The market for the elderly can be divided into segments, each with its own needs and wants. The key to successful marketing is understanding these different segments and targeting them with the right products.
One of the most popular methods for performing market segmentation uses demographic factors like age, gender and income.
Other methods use psychographic factors like lifestyle, motivations, values, likes and dislikes as well as behavioral factors like purchasing habits, how someone intends to use a product or service, how often they will use it, the benefits they seek, or brand preference that they have.
In this article, we will perform elderly market segmentation using the following 7 variables: age bracket, gender, income, health status, living situation, comfort with technology, and activities & interests.
But first, let’s start by understanding why elderly market segmentation is important.
The Importance of Segmentation of the Elderly Market
The segmentation of the elderly market is essential because it allows product manufacturers and service providers to target specific groups of elderly consumers with laser precision.
By understanding the needs and wants of different groups of elderly people, businesses can create products and offer services that are more likely to appeal to them and retailers can stock products that their elderly customers are most likely to buy.
Products and services for elderly people can range from life insurance and hearing aids to mobility scooters and retirement homes.
Some elderly people will need or want all of these things, while others will only need or want a few.
The elderly market is not a homogeneous group and businesses need to understand the different segments that make it up if they want to be successful in selling to this market.
By segmenting the market, businesses can identify which type of products for the elderly are most popular with each group and target their marketing and sales efforts accordingly.
Variables for Elderly Market Segmentation
Elderly market segmentation can be performed along the following 7 axes:
- Age bracket
- Gender
- Income
- Health status
- Living situation
- Technology use
- Activities and interests.
Different people have different needs, wants and motivations for purchasing a product or service.
And so most manufacturers of products for the elderly do not cater to all elderly buyers. Instead, they focus on those segments of the market that are most likely to buy their products.
With market segmentation, they can target specific groups of consumers with tailor-made products or services that satisfy their needs.
It is therefore essential that businesses decide which segments they want to target and then design their products or services, marketing, and sales strategy accordingly.
Let’s now look in detail at each of the 7 variables used in elderly market segmentation.
#1. Segmentation Based on Age Bracket
When businesses build products for the elderly, they often target a specific age bracket. The most common elderly age brackets are 60+, 65+, and 70+.
There are several reasons for this. Firstly, people in these age brackets are more likely to need products or services specifically designed for the elderly such as life insurance, hearing aids, or mobility scooters.
Secondly, elderly people in these age brackets are generally more affluent than younger elderly people and so they can afford to spend more money on these products.
And finally, as the elderly age further and move from one age bracket to the next, their needs and wants change and so businesses need to target them differently. So the same product or service needs to change for an individual as they progress to the next age bracket.
For example, a mobility solution that is suitable for a 60-year-old might not be suitable for a 70-year-old.
Or the type of life insurance that a 60-year-old needs will be different from the type of life insurance that a 70-year-old needs.
#2. Segmentation Based on Gender
Men and women age differently. They also have different health needs, want different types of products, and are motivated by different things.
Older women, for example, are more likely to be caregivers than older men and so they have different needs when it comes to products and services.
They are also more likely to suffer from health conditions such as osteoporosis and so they need different types of products and services compared to men of the same age.
#3. Segmentation Based on Income
Their income has a significant impact on the types of products and services that elderly people can afford.
Those with a higher income can afford to spend more money on discretionary items such as travel and so businesses need to target them differently from those with a lower income.
Those with a lower income, on the other hand, may need to make more use of government benefits such as Medicaid.
They may also be more price-sensitive and so businesses need to offer them products and services that are good value for money.
#4. Segmentation Based on Health Status
Different elderly people will have different health needs depending on their health status.
Those who are in relatively good health may be able to live independently for longer and so they will have different needs compared to those who are in poor health. They could be good candidates for products like life insurance or retirement planning products.
Those who are in poor health, on the other hand, may need to make use of more health-related products and services such as home health care or hospice care.
#5. Segmentation Based on Living Situation
The products that the elderly can use or the services they can sign up for will be different depending on their living situation.
For example, those who live in their own homes will be able to use products that those who live in assisted living facilities or nursing homes cannot use. For example, they may be able to use a home security system or they may be able to have a pet.
Those living at home can also undergo physical therapy at home or receive healthcare treatment at home.
On the other hand, those who live in assisted living facilities or nursing homes will have different needs. They may need services that help with daily living such as bathing, dressing, and eating. They may also need transportation services to and from the nursing home, for instance, to visit a doctor, go to a hospital or go shopping.
#6. Segmentation Based on Comfort With Technology
For better or for worse, technology has a big impact on the elderly.
Those who are comfortable using technology will automatically have different needs compared to those who are not comfortable using it.
For example, those who are comfortable using technology may be able to use a fitness app to track their activity levels or a health app to keep track of their medications. They may be able to use online banking to manage their finances and use video chat services to stay in touch with family and friends.
On the other hand, those who are not comfortable using technology may need help in using it or may need products and services that do not require the use of technology.
For example, they may need help in setting up an email account or they may need to use a paper checkbook instead of online banking.
By using technology-ease as a metric for elderly market segmentation, businesses can target products to each segment of the market that they are able to, and therefore, likely to use.
#7. Segmentation Based on Activities and Interests
The elderly have a wide range of activities and interests and using the knowledge of these activities and interests, businesses can market relevant products and services to them.
Some elderly people may be interested in staying active and so they may be good candidates for products like fitness equipment or membership to a fitness center. They may be interested in products that allow them to travel such as RVs or cruises.
Other elderly people may be more interested in products that allow them to relax and enjoy their retirements such as golf memberships or wine clubs.
Still others may be interested in products like toys or books that allow them to enjoy time with their grandchildren.
By understanding the activities and interests of elderly people, businesses can better target their marketing efforts to reach the people who are most likely to be interested in their products.
Conclusion
As you can see, the target market for products for the elderly can be segmented using many variables and can be analyzed from different angles.
In this article, we performed elderly market segmentation following these 7 factors: age bracket, gender, income, health status, living situation, comfort with technology, and activities & interests.
Manufacturers and retailers of products for the elderly often use market segmentation to better understand their customers and figure out how to appeal to them.
With elderly market segmentation, they can better understand which of their products are likely to sell well and can target their audiences more effectively.