Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 3 THE CHANGING MARKET ENVIRONMENT
Demographic change
The Western ‘demographic time bomb’ has started to have an impact on diverse businesses. With 
generally better standards of living, life expectancy has increased across the world and is set to 
continue increasing: for example, by 2030 life expectancy is set to exceed 90 in South Korea.
The grey market
In the developed West, the over-60s age group currently makes up around 23 per cent of the 
population, and is predicted to rise to nearer one-third by 2050 (and projected to grow by 
56 per cent between 2015 and 2030 worldwide). These ‘grey’ consumers are relatively rich.
The over-50s own around three-quarters of the world’s financial assets and control half 
of the discretionary budget. Perhaps surprisingly, however, around 90 per cent of consumer 
advertising is aimed at the under-50s. Marketers are increasingly coming to recognise the 
potential value of this market and to target more offerings and promotions towards them 
(Fishburn and Green, 2002).
Barratt Developments in the United Kingdom, for example, has been particularly quick 
to capitalise on this change in the demographic profile and has specialised in providing 
retirement homes for the elderly. Demographic changes of this type vary significantly 
between countries and regions throughout the world, and warrant serious study as a fun-
damental influence on demand for different products and services. In Japan, for example, 
it is predicted that by 2030 around 37 per cent of the population will be older than 65, 
compared with 5 per cent in 1950 and 19 per cent in 2000.
There are also significant financial implications of the greying of Western society. 
Increased longevity, coupled with economic slowdown, has led to significant challenges to 
pension funds. Many defined benefit (final salary pension, or career average) schemes have 
been underfunded and forced to change terms and conditions for members. This could have 
significant implications for the purchasing power of tomorrow’s pensioners.