California State University, San Bernardino CSUSB ScholarWorks Theses Digitization Project John M. Pfau Library 2001 Generational marketing: Baby boomers, Generation X and the net generation Jane Ronnfeldt Follow this and additional works at: https://scholarworks.lib.csusb.edu/etd-project Part of the Marketing Commons Recommended Citation Ronnfeldt, Jane, "Generational marketing: Baby boomers, Generation X and the net generation" (2001). Theses Digitization Project. 2019. https://scholarworks.lib.csusb.edu/etd-project/2019 This Project is brought to you for free and open access by the John M. Pfau Library at CSUSB ScholarWorks. It has been accepted for inclusion in Theses Digitization Project by an authorized administrator of CSUSB ScholarWorks. For more information, please contact [email protected]. GENERATIONAL MARKETING: BABY BOOMERS, GENERATION X AND THE. NET GENERATION A Pro.ject Presented to the Faculty of California State University, San Bernardino In Partial Fulfillment of the Requirements for the Degree Master of Business Administration by Jane Ronnfeldt September 2001 GENERATIONAL MARKETING: . , BABY BOOMERS, GENERATION X AND THE NET GENERATION A Project Presented to the Faculty of California State University, . San'Bernardino by Jane Ronhfeldt September 2001 Approved by: Nabil Razzduk, Chair, Marketing Date>^ Sue Greenfeld ame es I I ■ABSTRACT ■ The purJ>ose of this project is to gain a better, , understanding of the differeht market opportunities \ available to credit unions. The project differentiates the markets by age: .Net, Generation, , 2 to 22., ...Generation X 2,3 to 34 and' the' Baby Boomers ■35 to '53, 'Each of • these groups are' important to the ongoing health of credit unions, .Baby Boomers and Generation X typically are underrepresented St credit unions but both groups are important to credit uhionsl. financial health; seniors for, their deposits; young adults for their future business. ' Competition is fierce for Baby Boomers ■deposit; ■ dollars. High-yielding,mutual funds, annuities, and other investments are the ; chie.f ;culprits. Credit, unions can attract.Baby Boomers by;providing financial education and clearly'■written information and marketing materials., - . If credit unions do not, attract young members now, they will have ■ to- .buy ■markef share, later with lower- interest rates o,n loans. Although 36% of all adults, belong to credit unions, phly :23,% of ,adults age 18 to 23 are . : members, despite the fact Generation X are most likely to say that they.are eligible for membership. The project looks closely at the financial needs-of each group, and-makes a number of specific recommendations.. 111. for attracting and retaining market share. The major conclusion of this project is understanding generational differences is essential to Arrowhead Credit Unions success in the future IV TABLE OF CONTENTS . ABSTRACT . ,:. .:... • • • • • .. ... iii, LIST OF TABLES ..;. .. vii LIST OF FIGURES,... .... ..... .. ..... ... viii CHAPTER ONE INTRODUCTION . CHAPTER TWO: BABY; BOOMERS - 35 TO' 53 ... 6 Boomers Affe.e,t..Wall. Street and Life .. .... ..... 8 The Power Group ....... ... 11 Boomers Glimpse Their Future ...... .. 13 -Marketing .Challenges ......... .. ... ...... 15 CHAPTER THREE: GENERATION. X - . 23 TO 34 .............. 19 Marketing Challenges .................... ........ 21. Cooperative Branding .. .... • .. • • • • • • • - • • . 29 CHAPTER FOUR: NET, GENERATION..- 2 TO 22 .... ... ..... 32' What Makes N-Gehers Different ........ ... ...... 33 WWW and the Net Generation ..... ... 36 Marketing Challenges ... .. .... ... .............. 38 CHAPTER FryE.:. LIFESTYLE AND :INFLUENCES - ' Selling, to The Boomers, Generation X and. the Net Generation ..... .......; ...... 45 . it is All. - a. .Matter of; Style ..'. ........ 46 . Lifestyle Versus . Demographics ........ .'47 GeOdemographic. Analysis:... ....... ..... .. o 49 Cluster Analysis'...... .. ........ ...... .•. 52 CHAPTER SIX:.RECOMMENDATIONS AND CONCLUSION V Recommendations 59 Conclusion 73 APPENDIX A: GENERATIONS - WHAT WE KNOW 77 APPENDIX B: AREAS OF PERCEIVED NEED FOR PROFESSIONAL FINANCIAL ADVICE (BY MEMBERSHIP STATUS 80 APPENDIX C: ARROWHEAD CREDIT UNION PRODUCTS 82 APPENDIX D: GLOSSARY OF TERMS . 85 REFERENCES 89 VI LIST OF TABLES Table 1. Generations at a Glance 3 Table 2. Online Statistics 37 Table 3. Clusters 55 Table 4. Cluster Analysis 57 Vll LIST OF FIGURES Figure 1. Old to Outnumber the Young by 2030 • • • 1 Figure 2. Demographic Breakdown of U.S. Population (1998) 4 Figure 3. The Second Booming 33 Vlll CHAPTER ONE INTRODUCTION In the 2000 U.S. Cen.sus, 281.4 million people were counted and,.barring some uhexpected calamity, we can predict how. many people will be in alive in 30 years or- even 50 years. Between 1990 to 2000,, the population increased 32.7 million, the largest increase in American history^. The previous record was held by the Baby Boomers. The Boomers were able to. fuel a population explosion of 28.0 million people between 1950 and 1960 (see Figure .1) Figure 1. - Old to Outnumber the Youn.g by 2030 45 40- 35 - 30 - 25: □0-17 yeans of age 20 □65+ years of age 15 10 - 5 0 1900 1970 1980 1990 2030 1 U.S. Census Bureau, [home.page on-line]; available from http://www.census.gov; Internet; accessed 1 March 2001. 2 Ibid, 1 March 2001. Declining birthrates and longer life expectancies have aged the population. Suddenly, everyone from car makers, soft-drink .manufacturers, TV producers, political . .. pollsters, pundits and candidates has become aware, of the country's changing age profile, and they are working fast to target their messages to distinct age groups. A simple flip through the TV channels confirms that age targeting has arrived. Whether it is "Sesame Street," "Felicity," "Now and Again" or "Touched by,an Angel," there is a program for every generation flashing before the eyes of Americans on a daily basis. Age targeting is just .as evident in the public sector. From city hall to the county courthouse, the local school board to the floor of con..gress, different age groups and their advocates wield their clout to influence the taxing, spending and regulatory decisions made by governing entities. Although much attention is focused on the competition between the ages - young versus the old - the real strain in the future may be, in relations; between the middle-aged or working-aged population and the dependent.segments. Table 1. Generations at a Glance Generations at a Glance Generation Age Influences Traits Net Generation 0 to 22 Fall of the Berlin Wall Independent spenders Expansion of technology Globally concerned Mixed economy Health conscious Natural disasters Cyber literate Violence Drugs and gangs Generation X 23 to .34 Sesame Street^ MTV Technosavvy End of Cold War Diverse Rise of personal computing Independent Divorce Skeptical AIDS/ crack cocaine Entrepreneurial Missing children on milk cartons and missing parents Baby Boomers 35 to 53 Booming birthrate Idealistic Economic prosperity . Competitive Expansion of suburbia Question authority Vietnam^ Watergate "Me" generation Human rights movement Sex^ drugl rock'n roll Source: BridgeWorks 2/2000 www.generations.com ^ Jan.l, 2001 Understanding what the population will look like in the future is important to Arrowhead Credit Union (AGO). The US Census Bureau predicts that by 2010, California will have the largest number of residents 65 or older, in the nation. California grew 13.8% between 1990 to 2000 from 29,760,021 to 33,871',648 people. California, with 33.9 million people, is the most populous state, accounting for 12% for the nation's population^. Currently, Florida ranks fourth in population with 15,982,378 people and the largest percentage of the 65+ crowd with 20%, up from 18% in 1990. Of Florida's population, ,3% will be 85 or older by 2010, in. contrast to 2% nationally^. According to the 2000 U.S. Census Bureau, the median age of the population in California is. 33 and Florida.is 37+ (See Figure 2). Figure 2. Demographic Breakdown of U.S. Population (1998) 29% 30% _ N-Geners m Pre-Boomers □Senior Citizens dBaby Bust HBoomers 12% 16% 13% 3 Ibid^ 1 June 2001. 4 Richard D. Thau and Jay S. Halfin, Generations Apart (New York: Prometheus Books, 1997) , 52-53. Understanding the population shifts and changes is criticallY important to businesses that, plan to serve or fulfill the financial needs of a constantly changing market. Arrowhead Credit Unions goal is to "help members build wealth." In order to do this, understanding the needs of the membership i*s, essential. Dividing the membership into segments helps to, provide a clear picture of each generation. In this chapter, a brief description was given of the segments that are of most interest to ACU: the Net Generation, Generation X and the Baby, Boomers. A complete, description of each .segment is provided in the following chapters beginning with the Baby Boomers. CHAPTER TWO , BABY BOOMERS - 35 TO 53 Welcome to the most egocentric generation in the history of mankind. Boomers grew up the most affluent generation ever, protected in suburbs and small towns, enjoying greater health and expecting longer, fuller lives than any of their predecessors. Boomers have lived through, the longest and greatest period of national prosperity, the nation's first loss of a war, and its most culturally eccentric period—only to end up gazing at the world they inherited with a sense of longing, unfulfilled promise, and self-doubt. From infancy, the fertile fields of opportunity lay beneath their feet,