You cannot sell your products or services to every single customer. It is just too expensive to try and reach everyone. What you can do is focus on smaller groups of customers who are more likely to buy your products therefore increasing the efficiency of your marketing efforts. One way to do this is by segmenting your customers by age. Grouping the customers by age allows you to identify those customers who are more likely to share common interests, priorities and needs. You must also consider the six Macro Market Environment Influencers as each affects age demographics differently which also causes changes to your marketing decisions.
Beyond the control of your organization, the Macro Market Environment Influencers cannot be thought of as separate as they all influence each other. A new trend in one may cause a chain reaction throughout the others. These changes will affect the customer population, pricing and positioning strategies.
The Demographic Environment, as age is a demographic trends in the Demographic Environment greatly affects the various age groups by increasing or decreasing their size and changing their characteristics.
The Economic Environment, will have little impact on the youngest age groups as they are reliant on the caregivers. The oldest of the age groups will also not nearly be affected as those in their late retirement are often living on a strict budget with consistent income. The two age groups that will be most affected are those transitioning life stages between student and employee and employee into retirement. In good conditions jobs are plentiful and it is easier to save. In unfavorable conditions jobs are at risk and retirement funds can shrink.
The Sociocultural Environment, each age group can grow up with a different set of values. Some older generations may feel that working hard is the only way to get ahead while younger generations may have a feeling of entitlement.
The Natural Environment, older generations grew up in a time before mainstream recycling and pollution was even an issue. Younger generations grew up with headlines of global warming and may feel that they were gifted a dying planet that needs to be saved.
In the Political-Legal Environment, laws and regulations affect all age groups equally. They give or take away freedoms. They can increase costs for some and subsidies others.
In the Technological Environment, some technologies like entertainment (Virtual Reality, Streaming Video) tend to have a much bigger impact on younger generations. These technologies can influence access to knowledge and attitudes, beliefs and values. The oldest generations can also be affected by breakthroughs in medical technologies that can increase their lifespans and give better quality of life in their last days.
If you look at just one of these Market Environment Influencers the Economic Environment and you focus in on two different age demographics young adults ages 20-40 and middle-age adults ages 40-65 you can see the differences in Market Segmentation, Targeting and Positioning process.
The Great Recession caused so much fear, panic, and riots in countries around the world. Consumer confidence was shaken, those near retirement lost a great deal of the value of their retirement funds and unemployment rates rocketed up. Many have re-evaluated their lifestyles and are focusing on saving for a simpler retirement than they first imagined.
In an economic downturn, young adults having finished high school and perhaps have gone on to college, university or trade schools. They have completed their training and are just starting to find their way in the workforce. Many will be faced with trying to find a job fresh out of college and have lots of student loans. During a poor economic environment this age group will consider pushing off having children, buying a home or car. They are more concerned with staying employed.
The middle-age adults are close to retirement and could lose a great deal of their retirement funds forcing them to work longer. They have possibly had a few relationships got married, perhaps more than once, and may have had children or saw their friends have children. If they planned safely they will be retiring soon. This age group will likely put off going on vacations and may consider downsizing early.
If you concentrate your targeting efforts you can focus in on both of these age groups further by looking at those hit the hardest by the downturn. The young adults who may have lost their jobs and middle-age adults who lost value of their retirement plans.
Once we have focused our targets it is most important to position value to the consumer. These consumers want to know their money can stretch. They want to know that they can still afford a similar lifestyle in an uncertain time.
In order to be efficient with marketing efforts you need to focus on the customers who are most appropriate for your company. Once you consider the six Macro Market Environment Influencers you can then segment your customers, decide on a target customer and position properly to that target.