be effective with one category of older adults, while other groups of the mature market will find the same offerings less attractive. A more effective strategy to reach a heterogeneous market is to match company offerings with the needs of subgroups. Doing this calls for market segmentation and target marketing. Market Segmentation refers to subdividing the market into several groupings, with each subsegment being recognized for its preferences regarding products/services and methods of delivery. Target marketing refers to the development of a different viable marketing mix for each of the segments.(7)
RATIONALE FOR SEGMENTATION
Segmentation analysis is based on the assumption that individuals...