It’s All About the Math
When it comes to marketing wisdom, is there anything new that can be said about the power of critical mass? Lately, scores of marketing books devoted to the subject have been published. Still, demographics expert Kenneth Gronbach’s latest book, The Age Curve: How to Profit from the Coming Demographic Storm, is a valuable read. Along with the vicarious thrill of reading about the gargantuan faux pas of some of America’s most iconic brands, readers also receive a bigger thrill from the compelling arguments Gronbach offers in which he presents his generational marketing statistics in a lucid and no-nonsense way.
All Eyes on Generation Y
Some of the most venerable U.S. brands, such as Levi Strauss and Harley-Davidson, have made some very big miscalculations along the way, Gronbach writes, because they failed to see the writing on the wall. The irony is that for all of their cash-infused marketing departments, they failed to use such universally available information as U.S. Census data when targeting customers. If they had done their homework, Gronbach adds, they would have seen much earlier that courting Generation Y, not the Baby Boomer generation, is their salvation.
Generation Y (those born between 1985 and 2010, according to Gronbach) is huge by any calculation — more than 100 million people, thus dwarfing the last large generation, the Baby Boomers. With at least 30 percent of Generation Y having four guilt-ridden parents and eight (often-doting) grandparents, Gronbach writes that many of those in Gen Y are primed to consume at an unparalleled rate. Marketers can make gold from this population’s critical mass by determining who their best customers are and matching them with the demographic peak: the top of the birth-rate bell curve for their generation.
The marketers who take the time to determine these patterns will reap all the gold, writes Gronbach, because the leading edge of the curve gives them the “expanding pie” part of the market when products or services sell based on merit and value. Missing this window of opportunity, he explains, marketers must settle for shrinking markets where products are reduced to commodities battling for the right price point in the wake of diminishing margins.
The U.S. automobile sector is a poster child for misguided marketing, Gronbach writes. Instead of focusing its efforts on the expanding Gen Y market that demands eco-conscious features as well as flash and speed, Detroit built the leviathan SUV for the shrinking Boomer market. With gas at record levels and Gen Y car buyers coming of age — the youngest group is now 18 years old — the U.S. car industry is now in scramble mode, cobbling together new concept cars while trying to rehabilitate its environmentally unfriendly image.
Gen Xers Are Not Boomers
Gronbach is at his best when he writes about how world demographic trends relate to his hypothesis, such as his prediction that Gen Y’s huge English-speaking and skilled population — along with China’s shrinking population — will eventually bring jobs and industry back to the United States. He also expertly debunks many myths about Generation X. The smaller-sized Gen X, writes Gronbach, is unfairly compared to the much larger Boomer generation. Gen Xers are maligned because they consume less than the Boomers. However, he writes, Gen X contributes money to political parties, votes and participates in government at a rate equal to Boomers, age for age.
Where The Age Curve suffers is when Gronbach veers off topic into riffs that sound more like his personal peeves than arguments with direct ties to his hypothesis. The gift card concept is a bust, he writes, since recipients don’t perceive them as money, but Gronbach fails to make the generational connection. He also voices a familiar rant about the ailing Social Security system. Instead, he should have offered his perspective on how dire predictions about the system’s demise may need to be revisited in light of the fact that many Boomers, instead of retiring, are continuing to work and pay into the Social Security system.
In what is probably his most surprising advice, Gronbach advocates that marketers build Generation Y-targeted direct marketing strategies delivered by snail mail. Oddly, he writes that Gen Y loves direct mail. Beyond a few strange assumptions, his book still provides a fascinating look into the demographics of today’s marketing world.