The Myths & Realities of Generational Marketing

Generations

Generational marketing has become almost a default segmentation for some brand owners. Most of the consumers in the market today are found within the generations born since World War 2 (i.e. after 1945). Names have been given to distinct segments that have emerged over this period, including ‘Baby Boomers’ (born 1945–1964), ‘Gen X’ (born 1965–1979), ‘Millennials’ (born 1980–1999), and ‘Gen Z’ (born 2000 or later).

In order to get a better understanding of these consumers and how to market to them, stereotypes and ‘pen portraits’ have been developed for these generations that can be crudely summed up as follows. Note that these are very much in a Western context.

‘Baby Boomers’ (born 1945–1964):

These consumers grew up during a period of sustained economic growth following World War 2. Such fortunes allowed governments to subsidise education with free universities, and consumers benefitted from huge appreciation in the value of their homes over their lifetimes, allowing for comfortable retirement for some.

The Baby Boomers were the first true TV generation, making it easy for brands to communicate with them, and it was this generation that lived through the Sexual Revolution with all the associated liberalisation of attitudes to sex outside of marriage, homosexuality, and even recreational drugs.

‘Gen X’ (born 1965–1980):

Sometimes called the ‘latchkey generation’ because kids would come home to empty homes after school, this generation saw a breakdown of marriage, and with more female participation in the workforce, kids needed to look after themselves more than ever. Kids were free to wander around their neighbourhoods completely unsupervised, and they grew up with MTV (music TV) and the development of the pop video, which some say created a generation of cynical, disaffected adolescents.

But the ‘forced self-sufficiency’ in their childhood paid dividends later on in life, with many Gen Xers going on to have successful careers and some starting their own businesses.

‘Millennials’ (born 1980–1999):

The most studied generation ever, Millennials have grown up with technology and are wedded to their mobiles and social media, which have come to replace ‘real’ relationships.

There are mixed views pertaining to the work ethic of Millennials, with some claiming that they are lazy, impatient, and entitled, while others say they are working harder than any other generation before them.

‘Gen Z’ (born 2000+ or possibly earlier):

Gen Z are curators of online information, and corporations will only be able to communicate with them via content, visuals, and particularly video, some of which Gen Zers will share with friends, making ‘word-of-mouth’ marketing even more powerful than before.

They will be, or already are, the most ethnically diverse group, born of mixed marriages, with more educated overseas or within multi-racial classrooms.

Table: Population distribution by age groups

They are inheriting a world with a hangover. They will need to deal with enormous national debt and look after an aging population while the numbers of their own ranks able to pay for the care of the elderly diminish. They will also need to deal with the impact of decades of environmental degradation. If the Gen Zers are the ones to fix these problems, they certainly have their work cut out!

But to what extent do these stereotypes apply to Asia? Some believe that the generations in Asia are somewhat shifted compared to the West. For example, the Millennials in Asia can show similar characteristics to Gen Xers in the West, and Asian Gen Zers to Western Millennials.

But in contrast to the West, many of the emerging Asian markets are seeing generations becoming ‘better off’, for example through more democratic governments, less corruption, more foreign direct investment, and growth of their own indigenous industries and brands, resulting in a growing middle class.

Why the obsession with Millennials?

As ‘the most studied generation ever’, Millennials have been targeted by some organisations with very specific product propositions. For example, Air France have launched a new airline called Joon, with in-flight services designed around technology and a cabin service designed for “an innovative and offbeat experience”.

But the obsession with Millennials leads to distractions, and the issues are often misunderstood or taken out of context. The reality is that technology impacts all generations, and often in the same way. For example, people who use the shared economy through apps are using it for the same reason. A Baby Boomer using a taxi-ordering app is doing so for the same reason as a Gen Xer and a Millennial (i.e. they need to get from A to B quickly) – there’s nothing generational in this!

Developing products and services for specific generations based on these stereotypes can tell a much larger audience just to ‘go away’. For example, will 40+-year-olds think of Joon if this airline is continually shouting about being for Millennials? And even among Millennials, supposing the product proposition disappoints them? If a brand or product overtly targets a particular audience, it is harder to please them and much easier to disappoint.

The obsession with Millennials also ignores the realities of populations. Sometimes I get the impression that corporations think that anyone over 55 years old is about to die, but people are living longer than ever. In Singapore, people older than Millennials account for two-thirds of the population, and this will grow to nearly three-quarters by 2025. 55+-year-olds will represent 40% of the market by 2025. The reality of these demographic changes is also affecting other SE Asian markets, such as Thailand, which is on a similar trajectory to Singapore.

With this in mind, would it not be better to develop an airline proposition for an aging population? Why do so many clients not want to sample consumers over 55 years old?

Where is the evidence?

BDRC Asia looked at various categories to see whether or not generational marketing actually works. One area in which BDRC undertakes considerable research is the travel sector. In 2017, we conducted a global survey of air passengers through our Media GPS (Global Passenger Survey). One aim of this survey was to establish travellers’ motives for leisure trips. Within SE Asia (including Singapore, Malaysia, and Thailand), Gen X and Baby Boomers generally had similar motives for travel, the top three being to see family, for relaxation, and to see and explore landscapes. Millennials showed similar motives to the others, although they were less likely to want to travel to see family; indeed, they might even have been looking to get away from their families when they travelled!

Table: Main Reason for Leisure Trip – Millenial Comparison by Region

But when we compare across nations, the differences are far more contrasting, particularly between the West and Asia. When we look at Millennials specifically, Western Millennials are far more motivated to travel to see family. Sightseeing and shopping are more motivating to Asian Millennials compared to their counterparts in the West.

With reference to the BDRC Hotel Guest Survey (a survey that examines the key motives for people’s choice of hotels), in SE Asia we see Millennials having more in common with Baby Boomers, both putting ‘good value’ and ‘free access to Wi-fi’ in their top three considerations for choosing their hotels. Gen Xers, on the other hand, have completely different considerations in their top three. In China, the generations’ needs for hotels are quite different and do not follow much of a pattern.

Across the generations, Japanese hotel guests consistently put ‘location’ in their top three considerations, with ‘value’ and ‘trustworthiness’ also being relevant to two of the three generations. Australia has remarkably consistent needs across the generations, with ‘good value’ and ‘affordable luxury’ always being the top two.

Based on this evidence, we would not recommend generational marketing to the travel sector. Far more effective segmentations of this market are based on the circumstances of the travellers, which then translate into the needs of the hotel guests. Hotel ‘residences’ and ‘apartments’ are designed for longer stayers, as they have a more homely feel, including in-room kitchen facilities. Not only do these services provide pragmatic solutions for longer stayers, they also reach out to all generations.

But a far smarter way of determining the needs of a traveller is at the point of booking. The online travel agent (OTA) is now one of the leading methods for booking hotels. But with so many OTAs to choose from, each OTA needs to be able to shortlist the hotels that people really want, otherwise these inquirers will just become browsers with no sales. It is essential for the OTA to put a range of appealing hotel propositions within the first one or two pages so that the client will then go on to book, and the OTA can get their commission.

The needs of the hotel guest can be worked out quite easily. For example, weekend dates for a room for two people in a city location are likely to suggest a couple looking for a city-break holiday. This in itself can determine the type of hotel likely to appeal to the couple, who might spend relatively little time in the hotel room during the day, but want comfort, privacy, and a bit of luxury at night.

Table: Top 3 priorities guests have for selecting hotels for leisure trips

While generational marketing has obvious applications in some areas (e.g. anti-aging cream and retirement), if age is going to be used as a proxy for assessing needs, then ‘life stage’ might be a better measure. The needs of a single person in their early 40s can be far closer to those of a single person in their 20s than a couple of the same age. Pre-family couples have more spending power and tend to go out more. Families have specific needs, such as child-friendly, informal eating outlets when they dine out, or TV channels in the home. Empty Nesters can behave like pre-families when they lose the burden of providing for children, and have more disposable income and want to relive their youth!

But it is the understanding of the context or circumstances of the individual consumer regardless of their age that will result in the best products and the highest sales conversion rates.