Why Age-Based Marketing Doesn't Work: Does Less with More

By Wolfe, David B. | Aging Today, November/December 2004 | Go to article overview

Why Age-Based Marketing Doesn't Work: Does Less with More


Wolfe, David B., Aging Today


"The Seniors are coming! The Seniors are coming!" So began my book Serving the Ageless Market, published in 1990. Back then, it seemed only a matter of time-a short amount of time-before corporate America would awaken to the demographics-driven transformation of the marketplace just getting underway. "Who wouldn't take notice of this phenomenon?" thought many of us tracking the event. We just needed to get a few facts and figures out there for everyone to see.

But corporate America was preoccupied with other things during the 19905, especially with the dot-corn universe and the information technology from which it was wringing out costs and making histone productivity gains. However, one sector of business did not participate in these productivity gains. Marketing, which revolves around information, ironically became less productive during the 19905. For example, television advertising lost much of its punch. That Starbucks, New Balance and other brands became superbrands without TV advertising suggests that the tube is no longer the high-powered marketing tool it once was.

INEFFECTIVE MARKETING

Marketing's flagging effectiveness has strained relationships between marketing -agencies and their clients. While agencies blame external conditions- from media clutter to new wrinkles in customer behavior-for falling productivity, clients blame their agencies because good marketers are supposed to know what to do when conditions change the requirements for marketing success. Recent research shows that 90% or more of sales promotions for packaged goods result in lowered profits. A 1995 study by Information Resources Inc. found that 70% to 80% of new-product introductions fail, with each failure resulting in a net loss of up to $25 million. Also, direct marketing response rates were falling even before anthrax made headlines after the attacks of Sept. 11, 2001.

Despite this broad picture of decaying efficacy, marketing is consuming a bigger portion of corporate budgets than ever. In an analysis of 20 industries, half had selling, general and administrative (SG&A) costs of more than 40% of every sales dollar, and none were spending below 30%. Between 1978 and 1996, SG&A expenses for S&P 500 companies grew from 19% of sales to 24%. Spending on advertising rose from around 3% of revenues to about 4.5% in the same period-a 50% increase. Thus, in an age when every other business function has had to do more with less, marketing has managed to achieve an unenviable track record of doing less with more.

Desperate for a magic bullet to cure mounting marketing woes, companies invested billions in customer relationship management (CRM) systems to automate customer analytic and transaction processes. CRM became big business overnight on the strength of such promises. The global marketing research firm IDC estimated that the total worldwide CRM services generated by business totaled $40 billion in 1999, and will pass $100 billion sometime in 2004. In spite of this flood of spending, however, the Gartner Group regularly reports that more than half of all CRM initiatives fail to achieve their objectives. Wells Fargo, for one, pulled the plug on its CRM program in 2002, after spending $38 million trying to make it work.

Companies are learning the hard way that deploying expensive software "solutions" does nothing to address the fundamental philosophical, methodological and organizational flaws that bedevil their marketing functions. Merely automating a business function that is deeply dysfunctional to begin with only makes matters worse. Companies need to understand that what will work in today's more life-seasoned markets are often not the same as the things that were right to do when the consumer universe was dominated by people 18 to 34 years old.

DEHUMANIZATION

Poor marketing angers and alienates customers. If my walk-around market research-which I conduct on trains, in airports and in other public places-means anything, huge numbers of adults-perhaps even a majority-feel marginalized by most advertising. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Why Age-Based Marketing Doesn't Work: Does Less with More
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.