Aging Baby Boomers pose challenges to auto marketers

Baby boomer Ray Daniels has experienced a lot in his 64 years. He remembers the days of civil rights marches and "swinging it" in the disco clubs of Detroit..

"I'm ok with growing older and I'm not trying to relive anything," said Daniels, a surgical assistant from Inkster, Mich. "I'm just pretty happy where I'm at."

Daniels and his wife, Deborah, recently bought a 2006 Ford Five Hundred and love it.

"I've been driving Fords for a long time -- a good 30 years," he said. "I like my cars to be loaded, and have things like leather and heated seats. And I like a good sound system, which the Five Hundred has."

The Ford Five Hundred seems to have hit the bull's-eye with boomers. Sales data shows the full-size sedan is quietly winning over aging middle-income, as well as younger, buyers. The average age of a Five Hundred buyer is 56 years, in line with its key competitors like the Chrysler 300, Chevrolet Impala and Toyota Camry V6.

"Aging boomers form a tremendous customer base for this vehicle, and those who have driven the Five Hundred are just in love with it," said Mike Herniak, Ford Marketing group brand manager.

Baby boomers -- those born between about 1946 and 1964 -- have been a darling for marketers over the years. But as they ease into their golden years -- more than half are 50 or older -- marketers are a bit puzzled at how to engage this diverse group.
 

"Boomers have set the market stage ever since they've been in existence," said Michael Bernacchi, a professor at the University of Detroit Mercy who studies automotive marketing. "But now that they are older, marketers are putting on the brakes and asking, 'How are we going to market to them?' "

And there's a lot at stake. At 77 million strong in the U.S. alone, boomers are a consumer force to be reckoned with.

Consider these facts:

* Boomers represent $2.1 trillion in annual spending power.
* Boomers ages 50 to 60 have double the spending power of those 60 to 70 years old.
* 80 percent of boomers say they will work past 60.
* Their life expectancy is an all-time high of 77.4 years.

"They by far are the most affluent and spend-worthy generation in the history of mankind," said Bernacchi.

A smattering of companies are starting to pay attention, such as Michelob Ultra's ad featuring a graying boomer paddling around in a kayak, or an American Express' financial services ad saying: "You changed everything that came before you. That was you then ... that's still you now."

But it's a tricky sell, and the risk of offending boomers who don’t want to be called old or feeble is high. Marketers don't want to turn off younger buyers to a product. The secret, say experts, is to capture boomers without directly targeting them.

"Madison Avenue is scared out of its skin on how to approach this group," said Bernacchi. "We know one thing for sure: marketers better not take the approach that, you're old, live with it. Boomers are saying, please don't call me old, please don't give me things so I can maintain life -- because I don't want to maintain life, I want to live it.

"At the same time, nobody wants to age their vehicles, so we have to take vehicles that are in various target markets and try to maintain the youthful pitch, while making adaptations."

Automakers over the past few years certainly have been pitching to youth, spending billions on campaigns seeking younger, hipper buyers. Toyota began its Scion brand, Cadillac ads feature classic rock and DaimlerChrysler recently came out with its youth-focused Dodge Caliber. Honda tried to reach 25-year-olds with its "dorm room on wheels" Element. To their surprise, boomers were more likely to buy it.

"Honda is really embarrassed by that," said George Peterson, president of AutoPacific, Inc. "Little did they understand that the things that made the vehicle a dorm room on wheels were all things that made it attractive to boomers."

An AutoPacific survey released in January found the average American household purchases 13 cars over a lifetime -- and seven of those are purchased after the head of the household turns 50. Yet only about 10 percent of advertising money is aimed at consumers 50 or older, according to AutoPacific.

"A lot of the marketing weight is always thrown against youth, and that's because it's often a lot more fun, a lot sexier, than marketing to the old gray hairs," said Peterson. "But it's the old Jerry MacGuire thing, 'Show me the money.' Well, the money is with the boomers."

Toyota is marketing the Avalon specifically to boomers, giving it more leg room and rear seats that recline by 10 degrees. It targets customers in their 50s who like to go out in groups. These trends represent a bet that a significant slice of boomers are getting tired of stiff-riding German cars and are coming back to the comfort of big sedans.

As part of its Way Forward plan, Ford is taking a slightly different approach to baby boomers, which targets those who lust for life, not just a particular demographic cohort.

"We are trying to focus on our customers more than just the simple demographic," said John Felice, general marketing manager, Ford Division. "Take the Ford Division brand. Our target customer is Lust for Life. So, rather than just saying we are targeting baby boomers, what we are specifically targeting the Lust-for-Life customer. They share an on-the-go spirit and believe life is to be lived boldly.

"They are confident in who they are and try new and better things to improve their lives. This is a long way from simply targeting an age group."

For example, as part of the recently launched BOLDMOVES marketing platform, Ford will demonstrate how our product meets the needs of the lust for life customer, which will include the baby boomer.

"I think you'll find our new advertising will connect with the baby boomer demographic," said Felice. "We are connecting emotionally by tapping into the shared attitudes and values of our Lust for Life target."

Source: Ford Motor Company